Virginia could soon have more than 2,500 MW of solar. We just need customers.

Photo by Activ Solar via Wikimedia Commons.

A review of the Virginia Department of Environmental Quality website reveals developers have at least started the permitting process for 64 solar farms across 40 jurisdictions, representing over 2,400 megawatts (MW) of solar capacity.

This includes projects that are already in operation, like the thousand-acre, 80 MW Amazon Web Services farm in Accomack that kicked off the solar gold rush here in 2015. Amazon also has another 5 projects in development. By the end of 2017, Amazon will have 260 MW of solar in Virginia, accounting for more than half the solar in the state.

The DEQ total only includes projects above 5 MW. It also omits another 94 MW of Dominion Energy projects permitted by the State Corporation Commission, all of which will be in operation by late fall. (Under legislation passed this year, Dominion’s projects will now also follow the DEQ Permit By Rule process, which applies to projects between 5 and 150 MW.)

In all, Virginia would have over 2,550 MW of utility-scale solar if all the projects were to be completed, at the maximum size for which they are seeking permits. But a closer look at the DEQ “notices of intent” suggests that so far the projects seem to have attracted only a limited number of customers: Amazon, our utilities, and the Commonwealth of Virginia itself.

Governor McAuliffe pledged that the Commonwealth would buy 110 MW of solar, enough to meet 8% of its electrical demand, split between onsite and offsite arrays. Announced deals include 18 MW at Naval Station Oceana and two projects totaling 32 MW that will serve the University of Virginia. The Commonwealth is also the off-taker of a project that provides Microsoft with RECs, to date the only announced deal involving a corporation other than Amazon.

Dominion Energy Virginia committed to 400 MW in 2015, and the utility’s 2017 integrated resource plan proposes a continuous build-out of 240 MW per year for the next 25 years. Old Dominion Electric Cooperative has also contracted for 30 MW of solar at two locations, with Dominion Energy owning the projects. Most recently, Central Virginia Electric Cooperative contracted for the output of two 5-MW solar farms. (These do not appear on the DEQ site.)

Where can we find more customers?

This leaves most proposed solar farms in Virginia without identified customers. Certainly, Dominion will prove to be the buyer for many, and there is no good reason it should stop at 240 MW per year. Appalachian Power is also considering sites in Virginia and West Virginia, but its appetite appears limited to 25 MW. The Commonwealth probably has a couple more deals in the works to complete McAuliffe’s pledge, and the next governor could up the ante—especially now we know that purchases by public colleges and universities count.

But for renewable energy to make a serious contribution to our energy supply, new customers have to commit. Fortunately they don’t need to sign onto Dominion’s half-baked green tariff proposal; they can contract directly with developers, as Amazon did initially. When Dominion Energy bought the first Amazon project from its from developer, the parties negotiated a special rate. Industry members say that deal is too complicated to serve as a model for others, but Dominion has indicated an interest in finding a solution.

Dominion’s participation was not necessary for Amazon to move forward, and it would not be required for other large customers to follow suit. In particular, a financial model known as a “virtual PPA” may offer an attractive option. In this arrangement, a large user contracts for the output of a solar or wind farm, but does not actually take delivery of the electricity. Instead, the power is sold into the wholesale market while the customer buys electricity from its utility as usual. The sale of electricity in the wholesale market offsets the cost of power purchased from the utility, acting as a hedge against rising energy prices. The customer gets the renewable energy certificates (RECs) to legally “green” its electricity supply.

A virtual PPA avoids treading on the monopoly power of a utility because it does not require a customer to take delivery of energy from the solar farm. According to Niels Crone of Customer First Renewables, a company that helps large businesses and institutions maximize the value of renewables, virtual PPAs could be a good option for customers located in Virginia.

Crone says that although virtual PPAs (as well as physical PPAs) deliver the greatest bottom-line benefit with larger projects, smaller customers can aggregate their demand to take advantage of economies of scale. That means the benefits don’t have to be limited to the Amazons of the world. Smaller corporations, universities, hospitals and even local government can band together to lower their energy costs—and make a positive impact on Virginia’s environment and economy.

8 thoughts on “Virginia could soon have more than 2,500 MW of solar. We just need customers.

  1. What is the incentive or disincentive for dominion to buy that energy? Is there anything we the people can do to help the situation? Like talk to my university or my city?

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    • Yes, Dominion might increase its solar purchases if it feels enough pressure to do so from its customers. The pressure is certainly growing. Meanwhile the direct route is for customers including universities and cities to go out and contract for solar themselves, either with on-site projects or one of these offsite projects. So talking with your contacts in sustainability offices is a great idea.

  2. Hi Ivy, as usual, a well researched & well thought out post. The PJM Queue includes 6 GWs of solar projects under active development. And interesting the trend is for larger projects many over 100MWs in size. We believe many of these projects will never be built because there currently is not sufficient demand as you point out. However, we are also seeing significant interest from a variety of corporate purchasers.

  3. Ivy, Virginia’s 2,500 MW of solar capacity, at your state’s capacity factor of 17.2%, would have been capable of generating 3.7 terawatthours of the 112 terawatthours of electricity Virginia consumed in 2015 (EIA).

    You seem to regard the possibility solar might contribute 3.3% of your state’s electricity as an impressive accomplishment. With the specter of climate change and Atlantic superstorms knocking on Virginia’s door – whatever for?

  4. At the current rate of 3.3% over 50 years, it would take Virginia 800 years to fill the bucket half full. Not good enough.

    But surprisingly, my organization (Californians for Green Nuclear Power) finds itself allied with Sierra Club in opposition to two bills currently in California Assembly. It seems Wyoming aims to sell unlimited coal electricity to California to help replace Diablo Canyon Nuclear Power Plant. Sierra Club is starting to see the light – and dark – of California politics.

    Hope springs eternal.

  5. But solar is growing exponentially. If politicians and entrenched interests don’t get in the way, renewable energy will take over the grid. If you haven’t watched Tony Seba talking about “Clean Disruption,” you should. I know I can’t convince you true believers in nuclear that the future lies with solar, but the market is already saying it.

  6. Ivy, your enthusiasm is admirable. But solar is not growing exponentially – there is a projected 2% decline in new installations for 2017:

    Several factors are to blame: 1) Those who aren’t wealthy enough to afford a solar array are fed up with subsidizing those who are, and 2) Environmentalists are realizing physical realities (rotation of the earth, extended cloudy weather) make solar 100% dependent on burning fossil fuel for the other times they need electricity. Maybe politicians and entrenched interests are getting in the way, or maybe solar’s not living up to expectations?

    But let’s celebrate where we agree – today, Sierra Club and Californians for Green Nuclear Power scored a victory in California with defeat of AB 726 and AB 813, forcing Wyoming to find some other state to buy its coal-fired electricity. Cheers!

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