News on renewables makes Virginians green, but not in a good way

Virginians want wind and solar. Bummer, y'all.

Virginians want wind and solar. Bummer, y’all.

On May 20, the Georgia Public Service Commission signed off on two power purchase agreements that will add 250 megawatts (MW) of wind energy to the state’s electricity mix. This comes on top of earlier commitments to solar energy that, combined with the wind power, will give Georgia more than 1,000 megawatts of renewable energy capacity by 2016.

While we certainly want to congratulate Georgia on its commitment to clean energy, the news has turned Virginia advocates a little green–and not in a good way. We can only wish this were us. Virginia has no wind energy to boast about, and about 15-18 megawatts of solar, according to estimates from the Department of Mines, Minerals and Energy.

This comes on top of other recent announcements about the great strides being made in renewable energy nationwide. If you can stomach it, here are the numbers: the U.S. installed over 1,000 MW of wind in 2013, and another 485 MW of wind just in the first quarter of 2014, bringing the total installed capacity to date to over 61,000 MW. More than 7,000 MW are in development

In Virginia, we have a few backyard turbines.

Solar, for its part, keeps breaking records, with over 4,700 MW installed in 2013, a 41% increase over the previous year, and another 680 MW in the first quarter of 2014.

Virginia solar broke into the double digits—bring out your horns and whistles!—thanks to the efforts of homeowners, colleges, the military, a few progressive towns and a handful of consumer-conscious businesses. As for our utilities, they have developed less than 1 MW of wind and solar in the Commonwealth.

Oh, but Dominion Resources, the parent of Dominion Virginia Power, just bought a 7.7 MW solar project. In, um, Georgia.

Changing to a local focus won’t help our case of envy. West Virginia doesn’t have much solar, but it has 583 MW of wind energy. North Carolina doesn’t have much wind, but it installed 335 MW of solar energy in the last year alone. Maryland is up to 142 MW of solar and 120 MW of wind.

Tennessee—Tennessee!—has 29 MW of wind and 74 MW of solar.

If we were shooting for last place among east coast states in the race to develop renewable energy, we might be able to congratulate ourselves. We are doing a great job of falling further and further behind.

Sadly, Virginia, there is no consolation prize.

American Wind Energy Association to highlight Virginia potential at June conference

Works of art, attractively priced. Photo credit: Andy Beecroft

Works of art, attractively priced.
Photo credit: Andy Beecroft

The American Wind Energy Association (AWEA) will be sponsoring a one-day forum on wind energy in Harrisonburg, Virginia on June 3. The Virginia Wind Center at James Madison University will host; others partners include the Department of Environmental Quality, the Sierra Club and the Southeastern Coastal Wind Coalition.

Virginia currently has only a handful of small wind turbines statewide, putting us far behind neighboring states like Maryland and West Virginia. But AWEA’s Larry Flowers, who leads the team organizing the event, says his trade association sees great potential in the Commonwealth.

With good sites for about 2,000 megawatts (MW) of land-based wind farms, and at least another 2,000 MW already slated for development offshore, Virginia could experience a wind boom in coming years.

“With Virginia’s good on- and offshore wind resource, significant load, and proximity to the PJM market, AWEA’s wind developers see Virginia as an important wind energy market,” says Flowers. “Wind has been an important diversification strategy with utilities all over the country with its fuel price and carbon risk avoidance features, while providing significant long-term local economic development benefits.”

Achieving this development will be no easy feat. Virginia does not have a Renewable Portfolio Standard requiring utilities to buy wind power, a standard policy feature in northeastern states. Nor do we offer the kind of economic incentives developers need to make wind power cost-competitive with our old, fully-depreciated coal and nuclear plants, or with electricity from natural gas at today’s low prices. (Wind power is the cheapest form of energy in some prairie states, but it is costs more to build in our mountains and offshore.) Wind is endlessly renewable and emission-free, but until we put a value on that, our utilities and regulators see little point in paying for it

Yet that calculus may be changing as wind costs continue to decline, coal grows increasingly expensive, and natural gas prices show their historic volatility. At least as significantly, wind energy could be a means of helping Virginia comply with the EPA’s carbon regulations under Section 111(d) of the Clean Air Act. The regulations for existing sources have not been proposed yet, but may allow states to reduce their overall carbon emissions by adding renewable energy to their electric generation mix.

Certainly, wind development would be a huge economic opportunity here. Offshore wind development is projected to create ten thousand career-length jobs in Virginia and bring millions of dollars in new economic activity to the state, especially to the Hampton Roads region. Land-based wind would be a boon to the economically hard-hit counties of southwest Virginia, where coal jobs have been disappearing steadily for more than twenty years. In addition to jobs and payments to landowners, wind farms would provide critical local tax revenue.

These policy issues will be featured topics at the AWEA forum, along with practical issues including siting, wildlife impacts, and small wind applications.

Registration for the Virginia wind energy forum is available here. Early bird discount pricing is available until May 13.

 

Time to get serious about offshore wind

Photo credit: Phil Holman

Photo credit: Phil Holman

A version of this article originally appeared in the Hampton Roads Virginian-Pilot on Sunday, December 15.

