Energy efficiency in Virginia: talking big while headed the wrong way

map of US shows changes in retail sales of electricity in each state

Data from the Energy Information Agency shows Virginia retail electricity sales increased by 2% year over year, one of the largest increases in the country. Nationwide, electricity sales declined slightly on average.

There’s bad news for Virginians looking to reduce our dependence on fossil fuels: The job just got 2% harder.

That’s the percentage increase in electricity use in Virginia over the past year, according to data from the U.S. Energy Information Agency (EIA).

The increase was driven by the continuation of a three-year upward trend in the commercial sector. (My guess is it’s those data centers.) The somewhat better news is that residential use has stayed basically flat for 10 years.

The thing is, we would expect a 2% decrease in electricity demand every year, if we were among the states with the strongest energy efficiency programs. Needless to say, Virginia is not among them.

Virginia consumers share in the benefits of federal energy-saving programs for lighting, appliances and other equipment (advances that are now under attack from the Trump administration). These national standards, pretty much painless for consumers, have kept residential electricity usage from growing even as the population grows.

Yet Virginia makes little effort to build on these savings, and it shows. The American Council for an Energy-Efficient Economy ranks Virginia 29th in the nation overall in its 2019 State Energy Efficiency Scorecard; in the narrower category of electricity savings, Virginia came in a dismal 47th.

This should concern policy-makers, not least because wasting energy costs money. Recent EIA data reveals that in spite of Virginia having slightly lower electricity rates than the U.S. average, our residential bills are almost $20 per month higher, continuing a long and, especially for low-income residents, painful trend. Virginia residents use more electricity per household than any other state in the nation with the exception of just six southern states (Alabama, Kentucky, Mississippi, Tennessee, Louisiana and Texas).

Lobbyists for our utilities argue it’s the weather here. They say hot summers drive up the use of air conditioning, while cold winters keep electric heat pumps running. We’d like to see their data. The fact is, Virginia residents use more electricity (averaging 1165 kWh per month) and have higher bills (averaging $136.59) than residents of Maryland (1005 kWh, $133.68) and Delaware (977 kWh, $122.43), even though both of those states don’t just have colder winters, they have slightly warmer summers as well.

So if it isn’t weather, what is it? Policy. Both Maryland and Delaware have laws requiring reductions in energy consumption and have programs to make it happen.

It’s worth mentioning that Maryland and Delaware are members of the Regional Greenhouse Gas Initiative, the carbon-cutting compact of northeastern states that Virginia plans to join. Critics of the plan claim it will harm Virginia consumers. That makes it especially telling that of all the RGGI states, only Connecticut has higher residential electricity bills than Virginia.

Most RGGI states appear in the top ranks of the ACEEE scorecard. That’s not a coincidence; those states use money from the auctioning of carbon emission allowances to fund energy efficiency programs. Consumers benefit from the resulting trade-off: their electricity rates go up, but their bills go down.

Shrinking a state’s carbon footprint and reducing reliance on fossil fuels are prime objectives of energy efficiency in the RGGI states, but the lower bills give success that sweet taste that keeps them coming back for more.

Virginia has tackled energy efficiency in fits and starts over the years, with limited programs that tend to expire before they gain traction. That’s supposed to change now with implementation of 2018’s Grid Transformation and Security Act (GTSA). The GTSA requires Dominion Energy Virginia and Appalachian Power together to propose a billion dollars’ worth of energy efficiency programs over 10 years. The State Corporation Commission approved one round of spending from Dominion in May of this year.

The problem is that the GTSA only requires utilities to propose programs; it doesn’t say the programs have to be good ones, and it doesn’t require the SCC to approve them. Even the ongoing participation of a stakeholder group doesn’t change the fact that, as ever, the utilities are in the driver’s seat.

Since they’re spending their customers’ money, Dominion and APCo are happy with this set-up. Alas, they don’t have much incentive to produce really great programs. Quite the reverse: their business model depends on an ever-increasing demand for electricity. Successful energy efficiency programs are bad for business.

By contrast, the states at the top of the ACEEE scorecard all have laws called energy efficiency resource standards (EERS) that require utilities to achieve savings, not just spend money, or that take the job away from utilities entirely and entrust it to a separate entity without a conflict of interest.

More than half of states now have EERS, though not all target—or achieve—energy savings of 2% per year.

How does a good EERS work its magic? As ACEEE explains:

“In states ramping up funding in response to aggressive EERS policies, programs typically shift focus from widget-based approaches (e.g., installing new, more-efficient water heaters) to comprehensive deep-savings approaches that seek to generate greater energy efficiency savings per program participant by conducting whole-building or system retrofits.”

Some deep-savings approaches also draw on complementary efficiency efforts, such as utility support for full implementation of building energy codes. Deep-savings approaches may also promote whole-building retrofits, grid-interactive efficient buildings and comprehensive changes in systems and operations by including behavioral elements that empower customers.

The good news for Virginia is that, having failed to do much of anything on energy efficiency for all these years, we have a lot of low-hanging fruit. The GTSA can’t help but gather up some of it; a real EERS could do much more and at lower expense. We could also follow the lead of other states in adopting state-level appliance efficiency standards, tightening our building codes and allowing localities to go beyond state codes in their jurisdictions.

More and more, Virginia legislators accept the urgency of the climate crisis and the need to transition to renewable energy. It’s a job that requires lowering energy consumption as well as building wind and solar, and we can’t afford to do it wrong. Two years ago, most legislators settled for the flawed approach of the GTSA. In 2020, we should expect them to do better.

After all, to paraphrase Winston Churchill, you can always count on the General Assembly to do the right thing after they have tried everything else.

 

A version of this article appeared in the Virginia Mercury on October 11, 2019. 

Growth in data centers overpowers Virginia’s renewable energy gains

 

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.