Tag Archives: Amazon

Don’t give data centers a pass on pollution

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Senator Petersen and a group of advocates
Senator Chap Petersen talks with advocates at the General Assembly on February 3. Photo courtesy of Piedmont Environmental Council

In 2019, with Northern Virginia’s data center boom well underway, I worked with the Sierra Club to provide comments to the Department of Environmental Quality (DEQ) on a proposed major source air permit for a data center. 

We urged that the data center, owned by Digital Realty, be required to minimize its reliance on highly-polluting, back-up diesel generators by installing on-site solar and battery storage. While rooftop solar alone wouldn’t produce more than a fraction of the energy a data center uses, solar panels and batteries could provide a strong first line of defense against grid outages, without the air pollution. 

It wasn’t a new idea; other data centers elsewhere were using clean energy and storage or installing microgrids capable of providing all of the power the facility needed. Yet DEQ rejected the suggestion and gave the go-ahead for the data center to install 139 diesel generators with no pollution controls. 

Three years later, data centers have proliferated to such a degree that the power grid can’t keep up. DEQ is now proposing that more than 100 data centers in Loudoun, Prince William and Fairfax counties be given a variance from air pollution controls so they can run their diesel generators any time the transmission system is strained. DEQ is taking comments on the proposal through March 14 and will hold a hearing at its office in Woodbridge on February 27.

As a resident of Fairfax County, I’ll be one of the people forced to breathe diesel pollution to keep data centers running. Make no mistake: There would be no grid emergency without these data centers’ thousands of megawatts worth of electricity demand. And there wouldn’t be a threat to Northern Virginia’s air quality without their diesel generators. 

It’s fair to ask: Should these data centers have been built if the infrastructure to deliver power to them wasn’t ready? I’d also like to know why DEQ thinks it’s okay to impose on residents the combined pollution from many thousands of diesel generators firing at once, when it has known since at least 2019 that viable, clean alternatives exist. 

Batteries alone are an obvious solution for short-term emergency use, and can provide exactly the kind of help to the grid that will be needed this year. Instead of calling on data centers to run diesel generators, a grid operator can avoid the strain by tapping into a data center’s battery, a solution Google is implementing.      

But data centers can economically lower their energy and water costs as well as reduce strain on the electric grid by reducing their energy use and using on-site renewable energy. Global energy management companies like Schneider Electric, Virginia AECOM and Arlington’s  The Stella Group design microgrid solutions for data centers and other facilities that need 24/7 power.

I contacted Stella Group president Scott Sklar to ask how feasible it is for Northern Virginia’s data centers to meet their needs without diesel generators, given land constraints that limit their ability to meet demand with on-site solar. He told me data centers can start by reducing their cooling load by two-thirds by using efficiency and waste heat; cooling, he says, accounts for 38% to 47% of electricity demand. Cost-effective energy efficiency can reduce energy demand by one-third, and waste-heat-to-electricity can meet another 25% to 38% of the remaining electric load. “If you cut the cooling load and use waste heat to electricity, then you only need renewable energy and batteries for a maximum of half,” he concluded. “That’s doable.”

If Virginia data centers don’t start taking these kinds of measures, the situation will get worse. This year’s grid strain may be relieved through construction of new generation and transmission infrastructure, but the industry’s staggering growth rate threatens to create future problems. In 2019, when the Sierra Club was urging DEQ to think about the environmental impact of data centers, the industry consumed 12% of Dominion Virginia Energy’s total electric supply. Today, that number has risen to 21%, a figure that does not include the many data centers served by electric cooperatives rather than Dominion.  

Just last month, Gov. Youngkin announced that Amazon Web Services will invest $35 billion in  new data centers in Virginia, at least doubling Amazon’s existing investments here. By way of thanks, Youngkin wants taxpayers to provide up to $140 million in grant funding to Amazon and extend Virginia’s already-generous tax subsidy program. Ratepayers would also subsidize the build-out by contributing to the cost of new generation and transmission.

Amazon claims to lead the list of tech companies buying renewable energy, though its investments are mostly in other states and abroad. A scathing report in 2019 showed Amazon owned the majority of the data centers in Virginia at that time, but had made few investments in renewable energy here. Since then, Amazon has developed new solar facilities statewide, including enough to power its new Arlington headquarters. But as I discussed in a previous column, all the solar in Virginia would not be enough to make a dent in the energy appetite of Northern Virginia’s data centers, of which Amazon owns more than 100.  

I have no special beef with Amazon, but I do think that a rich tech company with pretensions to sustainability leadership should do more to walk the walk in the state that hosts so much of its operations. Surely that includes not relying solely on diesel generators for back-up power at its data centers. 

I also have no beef with data centers in general. They provide necessary services in today’s world, and they have to go somewhere. Data centers could be a valuable source of revenue and economic development for Southwest Virginia and other parts of the state that are not grid-constrained, if there are guardrails in place to protect nearby communities and the environment, and if they help rather than hurt our clean energy transition. Right now, none of this is the case.

