Up for a vote in this election: clean energy, data centers and utility influence

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Virginia voters will decide next month who will represent them at the State Capitol in January.

How much do Virginia’s elections matter in an off year? Measured by the turnout in past elections, you’d think the answer is “not much.” The percentage of registered voters who show up at the polls in Virginia typically drops well below 50% when no federal or statewide candidates are on the ballot. 

But measured by how much the outcome of this year’s election could affect the lives of regular people, the battle for control of the Virginia Senate and House of Delegates matters enormously. With a Republican in the governor’s mansion, a Democratic edge in either or both chambers would continue the status quo of divided government and (mostly) consensus-based lawmaking. A Republican takeover of both chambers, on the other hand, would lead to a wave of new legislation imposing the conservative social agenda on abortion, gay rights, transgender issues, education and welfare.

It would also put an end to Virginia’s leadership on climate and clean energy and lead to costly initiatives protecting fossil fuels, at the expense of consumers and the environment.

Some of the divisions between the two parties are well-known, and the consequences of one party edging out the other are clear. For some issues, however, the party positions are not as obvious, and it takes a look under the hood to understand where elections matter. 

Virginia’s clean energy transition is at risk

Let’s start with the obvious: the broad framework of Virginia’s energy transition to clean energy is a signature achievement of Democrats that Republicans have in the crosshairs. 

Three and a half years ago, Virginia made history as the first Southern state to commit to zero-carbon electricity by 2050 with detailed and specific guidance. The next year, the General Assembly followed up with legislation to begin the transition to electric vehicles. 

Clean energy investments soared after passage of the Virginia Clean Economy Act (VCEA). Solar installations in 2020 and 2021 dwarfed previous numbers, and the state solar market is now a $5.1 billion industry employing over 4,700 workers. Private investment dollars have poured into small-scale renewable energy as well, funding solar on schools, churches and government buildings. 

The VCEA’s support for offshore wind gave that industry the certainty it needed to move beyond the pilot project stage. Foundations for the first of 176 turbines of the Coastal Virginia Offshore Wind project are currently on their way to the Portsmouth Marine Terminal. By the end of 2026, the turbines are expected to provide enough electricity to power more than 600,000 homes. 

Communities benefited from Virginia’s entry into the carbon-cutting Regional Greenhouse Gas Initiative (RGGI), as $730 million in new revenue flowed to the Commonwealth for flood mitigation and low-income home weatherization. 

And after passage of the Clean Cars law, sales of electric vehicles in Virginia are set to double by the end of next year, and to double again by 2026.

In 2021, however, the election of Gov. Glenn Youngkin and a narrow Republican majority in the House of Delegates put these gains at risk. Early on, Youngkin declared his intent to repeal the VCEA and the Clean Cars law and pull Virginia out of RGGI. Only a Democratic majority in the Senate stopped legislative rollbacks passed by House Republicans in 2022 and 2023. Loss of that majority would ensure repeal of Clean Cars and the evisceration of VCEA.

As for RGGI, the failure to repeal the law led Youngkin to attempt to pull Virginia out through an administrative rulemaking that will be contested in court. He could sidestep a court battle and do it legally through legislation if his party takes control of the General Assembly. 

“No-brainer” bills killed in small committees

While a clear divide separates the two parties on signature Democratic initiatives like VCEA and RGGI, party membership is the determining factor on other energy and climate bills in less obvious ways. House rules allow a subcommittee consisting of as few as 5 members to vote down a bill by majority vote, keeping it from being heard by the full committee. With Republicans in control of the House, every subcommittee has a Republican majority, and Democratic bills routinely die on 3-2 votes. This can be true even if a bill has already passed the Senate, and even if the Senate vote was bipartisan – or for that matter, unanimous.

The Senate operates very differently. There, a subcommittee can only make recommendations. It takes a vote of the full committee to kill a bill in the Senate. 

You might wonder: if a bill is such a no-brainer that it passes the Senate unanimously or by a wide bipartisan majority, why would it get voted down in the House at all? Wouldn’t the bipartisan endorsement suggest this is actually a good bill that even the party in charge of the House would want to support, or at least have heard in full committee?

Indeed, when a no-brainer bill is killed in a tiny House subcommittee along party lines, it is rarely because the bill’s patron just happened to find the only few people in the General Assembly who don’t like the bill. More typically, it’s because the governor or the caucus itself has taken a position against the bill, but doesn’t want to draw attention to that fact. The subcommittee members tasked with doing the killing let everyone else in the party keep their hands clean. 

This explains the fate of Fairfax Democrat Sen. Chap Petersen’s bill to study the effect of data centers on Virginia’s environment, economy, energy resources and ability to meet carbon-reduction goals. The bill passed unanimously by voice vote in the Senate before dying at the hands of three Republicans in a five-person subcommittee of the House Rules committee. 

The data center study was the very definition of a no-brainer bill. The unbridled growth of data centers has ignited protests in communities across Virginia, and the industry’s voracious appetite for energy is blowing up Virginia’s climate goals, according to Dominion Energy. How can it be that House Republicans don’t even want to study the issue?

The answer lies in the fact that the Youngkin administration testified against the three data center bills that were heard in the Senate. One of Youngkin’s proudest achievements in office was the deal with Amazon to bring another $35 billion worth of data centers to Virginia. He does not want a study that would bring negative realities to light, so the bill had to die. The Republican members of the subcommittee were merely the executioners.

Another no-brainer bill that never made it to a full committee vote is one that gets introduced year after year: a prohibition on using campaign funds for personal purposes. This year’s legislation passed the Senate unanimously before just five Republicans voted to scuttle the bill in a House Privileges and Elections subcommittee.

My guess is you could not find a voter anywhere in Virginia who thinks legislators should be able to take money donated to their election campaigns and spend it on themselves. Justifying it requires legislators to turn themselves into logical pretzels. 

The combination of unlimited campaign giving by donors and unrestricted spending by the recipients makes it easy for powerful corporations like Dominion Energy to buy influence. Dominion has long been the largest corporate donor to legislators of both parties. The company’s influence has cost consumers billions of dollars and kept its fossil fuel plants burning.

Dominion’s influence was clearly at work this year when a House subcommittee killed a bill from Fairfax Senator Scott Surovell that would have made shared solar available to more Virginians, over Dominion’s opposition. The bill passed the Senate with bipartisan support before losing 4-2 on a party-line vote in a House Commerce and Energy subcommittee. 

It is less clear whether Dominion had a hand in the death of a bill that would help localities put solar on schools. The legislation passed the Senate unanimously before being killed in House Appropriations, again on a straight party-line vote. 

Certainly, there have been plenty of Democrats over the years who have voted for Dominion’s interest time and again. Conversely, not all the no-brainer bills killed by House Republicans reflect a hostility to the energy transition; sometimes the problem seems to be a hostility to environmental protections in general. Thus a bill to require customer notification when water tests show contamination from PFAS – known commonly as “forever chemicals” – passed the Senate unanimously and then was killed in a House subcommittee on, yet again, a party-line vote. 

It would be hard to identify a consistent line of reasoning behind all the anti-environment votes across all the various subcommittees, but the pattern is clear enough. It reflects not just the positions of individual legislators, but a firm party line. 

Whether voters care about these votes now is not clear, mainly because the news media rarely look at the role of the environment, climate and energy in elections. Regardless, these issues will be very much at stake at the polls next month. 

This article originally appeared in the Virginia Mercury on October 4, 2023.

