Monthly Archives: November 2018

Amazon will need even more energy in Virginia. Will they make it clean?

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Entrance to Crystal City Metro Station in Arlington, Virginia

Crystal City in Arlington will be the heart of Amazon’s new Virginia headquarters. Renewable energy options on site are limited. Photo credit Woogers via Wikimedia Commons.

Amazon Web Services jump-started the utility solar industry in Virginia in 2015, when it announced plans for its first solar farm in Accomack County. Three years later, Amazon remains the biggest purchaser of solar in the commonwealth, allowing it to offset some of the enormous amount of energy used by its data centers.

Yet the company’s energy footprint in Virginia far exceeds the energy output of its solar projects. The addition of a new headquarters in Arlington will further increase its need for electricity, and will attract new residents who will also use electricity. All this demand poses a problem for the company and the climate: Dominion Virginia Power will burn more coal and fracked gas to meet Amazon’s energy need, unless Amazon acts to ensure the power comes from renewable sources.

Like many big tech companies, Amazon has adopted aggressive sustainability goals, including a “long-term commitment to achieve 100% renewable energy usage” for its data centers. But the details of its commitment are fuzzy, and the qualifier “long-term” makes the commitment meaningless.

Earth to Jeff Bezos: in the “long term” climate change will put HQ2 under water.

If Amazon still wants a habitable planet to compete in, it should consider the entire energy footprint of its operations, and make sure it is meeting these needs 24/7 with clean, renewable energy. Solar should be a big part of the plan, but so should land-based wind and offshore wind, which complement solar by providing power in the evening and at night. An investment in battery storage would round out the package nicely.

Virginia officials made a perfunctory mention of renewable energy availability to Amazon in the state’s bid package (see page 184). This was accompanied by a quote from Bob Blue of Dominion Energy, promising to sell the company renewable energy. (Be pleased, Mr. Bezos; that’s not a promise he’s made to the rest of us.)

Arlington County has reportedly discussed with Amazon how to make its new campus as environmentally-friendly as possible. Arlington is considering making a commitment to 100 percent renewable energy by 2035, so it has a real incentive to ensure that newcomers are part of the solution, not part of the problem.

Given today’s building technology, there is no reason the National Landing campus should not set a new standard for energy-efficient design. Ideally that will include on-site solar as well. Local officials also want to see enough improvements to transit, pedestrian and biking routes to keep 25,000 new commuters from spewing air pollution while they sit in traffic.

Even if Amazon and Arlington do everything right, though, the campus will need to purchase electricity from off-site generation—and there is still the matter of those power-hungry data centers.

Amazon can take Bob Blue up on his offer and let Dominion supply the company with all the renewable energy it needs. Caveat emptor, though: Dominion’s idea of renewable energy includes resources of dubious value to the climate, like the burning of trash and woody biomass.

And, thanks largely to Dominion’s clout in the General Assembly, Virginia has many barriers to on-site solar, which limit customers’ ability to supply their own renewable energy. We also boast a renewable portfolio standard that works approximately opposite to that of every other state, by ensuring wind and solar will never be part of our resource mix.

Come to think of it, we could really use Amazon’s negotiating chops with our legislators.

In any case, with or without Dominion’s help, Amazon will find plenty of opportunities to procure wind as well as more solar in Virginia. Apex Clean Energy’s Rocky Forge wind farm near Roanoke is already permitted and ready for construction as soon as a customer shows up. Apex now has two additional wind farms in development in southwest Virginia—a nice way to support areas of the state outside of Northern Virginia.

Offshore wind is another opportunity to deliver energy at scale while supporting jobs in the Hampton Roads region. Although offshore wind is poised to become a huge industry in the U.S. within the next ten years, right now only the northeastern states are moving forward with offshore wind farms in the near term. Amazon could make it happen here, too.

Dominion Energy has secured approval for two test turbines off the Virginia coast, but the utility has been slow-walking plans to develop hundreds more turbines in the commercial lease area it owns the rights to. In part that’s because Dominion doesn’t see how to get the State Corporation Commission (SCC) to approve the cost to ratepayers.

That wouldn’t be an issue if Amazon were the buyer, but nor is Amazon limited to Dominion as a supplier of offshore wind. Amazon could let Dominion and its developer, Ørsted, compete against Avangrid, the developer that holds the lease on the Kitty Hawk offshore wind area just over the border in North Carolina. The power from both areas has to come to shore at the same point in Virginia Beach, where a high-voltage transmission line is available. Avangrid has already announced that it is speeding up its development work in hopes of appealing to Virginia customers.

It will take several years for Amazon to build out HQ2, but given how much electricity the company already uses in Virginia, there is no reason to wait on making new investments in renewable energy. Virginians, and the planet, will thank you.

This post first appeared in the Virginia Mercury on November 26, 2018. 

