What’s not to like about biomass? Deforestation, pollution and overpriced power.

What if you could get your electricity from a fuel that destroys forests, produces more air pollution than coal, and is priced higher than alternatives?

“Wow, sign me up!” you would not say, because as a sane person you don’t like deforestation, pollution and overpriced power.

Also, because you are not Dominion Energy Virginia. Dominion burned wood at one power plant from 1994 until last year; converted three small coal plants to wood-burning in 2013; and burns wood along with coal at its Virginia City coal plant. This “biomass” energy makes up about one percent of the electricity Dominion sells to Virginia ratepayers, according to its most recent IRP.

Biomass counts as renewable under the Virginia Code, so in theory it can also be used to supply customers who are willing to pay extra for renewable energy. Lots of people want renewable energy these days. Unfortunately for Dominion, they want clean, non-polluting renewables like wind and solar. No one is clamoring for biomass.

That’s especially true because biomass costs more than wind or solar, not to mention more than fossil sources. Who’s going to buy dirty energy when they can get clean energy for less money?

We recently learned just how much more expensive biomass is when the State Corporation Commission held a hearing on Dominion’s latest effort to get a renewable energy tariff approved. Rider TRG combines wind, solar and hydro with biomass, originally including biomass burned at the Virginia City coal plant.

Pretty much everyone hates the proposed tariff, as the Virginia Mercury reported. Counties looking to buy renewable energy objected. Corporate customers said they wouldn’t buy it.

So, in a halfway step meant to mollify opponents, Dominion offered to remove the Virginia City coal plant from the list of sources, while leaving in the rest of the biomass facilities.

Here’s the interesting part: taking Virginia City out made the program more affordable. Having biomass as part of the renewable energy mix, it turns out, doesn’t save money for participants; it costs extra.

In that case, you might say (again, you being a sane person), Dominion ought to remove all the biomass from Rider TRG and save participants even more money, while making it a program people might actually want.

And indeed, the SCC staff calculated that if all the biomass were to be removed, it would reduce the cost by almost two-thirds. For average residential customers using 1,000 kilowatt-hours per month, removing biomass from Rider TRG would mean the added cost of making all their power renewable would fall from $4.21 per month to $1.78.

A no-brainer, right? Making the program both cleaner and more affordable would make it more popular and spur construction of new renewable energy facilities.

Dominion refused. Having the program be successful, you see, is not the point. As I wrote this summer, the purpose of Rider TRG isn’t to offer a product people want to buy, it’s to prevent anyone else from selling renewable energy. If the commission approves Dominion’s tariff, under state law competitors will be locked out of the Virginia market.

If the biomass turns out to be a kind of poison pill for the program, so that no one signs up, that really doesn’t matter to Dominion because, again, the whole point of Rider TRG isn’t to attract customers, it’s to kill competition.

The SCC hasn’t ruled on the program yet. Post-hearing briefs are due Dec, 20, so we can expect an order in the case early next year.

But why biomass?

At this point you may be asking yourself why Dominion chose to invest in all those biomass plants in the first place. The answer is subsidies. During its early years, Virginia’s voluntary renewable portfolio standard rewarded Dominion with tens of millions of dollars annually as a bonus for meeting the renewable energy goals set out in the law. Section 56-576 of the Virginia Code very helpfully defines renewable energy to include “biomass, sustainable or otherwise, (the definitions of which shall be liberally construed).”

Fun fact: as recently as 2008, only “sustainable biomass” qualified as renewable energy. The definition was altered in 2009, at the same time it was expanded to cover biomass burned in a coal-fired power plant such as the one Dominion had just announced it would build.

The RPS bonus money boondoggle came to an end in 2013 when public outrage reached a fever pitch. Then-Attorney General Ken Cuccinelli reached a deal on legislation to repeal the bonus money provisions of the statute. (Utilities could still recover the costs of the RPS program from ratepayers.) Left intact was everything else, including defining renewable energy as “biomass, sustainable or otherwise.”

Liberally construing “sustainable or otherwise” has not been good for southeastern forests. Dogwood Alliance and Southern Environmental Law Center document widespread clear-cutting, loss of forests, and replacement of mixed hardwood forests with pine plantations. As these groups and others have also pointed out, burning wood produces more pollution than coal and isn’t carbon-neutral in the time frame that matters for the climate pickle we’re in.

Dominion is not the worst offender; pride of place belongs to wood pellet manufacturer and exporter Enviva, which just received a permit to expand its Virginia facility in Southampton.

