Monthly Archives: May 2021

Why most ‘renewable energy’ options don’t add new wind and solar to the grid

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bucket of green paint with spill
Photo credit: Neep at the English Language Wikipedia.

Virginia residents who want to do right by the planet are confronted with a bewildering array of renewable energy and “green power” options. Unfortunately, few of these programs actually deliver renewable energy. People who want the gold standard — electricity from new wind and solar projects — are completely out of luck if their utility is Dominion Energy Virginia or Appalachian Power. 

To understand how there can be so many options and none of them good, we first have to talk about renewable energy certificates.  RECs are a topic that is way more interesting than it sounds because — well, it would have to be, wouldn’t it? RECs are how we know that some electricity can be attributed to a renewable source. If you want to know what kind of renewable energy your utility is buying, or if you yourself want to buy renewable energy, RECs matter.

RECs are not electricity; they aren’t even real certificates. They were conceived of as an accounting tool enabling a utility to show it is in compliance with a state mandate to include a percentage of renewable energy in its mix. A utility amasses RECs associated with its own renewable generating sources, or buys them from renewable sources it doesn’t own, and then “retires” them to show compliance with the law. Since RECs are separate from the electricity itself, they can be bought and sold independently. There is even an online marketplace for your REC shopping convenience. 

RECs are also how voluntary buyers of renewable energy, like customers of Arcadia or Dominion’s Green Power Program, know they’re actually getting what they pay for —assuming they understand that what they pay for is not actually energy, and may have no relationship to the electricity powering their home or business. If you buy RECs, you are still using whatever electricity your utility provides, but you are also paying a premium on top of your regular bill. 

There is no nationwide, generally accepted definition of “renewable energy,” just as there is no definition of “natural” in food labeling. In Virginia, there is a state law defining what counts as renewable, and it includes not just solar, wind and hydro, but also a range of burnable fuels like biomass and municipal solid waste that foul the air and contribute to climate change. Buyer beware!  

The Virginia Clean Economy Act narrowed the list of sources that Dominion and APCo can use to meet the law’s new renewable portfolio standard, and also limited the locations of qualifying facilities. After 2025, happily, most of the RECs retired by Dominion and APCo under the VCEA will come from Virginia wind and solar facilities. 

But crucially, the VCEA didn’t change the definition of renewable energy in the code. Dominion won’t be able to use RECs from its biomass plants to meet the VCEA, but it can still sell them to anyone else and label the product “renewable” without falling afoul of the law. Anyone buying a renewable energy product from Dominion had better check the list of ingredients. 

It’s not just Dominion. Anyone buying RECs from Arcadia or anywhere else should take a good look at what they are getting, and ask themselves if the money they spend means new renewable energy will be added to the grid. 

The answer is probably no. If the RECs come from a wind farm in Texas or Iowa, the electricity from those turbines doesn’t feed into the grid that serves Virginia, so you can’t even pretend it is powering your house. It also doesn’t mean anyone built a wind farm because of REC buyers like you. Wind energy is already the cheapest form of new energy in the central part of the U.S. People build wind farms because they are profitable, not because they can sell RECs. In fact, those wind farms are swimming in surplus RECs, because states in the center of the country don’t have renewable energy mandates to make their own utilities buy them.  

For that matter, a lot of RECs come from facilities that were built before the idea of RECs even existed. Hundred-year-old hydroelectric dams can sell RECs; so can fifty-year-old paper mills that sell biomass RECs from burning wood. 

With this background, let’s look at the offerings available in Virginia and see which are worth paying more for. 

Dominion Energy Virginia

In theory, Dominion customers will have the ability to buy real solar energy directly from independent providers beginning as early as 2023, thanks to shared solar legislation sponsored by Sen. Scott Surovell and Del. Jay Jones and passed in 2020. The law envisions independent solar developers building solar facilities in Virginia and selling the electricity (and the RECs) to subscribers who are Dominion customers. But the SCC opened a Pandora’s box last fall by allowing Dominion to propose the rules, and in an act of classic Dominion overreach, the utility has now proposed to collect an average of $75 a month as a “minimum bill” from every customer who buys solar energy from someone else. A fee like that would end the program before it ever started.