No doubt about it, Virginia is for lovers of offshore wind. It’s hugely popular with the public, and Virginia legislators passed a near-unanimous resolution in its favor. Governor McDonnell talked it up, and even tossed it some bucks. Governor-elect McAuliffe is such a fan that he made television commercials about it way back in 2009.

But all that love won’t get us turbines in the water unless Dominion Virginia Power decides to build them. Dominion is the key player after winning the exclusive right to develop the federal lease area 25 miles off Virginia Beach. The company has five years to study the area and come up with a construction and operations plan—or not. Right now the company is being coy about whether it will move forward come 2018.

Alas, Virginia, getting offshore wind turbines is going to take more than sweet talk: we have to start laying the groundwork now for that trip down the aisle. So here’s a to-do list to help get us there.

Governor McAuliffe should declare offshore wind a priority from the day he takes office. Only two test turbines are likely to be spinning before the end of his term, but he can make it clear he expects Dominion to meet all of the milestones in its federal lease, ensuring the next governor presides over the big buildout.

The governor and the General Assembly can also prove their ardor by funding ocean studies that have to be conducted before construction starts. The developer of Rhode Island’s wind energy area, Deepwater Wind, expects to have its turbines spinning only five years from now thanks to state-sponsored ocean studies that, Deepwater says, translated into a three-year head start. It’s an approach Virginia should emulate. The public will pay for these studies one way or another—either as taxpayers or as ratepayers—and footing the bill now will help us make up time.

The governor can also direct an analysis of workforce and port readiness so we begin to train workers and put in place the infrastructure needed for this huge new industry.

Of course, creating a skilled workforce is hard to do with no wind projects now in Virginia. Building land-based wind here would support the growth of the workforce and the supply chain, and give everyone experience with wind energy here. One project might be the wind farm proposed by Iberdrola in northeastern North Carolina, within commuting distance of Hampton Roads workers. Dominion turned down the chance to buy energy from the project a few years ago, and it hasn’t been built. The General Assembly could turn that around with legislation to require our investor-owned utilities to incorporate wind power into their energy mix.

Why support a project in North Carolina? The simple fact is that offshore wind is too big an industry for any one state to go it alone. Creating scale and keeping costs down demands a regional approach. Cooperation means both states win. In addition to North Carolina, the governor should partner with Maryland and Delaware, which also have federally-designated wind energy areas off their coasts.

Regulators, and the public, also need to see an analysis of what impact this energy will have on our electric bills. Harder to quantify, but just as important, is a full understanding of offshore wind’s benefits. Such a study might begin with a survey to identify those Virginia companies that could participate in the supply chain, what new businesses and jobs the state might attract, and how the economically distressed regions of the state can best participate.

When the time comes, the State Corporation Commission will have to do its part by approving both the two test turbines and, later, the full wind farm. The legislature can help by declaring an offshore wind farm in the public interest—a short step beyond its earlier resolution, but one with actual weight.

Virginia offshore wind may still seem to be off in the future, but now is the time for the incoming McAuliffe Administration and the General Assembly to prove their love. Otherwise, Virginia just might get left at the altar.

From Massachusetts to New York, offshore wind energy now ready to deliver

Interior Secretary Sally Jewell addresses a packed ballroom

Interior Secretary Sally Jewell addresses a packed ballroom at the American Wind Energy Association offshore wind conference

The long-awaited Cape Wind offshore wind farm will finally begin construction off the coast of Massachusetts in 2014. So, too, will the much smaller Block Island Wind Farm off Rhode Island. When completed, Cape Wind’s 130 wind turbines will supply almost 75% of the power needs of Cape Cod, Martha’s Vineyard and Nantucket, while the 5-turbine Block Island Farm will supply enough clean energy to power over 17,000 homes.

2014 also seems likely to see a power purchase agreement for some of the energy to be generated by a 900 MW wind farm off the tip of Long Island that would feed power to a growing and hungry New York market, at a cost that’s economic now.

And with a second round of grants from the Department of Energy expected next spring, demonstration projects of 12-25 MW will also go forward in three more locations, producing power in 2017 and helping set the stage for rapid growth in the industry. The first-round grants went to projects in Oregon, Texas, Ohio, Maine, New Jersey and Virginia.

These were a few of the highlights from the American Wind Energy Association 2013 offshore wind conference, held October 22 and 23 in Providence, Rhode Island. More than 700 attendees packed a ballroom to hear Secretary of Interior Sally Jewell, Rhode Island Governor Lincoln Chafee, U.S. Senator Sheldon Whitehouse and others make the case for why offshore wind energy will play a growing role in the U.S., starting in the Northeast.

Five years have passed since the American Wind Energy Association, the University of Delaware and the Sierra Club brought together researchers and wind developers for America’s first-ever conference on offshore wind energy, in Dover, Delaware. Since then, the conference has grown in scope and attendance, but the only wind turbine to make it to U.S. waters is a one-eighth-scale test model off the coast of Maine.