A bright spot at the intersection of farming, electric vehicles and solar energy

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Peggy Greb, USDA

The energy transition is in full swing across the U.S. and the world, but the changes now underway are not simple or linear. In an economy as complex and connected as ours, progress in one area will often affect other parts of the economy, creating winners and losers. 

And then there are the changes that work together synergistically and leave everyone better off. This is what we will see as renewable energy overtakes fossil fuels and electric vehicles go mainstream. These transformations will deliver another enormous benefit, this time to farmland, as they pull the rug out from under the expensive and wasteful ethanol industry. 

Counting Corn

Across the United States, more than 30 million acres of farmland is currently devoted to growing corn for a purpose other than feeding humans and animals. The corn – over 5 billion bushels every year — is processed into ethanol and then added to gasoline to comply with a federal mandate.

The U.S. Renewable Fuel Standard (RFS), enacted in 2005, requires the nation’s oil refiners to mix 15 billion gallons of corn-based ethanol into the nation’s gasoline supply annually; this is the reason why most gasoline sold in the U.S. includes 10% ethanol. The mandate was intended to cut U.S. dependence on energy imports, support farmers and reduce emissions. 

As it turned out, the RFS was primarily successful in increasing the acreage devoted to growing corn. Because of the ethanol mandate, an additional 6.9 million acres of corn were planted between 2008 and 2016. Corn is now the nation’s number one crop and, according to the U.S. Department of Agriculture, ethanol production accounts for 45% of the U.S. corn crop. Most of the rest goes to animal feed, with only 15% destined for human consumption. (A mere half of one percent of the total corn crop is sweet corn, a different plant entirely.) 

As a way to reduce emissions, however, the mandate proved a failure. A study funded by the U.S. Department of Energy and the National Wildlife Federation concluded that ethanol is at least 24% more carbon-intensive than gasoline, once land use impacts are factored in. 

It’s a bad deal for taxpayers, too. In addition to the ethanol mandate, the U.S. government subsidizes corn farmers through the federal crop insurance program, with taxpayers covering an average of 62% of the cost of insurance premiums. More than a quarter of the insurance subsidy goes to corn, and very little goes to small farms. Add to this the many concerns about water use, fertilizer, pesticides and land degradation, and it is hard to find much good in the corn ethanol program.

EVs threaten King Corn

The world is a different place now than it was in 2005, with the U.S. having become the largest oil producer in the world and a net exporter. Yet the ethanol subsidy is fiercely guarded by the corn lobby and, in spite of occasional bipartisan efforts at repeal, it seems to be untouchable politically. Indeed, last year’s Inflation Reduction Act, passed by Democrats, actually contains new credits for biofuel production that corn-state Republicans are keen on keeping even as they continue to seek rollbacks of other clean energy incentives. 

The biggest threat to the corn lobby, though, isn’t a repeal of the mandate, it’s electric vehicles. When people no longer need gasoline, they can no longer be forced to buy corn ethanol. 

Electric vehicle sales reached 5% of the U.S. new car market in 2022, and already this year they’ve hit 8.6%. JD Power projects 70% of new vehicles will be electric by 2035, with California leading the way at 94% by then. 

Many agricultural communities are in denial about EVs, preferring to believe they will never catch on in numbers enough to threaten the importance of the corn crop. And indeed, it will take decades before the last gasoline-powered cars drive off to the junkyard. But most of us can see the writing on the wall. As more vehicles become electric, more land that is now devoted to corn ethanol will become available for other purposes. 

While the ethanol industry looks to jet fuel and other possible new uses for its product, a far more promising “crop” is renewable energy. Planting wind turbines and solar panels, either alone or combined with actual crops that feed people, provides higher returns with less risk and is better for the planet. 

“Planting” more solar energy instead of corn

Wind turbines already coexist with farmland across the Great Plains, but let’s focus on solar, since that is the form of renewable energy best suited to Virginia’s landscape. Solar energy is somewhat land-intensive, but not compared to corn. A decade ago, the National Renewable Energy Laboratory calculated that we could power the country’s entire electricity demand with 10 million acres of solar panels. That’s only one-third of the land now devoted to corn ethanol. 

Since that study, solar efficiency has increased, while electricity demand has risen only modestly. With the electrification of vehicles, buildings, and everything else that can be electrified, however, electricity demand is likely to double. But even if we had no wind energy, hydropower or nuclear, and we needed 20 million acres of solar to meet the demand, that would represent only two-thirds of the land currently devoted to corn ethanol, leaving millions of acres more freed up for food crops, land conservation and rewilding.

A comparison of the energy yield of corn vs. solar shows why displacing ethanol with solar energy would be a welcome change.  An acre of corn yields 328 gallons of ethanol, which is one-third less efficient than gasoline. If you could run an internal combustion automobile entirely on ethanol (you can’t), a car averaging 40 miles per gallon could go 8,738 miles on an acre of corn. 

But that same acre “planted” in solar panels would yield 394-447 MWh per year of electricity. Even at the low end, that’s enough to power a Tesla Model 3 for over 100,000 miles.

Much of the corn crop is grown in places like Iowa and Nebraska, but even here in Virginia, 540,000 acres were planted in corn last year, second only to soybeans. Assuming 45% of Virginia’s crop goes to corn ethanol (I could not find an actual breakdown by state), that amounts to 243,000 acres that could be put to better use. That’s worth keeping in mind for the next time someone frets about farmland being “lost” to solar development.

Solar is also a more reliable crop, and a better one for small farmers. The profitability of corn growing varies by state and by year, but it is never exactly a lucrative business for any but the largest farm operations. In a good year, such as 2022, corn might return a profit of $450 per acre, minus land rents (or taxes). In a down year, such as the current one, returns can be negative once land costs are accounted for. (Rents vary considerably, averaging about $325 per acre.)

Meanwhile, solar lease rates range from $250 to $2000 per acre, depending on location and suitability. A guaranteed payment for 20 or 30 years with no work involved is a pretty attractive deal. Even putting just a portion of a farm into solar provides a form of insurance, guaranteeing a steady income flow regardless of weather and commodity price swings.

Solar is also a better deal than corn for the community, since it provides tax revenue, diversifies the local economy and conserves water. If the developer plants pollinator-friendly species around the solar panels or uses sheep instead of machinery to control grass, the benefits to the local economy increase further. 

The ethanol industry is already looking for new uses for their product, but if they don’t find takers, it is one fuel we don’t need to mourn losing.

This article first appeared in the Virginia Mercury on September 19,2023.

If Dominion’s plan is so bad, is there a better one? (Spoiler alert: yes, there is.)

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Courtesy of Lowell Feld, Blue Virginia

In my last column I took Dominion’s Integrated Resource Plan (semi-) seriously, giving the utility the benefit of the doubt in its projections for data center growth and the alleged need for more fossil fuels to keep up with the power demands of that ravenous industry. But as I also noted, Dominion doesn’t deserve to be taken seriously with this document.

Under Virginia law, an Integrated Resource Plan (IRP) is supposed to explain how the utility expects to meet demand reliably and at low cost within the constraints of the law. In this IRP, however, Dominion asked a different question: how to make Gov. Glenn Youngkin happy by keeping fossil fuels dominant regardless of both law and cost. 