Unfortunately, Gov. Youngkin not only doesn’t want guardrails, he doesn’t even want to know where and why they are needed. On February 3, a representative of his administration spoke in committee in opposition to legislation filed by Sen. Chap Petersen, D-Fairfax that would have the Department of Energy and DEQ study the impact of data centers on Virginia’s environment, energy supply and climate goals. The Senate agreed to the study, but a similar bill died in the House, and a House subcommittee killed Petersen’s Senate version Monday on a 2-1 vote. (The vote was later changed to 3-2 when two delegates who missed the meeting, and the discussion, added their votes. Killing a bill in a tiny subcommittee is one way House procedures allow delegates to avoid accountability on controversial issues — but that’s a topic for another day.)

I spoke with Sen. Petersen by phone after the subcommittee hearing. He pointed out that the administration would have been able to shape the study any way the governor wanted, and would have had control over the recommendations as well. Petersen’s conclusion: “He just doesn’t want anyone looking at it.”

Refusing to look at a problem, however, never makes it go away. And in this case, the problem is just getting bigger.

This article was originally published in the Virginia Mercury on February 15, 2023.

Update: On March 7, DEQ issued a new permit variance limited to data centers in Loudoun County. Although DEQ doesn’t say so, it appears that the original proposal has been modified. The comment period will now run through April 21, and another hearing will be held on April 6.

Growth in data centers overpowers Virginia’s renewable energy gains

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Greenpeace rebranded National Landing, the future home to Amazon’s HQ2, with a human-sized Alexa, lamppost signs and street posters highlighting the company’s stalled progress towards its commitment to power its cloud with 100% renewable energy. Photo credit Greenpeace.

 

More than 100 massive data centers, over 10 million square feet of building space, dot the Northern Virginia landscape around Dulles Airport in what is known as “Data Center Alley.”

And the industry is growing fast.

Local governments welcome the contribution to their tax revenue, but these data centers come with a dark downside: they are energy hogs, and the fossil fuel energy they consume is driving climate change.

A new report from Greenpeace called Clicking Clean Virginia: The Dirty Energy Powering Data Center Alley describes the magnitude of the problem:

“Not including government data centers, we estimate the potential electricity demand of both existing data centers and those under development in Virginia to be approaching 4.5 gigawatts, or roughly the same power output as nine large (500-megawatt) coal power plants.”

As these data center operations continue to grow, they are providing the excuse for utilities, primarily Dominion Energy Virginia, to build new fracked-gas infrastructure, including gas generating plants and the Atlantic Coast Pipeline.

Many of these same tech companies have publicly committed to using renewable energy, and in some cases they have invested heavily in solar and wind power in other states. With the exception of Apple, however, all these data center operators are falling far short in meeting their Virginia energy demand with renewables. Intentionally or not, that makes them complicit in Dominion’s fossil-fuel expansion.

One tech company in particular stands out in the report, due to the sheer size of its operations. Greenpeace calculates that Amazon Web Services, the largest provider of cloud hosting services in the world, has a larger energy load than the next four largest companies combined.

For a while, it looked like AWS would provide leadership commensurate with its size. In 2015, AWS helped break open the solar market in Virginia with an 80-megawatt solar farm. A year later it added another 180 megawatts of solar here, as well as a wind farm in North Carolina in Dominion territory.

Then the investments stopped, while the data center growth continued.

Today, Greenpeace estimates that AWS uses close to 1,700 megawatts for its Virginia data centers. Adjusted for their capacity factors, the renewable energy projects total just 132 megawatts, or less a tenth of the energy the data centers use.

The capacity factor of an energy facility reflects how much energy it actually produces, as opposed to its “nameplate” capacity. A solar facility produces only in daylight, but a data center consumes energy 24/7. To match all of its energy demand with solar energy, AWS would need more than 7,000 megawatts of solar—at least 15 times the amount in all of Virginia today.

For a company whose website promises a commitment to 100 percent renewable energy, that’s a major fail.

The Greenpeace report shows Amazon is not alone in data center operators that are dragging their feet on clean energy. It is simply, by far, the largest. The next three biggest data center operators—Cloud HQ, Digital Reality, and QTS—have no renewable energy at all in Virginia.

Better-known names like Microsoft and Facebook also operate Virginia data centers. Although both have invested in Virginia solar farms, they also fall well short of meeting their energy needs with renewables.

The tech giants are not entirely to blame in all this. As the Greenpeace report details, many of them have asked the General Assembly and the State Corporation Commission for more and better options for purchasing renewable energy. Their requests have largely been ignored.

Virginia’s monopoly system makes it hard for the companies to buy clean electricity from other providers. Our number one monopoly, Dominion Energy, claims to be working hard to meet the large customers’ demand for renewable energy, but its extensive investments in gas infrastructure pose a clear conflict of interest.

Surely, though, if anyone can stand up to Dominion on its home turf, it should be Amazon — which, of course, plans to make Virginia its home turf as well.

And AWS does have options, including more solar as well as land-based wind from the Rocky Forge wind farm and offshore wind from Virginia or North Carolina.

The fact that Amazon doesn’t even seem to be trying should be of great concern to Virginians. As Greenpeace puts it, “AWS’ decision to continue its rapid expansion in Virginia without any additional supply of renewable energy is a powerful endorsement of the energy pathway Dominion has chosen, including the building of the ACP, and a clear signal that its commitment to 100 percent renewable energy will not serve as a meaningful basis for deciding how its data center are powered.”

Amazon has already fired back at the Greenpeace report. In a statement, it asserts that “Greenpeace’s estimates overstate both AWS’ current and projected energy usage.”