Dominion also isn’t the only Virginia utility to have invested in burning trees. Northern Virginia Electric Cooperative provides its customers with electricity from a biomass plant in South Boston. NOVEC doesn’t have an RPS to meet, so it sells renewable energy certificates to Maryland utilities. It’s a lousy deal for the Maryland residents who get higher bills and no clean energy to show for it, but meanwhile NOVEC brags about its “environmentally friendly” plant.

So now what?

There are really two questions when it comes to burning trees for fuel: one, should government give it preferential treatment; and two, should an electric utility be doing it at all?

The General Assembly will almost certainly consider legislation this year requiring utilities to increase the proportion of electricity they sell that comes from renewable energy. If biomass is allowed to qualify, the result will be less new wind and solar and less progress towards a carbon-free grid. The lesson from other states that have renewable energy mandates is simple: states that allow junk get junk. (Here’s looking at you, Maryland.)

But as we’ve seen, biomass can’t compete with other energy sources on cost if it doesn’t get subsidies. Dominion can follow NOVEC’s lead in selling RECs to Maryland or other states that haven’t wised up yet, but REC payments won’t make up the cost difference between biomass and other fuels.

Worse—or better, depending on your point of view—other states may decide not to support the biomass racket. Maybe Dominion could still sell the renewable energy certificates (RECs) to the ultra-cheap Green Power for Suckers program that the SCC approved a couple weeks back. But selling cheap RECs to chumps would net the company only—ahem—chump change.

In fact, the SCC should take a hard look at biomass when Dominion files its next Integrated Resource Plan. Requiring the utility to get out of the wood-burning business wouldn’t just clean the air and protect forests, it could be a smart way to save money for customers.

 

This article originally appeared in the Virginia Mercury on December 2, 2019. 

Green Power for Suckers program wins regulatory approval

Trees clearcut.

Don’t think of biomass as destroying forests, think of it as a way to feel good about subsidizing pollution. Photo by Calibas, Creative Commons.

Virginia’s State Corporation Commission (SCC) has approved Dominion Energy Virginia’s request to offer a new product to electric utility customers who want to buy renewable energy at a discount but lack the knowledge to understand when they are being taken for chumps.

“Rider REC” is an ultra-cheap version of the company’s Green Power Program (itself of questionable value). For less than a buck a month on their electric bills, customers will be able to buy renewable energy certificates that cost Dominion next to nothing because no one else wants them. And for good reason: these are the dregs of the renewable energy category.

You won’t find any wind or solar in Rider REC, but you might find paper mill waste, trees burned after clear-cutting, or century-old hydro dams—all officially “renewable” under the generous provisions of Virginia law. Dominion will scrounge up these old and dirty leftovers, package them up, and put a green bow on them.

“Caveat emptor,” says the SCC with a shrug. The SCC seems to think anyone dumb enough to pay extra voluntarily deserves whatever they get.

This is not the first time the SCC has shown disregard for eco-conscious consumers. Four years ago it gave Dominion the nod for a program the company was calling “community solar,” which wasn’t actually selling any solar and had nothing to do with communities. Dominion never did roll out that program, perhaps because there was no way to market it without courting accusations of consumer fraud. But it had the SCC’s blessing for it!

(In case you are confused: this was before the company’s most recent iteration of community solar, also approved, also not actually community solar, and which we are still waiting for. Dominion executives could probably do with a thesaurus.)

In response to concerns that customers wouldn’t know what they are getting, the SCC order did impose one labeling requirement. Dominion’s marketing materials must “clearly identify the source of the RECs available for purchase under Rider REC (i.e., the less expensive of PJM Tier II RECs or national Green-e eligible RECs).”

Perhaps Dominion will even tell buyers what those things mean, though the SCC doesn’t seem to be saying it has to. In the interests of clarity, Dominion could explain that “PJM Tier II RECs” translates to “some stuff we found behind the refrigerator and think might still be edible.” But it probably won’t.

That’s because, just as with the old community solar thing, the problem is that if buyers understand what’s in it, they won’t be buyers.

 

This article was originally published in the Virginia Mercury on November 8, 2019. 

Virginia is all-in on offshore wind, but Dominion’s go-it-alone approach raises questions

John Warren speaking at AWEA

John Warren, Director of Virginia’s Department of Mines, Minerals and Energy, speaks at AWEA about the opportunities for state collaboration on supply chain development.

It’s not every day that the names of a major utility and the nation’s largest grassroots environmental organization share space on a banner. But at the American Wind Energy Association’s (AWEA) annual offshore wind conference on October 22-23 in Boston, Massachusetts, the logos of the Virginia Chapter of the Sierra Club and Dominion Energy bookended those of half a dozen state agencies, educational institutions and business development organizations on a banner proclaiming “Virginia is all-in on offshore wind.”