Coming up with a favorable answer required Dominion to ignore the Virginia Clean Economy Act (VCEA), create arbitrary limits on solar deployment, use wishful thinking instead of facts and, for good measure, do basic math wrong. They also assume the Youngkin administration will succeed in pulling Virginia out of the carbon-cutting Regional Greenhouse Gas Initiative (RGGI), a move that is being challenged in court. This makes Dominion’s IRP, with its plan to double carbon emissions, a sort of evil twin to a plan from any RGGI state. 

Sure enough, the governor loves it. Elsewhere, however, this evil twin found a cold reception. Experts retained by environmental, consumer and industry groups all agree that this IRP should be chucked in the trash bin and Dominion told to start over.

It’s worth taking a look at the testimony from these groups to understand where Dominion went so badly wrong, and what a better plan might look like. 

It’s all about the data centers

Northern Virginia data centers are the driving force behind Dominion’s plans to burn more coal and gas, but there is some disagreement whether their growth will be absolutely off-the-charts crazy, or merely eye-poppingly huge. Dominion’s IRP projects the data center industry’s power use in its territory will quadruple over the next 15 years, rising from 2,767 megawatts (MW) in 2022 to more than 11,000 MW in 2038. At that point it would represent close to 40% of Dominion’s load. 

Experts testifying in the IRP case believe data center demand won’t reach the dizzying heights Dominion projects. They question whether Virginia communities will accept so much new data center development, given the pushback already evident in localities like Prince William and Fauquier Counties. Their thinking is essentially that if things can’t go on this way, they probably won’t.

They also suggest that some of the demand Dominion expects may also be reflected in the plans of other utilities serving Northern Virginia’s Data Center Alley, leading to double-counting. A load forecast published by grid operator PJM shows that Northern Virginia Electric Cooperative (NOVEC) projects its data center demand to rise from about 400 MW in 2022 to 4,000 by 2028 and 8,000 by 2034. Two other cooperatives project a combined 3,000 MW of data center development in the same time period. 

Aside from data centers, demand for electricity in Dominion territory is flat or declining over the next fifteen years; presumably this is due to the increased efficiency of homes and businesses offsetting the increased demand from electric vehicles and building electrification. 

If you were already experiencing vertigo over Dominion’s data center numbers, and you are now hearing for the first time that Dominion’s numbers represent only half of the total projected data center load coming to Virginia, maybe you won’t find it all that cheering that some of that added demand could be illusory. Still, it is a reasonable point. If you reduce demand by a few thousand megawatts here and there, pretty soon you might not “need” a new gas plant.

As an aside, one Virginia utility stands out for apparently not expecting much in the way of new data centers in its territory. Appalachian Power, which serves customers in Southwest Virginia, West Virginia and Tennessee, has experienced declining demand for years, and rural Virginia leaders would dearly love to see data centers come there. Yet the PJM forecast shows Appalachian Power’s parent company, American Electric Power (AEP), told grid operators it expected only about another 200 MW on top of the 500 MW of data center load it serves across its entire 11-state territory. AEP seems to regard this as quite a lot, which, when compared with what is happening in Northern Virginia, seems rather sweet.

I can’t help but wonder how Gov. Youngkin managed to make a deal with Amazon to bring $35 billion worth of new data centers to Virginia without securing a guarantee that many of the facilities would be located in a part of the state that actually has surplus energy capacity and desperately needs new economic development. Southwest Virginia voters may have put Youngkin in office; you’d think he’d be looking out for them.

Instead of real investment today, Youngkin promises the area a little nuclear plant a decade from now, when and if small modular reactors (SMRs) prove viable. Local leaders must be muttering, “Gee, thanks.”

And this leads to another point raised by several of the experts in the IRP case: All of the load growth Dominion projects is due to a single industry in Northern Virginia; elsewhere, demand is decreasing. Yet, instead of crafting a solution specific to the industry and region experiencing runaway growth, Dominion proposes to build a fossil fuel plant 140 miles away in Chesterfield and a nuclear plant 300 miles away in another utility’s territory.

Gregory Abbott, a former SCC Deputy Director, offers a particularly withering assessment of the IRP in his testimony on behalf of environmental advocacy group Appalachian Voices. Dominion’s computer model, he says, “is proposing supply-side solutions that are not focused on solving the actual problem, are likely unnecessary, and driving costs higher than they should be.”

Although Dominion insists this IRP represents just a “snapshot in time,” Abbott says that’s misleading: The IRP “sets the stage for multi-billion-dollar investments that Dominion’s customers will pay for decades to come. If a future snapshot in time changes, based on new public policy goals or market dynamics, ratepayers are stuck with paying for these sunk costs.” 

Garbage in, garbage out

Abbott and others also note that unlike factories or other high consumers of energy, data center operators can shift some functions to other data centers elsewhere for short periods of time. Dominion could save money and reduce the need for new investments by capitalizing on this capability to develop demand-response programs tailored specifically to this industry. 

Instead, Dominion treated the surge in demand as if it were statewide and spread across all its customers; then it used a computer model to figure out how to meet the soaring demand. 

An expert for the Sierra Club, Devi Glick of Synapse Energy Economics, noted several problems with Dominion’s approach. Among them: the company told its computer model that it couldn’t select energy efficiency as a resource; it had to include gas combustion turbines in 2028; it had to adhere to artificial limits on solar, wind and battery storage; and it had to assume prices for solar that were “substantially higher than industry projections.” Dominion also did not instruct the model to account for proposed (and since finalized) new federal pollution limits that will raise the cost of burning fossil fuels, and miscalculated — by a billion dollars — the penalties associated with failure to meet the VCEA’s renewable energy requirements. 

As they say, garbage in, garbage out. The model did what it was told, and produced plans that limited solar and battery storage, called for new gas combustion turbines and/or SMRs, and kept uneconomic coal plants running past their previously-planned retirement dates. Accordingly, none of the modeled scenarios complied with Virginia law and all would be unnecessarily expensive for customers.

Synapse ran its own computer model that kept most of Dominion’s load and cost assumptions but corrected for the company’s errors and artificial constraints. The results, not surprisingly, show that building more solar and storage and retiring coal plants earlier than Dominion wants to will lower carbon emissions and “reduce costs for Dominion’s ratepayers by between $4.1 and $9.0 billion over the 25-year study period.”  

When Synapse then tweaked the model to reflect the new federal pollution rules and prices for solar and battery storage in line with industry projections, the results saw solar and battery investments soaring, while the “need” for firm capacity such as a new gas plant disappeared altogether during the planning period.  

Clean energy, vindicated

So finally, we begin to see a path forward founded on real data and not constrained by political expediency. With none of its plans meeting the basic requirements of Virginia law, Dominion should be ordered to go back to the drawing board. The company should reexamine its data center load projections and design a demand-response program tailored to that industry. Then it should re-run its computer model with energy efficiency allowed as a resource, with no artificial constraints on battery storage and renewable energy,with federal and state compliance costs associated with fossil fuels fully included and with cost estimates for solar and storage consistent with industry norms.   

The General Assembly has a role to play, too, in ensuring the data center industry does not shift costs onto other customers and cause Virginia to fall short of its carbon reduction goals. Data centers should be required to meet energy efficiency targets and to secure an increasing percentage of renewable energy on their own as a condition of obtaining generous state tax subsidies. Likewise, the State Corporation Commission should be required to ensure that data centers pay for the transmission upgrades they need. Finally, the General Assembly should pass the data center study bill adopted by the Senate this year before being killed in the House.

Finally, it’s clear that the computer models will select as much low-cost solar as they are allowed to, so the General Assembly should make it easier to build solar projects at competitive rates. They can do this by further opening the market to third-party developers, who are currently constrained by an interpretation of the VCEA that caps their share of the solar Dominion procures at 35%.