However, the statement did not offer a different estimate. It also points to its investments in Virginia renewable energy (the same ones described in the report) and concludes, “AWS remains firmly committed to achieving 100 percent renewable energy across our global network, achieving 50 percent renewable energy in 2018. We have a lot of exciting initiatives planned for 2019 as we work towards our goal and are nowhere near done.”

Well, that’s nice.

But meanwhile, those data centers are using electricity generated from burning fossil fuels, driving climate change, and providing an excuse for new fracked gas infrastructure. Given the rapid pace of data center construction in Virginia, it’s going to take a lot of exciting initiatives from AWS — and all the other data center operators — to make any kind of meaningful impact.

All I want for Christmas is a 500 MW offshore wind farm

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Ivy Main with wind turbine

Yes, you will say I have expensive taste. But it’s not for me, it’s for the children! Picture their shining faces on Christmas morning when they find Santa has delivered 62 SiemensGamesa 8.0-megawatt, pitch-regulated, variable speed offshore wind turbines sporting a rotor diameter of 167 meters each, to a patch of ocean 27 miles east of Virginia Beach. 

Or the turbines could be GE’s sleek Haliade 150-6 MW like my friends up in Rhode Island got two years ago, or the MHI Vestas 10 MW beast that the cool kids are talking about. It sports a hub height of 105 meters and has blades 80 meters long. A single one of those bad boys can power over 5,000 homes.

But really I am not particular; these are just suggestions. 

I know we’re getting two turbines in 2020 as a demonstration project, and I’m grateful, I really am. But all the clued-in states are serious about offshore wind, and they’re building projects of 200 MW and up. We’ll be left behind if we don’t get in the game.

The states north of us are making port upgrades, attracting new businesses, and doing workforce training. They look at offshore wind as not just a jobs generator, but as a way to save money on energy costs, meet sustainability goals, improve the environment and reduce their reliance on fracked gas and imported energy. 

They’re positioning themselves to be serious players in a huge industry that a decade from now will employ tens of thousands of Americans. In the decade after that, offshore wind turbines will start delivering power to the West Coast, Hawaii and the Great Lakes region.  The effect will be transformative, as offshore wind energy feeds East Coast cities, pushes out the last of the Midwestern coal plants and leaves the fracking industry without a market.

Think that’s just the eggnog talking? Consider these indicators of an industry that’s taking off: 

1. Offshore wind is now a global industry.Offshore wind got its start in Europe more than 20 years ago as a way to get more wind energy without sacrificing valuable land space. But just in the last few years, it has spread to China, South Korea, Taiwan, Japan, and Vietnam in addition to the U.S. Analysts estimate China alone will have 28,000 megawatts installed by 2027. 

Offshore wind has been slow to advance in the U.S. because building 600-foot tall machines and planting them twenty-five miles out to sea is not cheap or easy, and the federal government had to devise a regulatory scheme from scratch. As the kinks get worked out and a manufacturing and supply chain emerges, the U.S. will move to the forefront of the industry. We always do.

2. Offshore wind competes on price in many markets. Offshore wind is cheaper than fossil fuels and nuclear in Europe already. That hasn’t been so true in the U.S. thanks to abundant coal and fracked gas, but even here, tumbling offshore wind prices have states looking at offshore wind as a way to help customers save money on energy. Bloomberg reported that Massachusetts’ first commercial-scale offshore wind farm will save electricity users $1.4 billion over 20 years. 

3. Early movers in the U.S. are already doubling down. Massachusetts and New York, which committed to a limited number of offshore wind projects early in order to capture a piece of the jobs pie, now want more projects. New York has set a goal of 2,400 MW by 2030; this fall Governor Andrew Cuomo announced a solicitation for 800 MW. This fall New Jersey announced a solicitation for 1,100 MW of capacity, a down payment on the state’s goal of 3,500 MW by 2030. 

3. Large multinational companies are buying the entrepreneurial start-ups.This year Ørsted, the energy giant formerly known as DONG Energy (for Danish Oil and Natural Gas) acquired Deepwater Wind, the scrappy developer of the Block Island project as well as projects in other states. French company EDF Renewables bought Fishermen’s Energy, another homegrown company that sought to give fishing interests a stake in wind projects. 

Along with big developers have come big law firms. You know there’s going to be serious money involved when $800 an hour lawyers trawl for clients at industry conferences. 

4. Oil and gas companies have moved in. Shell Oil and its partner EDP Renewables just spent $135 million for the right to develop a lease area off Massachusetts large enough to accommodate 1,600 MW of wind turbines. Norway’s Equinor (formerly Statoil) also put in $135 million for another section of the lease area, with the third piece going to a European partnership. 

American oil companies haven’t shown the same level of interest yet, but their suppliers in the Gulf of Mexico are handing out cards at offshore wind conferences, advertising their offshore expertise in everything from cables to shipbuilding.

5.  Offshore wind turbines have evolved away from their land-based kin. Unfettered by space limitations, offshore turbines now average close to 6 MW, more than twice the size of the typical land-based turbine. Wind farms slated for completion over the next several years will use even larger turbines, ranging in size up to a General Electric 12 MW turbine expected to deploy in 2021, and even larger ones still on the drawing boards. 

Foundations are diversifying, too, away from the original “monopile” design that mimics its land-based counterparts. Floating turbines will become mainstream in the next decade, enormously increasing design options as well as potential locations for wind farms. 