The banner anchored a large corner booth showcasing the strengths Virginia brings to the growing industry. Broad stakeholder support is one advantage; unlike Massachusetts, Virginia has seen little opposition to its plans for developing the 112,799-acre offshore wind energy area 27 miles out from Virginia Beach.

This broad stakeholder support is the product of more than a decade of work on the part of researchers, environmental organizations, the business community and elected leaders from both parties.

For the Sierra Club and the Northam administration, offshore wind offers carbon-free, renewable energy and a way to position the Virginia as a leader in the green economy. For the Port of Virginia and Virginia Beach Economic Development, it brings new business opportunities. For Old Dominion University and Virginia Tidewater Community College, it’s a chance to train young people and participate in ground-breaking research in ocean science and engineering. And for Dominion Energy, it offers a new avenue for profit and a way to rebrand itself as a clean energy company without having to shed its core investments in fracked gas.

Now at last it is poised to happen. Last month, Governor Ralph Northam signed an executive order targeting the full build-out of the federal offshore wind lease area off Virginia by 2026; two days later, Dominion Energy, which holds the lease, confirmed it plans to build 2,600 MW of offshore wind in three phases in 2024, 2025 and 2026. Once built, the 220 turbines are projected to produce enough electricity to power over 700,000 homes.

This commitment puts Virginia among the states pursuing offshore wind most aggressively. With other states rapidly increasing their own targets and signing contracts with developers, the East Coast could now see over 25,000 MW of offshore wind by 2030, with some conference speakers predicting the total will rise to 30,000 MW by the end of the decade. At the AWEA conference a year ago, that number stood at just 10,000 MW—and attendees were plenty jazzed then.

Virginia will also have the first wind turbines in federal waters when the 2-turbine Coastal Virginia Offshore Wind (CVOW) pilot project reaches completion next summer. Earlier this year CVOW became the first project permitted by the federal Bureau of Ocean Energy Management (BOEM).

Massachusetts hits a snag, and sends a shiver through the industry

The second project in line, the 800-MW Vineyard Wind off Massachusetts, suffered a setback this summer when the Department of Interior (DOI) decided to require an additional layer of review. Bowing to objections from the commercial fishing industry and the National Marine Fisheries Service, DOI is now requiring a supplemental Environmental Impact Statement to look at the cumulative impact of many wind farms instead of limiting review to the one project.

Project developers and advocates wonder whether the move reflects a Trump administration change in attitude towards offshore wind or merely shows the federal government is still figuring out how to balance competing ocean uses. President Trump is famously derisive of wind power, but BOEM Director Walter Cruikshank assured the AWEA audience that the administration remains committed to a successful offshore wind industry.

That may be, but meanwhile the delay in the project timeline is causing heartburn for industry members and anger among advocates. Jack Clarke, Director of Public Policy & Government Relations at Mass Audubon, commented testily that if the National Marine Fisheries Service was really so concerned about protecting fisheries, it should have acted 40 years ago before overfishing led to the collapse of Massachusetts’ cod, haddock and flounder fisheries.

Clarke is a veteran of more than a decade’s worth of battles over offshore wind, beginning with the ill-fated Cape Wind project proposed in 2001. Cape Wind was ultimately abandoned in 2017 in the face of implacable resistance from NIMBYs—but not from Mass Audubon and other wildlife groups, which championed the wind farm as part of the solution to global warming. Now, Clarke says, it is time for the government to put its full weight behind the wind projects.

Fewer conflicts seen for Virginia

Concerns about commercial fishing seem less likely to stall offshore wind plans in Virginia, where years of public engagement helped ensure the Virginia Wind Energy Area is reasonably free of conflicts with the fishing industry, as well as shipping and military operations.

AWEA panelists also agreed that careful siting and construction practices can limit harm to wildlife. Siting wind farms 25 miles or more out to sea puts them beyond the paths of migratory birds; and according to Dr. Stuart Clough, President of environmental consulting firm APEM, European data shows birds tend to avoid wind farms altogether, or keep to shipping channels that transect them.

Yet some impacts are inevitable. Sarah Courbis, Protected Species & Regulatory Specialist at consulting firm Ecology and Environment, Inc., recommended developers follow a practice known as “adaptive management,” which involves continuous monitoring during construction and operations, with contingency plans in case problems arise.

European studies have shown that marine mammals generally adapt well to wind farms, moving out of the area during construction and returning afterwards. That is expected to hold true for the U.S., though conservation groups remain worried about interference with migrating North Atlantic Right Whales, a species already perilously close to extinction. Courbis said, however, that although wind farm construction affects whale behavior, the more serious threat to the species comes from entanglement in fishing gear and ship strikes, which cause most whale fatalities.

