Dominion’s Own Model Shows that 15,000 MW of Solar Would Save Virginia Customers $1.5 Billion

powerhouse_six_1_megawatt_solar_array_ettp_oak_ridge_2016_courtesy-doeDominion Virginia Power has begun making good on its commitment to install 400 megawatts of solar in Virginia, a goal we have been cheering. Dominion argues its projects make economic sense. That leads us to wonder: if 400 MW makes economic sense, would more be even better? As guest blogger Will Driscoll reveals, we don’t need to speculate; Dominion ran the numbers. They just didn’t like the answer. 

By Will Driscoll 

Dominion Virginia Power modeled a resource plan with 15,000 megawatts of solar power, which it calculated would save Virginia customers $1.5 billion compared to a plan that includes a $19 billion nuclear reactor.  Yet when the company submitted its menu of resource options to regulators at the State Corporation Commission as part of its 2016 Integrated Resource Plan (IRP), it included the North Anna 3 nuclear plant while omitting the high-solar option.

The high-solar option only became public when attorneys Will Cleveland and Peter Stein of the Southern Environmental Law Center (SELC), representing an environmental coalition, asked the right questions during the discovery phase of the IRP proceedings.

Utilities in 33 states must periodically file an IRP.  The IRP is intended to define the least-cost set of resources that can meet forecasted electricity demand plus a reserve margin, while also meeting the state’s policy goals on renewables and efficiency.  Utilities use computer models to develop an IRP.

Dominion’s utility planning model generated the 15,000-megawatt solar option when the utility set no constraint on the amount of solar that could be added.

The high-solar plan would actually save Virginians much more than $1.5 billion, according to an expert witness in the IRP hearing, former Texas Public Utility Commissioner Karl Rabago.  The projected $1.5 billion in savings would be after Dominion’s projected $5.8 billion of solar integration costs (i.e., any costs needed to adapt the grid for a high level of solar).  Yet the $5.8 billion value “is at least 54 to 84 percent higher than the PJM high and low [integration cost] numbers that [Dominion] cites,” Rabago said.  Thus, “the overall savings … [with] a more reasonable approach to the integration costs would be much higher than $1.5 billion.” (PJM is a regional transmission organization that coordinates the movement of electricity through Virginia, Maryland, Delaware, New Jersey, Pennsylvania, Ohio, the District of Columbia, and parts of seven other states.)

To those who have followed the low and still-falling costs of utility-scale solar, it may not be surprising that solar, including any integration costs, would cost less than the proposed North Anna 3 nuclear reactor.  But to learn that Dominion’s own utility planning model presented that result to Dominion is a revelation.

To justify discarding the high-solar option, Dominion executive Robert Thomas said that “15,000 megawatts of solar… was a lot of land.” Yet data from the National Renewable Energy Laboratory show that this amount of solar would need only 0.4 percent of Virginia’s land area (i.e., 15000 MW times 7.9 acres per MW, divided by 27.376 million acres of land).  Mr. Thomas also said that the high-solar option “could create reliability issues,” yet high-renewables utilities in Iowa, South Dakota, California and Europe are highly reliable, thanks to accurate day-ahead weather forecasting and sophisticated utility “unit commitment” models that are also available to Dominion.

The State Corporation Commission, in its final order regarding Dominion’s IRP, did not mention the high-solar option.  The SCC approved the IRP as submitted, noting that “approval of an IRP does not in any way create the slightest presumption that resource options contained in the approved IRP will be approved in a future certificate of public convenience and necessity (“CPCN”), rate adjustment clause (“RAC”), fuel factor, or other type of proceeding governed by different statutes.”

SELC attorney Will Cleveland called on Dominion and the SCC to do better next time: “Citing ‘feasibility concerns,’ Dominion rejected and buried the high solar resource plan without any legitimate analysis of whether the plan was in fact feasible. Virginia ratepayers deserve the lowest-cost, cleanest energy available, and it is increasingly clear that means more solar, not more fossil fuels or nuclear. In the future, Dominion should not be allowed to dismiss the cheaper, cleaner resource plan without a full analysis.”

The environmental coalition represented by SELC consisted of Appalachian Voices, Chesapeake Climate Action Network, and the Natural Resources Defense Council.

Will Driscoll is a writer and analyst.  Previously he conducted environmental analyses for EPA, as a project manager for ICF Consulting.  His publications include the book Nonproliferation Primer (MIT Press).

8 thoughts on “Dominion’s Own Model Shows that 15,000 MW of Solar Would Save Virginia Customers $1.5 Billion

  1. Some context for 120,000 acres. It is a big area – roughly the size of 15 Pocahontas State Parks. But compare it to approximately 32,000 acres of golf courses in the state. And it’s less than 2% of Virginia’s agricultural acreage (8,600,000 acres). Mining enough Virginia coal to burn to create 15000 MW would “disturb” about 18,000 acres of land per year – then multiply that by the number of years solar panels will keep on producing electricity.
    Of course, much of that 120,000 acres would be on roofs.

  2. I would challenge the assumption of 7.9 acres per MW these are old numbers, with the higher wattage panels it would be closer to 4 to 5 acres per MW significantly lowering the area needed

  3. Pingback: Dominion’s Own Model Shows That 15,000MW of Solar Would Save Virginia Customers $1.5 Billion – Enjeux énergies et environnement

  4. Dominion has admitted that utility scale solar can compete on a cents per kilowatt basis with gas-fired generation at the wholesale level. Tom Hadwin told Bacon’s Rebellion … “In their IRP cross-examination”, Dominion said they had “reduced solar’s value in their plan by adding a penalty that was about 40% of the installed cost of solar for “grid integration”. The addition made solar appear not cost effective for the IRP. “Puzzling, because Dominion makes money building transmission lines and they don’t penalize their new gas plants for needing transmission lines.”
    (http://baconsrebellion.com/new-solar-farm-works/#comments)

    Mr. Hadwin went on to say he was concerned “that we are missing the boat by not allowing similar development of more distributed solar. This would add to grid stability and resiliency. Some states require a 50/50 balance between utility scale and distributed solar.”

    My point is that simple economic value is not relevant in the decision making process of a company whose economic choices are determined by 20th century monopoly regulations. “The declining cost of solar and storage has the potential to disrupt their current business model. Their (Dominion’s) best response is to try and control all of the solar themselves and put it in the rate base. But this does not best serve the customer or the grid.”

    “We need to examine better ways of keeping Dominion financially healthy while serving the interests of the ratepayers. “ (http://baconsrebellion.com/dominion-solar-deal-amazon/#comments)

    That better way requires a new set of rules.

    • You are exactly right. Dominion wrote and controls the current rules. Until we can break the stronghold it has on Virginia, we are doomed to last century investments that will hold Virginia back for another century.

  5. The free-fuel solar model does not provide the same return on investment.

    This is why I emphasize the bottom-up customer-owned model. If we wait for the top-down utility-driven solar model, we’re gonna be waiting a loooooooo-o-o-ong time.

    At least us individual residences, businesses, and organizations should choose free stable onsite-generated power. (There’s nothing standing in our way – you don’t need a PPA.)

  6. Ivy,

    Could Will send me the documents he analyzed for this piece?

    Thanks,

    Judy

    On Tue, Jan 3, 2017 at 8:58 PM, Power for the People VA wrote:

    > Ivy Main posted: “Dominion Virginia Power has begun making good on its > commitment to install 400 megawatts of solar in Virginia, a goal we have > been cheering. Dominion argues its projects make economic sense. That leads > us to wonder: if 400 MW makes economic sense, would m” >

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