This will prove a special boon to the U.S., because while most of the East Coast is blessed with a shallow outer continental shelf that allows for fixed foundations even 30 miles from shore, the deep waters of the West Coast require floating technology to feed energy-hungry California. And the open ocean offers a lot of space.

So what’s holding Virginia back?

Dominion Energy holds the lease on the commercial-scale Wind Energy Area off Virginia. The company won it for a mere $1.6 million back in 2013, and not a whole lot seems to have happened with it since then. Dominion needs a customer, or perhaps just competition.

But Governor Northam is determined to see Virginia become a supply chain hub for at least the Mid-Atlantic states, and he has adopted a goal of achieving 2,000-MW of wind energy off our coast by 2030. 

That means I am not the only person in Virginia who wants a wind farm in my Christmas stocking, although I am likely the only one trying to get you to picture that image.

Admittedly, even Santa could find this a tall order (ho ho ho!), but Virginia is now rife with data centers that consume huge amounts of energy, owned by corporations that have promised the energy will be clean. So far the actions of these corporate players have lagged behind their promises. 

So if Santa can’t bring the governor and me a 500 MW wind farm off the coast of Virginia, maybe Amazon will deliver.

This column originally appeared in the Virginia Mercury on December 24, 2018. As this is now December 26, perhaps you think people are asking me if I got my wind farm yesterday. But no one has. Because of course they know it is out there, only waiting for us to do the hard work to make it a reality.

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

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Entrance to Crystal City Metro Station in Arlington, Virginia

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A 5-year plan for economic growth: 10% solar and 50,000 new jobs

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Source: The Solar Foundation

A new analysis from the non-profit Solar Foundation shows Virginia could create 50,400 jobs if it commits to building enough solar energy in the next five years to provide just 10% of our electricity supply.

The analysis takes the form of an “infographic” showing the implications of 10% solar. It would require building 15,000 megawatts of solar, divided among utility-scale solar farms, commercial installations, and the rooftops of houses. At the end of 2016, Virginia had a total of only 241 MW of solar installed, representing one-tenth of 1 percent of total electricity consumption. Getting to 10% by the end of 2023 would mean an annual growth rate of 61 percent. That would be impressive growth, but well below the 87 percent growth rate averaged by California and North Carolina over the past 6 years.

So 10% in five years should be doable. And indeed, viewed against the need to dramatically lower our carbon footprint, it seems like a very small step indeed. The McAuliffe administration wants to significantly cut statewide carbon emissions, and it is hard to see how we can do that without replacing the dirtiest fossil fuels with solar (and wind, and energy efficiency).

The good news is that the market is in our favor. Dominion Energy’s 2017 Integrated Resource Plan (IRP) identified utility-scale solar as the least-cost energy resource available in Virginia today. And participants in local cooperative buying programs for homeowners and businesses, known as “Solarize” programs, report payback times of under 10 years for rooftop solar, after which they will have nearly free electricity for 20 or 30 years.

Recent solar deals involving Amazon, Microsoft, and now Facebook show just how strong the demand is from customers. The very companies that our political leaders want so desperately to attract to Virginia are insisting on renewable electricity.

These deals demonstrate the direction of the market, and they will give an initial boost to solar employment, especially in the rural communities that are the best locations for solar farms. But restricting solar to a handful of new companies just coming into Virginia won’t get us to 15,000 MW and 10% solar. It’s also fundamentally unfair to the rest of us who are stuck with a dirty grid. Why should existing customers get left with polluting sources, while big tech companies get solar?

For us, Dominion’s IRP caps its solar plans at 240 MW per year, an amount it admits is arbitrary. In other words, Amazon got 260 MW, Facebook is getting 130 MW, but all the rest of Dominion’s customers put together will get just 240 MW per year.

As for customers who are determined to take matters into their own hands with rooftop solar, a host of unnecessary restrictions continue to limit growth. Virginia needs to put policies in place to push utilities to do more, to support local governments and schools that want solar, and to remove the barriers that limit private investment.

Solar companies around the state say if we can do that, they will do their part by hiring more Virginians. Here’s what some of them had to say about the 10% solar goal, and how to achieve it:

“We believe, as Virginians, that we can solve our energy challenges. Ours is a Virginia company founded and based in Charlottesville, and we are committed to building Virginia-based energy production facilities that benefit all Virginians. But the fact is that over the past few years our growth has come from business in other states. We have 26 employees in Virginia now, and we could increase that dramatically if Virginia promotes solar through policy changes that incentivize business owners to invest, allows competition, and supports the environmental message.” –Paul Risberg, President of Altenergy, Charlottesville

“The economics have never been better for solar in Virginia than they are right now. Prospect Solar has grown from two employees in 2010 to 16 full time employees today. Roles such as electricians, skilled labor, engineers, project managers, and sales people are integral to the success of each project. We hope Virginia will commit to a rapid, sustained buildout of all sectors of the solar industry, allowing us to continue adding local jobs.” –Andrew Skinner, Project Manager at Prospect Solar, Sterling

“Nationwide, the solar market was a 23 billion dollar industry in 2016. One out of every 50 new jobs in America was created by the solar industry last year. Sigora has been part of that. We have doubled in size in the past year and now employ 80 people in the Commonwealth.” –Karla Loeb, Vice President of Policy and Development for Sigora Solar, Charlottesville