Nonetheless, Vineyard Wind committed to curtailing construction when Right Whales are nearby, as Deepwater Wind did when building its Block Island project in 2016. Conservation groups are pressuring other developers to take similar protective measures.

One of the more interesting features of Virginia’s CVOW pilot project is that it will test how well a double “bubble curtain” can muffle construction noise to reduce interference with marine mammals.

Questions of timing and cost

Other important questions remain for the Virginia wind farm, including whether the Administration’s timeline is achievable, who will actually do the work, and—critically—what it will cost.

Completing the first 880 MW of wind turbines off Virginia by 2024 depends on many factors that aren’t entirely under the control of Dominion and state agencies: how fast a supply chain develops; whether Virginia attracts manufacturers; how quickly port facilities can be upgraded; the availability of an installation vessel capable of handling 12-MW turbines (currently there are none); and whether BOEM will be able to expeditiously review the many Construction and Operations Plans (COPs) it will receive from offshore wind developers up and down the East Coast over the next few years.

Then there is the question of who will build Virginia’s first commercial wind farm. Dominion contracted with the Danish wind giant Ørsted for CVOW, but it has not renewed the partnership for the commercial wind farm. A shareholder call on Friday, November 1, indicated that Dominion intends to develop, own and operate the project itself.

If so, that raises questions of competence and cost. Other states have proceeded with competitively-bid contracts that ensure developers are qualified and that consumers pay a fair market price for the electricity produced. The competency issue can be solved through talent acquisition, but without competition or a price guarantee, it will be a challenge for Virginia’s State Corporation Commission (SCC) to ensure electricity customers don’t overpay.

I asked Stephanie McClellan, Director of the Special Initiative on Offshore Wind at the University of Delaware, how the SCC could tackle the problem. McClellan pointed to two offshore wind contracts that had been signed without competitive bidding: the ill-fated Cape Wind, and the (also never built) Bluewater Wind project in Delaware.

In 2007 the Delaware Public Service Commission hired an independent consultant to analyze the factors that determine the cost of electricity from a wind farm. These include the output of the turbines (primarily a factor of turbine size and wind speed), construction cost (CAPEX), operations and maintenance costs (OPEX), and financing costs. On the basis of this analysis Bluewater Wind won an all-source RFP against coal and natural gas, though thereafter it failed to find financing.

Within a year the Great Recession and the fracking boom would combine to delay the offshore wind industry in the U.S. by nearly a decade, while the European build-out gained steam.

But meanwhile, the economic case for offshore wind has only strengthened. Costs have plunged 32% in the past year globally, and conference participants see further price drops ahead as the U.S. builds its own manufacturing and supply chain instead of importing European parts. Dominion is currently floating cost figure of $8 billion for the Virginia wind farm based on European parts, but that figure ought to come down with U.S. parts and technology advances.

Could Virginia emerge a winner?

The conventional wisdom is that higher wind speeds make offshore wind more cost-effective in the Northeast than in Virginia. But members of the Virginia team think we may have offsetting advantages.

John Warren, Director of Virginia’s Department of Mines, Minerals and Energy, says Virginia could see lower prices than the Northeast because of lower labor costs and the proximity of our lease area to the supply chain. He sees regional collaboration with Maryland and North Carolina as the key to a low-cost supply chain. But unlike Maryland, he told conference attendees, Virginia will not impose a local content requirement that might increase costs.

George Hagerman, Senior Project Scientist at Old Dominion University, believes new, gigantic turbines like GE’s 12 MW Haliade-X promise an advantage in the Southeast because they can capture more energy at low wind speeds. The very strong winds that sometimes blow off New England would force a turbine that size to shut down for its own protection, resulting in a lower overall output.

Hagerman has also suggested that as a utility, Dominion’s financing costs will be lower than those of an independent developer, giving it an extra cost advantage.

Hagerman has led the research on the Virginia offshore wind opportunity for over a dozen years now. In 2010 he was the lead researcher for the Virginia Coastal Energy Research Consortium (VCERC), whose report that year concluded a wind farm off Virginia Beach could be built cost-effectively within five to ten years and bring economic development and thousands of jobs to the area.

The timeline has slipped, but, the Virginia stakeholders agree, the opportunity has only gotten better.

 

A version of this article first appeared in the Virginia Mercury on November 4, 2019. 

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. 

Governor Northam’s Executive Order, Dominion Energy’s about-face on offshore wind: is Virginia off to the clean energy races?

Man at podium

Arlington County Board Chair Christian Dorsey speaking to clean energy supporters on September 21, following the Board’s adoption of its new Community Energy Plan. Arlington’s plan would produce a carbon-free grid 15 years earlier than Governor Northam’s plan, while also tackling CO2 emissions from transportation and buildings.