SCC rips into Dominion’s offshore wind pilot, approves it anyway

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Photo credit: Phil Holman

The Virginia State Corporation Commission (SCC) approved Dominion Energy Virginia’s proposed Coastal Virginia Offshore Wind (CVOW) project on Friday, but not happily. A press releasefrom the SCC complains about the project’s “excessive costs” and the way it is structured to make customers, rather than the developer, shoulder risks:

The offshore wind project consists of two wind turbines to be built by Dominion that would begin operating in December 2020. In its factual findings, the Commission determined that the company’s proposal puts “essentially all” of the risk of the project, including cost overruns, production and performance failures, on Dominion’s customers. Currently, the estimated cost of the project is at least $300 million, excluding financing costs.

The Commission found that the offshore wind project was not the result of a competitive bidding process to purchase power from third-party developers of offshore wind. Doing so would likely have put all or some of the risks on developers as has been done with other offshore wind projects along the East Coast of the United States. The Commission also found that any “economic benefits specific to [the project] are speculative, whereas the risks and excessive costs are definite and will be borne by Dominion’s customers.”

In spite of these harsh words, the SCC goes on to conclude that the language of the giant energy bill passed by the General Assembly last winter, SB 966, leaves regulators no choice but to approve CVOW:

The Commission concluded that the offshore wind project “would not be deemed prudent [under this Commission’s] long history of utility regulation or under any common application of the term.” However, the Commission ruled, as a matter of law, that recent amendments to Virginia laws that mandate that such a project be found to be “in the public interest” make it clear that certain factual findings must be subordinated to the clear legislative intent expressed in the laws governing the petition.

Obviously, the SCC has a point about the high cost of CVOW. Even Dominion agreed that if you just want 12 megawatts (MW) of power, you can get it a lot more cheaply than $300 million. The SCC’s Final Orderis even harsher on this topic. Moreover, the SCC doesn’t see any future for offshore wind as a matter of pure economics.

Nor is it all that reassuring that Dominion has said the price tag won’t have any impact on rates. What Dominion means is that we ratepayers have already paid for it, and as we aren’t going to get our money back anyway, we may as well enjoy seeing it put to use in building an offshore wind industry.

That’s where Dominion is (sort of) right, and the SCC (sort of) wrong. CVOW is the first step in the Northam administration’s plan to build an offshore wind industry in Virginia and install at least 2,000 MW of offshore wind turbines in the coming decade, a goal shared by many members of the General Assembly.

Northam says CVOW will lead to the commercial projects. Dominion says maybe, maybe not (“It’s too soon to have that conversation,” in the words of Dominion’s Katharine Bond). At any rate, it sure won’t happen without CVOW first.

Critics have said it’s silly to insist on a pilot project when other states are going forward with full-scale wind farms. That’s not entirely fair. As the first project in federal waters, the first in the Mid-Atlantic, and the first to be located 27 miles out to sea, CVOW’s two turbines will have much to teach the industry about offshore wind installation and performance in this part of the world. The whole U.S. offshore wind industry stands to benefit.

And also, Dominion has us over a barrel. Dominion holds the lease for the 2,000 MW; nobody else can come in and build it. So if Northam wants an offshore wind industry with thousands of new jobs, he has to do it Dominion’s way or not at all.

Clearly the SCC would choose not to do it at all. But then, the SCC has never shown any understanding of the climate crisis and the pressing need for Virginia to respond by developing as much wind and solar as possible, as rapidly as possible.

In the long term, we have to build out much more than 2,000 MW of offshore wind. As we do, and as costs decline in response to increasing economies of scale and technological improvements, the price tag of one pilot project will shrink in proportion to the billions of dollars flowing into the offshore wind industry and decarbonizing our electricity supply.

If it’s Dominion’s way or the highway, we have to do it Dominion’s way—for now—and then make sure it gets done.

No doubt the SCC would disagree. Yet to its credit, on Friday the SCC also approved Dominion’s purchase of power from a proposed 80-megawatt solar facility dubbed the “Water Strider” project. Unlike the offshore wind project, the solar project met the Commission’s prudency test because it involves a purchase from a private developer and followed a competitive bidding process. This resulted in a price to customers that the SCC felt is “in line with market rates.”

Though the Water Strider project looks like a clear winner for ratepayers, its approval wasn’t a foregone conclusion either. After a long history of approving one fossil fuel project after another, the SCC has belatedly begun to question Dominion’s projections about its need for more generation, at precisely the time when the new generation happens to be solar and wind.

For now, the SCC believes it must bow to the will of the General Assembly. For these two projects, that’s a good thing, but ratepayers will be in trouble if the SCC declines to assert its oversight authority in other filings under SB 966. Dominion wants to spend billions of dollars over the coming years on smart meters, software, burying power lines and other grid projects. Customers still need the SCC to make sure we get our money’s worth.

This article originally appeared in the Virginia Mercury.