The SCC will hold a hearing on the IRP beginning September 18.

An earlier version of this article appeared in the Virginia Mercury on September 5, 2023.

Why are Dominion Energy’s customers footing the bill for Virginia’s data center buildout?

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Dominion Energy headquarters, Richmond, VA


Virginia’s embrace of the data center industry produced new fallout this spring when Dominion Energy Virginia released its latest Integrated Resource Plan (IRP). With data center growth the “key driver,” Dominion projects a massive increase in the demand for electricity. As a result, the utility claims the state-mandated transition to clean energy is now impossible to achieve. 

Jettisoning its commitment to the Virginia Clean Economy Act (VCEA), Dominion proposes to keep running uneconomic coal and biomass plants that were previously slated for closure, build a new fossil gas plant and pay penalties instead of meeting state renewable energy targets, all of which mean higher costs for customers.

As I said at the time, this IRP is primarily a political document aimed at currying favor with a gas-loving governor. It is not a serious plan. For example, a Sierra Club filing with the State Corporation Commission describes how Dominion put artificial constraints into its computer modeling (including limits on new solar) to ensure the plan came out fossil-friendly. Moreover, Dominion’s demand projections are inflated, according to the clean energy industry group Advanced Energy United.

But for the sake of discussion, let’s take the IRP at face value. And in that case, I have some questions. How did Dominion let itself get blindsided by the data center growth spurt? Why are the rest of us expected to pay for infrastructure that’s only needed for data centers? Does the Governor understand that his deal to bring another $35 billion worth of new Amazon data centers to Virginia  is driving up energy rates for everyone else? 

Oh, and while I’m at it, are tech company commitments to sourcing renewable energy just a pack of lies?

Virginia’s data center problem is well known. Northern Virginia has the largest concentration of data centers in the world, by far. Data centers are Dominion’s single largest category of commercial power users, already consuming more than 21% of total electricity supply and slated to hit 50% by 2038. In addition to the new generation that will be required, data centers need grid upgrades including new transmission lines, transformers and breakers, with the costs spread to all ratepayers. 

Residents are not happy. Controversy around data centers’ diesel generators, their water use, noise and visual impacts have spread outward from Loudoun County into Prince William, Fauquier, and even other parts of Virginia as massive new developments are proposed. 

Data center developers don’t build without assurance they will have access to the huge amount of electricity they need for their operations, so they have to start discussions with their utility early. Yet in July of 2022, Dominion stunned the data center industry by warning it would not be able to meet new demand in Loudoun County until 2025 or 2026. The utility said, however, that the problem was not generating capacity, but transmission. So, what gives?

Not that it would be better if Dominion anticipated the oncoming tsunami but kept it secret until this spring. You have to wonder whether the General Assembly would have approved hundreds of millions of dollars in grants and tax subsidies for new Amazon data centers in February if legislators understood the effect would be to upend the VCEA and drive up energy costs for residents. 

Some Republicans are no doubt pleased that Dominion’s IRP undermines the VCEA, but they shouldn’t be. Dominion proposes keeping coal plants open not for economic reasons, but in spite of them. These plants were slated for closure in previous IRPs because they were costing ratepayers too much money. Now Dominion says it needs more generating capacity and can’t (or rather, won’t) build enough low-cost solar to keep up with new data center demand.

Dominion also proposes to build a new methane gas combustion “peaker” plant that wasn’t in its last IRP, and again the company points to data center growth as the reason. Peaker plants are an expensive way to generate power; on average, the cost of energy from gas combustion is about double that of a solar/storage combination, or even triple once you factor in federal clean energy incentives.

Keeping the fossil fuel party going instead of embracing more solar isn’t the only way this IRP drives rates higher for customers. Limiting its solar investments means Dominion expects to miss the VCEA’s renewable energy percentage targets by a mile. The shortfall would subject Dominion to significant penalties. The kicker is, Dominion can pass the cost of those penalties  on to ratepayers, too. 

Regardless of your political persuasion, then, this IRP is bad news for Virginia consumers. 

It’s also concerning that the driver of all these higher costs and carbon emissions is the high-tech industry that is so eager to be seen as a leader in sustainability. If these tech companies were meeting their power needs with renewable energy, Dominion wouldn’t be able to claim a “need” to keep its old coal plants belching away.  

Amazon, the number one beneficiary of state data center largesse, says it is the leading corporate purchaser of renewable energy globally. Its website claims the company is “on a path to powering our operations with 100% renewable energy by 2025.” A map shows it has developed around 16 solar projects in Virginia, adding up to over 1,100 megawatts. That’s great, but the company’s Virginia data centers are such energy hogs that they would need many times as much solar, plus a huge amount of battery storage to meet their 24/7 demand. And of course, Amazon’s demand will skyrocket with that next $35 billion in new data centers.

That same map, by the way, shows that Amazon has on-site solar at warehouses and Whole Foods stores all over the Northeast, but none in Virginia. Northeastern states have higher commercial power rates than Virginia does, so on-site solar means bigger bill savings in those states. One cannot help but suspect that Amazon’s commitment to renewable energy is really just a commitment to cheap energy.  

The Data Center Coalition’s filing in the IRP case does nothing to reassure us otherwise. Instead of chiding Dominion for reneging on its clean energy commitments, the Coalition’s Josh Levi essentially argues data centers are so important it doesn’t matter. 

I have no beef with data centers as a general proposition. They are an integral component of today’s economy, and the developments that now drive their explosive growth — machine learning and artificial intelligence — will also help us achieve a zero-carbon future.  

I just think data centers should try a little harder to be part of the solution instead of part of the problem.  

This article was first published in the Virginia Mercury on August 16, 2023.

I’m a climate alarmist (and you should be too), but we aren’t dead yet

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Photo courtesy of the Sierra Club.

Until this summer, climate change was a threat most Virginians could ignore most of the time. It was like being hopelessly in debt: too upsetting to think about, so you may as well ignore it. But then smoke kept drifting down from Canadian wildfires and the planet experienced its hottest days on record. People are dying of the heat across the American South and in Europe. 

It’s as if the debt collectors suddenly switched from sending threatening letters to sending goons with baseball bats. Alarm is not too strong a reaction. 

If the goons have gotten your attention for the first time, you will want to acquaint yourself with the work of the Intergovernmental Panel on Climate Change (IPCC). The concise Summary for Policymakers that accompanies the IPCC’s latest report can get you up to speed. Like sorting out shambled finances, though, it’s both boring and terrifying: Boring because mountains of scientific research inform conclusions couched in dry probabilities; terrifying because those conclusions are bleak.  

Humans have overloaded the atmosphere with so much carbon dioxide, methane and other greenhouse gasses that further climate disruption is now unavoidable, no matter how fast we decarbonize. We are in for longer and more frequent heat waves, more extreme weather events, longer and more intense wildfire seasons, accelerating sea level rise, more people migrating to escape newly-uninhabitable lands, more loss of plant and animal species and the further spread of diseases. 

On the plus side — oh wait, there isn’t a plus side. Not only is continued disruption inevitable, but if we were to continue business as usual, children born today would live to see New York and most other coastal cities underwater. Instead of 60,000 people dying from heat in a bad year, as happened last year in Europe, the number worldwide could reach well into the millions. 