A single week in September brought an unprecedented cascade of clean energy announcements in Virginia. On Tuesday, September 24, Governor Northam issued an Executive Order aimed at achieving 30 percent renewable energy by 2030 and 100 percent carbon-free energy by 2050, and with near-term state procurement targets.

On Thursday, Dominion Energy announced it would fully build out Virginia’s offshore wind energy area by 2026, in line with one of the goals in the Governor’s order.

Then, Saturday morning, the Democratic Party of Virginia unanimously passed resolutions endorsing the Virginia Green New Deal and a goal of net zero carbon emissions for the energy sector by 2050.

Saturday afternoon, Arlington became the first county in Virginia to commit to 100 percent renewable electricity by 2035, and economy-wide carbon neutrality by 2050.

So is Virginia off to the clean energy races? Well, let’s take a closer look at that Executive Order.

The governor’s order sounds great, but how real are its targets?

Executive Order 43, “Expanding access to clean energy and growing the clean energy jobs of the future,” directs the Department of Mines, Minerals and Energy (DMME) and other state agencies to “develop a plan of action to produce 30 percent of Virginia’s electricity from renewable energy sources by 2030 and one hundred percent of Virginia’s electricity from carbon-free sources by 2050.”

The difference between “renewable energy” and “carbon-free” sources is intentional. The latter term is a nod to nuclear energy, which provides about a quarter of Virginia’s electricity today. Keeping Dominion’s four nuclear reactors in service past 2050 may not prove feasible, economical or wise, but the utility wants to keep that option open.

The order also doesn’t define “renewable energy.” It talks about wind and solar, but it doesn’t specifically exclude carbon-intensive and highly-polluting sources like biomass and trash incinerators, which state code treats as renewable. Dominion currently meets Virginia’s voluntary renewable energy goals with a mix of old hydro and dirty renewables, much of it from out of state. Dominion will want to keep these subsidies flowing, especially for its expensive biomass plants, which would undermine the carbon-fighting intent of the order.

Finally, there is the question whether all of the renewable energy has to be produced in Virginia. Old Dominion Electric Cooperative, which supplies electricity to most of the member-owned cooperatives in the state, buys wind energy from outside Virginia. Surely that should count. But what if a Virginia utility just buys renewable energy certificates indicating that someone, somewhere, produced renewable energy, even if it was consumed in, say, Ohio? Those had better not count, or we’ll end up subsidizing states that haven’t committed to climate action.

What will DMME’s plan look like?

In describing what should be in the action plan, Northam’s order largely recites existing goals and works in progress, but it also directs DMME and the other agencies to consider going beyond existing law and policy to achieve specific outcomes:

  • Ensure that utilities meet their existing commitments to solar and onshore wind energy development, including recommending legislation to reduce barriers to achieving these goals. These goals include 500 MW of utility-owned or controlled distributed wind and solar. Customer-owned solar is not mentioned.
  • Make recommendations to ensure the Virginia offshore wind energy area is fully developed with as much as 2,500 MW of offshore wind by 2026.
  • Make recommendations for increased utility investments in energy efficiency, beyond those provided for by the passage of SB 966 in 2018, the Grid Modernization Act.
  • Include integration of storage technologies into the grid and pairing them with renewable generation, including distributed energy resources like rooftop solar.
  • Provide for environmental justice and equity in the planning, including “measures that provide communities of color and low- and moderate-income communities access to clean energy and a reduction in their energy burdens.”

Can the administration do all that?

Nothing in this part of the order has any immediate legal effect; it just kicks off a planning process with a deadline of July 1, 2020. Achieving some of the goals will require new legislation, which would have to wait for the 2021 legislative session.

That doesn’t mean the governor will sit on his hands until then – delay is the enemy of progress — but it could have the effect of slowing momentum for major climate legislation in 2020.

Cynics, if you know any, might even suggest that undercutting more aggressive Green New Deal-type legislation is one reason for the order.

A second part of Northam’s order, however, will have immediate effect, limited but impressive. It establishes a new target for state procurement of solar and wind energy of 30 percent of electricity by 2022, up from an 8 percent goal set by former Governor Terry McAuliffe. This provision will require the Commonwealth to negotiate amendments to the contract by which it buys electricity for state-owned facilities and universities from Dominion. The order also calls for at least 10 MW annually of power purchase agreements (PPAs) for on-site solar at state facilities, and requires agencies to consider distributed solar as part of all new construction.

State facilities will also be subject to new energy savings requirements to reduce state consumption of electricity by 10 percent by 2022, measured against a 2006 baseline, using energy performance contracting.

