Last week a coalition led by the Sierra Club launched a “100% Virginia” campaign designed in part to encourage more localities to follow the lead of Blacksburg and Floyd in committing to a 100% renewable energy future. For many people this energy transition now feels inevitable, at least in the long run. In the short run, though, it still feels very difficult.
Consider the obstacles we face in Virginia. Most localities have to deal with Dominion Energy Virginia (Dominion) or Appalachian Power (APCo), which have monopolies in their service territories. With few exceptions, customers can’t just sign up with another supplier who will offer a cleaner energy mix. And most local governments themselves buy electricity collectively from Dominion under a contract that gives them an attractive price but constrains their ability to generate power for themselves.
Our utilities themselves show no interest in abandoning fossil fuels. Dominion Energy Virginia’s parent company, Dominion Energy, is heavily invested in natural gas transmission, storage and export. The parent company needs the electric utility it owns to keep burning fracked gas for electricity so it can fill pipelines like its $6 billion Atlantic Coast Pipeline. Dominion has sunk billions of dollars of its customers’ money into new gas generating plants, which it won’t want to close early. And Dominion’s 2017 Integrated Resource Plan (IRP) showed the company expected to see its CO2 emissions actually increase over the next 25 years.
For its part, APCo is a subsidiary of Ohio-based American Electric Power (AEP). AEP has reduced its use of coal in recent years and plans major investments in renewable energy, but it won’t reach its planned 80% reduction in CO2 emissions until 2050. Meanwhile it is increasing its use of fracked gas.
Both Dominion Energy Virginia and APCo make money by building new infrastructure, so they need customers to use more energy, not less. They oppose mandatory efficiency savings as well as customer-owned and third-party owned solar, both of which would reduce their own sales. One result is Virginia’s abysmal showing on energy efficiency rankings.
Virginia lacks a mandatory renewable portfolio standard (RPS), relying on a weak and voluntary standard. As a result, Dominion Energy Virginia’s energy mix is currently less than 4% renewable energy, none of it from wind or solar. (Dominion does generate a tiny amount of solar energy but sells the renewable energy certificates, so legally it no longer qualifies as energy from solar. This will be an ongoing problem as Dominion builds more solar.) APCo has more wind in its energy mix than Dominion does, but also more coal.
Customers who want to generate their own renewable energy face a long list of policy barriers, and Virginia lacks incentives like tax credits, rebates, or a REC market that would spur private investment. Under pressure from Dominion, APCo and the rural electric cooperatives, the General Assembly routinely defeats proposals that would boost investment in rooftop solar. A recent report gave Virginia an F on solar policy, ranking us among the “10 States Blocking Distributed Solar.”
If the General Assembly is unhelpful, Virginia’s State Corporation Commission (SCC) is actively hostile to renewable energy and energy efficiency. The SCC cares about low rates and not much else.
It’s also hard for local governments to fill the policy gap. Virginia is a Dillon Rule state, meaning local governments have only the power granted to them by state government. A city or county can’t adopt a building code requiring homes to be more energy efficient than called for in the statewide code, or require new buildings to have solar panels or green roofs.
With all these obstacles, the prospects for meaningful change once looked grim. But two trends have converged to change the outlook. First, the economics of electric generation have now shifted decisively in favor of renewable energy and away from fossil fuels (though a lot of people don’t know it yet). And second, customer demand for renewable energy has surged across the political spectrum, with major corporations driving much of the action.
As a result, even in Virginia a number of trends favor renewable energy:
Dominion’s 2017 IRP dropped plans for new baseload gas plants before at least 2025, a sharp change from 2016. That IRP for the first time identified solar as the least cost resource in Virginia, though it proposed a build-out of only 240 MW per year. Dominion’s 2018 IRP, due out May 1, will almost surely call for more than that, in keeping with 2018 legislation, SB 966, putting more than 5,000 MW of wind and solar by 2028 in the public interest.
SB 966 also called for a billion dollars in new spending on energy efficiency programs, and limited the SCC’s ability to reject proposed efficiency programs. Meanwhile, localities are putting in place Commercial Property Assessed Clean Energy (C-PACE) lending programs that will allow businesses and non-profits to access low-cost financing for both energy efficiency and renewable energy.
Corporate demand has created new solar options, including some from Dominion but also some that don’t involve our utilities. For example, the 500 MW solar farm that will serve Microsoft and others appears to be structured to bypass Dominion entirely. The deal uses what is known as a wholesale power purchase agreement, an option increasingly popular with corporations, institutions, local governments, and other large purchasers of energy. The Northern Virginia Regional Commission is currently working with local governments in its area to do something similar.
Legislation passed in 2017 is also finally producing a solar option for Dominion customers that will likely be available by the end of this year. As proposed, it will offer electricity generated from solar facilities in Virginia at a cost comparable to that of Dominion’s wretched Green Power Program.
Offshore wind has not gotten much attention in Virginia recently, but Dominion’s partnership with the Danish company Orsted, the world’s leading offshore wind developer, puts Virginia’s 12-MW pilot project on track for completion in 2020, with the commercial lease area likely to see the full build-out of 2,000 MW occur during the 2020s.