Then there are the possible tipping points that would bring devastation suddenly rather than gradually, and in ways we aren’t prepared for. The latest prediction to hit the news (though it has been discussed for years, with few people listening) is that meltwater from the Greenland ice sheet could force the powerful Atlantic Ocean current to stall sometime between 2025 (gah!) and 2095. That would make the tropics even hotter but send Europe into a deep freeze — a cure for their heat problems, but not the one they’re looking for. 

However dismal these scenarios may be, though, we are not dead yet. In spite of the best efforts of the fossil fuel industry, business will not continue as usual. Efforts to decarbonize our economy started late and are taking too long, but they are working, and they will only accelerate. Investment in the energy transition equaled global investment in fossil fuels last year for the first time. In the course of this century, we will not just stop adding greenhouse gasses to the atmosphere, we’ll begin removing the excess. 

The energy transition is just part of the changes ahead. We are in the early years of a golden age of invention that will make the 20th century look like a mere prologue. By the time today’s toddlers reach old age, they will have witnessed transformational innovations in technology, housing, transportation, industry, materials, food and agriculture. 

I keep a running list of breakthrough inventions and new technologies that together could solve our climate problem many times over. They won’t all pan out, of course, and I’ve learned not to put too much stock in promising ideas backed only by early research. 

On the other hand, something transformational could be in the mix that we don’t recognize yet. About 20 years ago I wrote a column mocking cell phones that could take grainy pictures as well as make calls, opining that only teenagers would pay $400 for such useless technology. Some ideas sputter and die, others change how we live. 

What is certain is that improvements in wind, solar, battery storage and electric vehicles will continue these technologies’ march to dominance, while fossil fuels become niche. Concerns about the land needs of renewable energy are overblown; you could power the entire U.S. with solar panels on just one-third of the more than 30 million acres currently devoted to growing corn for climate-unfriendly ethanol. Indeed, solar doesn’t even have to displace farming. Agrivoltaics is already making solar and agriculture compatible and creating money-saving synergies.  

In the near future, solar cells will be everywhere: on walls and windows as well as roofs, on top of electric cars and printed on paper.  We will also have cheaper, safer, and longer-duration battery storage; already, hundred-hour batteries are set for deployment in 2025. 

Innovative wind designs also promise more power for less cost. Offshore wind, still just getting started in the U.S., will be sending power to the East Coast, the West Coast, and Gulf states by the end of this decade. Longer term, autonomous, unmoored, floating wind turbines could guide themselves around the ocean, producing synthetic green fuels or performing direct-air carbon capture. 

Similar progress is happening in all sectors of our economy. Artificial intelligence and machine learning will reduce costs and speed up the ongoing work on low-carbon solutions, including in materials and chemicals. Some futurists predict a revolution in food production that will have us all eating cheap, nutritious and tasty microbes instead of animals by 2030 (yes, really), freeing up hundreds of millions of acres of agricultural land for reforestation and wildlife habitat. That seems like a tall order, but then again: cell phones with cameras.

Look, I am not by nature an optimist. I wish I were; it’s obvious that optimists are happier than pessimists (or, as I like to call us, realists). Nor do I kid myself that humans will suddenly lose our tendencies to self-centeredness, greed and bigotry. We have the most astounding capacity for doing the wrong thing even when the right thing is standing there waving its arms frantically in the air and yelling, “Ooh, ooh! Choose me! Choose me!”

And even this summer’s record heat won’t stop climate “skeptics” from insisting the climate is not changing, or as they say now, that “no one knows why” the planet is warming. They are dosing themselves with an attractive snake oil; who wouldn’t like to hope that Nature might defy physics and start cooling us off again, either on a whim or because she secretly works for Chevron? 

Let them have their snake oil. The rest of us have work to do.

This article was originally published in the Virginia Mercury on August 3, 2023.

Do carbon offsets offer climate salvation?

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Image by DALL-E with prompt from Ivy Main

In medieval Europe, the Roman Catholic church encouraged sinners to get square with God by performing good works and acts of charity. Since both of these might require spending money, some resourceful church leaders streamlined the process, taking the money and letting the good works slide. A rich sinner could buy “indulgences” to cover adultery, eating meat during Lent, or any number of other transgressions. 

The historical record does not indicate that emitting carbon dioxide was among the redeemable sins. (Well, CO2 wouldn’t be discovered until 1754.) Still, medieval Christians would have recognized the attraction of buying indulgences in the form of carbon offsets rather than actually cutting back on CO2-emitting activities. We can’t help sinning, so if the act of atonement evens the score, why not grant absolution?

Here in the present, a whole industry has sprung up to sell climate indulgences to guilt-ridden liberals. As one website explains soothingly, “Carbon offsets work through supporting tree planting services and carbon offsetting projects to neutralize your emissions and mitigate your impact on the planet.” Buying these indulgences requires just a click of your mouse and a credit card. For $25 you can feel good about an airplane flight of up to 10,000 miles! That’s enough to get you from D.C. to Australia, where you can visit the Great Barrier Reef before it is completely destroyed by the ocean acidification resulting from your carbon emissions. 

(I’ve committed this sin myself: I’ve been to Australia, on a miserably long flight the CO2 emissions of which I did not pay $25 to offset. They hadn’t invented $25 carbon offsets at the time, or I might have.) 

Martin Luther, a 16th century priest who made a name for himself by opposing the selling of indulgences, put the matter succinctly:  “Indulgences are most pernicious,” he wrote, “because they induce complacency and thereby imperil salvation.”  

He meant saving souls, and we mean saving the planet; regardless, he had the psychology right. We’re more likely to excuse ourselves for driving gas-guzzlers and flying to cool places if we also pay to plant trees in Africa or bribe Brazilians not to deforest the Amazon. 

Sadly, that approach doesn’t work. By one calculation, it would require planting at least 200 billion new trees to suck up the excess CO2 emissions of Americans alone. This assumes we don’t lose any trees to fire, drought, disease or clearing. And how’s that working out? As of the end of June, fires had already consumed 20 million acres of Canadian forest this year alone, in large part as a result of climate change. All the carbon those trees had stored up is now back in the atmosphere. 

That doesn’t mean planting trees and saving the rainforest aren’t good works. They are. But there’s a high likelihood any carbon offsets you purchase will be among the 90% of rainforest offsets that a Guardian investigation found were worthless. 

Yet fear not, sinners! Great minds are at work to find effective ways to remove CO2 from the air or the ocean and squirrel it away more or less permanently. Some ideas now in the research or pilot stage involve capturing CO2 from industrial processes like cement manufacturing or from direct-air capture. The CO2 is then injected underground or used as an ingredient in concrete or other products. (Carbon-negative food, anyone?) Technologies that let nature do the heavy lifting include spreading basalt rock dust on farm fields as a soil amendment and using microbes to gobble up CO2 in water.

Getting more attention, likely undeservedly, is the effort to capture and bury CO2 from fossil fuel power plant emissions. This isn’t carbon negative; it simply reduces the amount of CO2 that makes it out of the smokestack. Capturing CO2 where it is most abundant — right where coal and gas are burned — is more efficient than direct-air capture, but it’s expensive and energy-intensive. Shutting the plant and replacing it with renewable energy will almost always be the better option for the planet, and the cheaper one for whoever has to foot the bill. 