These provisions do for the state government what the action plan is intended to do for Virginia as a whole, but 8 years faster and without potential loopholes.

Thirty percent by 2030? Gee, where have we heard that before?

Just this spring, Virginia’s Department of Environmental Quality finalized regulations aimed at lowering carbon emissions from Virginia power plants by 30 percent by 2030. These numbers look so similar to Northam’s goal of 30 percent renewable energy by 2030 that it’s reasonable to ask what the order achieves that the carbon rule doesn’t. (This assumes the carbon regulations take effect; Republicans used a budgetary maneuver to stall implementation by at least a year.)

The answer goes back to the reason Dominion opposed the carbon rule. Dominion maintains—wrongly, says DEQ and others—that requiring lower in-state carbon emissions will force it to reduce the output of its coal and gas plants in Virginia and buy more power from out of state. That, says Dominion, would be bad for ratepayers.

As the company’s August update of its Integrated Resource Plan showed, Dominion would much prefer a rule requiring it to build more stuff of its own. As it turns out, that would be even more expensive for ratepayers, but definitely better for Dominion’s profitability.

So legislation to achieve Governor Northam’s renewable energy goals would take the pain out of the carbon regulations for Dominion. Whether it might also lower carbon emissions beyond DEQ’s 30 percent target remains to be seen.

The 2050 carbon-free goal, on the other hand, goes beyond anything on the books yet. Dominion’s corporate goal is 80 percent carbon-free by 2050, and it has no roadmap to achieve even that.

Is there anything in the order about pipelines?

No. In fact, there is no mention of any fossil fuel infrastructure, though shuttering coal and gas plants is the main way you cut carbon from the electricity supply.

That doesn’t mean Northam’s order leaves the Mountain Valley and Atlantic Coast pipelines in the clear. If Dominion joins Duke Energy in its pledge to go to zero carbon by 2050, the use of fracked gas to generate electricity in Virginia and the Carolinas has to go down, not up, over the coming decades (Duke’s own weird logic notwithstanding). As word gets around that Virginia is ditching fossil fuels, pipeline investors must be thinking about pulling out and cutting their losses.

What about Dominion’s offshore wind announcement?

I saved the best for last. For offshore wind advocates like me, Dominion’s announcement was the really big news of the week: it’s the Fourth of July, Christmas and New Years all at once. Offshore wind is Virginia’s largest long-term renewable energy resource opportunity, and we can’t fully decarbonize without it.

Dominion has taken a go-slow approach to offshore wind ever since winning the right to develop the federal lease area in 2013. Until this year, it refused to commit to anything more than a pilot project. The two, 6-MW turbines are currently under construction and will be installed next summer.

Then in March, Dominion CEO Tom Farrell told investors his company planned to build one commercial offshore wind farm, of unspecified size, to be operational in 2024. In its Aug. 28 resource plan update filed with the state regulators, Dominion Energy Virginia included for the first time an 880-MW wind farm, pushed back to 2025.

A mere three weeks later, the plan has changed to three wind farms, a total of 220 turbines with a capacity of 2,600 MW, with the start date moved up again to 2024, and all of them in service by 2026, exactly Northam’s target (except his was 2,500 MW).

Certainly the case for developing the full lease area has been improving at a rapid clip. Costs are falling dramatically, and it appears Dominion expects to maximize production by using massive 12 MW turbines, which did not even exist until this year.

But if the situation has changed that dramatically from August to September, all I can say is, I can’t wait to see what October brings.

Maybe it will bring answers to questions like who will build these wind farms, who will pay for them, and how Dominion expects to meet this accelerated timeline. As Sarah Vogelsong reports, several northeastern states have wind farms slated for development in the early-to-mid-2020s, too. Industry members are already worried about bottlenecks in everything from the supply chain to installation vessels, workforce training and the regulatory approval process.

That is to say, we’re coming to the party pretty late to expect good seats. But hey, it’s going to be a great party, and I’m glad we won’t miss it.

This article originally appeared in the Virginia Mercury on September 27, 2019.

Ignoring state climate rules, Dominion decides what carbon regulations should look like

woman in dinosaur costume holding sign reading clean energy now

Four out of five dinosaurs agree. The fifth, that would be Dominion. Photo courtesy of Sierra Club Virginia Chapter.

For several years now, Dominion Energy Virginia has factored into its plans an assumption that electricity from carbon-emitting power plants will eventually include a cost reflecting CO2’s role as the primary driver of global warming. Dominion says it has even integrated this into its corporate goals, targeting an 80 percent reduction in CO2 emissions by 2050.