“Local energy, local jobs, local investment. Our workforce is made up of local people—three of us went to Virginia Tech, one went to New River Community College, which has an Alternative Energy Program. An increase in demand of this scale would mean we’d hire more local people.” –Patrick Feucht, Manager of Baseline Solar, Blacksburg

“Residential and commercial rooftop solar has created most of the solar jobs in Virginia to date, and it has to be a part of the push to 10 percent. As we know, rooftop solar creates more jobs than utility solar, and these are good-paying, local jobs for local people. That’s one reason Virginia should lift the outdated 1 percent cap on net-metered solar, and leave the market open to anyone who wants to invest in their own home-grown energy supply.” –Sue Kanz, President of Solar Services, Virginia Beach

“Ten percent solar is a modest goal to shoot for given the strong economics of solar and the demand we are seeing from customers. Virginia has been held back by restrictive policies that have made it a ‘dark state.’ Reforming our policies would lead to a lot more economic development around solar.” –Tony Smith, President of Secure Futures LLC, Staunton

 

A Candidate’s Guide to Clean Energy and the Pipelines

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Photo courtesy of Chris Tandy.

Recently I attended a forum where a candidate for statewide office discussed his energy policies and voiced his support for wind and solar. He embraced a goal of Virginia reaching at least 30% renewable energy by 2030, which was roundly applauded. But then he added that we couldn’t get started on it without advances in battery storage, because, he said, without storage there is no way to put surplus wind and solar on the grid.

People around the room look dumbfounded. They weren’t energy experts, but they knew that was flat-out wrong. Later he made other statements that showed he misunderstood facts about energy, climate change and the grid, hadn’t questioned what he’d been told by utility lobbyists, or just hadn’t been paying much attention.

Maybe you are a candidate yourself (or you work for one), and you don’t want to embarrass yourself by saying so, but you frankly don’t understand what was wrong with that statement about wind and solar. Or perhaps you are an activist and you’d like to help your local candidate for office bone up on some of the most important issues he or she will have to vote on while in office.

Allow me to help. Here is what you need to know about the hot-button energy issues in Virginia today. I’ll also offer my opinion about where you should stand on those issues, but that part is up to you.

Solar is coming on strong—and it is the cheapest energy in Virginia today. This astounds people who don’t keep up with energy trends, but it’s what Dominion Energy Virginia’s latest integrated resource plan (IRP) reveals. Utility-scale solar farms, 20 megawatts (MW) and up, can produce electricity at a cost that beats coal, gas and nuclear. That’s why Dominion’s IRP proposes a build-out of 240 MW of solar per year. It’s why Amazon Web Services has been building 260 MW of solar in five Virginia counties to supply its data centers. It’s why, over the past year, developers have proposed more than 1,600 MW of additional solar capacity in counties across the state. It’s also why today, solar already employs more Virginians than coal.

None of the solar under development includes battery storage. It doesn’t have to, because electricity from solar all goes into one big grid.

The grid is HUGE. If you’re from around here, you probably remember the earthquake of August 2011. It was centered in Mineral, Virginia, but did damage all the way to Washington, D.C. It also caused an immediate shutdown of Dominion’s two nuclear reactors at North Anna that lasted for more than three months. That meant 1,790 megawatts (MW) of generating capacity, enough to power 750,000 homes, suddenly went offline. Do you remember what happened to your power supply at home? You probably don’t. Why not? Because your power didn’t go out.

That’s because the North Anna nuclear plants are only two out of more than 1,300 generating units (power plants) feeding a 13-state portion of the transmission grid managed by independent operator PJM Interconnection. When one unit fails, PJM calls on others. PJM’s job is to balance all this generation to meet demand reliably at the lowest cost.

The grid has no problem with solar. While solar makes up less than 1% of its electricity supply currently, a PJM study concluded the grid could handle up to 20% solar right now, without any new battery storage. Wind and solar together could make up as much as 30% of our electricity with no significant issues. The result would be less coal, less gas, and less carbon pollution—and $15.6 billion in energy savings.

Virginia already has energy storage. You could even say we are swimming in it. Bath County, Virginia is home to the world’s largest “battery” in the form of “pumped storage.” A pair of reservoirs provide over 3,000 megawatts of hydropower generating capacity that PJM uses to balance out supply and demand.

Actual batteries are also an option today, not sometime in the future. The price has dropped by half since 2014, to the point where solar-plus-storage combinations compete with new gas peaker plants. Batteries are also being paired with solar today to form microgrids that can power emergency shelters and other critical functions during widespread outages.

If Virginia goes totally gangbusters with solar, a day will come when there is so much electricity being generated from the sun in some areas that we’d need batteries. But, sadly, we aren’t anywhere near there yet.

So, you should definitely get on board with battery storage; just don’t make the mistake of thinking we can’t ramp up renewable energy today without it.

Make renewable energy your BFF. It probably polls better than you do. Renewable energy has favorability ratings most politicians only dream about. A Gallup poll last year showed 73% of Americans prefer alternative energy to oil and gas, a number that rises to 89% among Democrats. Republicans love it, too; North Carolina-based Conservatives for Clean Energy found that 79% of registered Republicans in their state are more likely to support lawmakers who back renewable energy options.