While Europe surged ahead and now has more than fifty offshore wind farms, the U.S. has been hampered by a slow federal leasing process, uncertainty about tax credits, and a political process ill-suited to the long-range planning and regional cooperation needed to realize the potential of this industry.

But as this year’s conference showed, the industry is moving ahead. The Obama Administration and several states identify offshore wind as a critical part of the response to climate change, as well as an opportunity to develop jobs. As many speakers explained, there is also a strong business case to be made for it. Given the price spikes that have plagued natural gas in New England and elsewhere, it makes sense to diversify power sources. In addition to providing price stability, wind energy has been shown to suppress wholesale energy prices, saving consumers money.

Perhaps most significantly, offshore wind power is likely to be the least-cost option in locations where demand is high, energy is expensive, and alternatives are few. This describes much of the Northeast, especially the densely populated area from northern New Jersey up to Massachusetts.

An analysis from AWS Truepower showed several factors that make offshore wind energy a good option in these areas:

  • A growing demand for power, driven in part by new data centers;
  • An already-congested transmission grid, coupled with the difficulty of either building new generation close to the load center or adding new transmission lines to bring in power from outside the area;
  • The proximity of offshore wind energy areas to these load centers along the coast;
  • High localized marginal prices for electricity, making offshore wind competitively priced; and
  • The ability of offshore wind to provide power when demand is greatest.

This last element is especially compelling for utilities, which have to meet a demand for power that changes throughout the day. Unlike onshore wind, which blows most strongly at night, and solar energy, which peaks in the middle of the day, offshore wind picks up in the late morning and continues through the evening hours, matching times of highest demand. According to Bruce Bailey, CEO of AWS Truepower, this fact means that in the New York market, the revenues from offshore wind energy will be about two and a half times that of onshore wind energy.

Whitney Wilson, the engineer who conducted the analysis for AWS Truepower, told me that when they looked at all the factors and then at the potential locations for offshore wind farms, one location stood out: a tract of ocean thirty miles off the coast of Montauk Point on Long Island, within the southern section of the Massachusetts/Rhode Island Wind Energy Area. Building wind farms there, her analysis showed, would provide the biggest bang for the buck.

Developer Deepwater Wind, LLC, won the right to develop the lease area last summer in the U.S.’s first-ever offshore wind lease auction. One likely customer may be the Long Island Power Authority, which put out an RFP for 280 MW of renewable energy, specifically mentioning offshore wind.

Lisa Dix, a Senior Campaign Representative with the Sierra Club’s Beyond Coal Campaign in New York who was also at the conference, says offshore wind makes perfect sense for Long Island, and complements the Long Island utility’s recent approval of a feed-in tariff for solar energy.

Other utilities seem likely to follow suit as they assess the benefits of offshore wind for their own customers. A greater understanding of these benefits will lead to the full buildout of the RI/MA area and the soon-to-be-leased New Jersey area.

The experience of Deepwater, Cape Wind, and the developers of the DOE-funded demonstration projects will help build the industry supply chain and workforce, and will produce the kind of learning that leads to lower prices for future projects. One such project involves the 2000 MW of the Virginia Wind Energy Area, which Dominion Power now holds the right to develop. While the economics are not currently as compelling in the cheap-energy South, this would change if the early movers achieve the cost reductions they are aiming for.

If states work together, these cost reductions and the development of a robust, domestic supply chain and workforce will happen better, sooner and smarter. Coordinated regional planning will support rapid growth in the industry while driving down costs in a virtuous cycle.

Given the urgency of climate change and the need to move the electric grid beyond fossil fuels as quickly as possible, Congress also has to make the growth of the offshore wind industry a national priority. Passing a long-term extension of the investment tax credit is a critical first step to support the tremendous renewable resource just off our coast.

Dominion wins Virginia offshore wind lease: well, duh

And the winner is . . . Dominion Power!

Okay, you knew that. Dominion had the deck so stacked in its favor for Wednesday’s Virginia offshore wind lease auction that the question everyone was asking at the end wasn’t “who won?” but “who bid against Dominion, and why did they bother?”

The answer to the first question proved to be Charlottesville-based Apex Energy, a far more experienced player in the wind industry—but one without Dominion’s lock on the Virginia power market.

There was much to criticize about the auction format and the process that led inevitably to Dominion’s win, but this historic step is still hugely exciting for offshore wind advocates. If Dominion follows through on the commitment it just made to develop offshore wind, Virginia will be a winner, too.

That “if” has a lot of people worried, given that Dominion is both a participant in the offshore wind industry and one of its loudest detractors. Company executives talk about their desire to develop the lease area, and also their opinion that offshore wind energy is way too expensive to succeed. Often they make both points in the same conversation.

Observers can’t help wondering why a company would pour money into a venture if it doesn’t believe it can sell its own product. Two possible reasons come to mind: one, because it is willing to gamble on political and market changes that will make its venture successful after all; or two, because by spending the money to win the lease, the company prevents any competitor from occupying the space. One is gutsy, the other is evil. It is possible for both to be true.