 The matter is hardly settled. The solar industry has asked for an evidentiary hearing and suggested that the minimum bill should be set at a single dollar. If all else fails, the program may go forward serving only low-income customers, whom the legislation exempts from the minimum bill. 

Dominion customers can hope for the best, but any shared solar option is still at least two years away. 

In the meantime, the utility’s website lists four renewable energy options: two that sell RECs, one that sells actual energy (and retires the RECs for you) and one that doesn’t exist. 

• The REC-based Green Power Program has been around for a decade, and as of 2019 it had more than 31,000 subscribers. Dominion’s “product content label” projected that for 2020 the program would likely consist of 56 percent wind RECs, 34 percent biomass RECs, and 10 percent solar RECs. Facilities are advertised as being “in Virginia and the surrounding region,” but the fine print reveals sources as far away as Mississippi, Georgia, Missouri and Alabama, none of which are part of the PJM transmission grid that serves Virginia.  (Side note: the biomass icon is a cow, not a tree, which is misleading but charming, unless they might be burning cows, in which case it is deeply disturbing.) With the website out of date, I contacted Dominion for current content information: solar is now up to 13 percent, but, sadly, biomass still makes up 35 percent of the mix (but now it has a leaf icon!).

• REC Select. When I say “buyer beware,” I have this offering in mind. Dominion has been authorized to go Dumpster diving to buy the cheapest RECs from around the country and from any facility that meets Virginia’s overly-expansive definition of renewable energy. The website implies that so far the company is only buying wind RECs from Oklahoma and Nebraska, an indication of just how cheap those are. But under the terms of the program, the RECs could come from 50-year-old paper mills in Ohio or hundred-year-old hydroelectric dams. No educated consumer would buy this product, and both Dominion and the SCC should be ashamed of themselves for putting it out there.

• The 100% Renewable Energy Program delivers actual energy from Virginia, and retires RECs on your behalf. That’s the good news. But only a few of the solar farms are new; the rest of the energy comes from old hydro plants and, worse, from biomass plants that are so highly polluting that they don’t qualify for Virginia’s renewable energy mandate under the VCEA. The inclusion of biomass makes the program more expensive than it would be otherwise. So why include biomass when no one wants it? Because Dominion doesn’t really care if you sign up for this program. The company only offers it to close off a provision in the law that allowed customers to buy renewable energy from competitors if their own utility doesn’t offer it.

• Dominion’s website does list one attractive program under the name “community solar.” Like the shared solar program already discussed, it would deliver actual solar energy from new facilities to be built in Virginia, while retiring the RECs on your behalf. This would pass all our tests, except that it doesn’t exist. The SCC gave Dominion the green light to offer the program more than two years ago, and we’ve heard nothing since, even though the enabling legislation appears to make it mandatoryfor both Dominion and APCo. 

Appalachian Power

APCo never developed a community solar program either, and the shared solar program discussed earlier would not be available to APCO customers even if it gets off the ground. But APCo does have two renewable energy offerings. 

• For its Virginia Green Pricing program, APCo put together wind and hydro from its own facilities. That means it’s actual energy and reasonably priced, at less than half a cent per kWh. But these are existing facilities that all its customers had been paying for until APCo figured out how to segment the market and make more money, and the hydro is old. (As with Dominion’s renewable energy program, the real purpose of the new product was to close off competition.) 

• Even cheaper is Alternative Option-REC, the RECs for which “may come from a variety of resources but will likely be associated with energy from waste, solid waste and hydro facilities.” No biomass, anyway, but I still have trouble imagining who would pay extra for (literally) garbage. 

Virginia electric coops

Some electric cooperatives offer real renewable energy to customers, and a couple have community solar programs that are quite attractive.  

• Central Virginia Electric Cooperative and BARC Electric Cooperativeoffer community solar programs that not only deliver actual solar energy, but also let customers lock in a fixed price for 20-25 years. Four other coops also offer a solar energy option, and at least one other is working on it.

• Many coops also sell RECs, of mixed quality. Shenandoah Valley Electric Cooperative offers RECs generated by wind farms owned or contracted byOld Dominion Electric Cooperative, the generation cooperative that supplies power to most Virginia coops. Rappahannock Electric Cooperative, however, sells only biomass RECs.