Even with generous subsidies in the Inflation Reduction Act (IRA), cost remains the biggest barrier to a market for effective carbon offsets. Carbon capture and sequestration (CCS) projects still can cost upwards of $400 per ton of CO2. In 2021 the U.S. Department of Energy launched what it calls its Carbon Negative Shot, aimed at reducing the price of removing 1 ton of CO2 from the atmosphere to $100 in 1 decade. That would put the price closer to the U.S. Government’s current estimate for the social cost of carbon of $51 per ton, and below the $185 that might be the true cost. 

The market is potentially enormous. Aviation, shipping, steelmaking, chemical manufacturing and cement production are especially challenging to decarbonize. Consider that steelmaking generates about 1.85 tons of CO2 per ton of steel, and the industry produces close to 2 billion tons annually. 

Commercial aviation generated 900 million tons of CO2 in 2019. According to this handy flight calculator, that’s about 2.2 tons of CO2 for every passenger flying round-trip from Virginia’s Dulles Airport to Paris, France. It’s no wonder the voluntary carbon-offset market is expected to become a $250 billion industry by 2050. 

Still, let’s be real. Carbon-negative technology is only needed because we continue to flood the atmosphere with greenhouse gasses from activities we can mostly decarbonize at far less cost today. Money being thrown at expensive CCS or ineffective forest offsets would have a greater impact spent on weatherizing homes, putting solar on rooftops or building renewable energy in fossil fuel-dependent areas. 

In theory, buying renewable energy certificates can do this, too, but their effectiveness is questionable, in part because of the tendency of companies to use them for greenwashing. That is, they want carbon indulgences, but at a price that lets them continue business as usual. 

Medieval sinners would surely relate. 

This article was originally published in the Virginia Mercury on July 19, 2023.

Update: This article in The Guardian challenges the worthiness of pretty much every carbon offset program in existence. Our search for climate indulgences continues.

Joe Manchin’s Pyrrhic victory

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The folly of building the Mountain Valley Pipeline should be obvious to anyone who hasn’t already committed billions of dollars to the project.

On Thursday, June 8, 2023, hundreds of frontline and Appalachian climate activists rallied at the White House against President Biden’s endorsement of the Mountain Valley Pipeline. (POWHR/Eman Mohammed/Survival Media Agency)


This spring’s passage of federal legislation raising the debt ceiling came with one provision that clean energy advocates had fought hard against: it sweeps away several legal challenges to the Mountain Valley Pipeline (MVP) that have stalled completion for more than four years. The pipeline is supposed to carry methane gas from the fracking fields of West Virginia into Virginia to connect to an existing interstate pipeline here, and getting it built has long been a priority of West Virginia Senator Joe Manchin.

Manchin surely believes he notched a victory with the inclusion of this provision in must-pass legislation. And in one respect, he’s right. Pipeline opponents aren’t conceding defeat, but stopping the MVP in court just got a heck of a lot harder. 

Whether the pipeline’s developers should be celebrating is another matter. The wisdom of building a new methane gas pipeline was questionable nine years ago when the MVP was conceived. Today, with the U.S. transitioning away from fossil fuels, the folly of building new gas infrastructure should be obvious to anyone who hasn’t already committed billions of dollars to the project.

Dominion Energy figured this out three years ago when it dropped plans to develop the Atlantic Coast Pipeline. Dominion is a big energy conglomerate and had other projects to pursue. Canceling the Atlantic Coast Pipeline saved it billions of dollars that it is now investing in offshore wind and other renewable energy assets. 

MVP’s two largest minority partners are also diversified companies with other options. NextEra Energy, which owns a 31% share in the partnership through its subsidiary Next Energy Resources, wrote off the value of its investment in MVP in 2021 and 2022, saying it planned to “reevaluate its investment in the Mountain Valley Pipeline.” 

A NextEra spokesperson did not answer my question about what the company plans to do about MVP now.  But if a picture is worth a thousand words, take a look at NextEra Energy Resources’ homepage. MVP isn’t mentioned anywhere on the website, which is largely a celebration of the company’s renewable energy assets. 

The third-largest stakeholder in the MVP is Consolidated Edison, with an initial 12.5% stake. In 2019 it exercised an option to cap its investment in MVP, and in 2020 it wrote down the value of its investment by almost half. ConEd CEO John McAvoy told investors that year the company would no longer invest in gas transmission projects and “certainly would” consider selling its stake in MVP. 

“We made those investments five to seven years ago,” he said, “and at that time we — and frankly many others — viewed natural gas as having a fairly large role in the transition to the clean energy economy. That view has largely changed, and natural gas, while it can provide emissions reductions, is no longer … part of the longer-term view.”

Unfortunately, these views aren’t shared by MVP’s majority owner and operator. Equitrans Midstream is solely a pipeline and gas storage company, having been spun off from a larger corporation, EQT, in 2018. MVP is its key to growth. The exit door may be wide open, but Equitrans doesn’t want to leave because it has nowhere to go.

That doesn’t mean it makes sense to stay, either. Many a gambler has learned the hard way that continuing to feed coins into a slot machine does not make it more likely to disgorge the jackpot. 

And really, if there ever was a jackpot for MVP, it is gone by now. In 2015, EQT saw an opportunity to undercut the price charged by existing pipelines to ship gas to an energy-hungry Southeast. Today, though, demand for methane gas has cooled in the face of cheap wind and solar, while MVP’s costs have ballooned to $6.6 billion from the initial projection of $3.25 billion. Analysts say MVP’s competitive advantage has evaporated, and its prospects for profitability look grim.  

Equitrans maintains that there is still a pressing need for its pipeline, but demand has always been hypothetical. From the very beginning, the partnership seemingly indulged in “build it and they will come” magical thinking. 

Getting a permit to build from the Federal Energy Regulatory Commission requires that pipeline developers have their customers lined up ahead of time in order to demonstrate a “need” for the project. Even in 2015 there were not enough customers clamoring for MVP’s services, so the partners named themselves as the buyers for more than half of the pipeline’s capacity. FERC’s approach to permitting allows this self-dealing, though the commission has been heavily criticized for it. 

Obviously, Equitrans was never going to be a customer; it isn’t in the business of generating power or selling gas at retail. Its field of dreams assumed demand for gas would grow, customers would be clamoring for pipeline capacity, and Equitrans would be able sell its share of the capacity and just reap the profits from owning the pipeline.

It’s hard to imagine that happening now. Economics had already started to favor wind and solar over fossil fuels when the MVP broke ground. Total natural gas consumption has been mostly flat nationwide since 2018, and the Energy Information Agency (EIA) projects it will decline steadily for the next decade. EIA also projects that more than half of all new electric generating capacity this year will be solar, with natural gas additions down to a mere 14%. Here in Virginia, methane gas burned by electric utilities has declined from a high in 2020.

The future will only get brighter for renewables and dimmer for gas. In 2020, Virginia committed to a zero-carbon energy future, and in 2022 Congress passed the strongest set of clean energy incentives in history. Betting on fossil fuels in today’s environment makes no sense.

Sure, Governor Youngkin is doing his level best to throw a wrench in the works, and Dominion Energy Virginia just proposed building a 1,000-megawatt gas combustion turbine, citing growing demand from data centers and electric vehicles. Misguided as that proposal is, it doesn’t signal good times ahead for the gas industry. Combustion turbines are not baseload plants; they run only when demand exceeds other sources of supply. Dominion has no plans to build new baseload gas plants.

MVP knows finding customers in Virginia will be hard. Before litigation and permit denials put construction on hold in 2018, the partnership had proposed an extension of the pipeline into North Carolina, perhaps hoping for better pickings in Duke Energy territory. Now that MVP has the congressional seal of approval, it is seeking to revive the proposed Southgate Extension, to the dismay of North Carolina activists. Yet economics don’t favor gas over solar there, either.