So what did Dominion win? The lease area, a 112,800-acre swath of ocean beginning more than 23 miles off Virginia Beach, is expected to support at least 2,000 megawatts of wind turbines—enough to power about 700,000 homes. It’s the second Wind Energy Area to be auctioned off in the U.S.; the first lies off Rhode Island and Massachusetts, and was auctioned off in August.

Under rules set by the Bureau of Ocean Energy Management (BOEM), the entire Virginia area was treated as one tract (a bad idea, in the view of advocates and industry members who aren’t Dominion, because it further reduced competition). Dominion won with a high bid of $1.6 million.

A formal announcement of the winning bid is expected in October, following federal antitrust review. As the winning bidder, Dominion will have five years to conduct the studies required for development of the area, with interim deadlines including submission of a Site Assessment Plan next summer.

After the five years is up, Dominion could decide not to proceed, releasing the area for BOEM to offer in a new auction. That result would be an unqualified disaster for Virginia’s ability to develop an offshore wind industry here. With states to the north proceeding, we would lose not just construction jobs, but the entire supply chain, and likely the marine services as well. Many thousands of jobs now ride on Dominion following through.

If Dominion decides to proceed, it will have to submit a Construction and Operations Plan at least six months before the expiration of the five-year site assessment period—that is, by the summer of 2018. BOEM will then evaluate the plan in accordance with the National Environmental Policy Act, producing an Environmental Impact Statement in 18-24 months, before construction can begin. That timeline puts construction underway no later than 2020, with electricity from the first turbines flowing by 2022.

The process doesn’t have to take as long as this; Deepwater Wind, which won the two leases in the Rhode Island/Massachusetts area last month, says construction there “could begin as early as 2017, with commercial operations by 2018.”

But Dominion had previously indicated its preference for the slowest possible approach. The company’s original idea was to build some wind turbines, think about it for a while, and five years later start all over again. Then five years later, round three. Another five years, round four. So 20 years on, if Dominion liked what it saw each time, Virginia would finally have its 2,000 megawatts.

In accordance with this plan, Dominion’s surrogate, the Virginia government, asked BOEM to make the lease term for Virginia’s Wind Energy Area 45 years instead of 25.

Other developers and the environmental community cried foul, pointing out that such an approach would mean a generation would be born, grow up and go off to college before we had all our wind turbines—hardly the way to build an industry or stave off climate change.

BOEM conceded half a loaf and agreed to a 33-year term that allows time for a phased approach, but a faster one. The agency expects the construction plan will consist of four, two-year phases, ensuring completion of the build-out in 8 years—or by 2028, to be followed by 25 years of operation.

We can only hope that BOEM’s confidence is not misplaced. Dominion employees have said candidly that right now, under current market conditions, the company has no intention of actually building offshore wind turbines.

What will it take to change its mind? The company talks about costs and the difficulty of getting approval from Virginia regulators. It seems likely that the company will follow through with construction only if some combination of events happens in the next few years:

  • Continuing advancements in technology bring the cost of offshore wind energy down. Already the latest cost estimates put offshore wind power well below the sky-high figures Dominion cites.
  • Congress or the EPA tackles climate change through incentives for renewable energy (or disincentives for fossil fuels);
  • The Virginia government passes legislation to create a market in Virginia for offshore wind power;
  • Virginia’s State Corporation Commission (SCC), which regulates utilities, alters the way it views renewable energy.

Of these contingencies, the last might be the hardest. The SCC seems to believe the public interest is served only by providing the cheapest possible electricity available today. It shows no interest in climate change, or the pollution costs of fossil fuels, or long-term price stability, or job creation, or asthma rates. Ignoring the actual language of the Virginia Code, it declared this summer that Virginia law doesn’t require it to consider the environment in evaluating a new electric generation facility.

But the offshore wind industry is now off and running in the U.S., and the only question is whether Virginia wants to be part of it. On that answer depend thousands of jobs for our residents, an abundant source of stably-priced energy, and Virginia’s ability to move beyond fossil fuels in the face of climate change.

Virginians overwhelmingly want to move forward on offshore wind; now our challenge will be to make it happen.

Virginia doesn’t need another gas plant

On April 24, Virginia’s State Corporation Commission (SCC) will consider a proposal from Dominion Virginia Power to build a new natural gas-fueled generating plant, the second of three it wants to add to its holdings. Its first plant, now under construction in Warren County, generated little opposition because it will replace old coal boilers that Dominion needs to retire.

But the latest proposal for a plant in Brunswick has come in for fierce criticism, and for good reason: we don’t need another gas plant. Dominion has exaggerated the growth in demand that it says justifies the plant, and the company could more cheaply meet its actual needs with energy efficiency and renewable energy.

Moreover, the world is changing, and the energy model of big utilities running big baseload power plants is becoming outdated. If Dominion builds another of these, Virginia could end up stuck with a giant concrete paperweight.  The SCC owes it to customers not to let this happen.

Every year Dominion tells regulators it expects demand to increase by 1.5% to 2% per year indefinitely, but its actual energy sales have been essentially flat since 2006. Sure, the recent recession threw everyone a curveball, but Dominion’s tendency to overstate future demand goes back decades. The company seems not to have anticipated widespread changes like more efficient appliances and better building codes that let consumers use less electricity even while we’re buying more gadgets.