• Bottom line: if you are a member of an electric cooperative, you may have better options than either Dominion or APCo is offering — and if you don’t, hey, you’re an owner of the coop, so make some noise!

Arcadia

 If you like RECs, you don’t have to buy them from your own utility. The folks at Arcadia have struggled for years to offer products that put new renewable energy on the grid. In states that allow community solar, Arcadia now offers wind and solar from projects in those states. Everywhere else, they just sell RECs. The website provides no information indicating where the facilities are, meaning they could be out in the same central plains states that are awash in surplus wind RECs. Their game plan appears to be for all the nice liberals with climate guilt to throw enough money at red state RECs that eventually the day will come when demand exceeds supply and drives the price up enough to incentivize new projects. The plan sounds self-defeating to me, but in any case, buyers should keep in mind that the RECs bought before that glorious date will have incentivized precisely nothing. 

Other options

Obviously, if you have a sunny roof, you can install solar onsite and net-meter. Of all the programs available today, that’s the one that will save you money instead of making you spend more. 

If you don’t have a sunny roof, but you’d still like to see your money put solar onto the grid, consider contributing to a church, school or non-profit that is going solar, or to an organization that puts solar on low-income homes. Two that operate in Virginia are Give Solar, which puts solar on Habitat for Humanity houses, and GRID Alternatives, which trains workers to install solar on low-income homes here and abroad. If everyone in Virginia who is currently buying RECs were to choose this alternative instead, it would put millions of dollars to work building new solar in Virginia, and lowering the energy bills of people who most need the help.

And that might make it the best option of all.

A version of this article first appeared in the Virginia Mercury on May 21, 2021.

Questions Dominion didn’t answer at its shareholder meeting

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Dominion Energy headquarters, Richmond, VA

Dominion Energy held its annual shareholder meeting virtually on May 5. Prior to the meeting, some shareholders submitted questions to the company in hopes of getting better transparency about its thinking regarding a range of pressing questions facing both the company and society at large. In an article that ran in the Virginia Mercury the week before the meeting, I offered a list of questions I’d really like answers to as well. 

I wasn’t able to attend the shareholder meeting, but I understand the questions mostly did not get answers at that time, with the exception of a non-sequitur CEO Bob Blue offered up in response to a question about third-party sales of renewable energy (read on!).  The company has promised to email responses to the people who submitted questions. 

Here are my questions:

1. We learned in Dominion’s Integrated Resource Plan (IRP) case last year that the Virginia City Hybrid Energy Center, the coal plant it owns in Wise County, has a 10-year net present value of negative $472 million. Why isn’t Dominion retiring it immediately to save money and reduce the number of emission allowances it has to buy now that Virginia has joined the Regional Greenhouse Gas Initiative?

2. In last year’s IRP, Dominion’s preferred scenario would have it keeping its gas plants open indefinitely, even past 2045, when the Virginia Clean Economy Act requires them to be closed. The refusal to plan for full compliance with the law almost certainly impacts the decisions Dominion is making today. Now that Bob Blue has taken over the reins of Dominion from former CEO Tom Farrell, has that changed, and can we expect Dominion to take actions consistent with a full phase-out of fossil fuels before 2045?

3. The energy transition will require construction of tens of thousands of megawatts of solar on hundreds of thousands of acres of land across Virginia. However, community resistance to utility-scale solar farms in Virginia is growing, in large part because they look more like industrial uses than like agricultural uses. As a result, some projects are not being permitted, a costly waste of the company’s time and resources. It’s possible to combine solar with traditional agricultural uses like animal grazing, or to install native plants to support pollinators and provide wildlife habitat, both of which would increase community acceptance. Dominion installs pollinator plantings along some of its transmission line rights-of-way, so the company has experience in this area. Will Dominion begin doing this at its solar projects? If not, what is Dominion doing to “sweeten the pot” for local communities in order to secure permits? 

4. Dominion offers residential customers the option of a renewable energy product that includes biomass energy, a source that is not carbon-free and produces more air pollution than coal. The inclusion of biomass also makes the tariff more expensive than it would be without biomass. In contrast to this unattractive option, two years ago Dominion received SCC approval to sell solar to residential customers via a “community solar” product. This would have appealed to far more customers, but Dominion never followed through.  Why not? 