The liquefied natural gas export market has also been floated as a potential source of growth, but critics say the lack of liquefied natural gas terminal capacity prevents that from happening. 

It’s time to stop this travesty. Equitrans claims MVP is 94% complete, but opponents say the true figure is more like 56%, with many of the most difficult segments (like stream crossings) still to be tackled. Those are also the most environmentally sensitive parts of the line. Pulling the plug on MVP now would avoid not only the cost of completing the pipeline, but also the cost of fixing leaks, erosion damage and other problems critics believe are inevitable given the terrain and geology. 

That would be a much better result for everyone concerned than completing the pipeline to serve a market that doesn’t exist – a Pyrrhic victory if there ever was one.

This article was originally published in the Virginia Mercury on June 28, 2023.

Is there a partisan divide on climate? Not among young people

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The divide politicians should be paying attention to is not between Democrats and Republicans. It’s between young people and old Republicans.

Photo courtesy of 350.org

Judging from the political rhetoric, you’d be justified in thinking that only Democrats feel the urgency of the climate crisis, while Republicans are united in dismissing it. Polling shows Democrats are better aligned with popular sentiment: the great majority of Americans support more climate action. But Republican leaders assume that even if their position is a losing one  with the general population, at least they represent their party membership. 

It turns out they are ignoring critical details. The divide they should be paying attention to is not between Democrats and Republicans. It’s between young people and old Republicans.

Recent polling from the Pew Research Center found that although 64% of Republicans over 65 oppose the U.S. taking steps to become carbon neutral, 67% of Republicans under 30 support doing so. Given that Millennials and members of Gen Z (those born after 1997) are less likely to identify as Republicans in the first place, you’d think the party leadership would pay close attention to the issues young Republicans care about, in hopes of growing their brand.

Instead, the party’s position on climate is driven by the opinions of the older, mostly white Republicans who dominate the conservative media echo chamber and control power in Congress and state legislatures. In Virginia, as in other states and Congress, lawmakers are older, whiter and more male than the people they represent. They can afford to dismiss climate change, because the worst impacts won’t happen until they have disappeared from the planet. 

But that tendency of older voters to die off is exactly why catering to the curmudgeon bloc is a bad strategy for holding on to power in the long term. Greenhouse gas concentrations continue to increase; the planet keeps warming. The choking smoke from Canadian fires is merely a warning of what lies ahead.  

The nothing-to-see-here narrative on climate change will only appear more fringe with every record wildfire season, every killer heat wave and every freak mega-storm. If Republicans don’t find a way to pivot, they will continue losing younger voters until they find themselves out of power. 

That’s actually the best-case scenario. In the worst-case scenario, Republicans win the presidency and Congress and, having backed themselves into a corner pandering to the curmudgeons, will feel forced to undo recent federal climate legislation including the Inflation Reduction Act. Consequences for the planet and the American economy would be disastrous. The IRA is not just the most impactful climate law the U.S. has ever passed, it has unleashed enormous infusions of capital into red states. 

And what demographic benefits most from the millions of new jobs being created in green energy and electric vehicles? Why, that would be the young people. 

Some Republicans in Congress and state legislatures do recognize the climate is in crisis. Behind closed doors, they may even concede their party needs to do more. But each lawmaker has a different excuse for failing to act. They fear a primary challenge from someone even farther to the right, or they depend on donations from fossil fuel apologists like the Koch brothers (again, old white men!), or they fear retribution from party leaders if they buck their caucus. In the end, they fall back on obfuscation, deflection, Democrat-blaming and wishful thinking. 

Recent news stories have featured much wringing of hands and pointing of fingers over Gen Z’s tendency towards pessimism and nihilism. Surveys show these young people are more likely to believe it is too late to avert climate change, and more than half feel “humanity is doomed.” Close to 40% say their fears about the future make them reluctant to have children. 

Many young people are channeling their anxiety and anger into action. Election turnout among younger voters has surged, though it’s still woefully behind that of older generations. Young workers are more likely to seek jobs with a positive impact for people and the planet — which makes the green job incentives in the IRA all the more relevant to their lives. 

Indeed, the good news for this generation is that the urgency of the climate crisis has spurred a remarkable acceleration of research and development into climate solutions. For young workers especially, there are more opportunities for meaningful work than at any time in history. The kids are right to worry about hard times ahead, but their generation may be the one to save humanity from this crisis of their elders’ making. 

Success, however, requires that those elders acknowledge the crisis, find the courage to move past partisan politics, and help.

This article was originally published in the Virginia Mercury on June 13, 2023.

Law? What law? Pandering to the governor, Dominion’s new plan ignores Virginia’s climate law

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Dominion Energy headquarters, Richmond, VA

Last December, Dominion Energy produced a remarkable document: a climate report predicting that by 2040 its electricity supply will be dominated by renewable energy. Coal will be gone by 2030, and methane gas will hang around in ever-smaller amounts, just to fill in the energy gaps. Small modular nuclear reactors (SMRs) probably won’t play a role for at least 15 years, during which time solar will become the mainstay of the electricity supply. According to the report, this strategy will allow Dominion to meet its goal of becoming carbon-neutral by 2050.  

Fast forward a few months, and the same company, using the same information, projects a future full of new methane-burning plants and SMRs. Dominion Energy Virginia’s 2023 Integrated Resource Plan (IRP), released May 1, now insists that the phenomenal growth of the data center industry and, to a lesser degree, the adoption of electric vehicles require so much energy that it can’t possibly meet legally-mandated climate goals. Accordingly, the plan doesn’t even try.

Instead of decarbonizing in accordance with Virginia’s role in the Regional Greenhouse Gas Initiative (RGGI) and the requirements of the Virginia Clean Economy Act (VCEA), Dominion now says it must build new methane-burning plants and keep old, expensive coal plants running “beyond statutory retirement deadlines established in the VCEA.”  All the alternatives examined in the IRP “assume that Virginia exits the Regional Greenhouse Gas Initiative (‘RGGI’) before January 1, 2024,” in violation of Virginia law. Most of the alternatives include the same SMRs its Climate Report recognized as unready. Compared to Dominion’s 2022 IRP update (filed just last September!), now costs have ballooned and CO2 emissions will skyrocket. 

What could possibly have happened in the course of a few months to produce this about-face? The astounding growth projections for the data center industry may be news to many Virginians, but not to the utility that provides their power. Vehicle electrification is hardly a surprise either. SMRs did not achieve any breakthroughs in technology or economics this winter, nor did anyone suddenly discover a way for new gas plants to make sense for the climate or ratepayers. Dominion makes a big deal out of the Christmas cold snap, but you have to try pretty hard to believe that requires upending all previous planning.

What did happen was the 2023 General Assembly session, in which Gov. Glenn Youngkin played a decisive role in handing Dominion a major – and unaccustomed – defeat. With Dominion Energy holding its shareholder meeting today, the company badly needs to show it is back in the governor’s good graces. And the governor, as we know, is not a fan of the energy transition. 

In other words, the IRP is a political document, not a serious approach to meeting Virginia’s electricity needs, at a time when climate change is accelerating and fossil fuels are giving way to superior renewable energy technologies.  