With a little effort, we could save even more energy. Virginia ranks in the bottom half of states for energy efficiency, and Dominion is not on track to meet even the modest efficiency goals of the Virginia Energy Plan. Some of the fault for this lies with the SCC itself, which has often rejected energy efficiency programs. But nor has Dominion tried very hard. Even their rate structure is designed to encourage energy use. Greater efficiency would mean lower electricity sales, and who wants that? Not a company that makes its money building plants and selling electricity.

And this is a shame, because the cheapest energy is the energy that isn’t used. Virginians use 20% more electricity per person as our neighbors in Maryland, so we have a lot of low-hanging fruit we should pick before we build another power plant.

Even if we needed more power, though, building another baseload natural gas plant is a bad plan. A “baseload” plant is one designed to run continuously, unlike a “peaker” plant that fills in when needed. The price of natural gas fluctuates wildly, so building a baseload plant means committing customers to paying whatever the going rate happens to be, all day, every day, for the 30-year life of a gas plant. With about a third of Dominion’s power mix already coming from natural gas, surely adding more baseload gas is a reckless gamble when alternatives are available. Even Dominion CEO Tom Farrell has warned against an over-reliance on natural gas for this very reason.

It used to be that alternatives to fossil fuels weren’t much available, so a 30-year gamble was normal, and regulators didn’t trouble themselves by asking what the world would be like in 20 years. Wind and solar have changed that. When you build a wind farm or a solar facility, you know exactly what you will be paying for energy 20 years down the road, because your “fuel” is free. Building wind or solar is like locking in a fixed-rate mortgage instead of gambling on an adjustable rate mortgage with a low teaser rate. With that as an option, why should Virginians commit themselves to 30 years of buying gas at whatever the market decides is the price?

With prices dropping rapidly, wind and solar are today’s fastest growing energy technologies, and wind is second only to gas as a source of new electric generation. Of course, Virginia can’t boast a single wind farm today, and the smattering of solar across the state totals less than 1% of what New Jersey has. But even here, time and economics are on the side of renewable energy. Citigroup recently issued a report projecting that renewable energy will reach grid parity across the U.S. within the next few years and will gradually relegate all other fuels to back-up status.

This makes it an even worse idea for Dominion to invest in a plant that cannot easily adjust its output when the wind picks up or the sun comes out. Other options exist. Gas turbines are now being designed to integrate with renewable energy, combining high efficiency with the ability to ramp up and down quickly. Companies like General Electric are making big bets that this is the future of gas turbines.

Dominion, meanwhile, seems to be looking at the future as if we were back in the 20th century, and without even taking advantage of hindsight. Its plan is a bad deal for its customers, and the State Corporation Commission should reject it.

Tom Farrell’s nuclear fantasy

Tom Farrell doesn’t get it. Dominion Power, the utility of which he is CEO, has been all about building natural gas plants for the past couple of years, as it rushes to take advantage of cheap fracked gas. Out with the aging coal plants that had been its first love, in with the next cheap thing, and never mind the pollution! Then suddenly two weeks ago, faced with a question about climate change, Farrell told reporters the answer is more nuclear plants.

Mother Earth to Tom Farrell: The correct answer is “renewable energy.”

Most of the rest of the country gets this. Wind supplied more new electric generation than natural gas did in 2012. More people work in solar energy than in coal mining. Renewable energy has overtaken nuclear worldwide. Almost no one is building nuclear plants, partly because—here’s an inconvenient truth for you, Tom—they cost too much. Almost three years ago a Duke University study found that power from new nuclear plants is more expensive than solar energy, and the cost of solar has only gone down since then.

But Farrell is convinced wind and solar can’t provide reliable electricity to power the whole grid. You’d think he’d been reading propaganda from the Koch Brothers and had come to believe that if there are solar panels somewhere and a cloud crosses the sun, the whole grid crashes.

Can I just point out here that Dominion’s own North Anna nuclear reactors shut down suddenly in 2011 following an earthquake in Virginia, and the grid did not crash? Even though nuclear is one-third of Dominion’s Virginia portfolio, and North Anna represents more than half of that? And even though, while weather forecasters are pretty good at predicting regional cloud cover, no one can yet predict an earthquake?

The reason the grid didn’t crash is that grid operators make sure there is enough surplus generation available to keep supplying power even at times of catastrophic failure. And note that the nuclear plants didn’t come back online when the clouds cleared off, either. They were down for four months.

If nuclear power is more expensive than renewables, and it has to be backed up 100% with other forms of energy, for much longer time periods, where is the place for new nuclear?

As the CEO of a utility, Tom Farrell should know better. He should also know about the new study demonstrating that renewable energy alone—onshore wind, offshore wind, and solar energy—can power the entire grid 99.9% of the time. The study authors show that doing this would actually cost less than conventional sources of electricity, assuming you include in the price the “external” cost society pays for the use of fossil fuels. That is, if you factor in the cost of climate change, it’s cheaper to build renewable energy than new fossil fuel plants.