Distributed renewable energy—think rooftop solar—is especially popular with the greenies on the left and the libertarians on the right, and pretty much everyone in between. It offers benefits that utility solar does not. The policy that makes it affordable is called net metering. It gives solar owners credit for the excess solar electricity they put on the grid in the daytime, to be applied against the power they draw from the grid at night. If you want to support your constituents’ ability to power their own homes with solar, you should protect and expand their right to net meter their electricity.

People who understand Dominion’s pipeline hate Dominion’s pipeline. The proposed Atlantic Coast Pipeline would carry fracked gas 600 miles from inside West Virginia through the heart of Virginia and into North Carolina. Instead of following highways, it cuts across mountains, rivers, forests and farms, and requires land clearing 150 feet wide the whole way. Landowners along the route are furious, as are lovers of the national forests and the Appalachian Trail, people who care about water quality, people who care about climate change, and fans of caves, bats and other wildlife.

The gas it will carry is extracted from shale formations deep underground using hydraulic fracturing, or fracking, a loud, dirty and dangerous practice that doesn’t poll well in Virginia. More quietly (but in many ways worse), leaking wells, pipes, and storage reservoirs are estimated to emit enough greenhouse gases to cancel out the climate advantages of burning gas over coal, and increase smog. An analysis using industry data found that building the ACP and a second controversial pipeline project, the Mountain Valley Pipeline, would more than double the carbon footprint of Virginia’s power sector.

Sea level rise is already taking a toll in Virginia with “sunny day” flooding regularly crippling low-lying areas of Hampton Roads. If you’ve pledged to address climate change, you need to understand how building gas pipelines will undermine the very efforts to reduce such threats.

Now, if you don’t want to oppose Dominion, you might be inclined to minimize all these issues, or to tell voters the destruction of all we hold dear is just the price we pay for cheap energy. I’m sure you can phrase it better than that.

Before you do, though, you should also spend a few minutes to understand why critics say the ACP will raise energy prices, not lower them. That’s because Dominion’s gas-burning electric generating plants already have long-term contracts to use another company’s pipeline, for less money. Using the ACP instead of cheaper alternatives means raising costs to consumers.

Dominion also plans to build more gas-fired power plants so it can fill the pipeline. Gas plants are built to last 30 years or more, pipelines 50 years. Locking us into gas infrastructure for decades when solar is already cheaper than gas now is a seriously bad bet.

And if you think Dominion is going to shoulder the loss of a bad bet, better think again. That’s what its captive ratepayers are for.

Another name for those people is “voters.”

Yay, Dominion is building solar! Just not for you.

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solar installation public domainThis week’s news of an 18 megawatt solar facility to be installed at Naval Station Oceana in Newport News marks the latest in a string of announcements of new solar projects to be built in Virginia. The Commonwealth had only about 22 megawatts of solar installed as of the end of 2015, but by the end of this year, we should be comfortably into the triple digits. That’s still trivial compared to neighboring North Carolina, which added over 1,000 megawatts last year alone, but it’s grounds for celebration here in the “dark state.”

How is this happening? Customer demand, coupled with falling costs, finally wrought a change of attitude at Dominion Virginia Power. The state’s largest utility dragged its feet on solar for years until announcing, in early 2015, plans to spend $700 million on 400 megawatts of solar power in Virginia by 2020.

The welcome change comes with a caveat: while these new projects will supply solar to important and influential customers like Microsoft, Amazon, and even the state government itself, Dominion offers no programs to supply solar to ordinary Virginians. And indeed, even where ratepayers are footing the bill for projects, our regulators insist that the renewable energy certificates—the right to say it’s solar power—should be sold to someone else.

Dominion’s early adventures in solar were not altogether encouraging. In 2012 the General Assembly authorized the utility to “study” solar by building up to 30 megawatts of distributed (mostly rooftop) projects. The SCC approved $80 million for the “Solar Partnership Program” the following year, with the stipulation that Dominion should sell the renewable energy certificates to reduce the cost to ratepayers. A steep learning curve made for slow and expensive going, and while a number of schools, universities and commercial businesses signed up to host projects, they weren’t permitted to purchase the solar energy being produced right on their property.

In 2013, Dominion created a special tariff “Schedule RG” especially to allow commercial customers to buy renewable energy. Cumbersome, limited and expensive, it never attracted any takers. Dominion spokesman David Botkins suggested to reporters last May the problem was Dominion’s low rates. As in, who wants renewable energy when dirty power is so cheap?

That was one month before Amazon Web Services announced it had contracted for the output of an 80 megawatt solar farm to be built in Accomack County. The project sidestepped Dominion’s limitations by feeding power directly into the Delmarva Power grid in Maryland. Dominion promptly bought the project.

Schedule RG was clearly a failure, but just as clearly, there was money to be made on solar. Dominion just needed to figure out how.

The utility was already trying. In January of 2015 Dominion proposed to build a 20 megawatt solar farm near Remington, Virginia. The State Corporation Commission (SCC) originally rejected Dominion’s proposal, saying the company had not considered third-party alternatives that might be cheaper for ratepayers. (They were proved right when it turned out the Amazon project was slated to deliver power at a cost that was 25% less.)