5. With no solar option available, residents who don’t own a house with a sunny roof are currently shut out of the solar market in Dominion’s Virginia territory. In 2019 and 2020 the General Assembly considered legislation that would have allowed customers to buy renewable energy from third party providers. The bill passed the House each year but failed in a Senate committee due to Dominion’s opposition. If Dominion isn’t interested in selling solar to its customers today, why not let them buy it from others? 

Mr. Blue reportedly answered this question at the meeting by exclaiming, “Because deregulated markets don’t work, they fail! Look at Texas!” 

I can, with difficulty, draw a line from the question to Blue’s answer, but it is not a straight one. Nor is it an honest one, since the causes of the Texas debacle don’t apply here (beyond a similar overreliance on natural gas). 

Here is the answer that is most probably true: “We threw together our so-called renewable energy offering for the sole purpose of blocking out competitors, and the SCC stupidly let us get away with it. If we cared about climate change, we would offer a clean renewable energy product people actually want, but we only care about profit. That requires us to keep our customers locked in, but nothing says we have to make them happy.”

But because hope springs eternal, I’ll also add an answer that I would much prefer Mr. Blue to give: “Under my new leadership, we are taking climate science seriously and will develop the renewable energy options our customers want. My goal is to offer a solar tariff so good that none of our customers will want to look elsewhere, and the question will become moot.”

6. According to Dominion’s 2020 IRP, data centers make up 12 percent of Dominion’s load in Virginia, a number that has been increasing by 20 percent per year. Data center operators say they want renewable energy but have trouble getting it from Dominion. The biggest tech companies negotiate deals for solar, but smaller customers have fewer attractive options. What is Dominion doing to ensure that data centers have access to solar energy at attractive market rates?

Notice how the answers to the previous question apply here. Dominion has a huge opportunity to lead on climate, requiring only that the company actually care.

7. A year ago Dominion canceled the Atlantic Coast Pipeline, losing the almost $3 billion already spent on the project but saving the additional $5 billion-plus it would have cost to complete the project. About the same time, Dominion sold off its entire gas transmission business, indicating it had come to see pipelines as poor investments. This makes sense since the company already gets all the gas it needs through existing pipelines, and going forward, climate policies and the increasing competitiveness of renewable energy and battery storage mean gas use will decline. But then the company contracted for 12.5% of the shipping capacity of the Mountain Valley Pipeline through its subsidiary Public Service Company of North Carolina, at a cost of at least $50 million per year. How can the company justify this investment? Is there an exit clause in the contract, or will shareholders suffer in the event the company is not allowed to pass this cost on to ratepayers?

8. Dominion is currently pursuing relicensing of its two aging nuclear reactors at North Anna, which are already beyond their 40-year design life. According to the 2020 IRP, Dominion plans to run the North Anna reactors, as well as its two reactors in Surry County, at least through 2045, the period covered by the IRP. Nuclear is a carbon-free resource, but so are wind and solar, and nuclear plants in other states are closing because they are no longer economically competitive. What will it cost Dominion to refurbish these nuclear plants to keep them in operation safely so far beyond their design life? And what will it cost the company if, in spite of refurbishing, one or more of the reactors can’t pass a safety inspection, or even suffers a major failure?

9. Millions of customers in Virginia, North Carolina and South Carolina are at risk from hurricanes and other weather events that can knock out power for many days at a time. Today, onsite solar-plus-storage can keep critical facilities operating and allow community centers and schools to serve local residents who have lost power, ensuring they have a place to store medicines that need refrigeration and to charge cellphones, motorized wheelchairs and other devices. If Dominion were to supply the batteries for these facilities, the company could access them for grid storage and services when they are not needed as backup power. In addition to offering a new profit center, it would relieve some of the pressure on line crews who work to restore power after a storm. When will Dominion offer this lifesaving service to its customers? 

10. Electric vehicle charging will increase demand for electricity in Virginia, and it also offers an opportunity for the company to deploy vehicle-to-grid technology, making use of the batteries in buses and private vehicles to help balance the grid. Virginia’s General Assembly rejected legislation that would have allowed Dominion to own and control the batteries in school buses in Virginia, but it passed a bill to help local school districts buy electric buses. Will Dominion now support the ability of the school districts to buy electric school buses and own the batteries themselves, and work with them to implement a vehicle-to-grid program?