Finally, the Northam Administration is finalizing new regulations designed to reduce greenhouse gas emissions from power plants by having Virginia utilities trade carbon allowances with those in states that are members of the Regional Greenhouse Gas Initiative (RGGI). It’s not clear yet how much this will incentivize utilities to build wind and solar.
Localities considering a commitment to 100% renewable energy should feel optimistic about these developments. As renewable energy costs continue to tumble, charting a path to 100% also means saving money for taxpayers.
The exact path to 100% may not be clear, but it will likely involve a combination of some or all these options:
- Prioritizing energy efficiency in both public and private buildings;
- Investing in large offsite solar (and wind) facilities, and encouraging corporate and institutional customers to participate in similar investments;
- Putting solar on rooftops and parking lots of municipal buildings and schools, using third-party PPA financing to avoid upfront capital costs;
- Offering C-PACE financing to businesses for energy efficiency and solar;
- Sponsoring and promoting “solarize” bulk purchasing programs that make it easier and cheaper for residential and commercial customers to install solar;
- Promoting utility-sponsored renewable energy purchase options for residents and businesses as they become available; and
- If adequate utility options don’t emerge, using municipal aggregation to purchase renewable electricity from another supplier.
Localities also have to do a better job advocating for clean energy at the General Assembly and with the Governor, where they are currently underrepresented in the energy debate. They need to become squeaky wheels about things like the barriers to customer-owned solar, the paucity of renewable energy options and our substandard residential building code.
But most of all, localities have to begin taking advantage of the efficiency and solar options that already exist. Too many boards of supervisors and city councils waste time dithering and second-guessing and deferring to unmotivated staff and wondering if, gee, maybe it would be better to wait for someone else to go first.
Getting to 100% may not be easy, but it’s impossible if you never start.
Great description of both issues and the way forward.
great summary. in San Mateo County, CA, the County took things into their own hands and created Peninsula Clean Energy which allows people to opt-in to either a 50% GHG-free/85% renewable (for a slight discount to PG&E electricity) or 100% GHG-free/renewable option (for a slight premium to PG&E electricity). My message being, even in CA, had to find a way to do an end-run around PG&E in order to drive faster renewable production/delivery. PCE is also just starting an EV incentive program since transportation is the biggest GHG emitter in our county (to go along with their solar panel incentive program). As you said, one piece of good news is that renewables are truly starting to become more economic so that and customer demand will hopefully win the day!
“Renewables are starting to become more economic”? Dan, a tip: the idea Peninsula Clean Energy customers are doing some kind of “end-run around” PG&E is a joke. Peninsula Clean Energy buys most of its clean energy from PG&E, which would have otherwise been sold to PG&E customers as part of their standard plan. See: http://cgnp.org/images/PGE_Sale_to_PCE.pdf
By buying clean energy from Peninsula instead of PG&E, customers are not making the environment any cleaner, they’re just driving up its price – why California has the highest residential electricity rates in the continental U.S.
By opting for the lower percent plan through PCE, customers pay *less* than PG&E’s rate *and* get a higher mix of GHG-free power through PCE’s agreements with wind and solar providers. Explain to me how that is not making the environment cleaner for less. Oh, and we’ve noticed that PG&E is increasing their mix of renewables too, so even people who don’t opt in are getting cleaner electricity. Lastly, our rates in CA are not high because we choose renewables, they were already high. PCE is introducing competition into our electricity pricing and pushing PG&E to do better. What is wrong with that? I don’t understand your argument at all, it just seems you want to deny the reality.
@Dan: because Community Choice Aggregators (CCAs) are unregulated you have no idea what you’re getting in your power mix. You don’t even know what PG&E is selling to PCE – as long as PCE slaps some green graphics on their website, they could be selling you imported coal electricity from Intermountain in Utah, couldn’t they?
No, California rates were not already high – they’ve risen 56% since supposedly “uneconomical” San Onofre was closed in 2013. And no, PG&E isn’t increasing their mix of renewables. Though they say they “intend” to replace the carbon-free energy coming from Diablo Canyon with renewables, they’re lying: http://cgnp.org
Who’s in denial?
“Virginia’s State Corporation Commission (SCC) is actively hostile to renewable energy and energy efficiency.” Since the SCC is appointed by the legislature, we should vote in state legislators who have pledged not to accept campaign contributions from Dominion.
Will, I have to ask: why would Dominion be hostile to renewable energy if it was so economic? There are two possibilities. Either:
1) Dominion is not interested in investing in an inexpensive, reliable source of clean energy. Or:
2) Renewables are not an inexpensive, reliable source of clean energy. Thus for Dominion, selling inexpensive, reliable nuclear electricity makes a lot more economic and environmental sense.
Which is more likely?
How could we repeal the Dillon Rule? That stands in the way of so much progress.
Interesting question, Anne. The GA would have to do the repealing, and might have to pass a constitutional amendment. But since the GA is the problem . . .