Dominion didn’t give up on Remington, nor was it willing to turn the project over to a private developer. Instead, it got to work rejiggering the deal into what, this spring, became a public-private partnership. Governor McAuliffe arranged to have the state government, rather than ratepayers, buy the power output from Dominion, while Microsoft agreed to buy the renewable energy certificates (RECs) to meet its corporate commitment to buying renewable energy. (In every solar deal, watch what happens to the RECs.*)

Although I wondered at the time if the state might be taking a financial hit to make the deal work, more recent information suggests the opposite. According to Dominion’s website, “the construction and deployment of this solar asset will lower the cost of the energy purchased by the Commonwealth. The Commonwealth is projected to save $500,000 to $1M in energy costs over the lifetime of the project.”

This tells us two things: one, obviously, we should sell more solar to Microsoft. And two, either the website omits key details about the financing, or the cost of energy produced by solar panels is now pretty darn competitive.

The projects have started coming in more quickly in recent months. In February of this year, Dominion announced it would buy the output of a 20 megawatt solar farm in Chesapeake through a power purchase agreement (PPA) with a North Carolina developer. Other PPAs are said to be under consideration.

Then, on June 30, the SCC gave Dominion approval to move forward on building three new projects totaling 56 megawatts in Powhatan, Louisa, and Isle of Wight counties. The 800 local jobs associated with the projects sparked news stories across the state.

That brings us to this week’s announcement of the deal with the Commonwealth and the Department of the Navy at Oceana. According to Dominion’s press release, Dominion Virginia Power will own and operate the facility, and the Commonwealth will buy the electricity, with Dominion retiring the RECs on the Commonwealth’s behalf.

Deputy Secretary of Commerce Hayes Framme confirmed to me this deal is the first step toward satisfying Governor McAuliffe’s commitment to having the state government get 8% of its power from solar by the time he leaves office, an amount equal to roughly 110 megawatts. That should mean there will be more announcements to come.

The Navy’s role here is especially interesting. Although some news outlets reported the Navy would buy the electricity, this appears to be a misreading of the Navy’s press release. Naval Station Oceana will instead receive “in-kind consideration in the form of electrical infrastructure upgrades” for hosting the project on its land. But the press release dwells mainly on the benefit to the regional grid that serves the naval station:

“Renewable energy projects, like the one at NAS Oceana and others throughout the Mid-Atlantic Region, are win-win-win collaborations. They’re good for the utility companies, good for our installations and good for the communities surrounding our installations,” said Rear Adm. Jack Scorby, Jr., commander, Navy Region Mid-Atlantic. “These projects increase the energy security, energy diversity and energy resiliency of our bases. Energy security, or having assured access to reliable supplies of energy and the ability to protect and deliver sufficient energy to meet mission-essential requirements, is critical to our installations’ roles to support the Fleet.”

The reference to “energy security, energy diversity and energy resiliency” is key here. The Navy will benefit from having a large renewable generation source onsite, one that can be protected from attack and that is not susceptible to fuel supply disruptions.

Come to think of it, “energy security, energy diversity and energy resiliency” are three of the prime reasons we need more solar projects all across the state, and why the benefits shouldn’t be limited to large, influential customers. So yay, Dominion, for getting rolling on all these solar projects! Now please stop blocking the way for the rest of us.

*RECs were invented as a way to identify units of electricity generated by wind, solar and other sources, since the electrons themselves can’t be dyed green. But RECs don’t have to just follow electrons around; they can also be bought and sold separately from the underlying electricity. When the RECs associated with a solar project are sold separately (in the case of the Remington solar project, to Microsoft), the electricity loses its green quality, and the buyer (in this case, the Commonwealth) can’t claim to be buying solar energy. For a fuller explanation of RECs, see this earlier post on the subject.

Dominion makes a play for utility-scale solar, but Amazon steals the show

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As_solar_firmengebaude.Christoffer.ReimerThis winter Dominion Virginia Power promised Governor Terry McAuliffe it would build 400-500 megawatts (MW) of utility-scale solar power in Virginia by 2020, part of the deal it cut to gain the governor’s support for a bill shielding it from rate reviews through the end of the decade. The company also took a welcome first step by announcing a proposed 20-MW solar farm near Remington, Virginia.

The applause had hardly died down, though, when Amazon Web Services announced it would be building a solar project in Accomack County, Virginia, that will be four times the size of Dominion’s, at a per-megawatt cost that’s 25% less.

Why such a big difference in cost? The way Dominion chose to structure the Remington project, building and owning it directly, makes it cost more than it would if a third party developed the project, as will be he case for the Accomack project. That means Dominion is leaving money on the table—ratepayers’ money.

There is nothing wrong with the Remington project otherwise. The site seems to be good, local leaders are happy, and solar as a technology has now reached the point where it makes sense both economically and as a complement to Dominion’s other generation. But by insisting on building the project itself, and incurring unnecessary costs, Dominion risks having the State Corporation Commission (SCC) reject what would otherwise be a great first step into solar.

And that’s a crying shame, because solar really is a great deal for consumers these days. Utilities now regularly sign contracts to buy solar for between 4.5 and 7.5 cents per kilowatt-hour. Compare that to the 9.3 cents/kWh cost of electricity produced by Dominion’s newest coal plant in Virginia City, and it’s no wonder that solar is the fastest growing energy source in the country.