Market watchers will recall that Dominion’s stock price tanked in the fall of 2022, losing more than 30% of its value from August to November. So the company came up with a bill that would have increased the profit margin for its Virginia utility from 9.35% to 10.77%. This number was calculated to improve Dominion’s standing on Wall Street but would cost consumers an extra $4 billion, according to the State Corporation Commission’s estimate. The company also expected to be able to defeat pro-consumer legislation that would return more authority over rates to the SCC.

Dominion’s bill was widely panned, but that hardly made it a non-starter. In past years, the company has gotten what it wanted more often than not, thanks to powerful friends like Senate Majority Leader Dick Saslaw, D-Fairfax, and House Majority Leader Terry Kilgore, R-Scott. This is the beauty of doing business in a state that allows corporations, even public utilities, to supply unlimited campaign donations to elected officials. Over the years, Dominion’s contributions to Republican Kilgore nearly match its contributions to Democrat Saslaw. Most other General Assembly members get contributions from Dominion, too, helping to cement bipartisan support for the company’s priorities.

As the patrons of this year’s money bill, Saslaw and Kilgore should have been able to deliver enough votes from members of both parties to ensure a profitable outcome for their biggest campaign donor. They were not counting on the governor poking holes in the plan. 

Dominion’s beating this year grew from seeds it sowed in 2021. That year, Dominion made a bad bet on Democrat Terry MacAuliffe to win the governorship, secretly funding a dark money group to run ads attacking Youngkin. 

This year, Youngkin took his revenge. As a Wall Street guy himself, he knows how to hit a corporation where it hurts. 

Youngkin forced Dominion to accept changes to the bill that increase the company’s return on equity modestly (and only temporarily), but take away other avenues of profit. Adding insult to injury, the General Assembly also adopted the pro-consumer legislation that allows the SCC to set “fair and reasonable” rates in the future. 

Dominion declared itself satisfied with the result, but Wall Street judged otherwise. The company’s stock, which had started to rally in January, reached a ten-year low this spring. 

Aside from punishing Dominion, the governor achieved none of his energy goals in the legislative session. Rolling back the VCEA, exiting RGGI through legislation, reversing the Clean Car Standard — none of that happened. And as long as the Democrats keep control of at least one chamber in the General Assembly in this fall’s election, none of that is likely to happen. 

So Dominion’s IRP violates Virginia’s laws and the public’s trust (such as it is), makes a mockery of its own climate plan and proposes “solutions” that will drive up both costs and carbon emissions. As a plan, it can’t be taken seriously.  

All that, however, is beside the point. It makes the governor happy. And what makes the governor happy, Dominion hopes, will make its shareholders happy. 

That assumes the shareholders don’t care about climate change, or that they hold values that are as malleable as those of Dominion CEO Bob Blue and the rest of the company’s leadership. 

Climate change? What climate change?

An earlier version of this article was published in the Virginia Mercury on May 10, 2023.

Is hydrogen a miracle solution for the climate, or the new ethanol?

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Refueling a hydrogen-powered vehicle. By Ogidya via Wikimedia Commons

The hydrogen gold rush is on. Spurred by the urgency of the climate crisis, and attracted by generous incentives in last year’s Inflation Reduction Act, companies ranging from oil majors to small start-ups are pouring money into the Next Big Thing in energy: a fuel that is flexible, transportable and carbon-free. 

Is hydrogen a critical piece of the decarbonization puzzle that needs floods of new funding, or an over-hyped, not-ready-for-prime-time financial boondoggle? 

At this point the answer seems to be both. 

In his 2022 Energy Plan, Virginia Gov. Glenn Youngkin touted hydrogen as “a once-in-a-lifetime opportunity to reimagine Virginia’s future and meet energy needs through an abundant, dispatchable, and zero-emission fuel source where water is the only required input.” 

This statement has its problems, including the fact that water is actually not the only required input. Making hydrogen from water requires a lot of energy, which must come from some other fuel. Therein lies the rub. 

 How the Department of Energy believes clean hydrogen could help decarbonize the U.S. economy. (U.S. Department of Energy)  

One way to make hydrogen — and the method everyone is talking about — is using electricity to split water (H2O) into its components, hydrogen and oxygen, through electrolysis. Energy is lost in the process, so there is no point in using hydrogen for anything that can plug into the grid. Hydrogen is also more expensive and less efficient than battery storage, which explains why automakers are focusing on electric vehicles rather than ones that run on hydrogen fuel cells. 

Yet some kinds of transportation (aviation, long-haul trucking) and many industrial processes are hard or impossible to electrify, at least for now. Hydrogen, ammonia and other products can often replace fossil fuels for these uses, and perhaps also play a role in long-term energy storage for grid power. 

Recognizing this potential, last year’s Inflation Reduction Act included a range of incentives to spur investment in so-called green hydrogen, defined as hydrogen made from renewable energy. Growing the supply of green hydrogen will require a massive buildout of wind and solar as well as years of technological refinement, but airlines, steelmakers and other customers are already either starting to use green hydrogen or say they want it for their operations.  

Unfortunately, any time the government dangles a subsidy, some businesses will look to exploit any opening to grab free money, even if the result is contrary to the whole point of the subsidy. Those businesses do find champions among politicians who are more interested in generating economic activity than in making sound public policy (or maybe they just confuse the two). But getting the rules right is critical for the climate, and for making sure customers get the carbon-free product they sign up for. 

Hydrogen is already used in many industrial processes and in the manufacture of fertilizers but today it is mostly made from methane gas, at half the cost of green hydrogen. Oil companies like Chevron have urged that to build the market quickly, making hydrogen green is “secondary” to making it affordable.

This is all wrong. The great promise of hydrogen is the potential to make it from renewable energy once wind and solar have scaled up so much that there is a glut of cheap, emissions-free power. 

That is not the situation today. Nationally, fossil fuels make up 60% of electricity generation, with all renewables together representing 21.5%. The regional grid that serves Virginia includes less than 10% wind and solar in the generation mix. Renewables are growing fast while coal shrinks, but few states have so much renewable energy that some of it occasionally goes to waste. California has experienced this under ideal conditions, and is likely to be the first to have surplus renewable energy on a predictable basis. 

The challenge is that a company that invests in the capital costs of a hydrogen production facility may not want to run it only when there is surplus wind and solar. These companies will make the most money by running their electrolyzers around the clock; profitability might even depend on it. Their choices are to build new renewable energy and battery storage for their own purposes and cut back production when they have to, or manipulate the rules.

So as the U.S. Treasury Department writes the rules around eligibility for green hydrogen incentives, corporate America is asking for loopholes. NextEra, the world’s largest renewable power generator, wants to be allowedto use fossil fuels to fill in whenever there isn’t enough wind or solar energy on the grid, without losing the “green” designation and all the subsidies that accompany it. The company proposes buying carbon credits as an offset.

The proposal makes climate advocates very uneasy. We have seen this movie before. When the federal government first offered subsidies for ethanol made from corn in the 1970s, the idea was that blending American-made ethanol into gasoline would reduce our dependence on foreign oil and lower greenhouse gas emissions. 

Forty years later, the program still consumes some 30 million acres of corn every year, and is estimated to have cost taxpayers billions of dollars, all while actually harming the climate. But just try scaling back ethanol subsidies today. Any politician who proposes such a thing gets their head handed to them by the powerful farm lobby. 

That makes it really important that rules set into place today for hydrogen and other “green” fuels do not compromise on the requirement that they be made from carbon-free sources. Make an exception once, and we’ll never close the loophole.

This article was originally published in the Virginia Mercury on April 25, 2023.