That promise may be more propaganda than corporate lodestar, but in any case the utility’s Integrated Resource Plans regularly point to the probability of future carbon regulations as a reason to build new renewable energy facilities and close old coal plants.

Planning for constraints on CO2 emissions proved wise this spring when Virginia’s Department of Environmental Quality finalized a state carbon cap-and-trade program. The DEQ regulations call for Virginia power plant owners to trade carbon allowances with those in the member states of the Regional Greenhouse Gas Initiative (RGGI). A Republican budget maneuver has delayed implementation of the new rules, but once they take effect they are expected to hasten the retirement of expensive old coal plants and support investments in new renewable energy projects.

But it’s not the DEQ regulations that Dominion is planning around. The utility’s 2019 update to its 2018 IRP, filed with the State Corporation Commission on Aug. 29, treats the DEQ regulations as hypothetical. Instead, it posits some unspecified future federal carbon regulations that, apparently, it would like much better.

The update describes three alternative scenarios, down from five in the 2018 IRP. The first is a “base case” that assumes no carbon emission constraints. The second assumes the state carbon limits take effect as well as some future federal regulations, and the third assumes federal (but not state) limits. However, the cover letter makes it clear that only the third scenario actually describes what Dominion intends to do. As it happens, that is the most expensive— and most profitable —plan.

The primary feature of the base case is that it keeps some old coal units running that will be closed in the other scenarios. According to Dominion, this makes it the least-cost approach to meeting electricity demand. Whether that’s true is a matter of dispute; these units hardly run at all any more, and experts for environmental organizations in the IRP hearing testified that retiring them will save money for customers.

It suits Dominion’s political strategy, however, to pretend that coal remains a low-cost option. This fiction makes coalfield legislators happy, and it allows Dominion to blame rising electricity rates on environmental regulations instead of on its own profligate spending and excess profits.

But Dominion Energy made a big bet on fracked gas, not coal. It won’t fight to keep outdated coal plants online and spewing out CO2 if it’s cheaper to close them. Gas plants are another matter. Dominion Energy’s massive investments in gas transmission and storage make the company keen to keep Virginia gas plants running full-tilt, and to build as much new gas generation as possible.

For that reason, Dominion hates the DEQ regulations. It warns the regional cap and trade plan will result in power from outside the state replacing electricity from Dominion’s combined-cycle gas plants, which provide baseload power. Dominion argues this will lead to higher, rather than lower, carbon emissions as well as higher consumer costs.

DEQ and others disagree on both counts, though the SCC takes Dominion’s view. So although Dominion labels its second scenario RGGI-compliant, it treats the DEQ regulations as hypothetical, as if Gov. Ralph Northam might change his mind any day now and order them scrapped.

Instead, Dominion offers its third scenario, positing only unspecified and (with Trump as president) truly hypothetical future federal carbon regulations. In Dominion’s fantasy, a federal plan will be strong enough to support Dominion building profitable new renewable energy and storage projects, but not so strong that it can’t also build a bunch of new gas plants.

Ergo, that’s what Dominion is shooting for. The cover letter accompanying the IRP update makes it clear that Dominion is already pursuing projects that appear only in the third plan. These include a 300 MW pumped hydro storage project that will take a decade to develop and cost upwards of $1.5 billion (if indeed it pans out), and an 852 MW offshore wind project slated for 2025, a year later than what Dominion told investors in March.

The third scenario also includes more than 3,000 MW of solar between now and the end of 2034, but that’s actually a whole lot less solar than under the RGGI scenario. Even the base case has more solar. Go figure.

Still missing is the rest of the 2,000 MW of offshore wind that the Virginia lease area can support. Also still missing are thousands more megawatts of wind and solar that Virginia would need if, instead of a gas-friendly plan, the federal government were to enact regulations actually sufficient to the climate crisis.

Dominion has not even modeled that possibility. The update’s third scenario still includes 10 new fracked-gas combustion turbines, a total of 2,425 MW, with two units coming online every year from 2022 through 2026.

Maybe the Dominion executive team thinks it knows more than the rest of us do about the federal climate plan we’ll see once Donald Trump is sent packing in 2020. More likely, Dominion is simply using its IRP carbon assumptions to bolster its case for more spending and higher profits.

In which case, the more things get updated, the more they stay the same.

 

This article originally appeared in the Virginia Mercury on September 13, 2019.

Fairfax County plans a historic solar buy—if Dominion Energy doesn’t stand in the way

Worker installing solar panels on a roof.

A worker installs solar panels at Washington & Lee University. Photo courtesy of Secure Futures LLC.