Utilities get those rates by buying solar energy from solar developers, not by playing developer themselves. From the ratepayer’s point of view, developers have three advantages over utilities: they are experts at what they’re doing, they work on slimmer profit margins, and they get better tax treatment. Dominion loses all three advantages if it builds the Remington solar farm itself.

Dominion has already demonstrated its lack of solar knowhow. In a May 7, 2015 filing with the SCC (case PUE-2011-0017), it admitted its “Solar Partnership Program,” which puts solar on commercial rooftops, is a year behind schedule and will total less than 20 MW of the 30 MW legislators wanted. Previously the company had told stakeholders it would likely hit its $80 million budget limit with only 13-14 MW installed.

As for profit margins, Dominion gets a guaranteed 10% return on its investments. This explains its desire to build solar itself, but it’s hard to justify charging ratepayers a 10% premium when there are cheaper alternatives courtesy of the free market. Unlike Dominion, solar developers have to compete against each other, so they accept much slimmer profit margins.

And then there are the tax implications. A third-party developer can claim the federal 30% tax credit immediately, and can take accelerated depreciation on the cost of the facility over five years. A utility has to take both the tax credit and the depreciation over the expected life of the facility, 20 years or more.

These three factors—knowhow, free-market cost competition, and tax implications—add up to huge savings for consumers when a project is put out to bid by third-party developers.

Just how big the savings could be is clear from a comparison of Dominion’s solar farm with Amazon’s project, to be built by a third-party developer. Dominion says Remington will cost $47 million for 20 MW, or $2.35 million/MW. Amazon’s project is reported to cost $150 million for 80 MW, or $1.875 million/MW. That is a difference of about 25%.

Obviously, then, the better way to finance Remington is for Dominion to put the project out for competitive bid among solar developers. Dominion won’t make as much money for its shareholders, but it will save money for ratepayers. And really, as a member of the American Legislative Exchange Council (ALEC), Dominion ought to jump at the chance to live up to ALEC’s “free markets” mantra.

More to the point, keeping costs down this way will make it possible for the project to get SCC approval, opening the way to many more like it. With hundreds of megawatts still to go, Dominion needs to show it can do solar right.

In fact, Dominion should put out a request for proposals for the full 400 MW it says it plans to build. This could include revisiting its refusal to buy power from another proposed solar farm that went nowhere. That solar facility in Clarke County, proposed by OCI Solar Power six months ago, would have added another 20 MW to the grid. With only a year and a half to go before the 30% federal tax credit drops to 10%, Virginia ratepayers have a right to expect many more solar farms, and soon.

Frustration over Dominion’s slow pace is widespread among solar advocates. Cale Jaffe, Director of the Southern Environmental Law Center’s Virginia office, noted, “Last General Assembly session, Dominion committed to building 400 megawatts of utility-scale solar projects in Virginia by 2020.  The General Assembly then passed, at Dominion’s urging, legislation declaring up to 500 megawatts of new solar projects to be in the public interest. But, unfortunately, Dominion appears to be getting out of the blocks very slowly when it comes to solar power.  I’m concerned that the company is not currently on pace to live up to its pledge.” SELC has intervened in the Remington case on behalf of environmental groups Appalachian Voices and Chesapeake Climate Action Network.

Of course, we also need solar from all sources, not just our utilities. Homeowners, small businesses, nonprofits, and big industrial customers—all should be encouraged to build solar as a matter of the public interest. Solar diversifies our energy base, creates local jobs, strengthens the electricity grid, and will help Virginia meet the EPA’s Clean Power Plan.

Even 500 MW of solar pales compared to the 4,300 MW of new natural gas plants Dominion expects to have built by 2020. When you adjust for capacity factors, in 2020 solar will make up less than five percent of Dominion’s power generation from new projects, and barely a blip on the radar screen of total generation.

While sad, this is hardly news. Virginia famously lags behind neighboring states in developing solar resources. Maryland had 242 MW of solar installed at the end of 2014 and expects to meet its goal of 1,250 MW by the end of 2015. North Carolina has over 1,000 MW and counting. The same source puts Virginia at a grand total of 14 MW.

(In fairness I think our total has to be a little better than that, but when your state’s total looks like some other state’s rounding error, who really stops to crunch the numbers?)

Getting serious about solar means opening our market to competition. Attracting more projects like Amazon’s will require the General Assembly to pass legislation removing all barriers to third-party power purchase agreements. Amazon’s solar farm has the advantage of being located on the Maryland border. It will feed into power lines owned by Delmarva Power, and then into the PJM transmission grid serving the multistate region that includes Virginia. It will not serve Amazon’s data centers in Virginia directly, but will simply offset their power demand. If Amazon or anyone else wanted to put in a similar solar farm elsewhere in Virginia, they would run into restrictions on third-party power purchase agreements and the absurd terms and conditions imposed by our utilities even on large corporate customers.

Tearing down the barriers that prevent the private market from building solar is critical to closing this gap. Dominion made a half-hearted effort to serve big customers, in the form of its cumbersome “RG tariff.” The fact that no one has used it, and Amazon has done an end-run around it, proves how worthless it is. Virginia should put an end to utility red tape, open the market to competition, and let the sunshine in.

The State Corporation Commission will hear arguments on the Remington proposal starting at 10 a.m. on July 16, 2015 at its offices in Richmond. The case is PUE-2015-00006.