Climate aside, there’s other evidence for the superior value of renewable energy in providing price stability for customers and a whole range of benefits for the grid. And of course, for meeting demand at the cheapest possible cost, you can’t beat energy efficiency.

It’s time to face reality, Tom Farrell. If all you care about is making money for Dominion today, your natural gas strategy probably makes sense. But if you care about tomorrow—or even about the big picture today—it doesn’t. Either way, there’s no room in the picture for expensive new nuclear plants.

And if you’re sincerely concerned about climate change, now would be a good time for Dominion to invest in energy efficiency, wind and solar.

*    *    *

Note to readers: Willett Kempton, one of the authors of the study cited above on powering the grid with renewable energy, will be speaking at a townhall meeting sponsored by Sierra Club and Environment America this Wednesday, March 13, at the MetroStage Theatre, 1201 North Royal St., Alexandria, VA. The meeting is open to the public (Tom Farrell is especially invited). To RSVP, contact Phillip Ellis at phillip.ellis@sierraclub.org or 571-970-0275.

 

Renewable energy makes small gains in Virginia’s 2013 legislative session

The Virginia General Assembly will soon wrap up its work on the 2013 legislative session. Renewable energy advocates began the session with high hopes for a series of bills that promised to reform our renewable energy law, expand net-metering, and open up new opportunities for financing solar systems and small wind turbines.

So how did we do? Well, this is Virginia. Progress is slow, the utilities are powerful, and half the legislature doesn’t believe in climate change. On the other hand, they do believe in business. Under the circumstances, we did okay.

Renewable Portfolio Standards: bye-bye, bonuses

Readers of this blog already know the long, miserable tale of Virginia’s weak and ineffective, voluntary renewable portfolio standard (RPS), which has enriched utilities with tens of millions of dollars in incentives without bringing any new renewable energy projects to Virginia. This year the legislature went halfway to fixing the problem. Legislation negotiated between the office of the Attorney General and the utilities will deprive utilities of future ill-gotten gains for meeting the RPS law, but won’t change the pathetic nature of the law itself.

Stripping out the RPS incentives was only part of a bigger, more complex bill that sweetens the deal for utilities in other ways, so it’s hard to judge whether the legislation as a whole marks a victory for consumers. Skeptics will note that Dominion’s stock price has actually gone up several percentage points since the deal was announced, which you wouldn’t expect if the AG were correct that the bill will save consumers close to a billion dollars over time.

What is clear is that the RPS remains as voluntary and as crummy as it ever was, but the utilities can no longer use it to rip off ratepayers while pretending to be good citizens. Some environmental groups consider stripping out the incentives a bad thing, on the theory that only by giving utilities a bonus can we expect them to meet the goals. Other groups (including the Sierra Club) believe Dominion, at least, will want to maintain its greenwashed public image by continuing to meet the RPS goals, and that ending the consumer rip-off is worth celebrating.

Sure, if the goals had brought wind and solar to Virginia, the Sierra Club would have considered the incentives a tolerable price to pay. As it happened, Dominion and the other utilities continuously rebuffed efforts over the years to improve the RPS. Had Dominion approached the RPS as an opportunity to bring real renewable energy to Virginia rather than as a cash cow to be milked for its own advantage, the company would have saved itself a public relations fiasco and likely kept its bonuses, too. Surely, someone at HQ should be out of a job right now.

Taking the long view, it is also worth noting that getting rid of the free money is a necessary first step towards a mandatory RPS in Virginia, which would unleash market forces for renewable energy that don’t emerge with a voluntary law. Utilities would oppose such a move more vigorously if they still had incentives to protect that were available only under the voluntary program.

. . . but reform efforts fail again

These views all assume the legislature will someday pass a bill to improve the goals and bring wind and solar projects to Virginia, without which the RPS is meaningless anyway. Surely legislators must recognize how pointless it is to have an RPS that can be met with out-of-state, pre-World War II hydro, plus some trash and wood-burning and a few assorted projects that put no power on the grid. (Even without the performance incentives, utilities remain entitled to pass along to customers the cost of meeting the RPS goals.)

Bills to improve the goals should have passed the legislature this year as part of the reform package. HB 1946 (Lopez) and SB 1269  (McEachin) even received the support of Dominion Power for provisions that would limit most future purchases for the RPS to high-quality projects like wind and solar. What killed the bills seems to have been a combination of opposition from vested interests and sheer cussedness on the part of some Republicans, who were engaged in partisan maneuvers that had nothing at all to do with renewable energy.

As usual, we are left hoping for better luck next year.  Meanwhile, however, a couple of other RPS bills made incremental progress. Most notably, HB 1917 (Surovell) adds solar thermal energy to the definition of renewable energy; as of this writing it has passed the House and is on the Senate floor.

A loss for more honest competition among fuels

There are more ways to support renewable energy than through an RPS, of course. One of my favorite bills would have required utilities and the State Corporation Commission to consider the long-term price stability of fuels used in electric power generation. HB 1943 (Lopez) would have helped price-stable wind and solar compete against notoriously price-volatile natural gas. It’s an idea that should appeal to fair-minded conservatives, so it’s a shame it hasn’t gained traction since first being introduced in 2012. However, it died in committee in the face of opposition from Dominion Power, which doesn’t want any interference with its plans for new natural gas plants.