In June, Fairfax County announced it was seeking proposals from solar companies to install solar at up to 130 county-owned facilities and schools, with another 100 sites to be considered for a later round. The request for proposals (RFP) covers solar on building roofs, ground-mounted solar and solar canopies over parking lots.

This massive solar buy could add as much as 30-40 megawatts of solar, according to one industry member’s calculation. This would easily triple the amount of solar installed to date in the entire NoVa region. What’s more, Fairfax County’s contract will be “rideable” so that other Virginia localities can install solar using the same prices and terms.

“It’s hard to overstate how significant a move this is,” says Debra Jacobson, an energy lawyer who serves on the county’s Environmental Quality Advisory Council. “It’s not just the largest solar buy by a local government in Virginia. It also opens the door for other Virginia counties and cities to buy solar because it makes the process simple and straightforward.”

Jacobson says approximately 15 solar companies attended a bidder’s conference hosted by Fairfax County, indicating strong interest. The county intends to select a contractor by early fall.

One problem stands in the way: Virginia law currently places an overall limit of 50 MW on projects installed in Dominion territory using third-party power purchase agreements (PPAs), the primary financing mechanism for tax-exempt entities.

Even without Fairfax County’s projects, the solar industry warns the cap will likely be met by the end of this year, as schools, universities, churches and other customers across Virginia sign PPAs at an accelerating rate.

The solar industry is asking the State Corporation Commission for action to keep the market alive. Secure Futures LLC, a Staunton-based solar developer, submitted a letter to the SCC on June 24 asking the commission to raise the program cap from 50 MW to 500 MW in Dominion territory and 7 to 30 MW in Appalachian Power territory and to increase the size limit for individual projects from 1 MW to 3 MW.

PPAs allow customers to have on-site solar installed with no upfront cost; the customer pays only for the electricity the solar array produces, at a price that is typically below the price of electricity purchased from the utility. It’s an especially critical tool for cash-strapped local governments and school systems, letting them save taxpayer money while lowering their carbon footprint. Every kilowatt-hour they get from solar replaces electricity they would have to buy from the grid, which in Virginia still comes almost entirely from fossil fuels and nuclear.

For-profit monopoly utilities like Dominion Energy Virginia and Appalachian Power don’t like losing sales when customers generate their own electricity. Virginia’s customer-owned electric cooperatives negotiated legislation this year to remove PPA barriers for non-profits in their territories, but Dominion and APCo didn’t sign on. Both utilities fought Solar Freedom legislation and other bills that would have lifted the PPA cap, claiming there was still plenty of room for projects under the 50 MW cap.

But there may be a simple solution — if the utilities don’t fight it. The legislation that created the PPA program in 2013 directs the SCC to review it every two years beginning in 2015, and to “determine whether the limitations [on the program size and project sizes] should be expanded, reduced, or continued.”

The SCC has never opened a case docket or consulted stakeholders in any previous review of the program — but no one seems to have asked until now. Secure Futures’ letter requests that the SCC open a public docket for this year’s review and consult with stakeholders, including the solar industry and customers.

In his letter, Secure Futures’ CEO Tony Smith notes that Virginia remains well behind North Carolina and Maryland on solar installations, solely for reasons of state policy. Installations using PPAs also lagged until the past year, but are now expanding “at an exponential rate,” according to Secure Futures, with notifications filed for almost 20 MW of projects as of June 12. This number does not include the Fairfax County projects or many others that are still in the early stages of development.

Other solar developers have also asked the SCC to lift the PPA cap. Ruth Amundsen, manager of the Norfolk Solar Qualified Opportunity Zone Fund, told the SCC in a July 20 letter that her fund has identified $117 million of potential solar sites in the Norfolk and Virginia Beach area. The fund brings in investors and installs solar on businesses and non-profits in Virginia Qualified Opportunity Zones, which are low income census tracts that offer tax benefits for investors, at no upfront cost to the customer.  It also hires residents of the Opportunity Zones as solar installers, training them and providing employment.

But, Amundsen’s letter notes, “Without PPAs, none of this is possible. If the PPA cap remains at 50MW, we cannot in good conscience advise these investors to invest in solar in the Virginia QOZs, as there would be no feasible financing method once the cap is reached.”

Amundsen also wants the ability to use PPAs for installation on private homes, which is currently not allowed under the terms of the PPA program in Dominion territory. “The original intent of the Norfolk Solar QOZ Fund was to mitigate the energy burden of low-income home owners.  But because of the current limitation on Power Purchase Agreements (PPAs) in Virginia, we cannot install on private homes via a PPA.  Removal of that limitation, and clarification that PPAs are legal with all customers, would allow us to better serve the most affected residents as far as crushing utility bills.”

 

This article originally appeared in the Virginia Mercury on August 1, 2019.