Power Purchase Agreements get a “pilot”

Two bills passed the legislature to allow some third-party power purchase agreements (PPAs) for wind and solar within Dominion’s territory. Under a PPA, an installer retains ownership of the solar equipment, with the customer buying the electricity that is generated. This arrangement has two primary advantages: the customer can “go solar” with no money down and no responsibility for the equipment; and in the case of a tax-exempt entity like a church or a university, it provides a way to access federal tax credits worth 30% of the system cost.

The bills were designed to prevent a recurrence of a dispute that erupted in 2011 when a Staunton-based solar company, Secure Futures, installed a large solar system at Washington & Lee University under a PPA. Dominion issued “cease and desist” letters insisting that only it could sell electricity in its assigned territory. Although Virginia law is unclear on this point, the university and the solar company capitulated in the face of massive litigation costs. Since then Dominion’s army of lawyers has proven as effective as any statute in stopping further efforts to use PPAs in Virginia.

This year’s bills, SB 1023 (Edwards) and HB 2334 (Yancey), were originally written to allow third-party PPAs wherever customers can currently install renewable energy systems that they own themselves. They were significantly scaled back to win acceptance from Dominion Power. (AEP and the coops wouldn’t play at all, so legal ambiguity remains the rule in their territories.)

The bills allow up to 50 megawatts’ worth of solar and wind installations using PPAs, in Dominion territory only, as a pilot program.  Whether net-metered or not, they will be counted against the current net-metering cap of 1% of the utility’s generation. Tax-exempt entities can have a facility of any size up to 1 megawatt (500 kW if they net meter); taxable entities must have a minimum size of at least 50 kW (so no homeowner need apply). PPAs that do not meet the requirements are expressly prohibited in Dominion territory.

Agricultural net metering, yes; community net metering, no

A bill to allow agricultural net metering also passed this year. HB 1695 (Minchew) allows the electricity from a single solar, wind, or digester gas facility to be attributed to two or more electricity meters as long as they are all on the same property and have the same owner. Thus, for example, a farmhouse, barn and other out-buildings can all share in the benefits of solar panels on one of the buildings, even if each building is separately metered.

Originally the bill would also have enabled community net metering, sometimes known as solar gardens, but the utilities opposed it. Bowing to political reality, Delegate Minchew scaled it back. The bill is notable, however, for making progress without including any provisions that seem capable of doing mischief.

A note about all the bills: In Virginia, the governor can sign a bill, veto it, or send it back to the legislature with amendments of his own, so none of these bills are final as of this writing.

For electric power generation, the end of fossil fuels is in sight

The rap on renewable energy is that it’s too variable to meet society’s demand for a constant supply of electricity. The answer to the problem turns out to be: More renewables.

111022-N-OH262-322Climate change is acting like an ever-tightening vise on our energy options. Each year that passes without dramatic decreases in our use of carbon-emitting fuels means the cuts we have to make simply get more drastic. By 2030, say experts, we must entirely replace coal with efficiency and renewable energy, or fry. Even the most intrepid environmentalists wonder if it can be done without huge price hikes and wholesale changes in how we live and use energy–changes that society may not accept.

A new study out of the University of Delaware shows it is possible to power the grid 99.9% of the time with only solar and wind energy, at a cost comparable to what we are paying today. This counters the conventional wisdom that we will always need large amounts of fossil fuel as a backup when the wind doesn’t blow and the sun doesn’t shine. It also means the goal of getting largely beyond fossil fuels by 2030 is not just achievable, but practical.

The study focused on a regional transmission grid known as PJM, which encompasses parts or all of fourteen states, mostly in the Mid-Atlantic. Researchers ran 28 billion computer simulations to find the most cost-effective combinations of wind and solar that could power the entire grid, at the least possible cost and with minimal amounts of energy storage. The winning combination relied on natural gas turbines for backup on only five days out of the four years modeled.

The study authors looked for the least cost taking account of carbon and other external costs of fossil fuels, which are not being accounted for today, but they also assumed no technology improvements over time, making their cost estimates conservative overall. All the least-cost combinations used much more storage than we have today, but needed it for only 9 to 72 hours to get through the entire four years modeled.

The secret to dealing with the inherent variability of wind and solar, it turns out, is to build even more wind and solar. One wind turbine is unreliable, but tens of thousands spread across a dozen states greatly reduces the variability problem, and tens of thousands of wind turbines balanced with millions of solar panels is better still. To get to 99.9% renewables, you keep adding wind turbines and solar panels until you are producing three times the electricity that you actually need to meet demand. To power the grid with renewables just 90% of the time, you would have to produce “only” 1.8 times the electricity needed. (And yes, we have the windy sites and the sunny places to support all those projects.)

While it may sound strange to build more generation than you need, that is already the way grid operators ensure reliability. To take one example, if you were in Virginia when the “Big One” struck in 2011, you will recall that the earthquake caused the North Anna nuclear plant to shut down for four months. Nuclear energy provides a third of the electricity in Dominion Virginia Power’s service territory, and yet the lights stayed on. That’s because the grid wizards at PJM simply called on other power sources that had been idle or that had spare capacity.

The other component of reliability is the ability to match demand for power, which rises and falls with the time of day, weather, and other factors. So-called “baseload” plants like nuclear, coal, and some natural gas turbines don’t offer that flexibility and must be supplemented with other sources or stored energy. PJM currently uses more than 1,300 different generating sources, as well as about 4% storage in the form of pumped hydro. The right combination of other sources can replace baseload plants entirely.

wind turbine-wikimedia

Pairing wind and solar improves their ability to meet demand reliably. Onshore wind tends to blow most strongly at night, while solar energy provides power during the peak demand times of the day. Offshore wind power is also expected to match demand well. Combining them all reduces the need for back-up power.

But until now policy makers have assumed that solar and wind won’t be able to power the grid reliably, even when combined and spread out over PJM’s more than 200,000 square miles, and with the addition of wind farms off the coast. Critics have insisted that renewable energy requires lots of back-up generating capacity, especially from some natural gas turbines that can ramp up and down quickly. New gas turbines have even been designed specifically to integrate with renewables in anticipation of increasing amounts of wind and solar coming onto the grid.

This makes the work of the U. Delaware researchers a game-changer by showing that wind and solar can be backed up primarily by more wind and solar. And so we can begin planning for a future entirely without fossil fuels, knowing that when we get there, the lights will still be on.

Offshore oil drilling in Virginia: undead and ugly

Photo: U.S. Coast Guard

Drilling for oil off Virginia’s coast is once again a possibility, popping up like a zombie when we thought it was dead (again). As the New York Times reported, “Efforts are focusing on Virginia because the public, politicians in both parties and energy companies all favor opening the waters to drilling.”

It will be news to many members of the Virginia public that we favor drilling off our coast, but there’s no doubt that oil companies are itching to open the Atlantic coast to drilling rigs, and plenty of Virginia politicians make it a talking point. Senators Warner and Webb are on board, as is Senator-elect Tim Kaine. Most famously, Governor McDonnell came into office dreaming of the highways he would build when his tanker ship came in.

For oil companies, Virginia is the thin edge of the wedge. Our share of federal waters is quite small because of the odd way that boundary lines are drawn. Virginia is targeted mainly as a means of cracking the line of resistance created by other eastern states. It’s a shame so many of our politicians are eager to help in the cracking.

It used to be that when Democrats and Republicans agreed on something, that improved the odds of it being a good idea. These days, it often just means they are taking money from the same corporations. Money alone may not buy a politician’s votes, but it most certainly buys lobbyists access to politicians, and access has a way of producing votes. So perhaps the surprise is not how many politicians have jumped on the drill-baby-drill bandwagon, but how many have not.

Some naysayers, including Congressman Gerry Connolly (D-Fairfax), point out that drilling off our coast is opposed by the U.S. Navy, which uses most of Virginia’s leasing area for its operations. These include testing air and surface missiles and bombs, which traditionally don’t pair well with oil rigs and tankers. (On the other hand, the Navy supports offshore wind farms, which would be located away from operations.)

Other legislators, like Congressman Bobby Scott (D-Newport News) oppose drilling because of the environmental hazards, and the danger posed to fishing and tourism.

Of course, no politician will admit to being unconcerned about the environment, including the ones who are very obviously unconcerned about the environment. This is why they say they support “environmentally safe offshore oil drilling.” The phrase is so familiar that we have come to take it for granted, but it actually bears some thinking about. Saying he supports “safe oil drilling” suggests a politician has in mind another kind of oil drilling–the unsafe kind–that he would not support.

But you’d be hard-pressed to find any restrictions on the drilling industry that the drill-baby-drill crowd supports. These politicians considered offshore drilling “environmentally safe” right up to the day millions of barrels of oil began gushing into the Gulf of Mexico and causing billions of dollars’ worth of damage. Drilling methods haven’t changed since the Deepwater Horizon disaster, and oil spills have continued to occur in the Gulf and elsewhere.

So let’s put in a plug for Truth in Advertising. Politicians, if you think extra American oil is worth the occasional catastrophic oil spill, then say so. Pretending there will never again be another Deepwater Horizon makes you look out of touch with reality, and the fact that a significant proportion of the voters are also out of touch with reality is not an excuse.

If you’re okay with drilling, tell us your Plan B for Virginia: how you would deal with the effects of a spill that fouls our coastline, kills wildlife, and contaminates everything that lives in the ocean, over an area that could be hundreds or thousands of square miles. If winds and tides spread the contamination onto Assateague Island or into the Chesapeake Bay, what’s your plan?

The folks in our commercial and fishing industries, and all the people who live and work in beach towns, should hear you talk about how confident you are in their ability to get by for a season on government handouts; if there’s longer-lasting damage, how maybe they can move to Northern Virginia and work in retail. I’m sure you can make it sound appealing.

And if you can’t, then maybe it’s time to kill the drilling zombie for good. You may be taking money from oil companies, but your job is to look out for Virginia.