Bacon's Rebellion

Dominion Sings New Tune, Embraces Solar

Dominion’s White House Solar farm in Louisa County

Dominion expects to install up to 5,200 megawatts of solar generating capacity by 2042 — about thirteen times its current commitment and enough to power 1.3 million homes — according to forecasts contained in its 2017 Integrated Resource Plan (IRP). That represents a dramatic shift from forecasts in previous versions of the long-range planning document, which is filed annually with the State Corporation Commission.

Natural gas emits half the carbon dioxide per unit of electricity than oil and coal, and solar produces no carbon emissions at all. Increasing reliance upon those two energy sources will shrink a typical Dominion Virginia Power customer’s carbon footprint (carbon dioxide emitted per customer) by 25% over the next eight years, the company stated in a press release.

“The ‘installed cost’ of large-scale solar facilities … has dropped 50 percent over the past four years,” said Paul D. Koonce, CEO of the Dominion Generation Group. “Our customers want more renewable energy, and changing economics make the transition to renewable resources easier.”

Dominion has been slow, compared to many other utilities, to embrace solar power. In past years, the company stressed that solar produced electricity only when the sun was shining, which made necessary extensive backup capacity, and that solar peak production in the mid-day did not match up well with peak demand for electricity on late summer afternoons or early winter mornings. Until now, the company had committed to building only 400 megawatts by 2020.

Environmental groups have been highly critical of the utility’s approach to renewable energy for years, and Dominion’s latest announcement changes little. The Sierra Club Virginia Chapter today attacked the utility’s continued reliance upon “dirty” “fracked” natural gas and criticized the proposed Atlantic Coast Pipeline.

“Dominion’s actions don’t match its words when it comes to promoting renewable energy,” said Kate Addleson, director of the Virginia Sierra Club, said. “Despite the fanfare, this does not appear to be a sharp change from what we have seen in the past.”

“Rather than deliver a clear energy plan, this document only serves to raise more questions about what Dominion really wants to do over the long-term and who really stands to benefit,” said Will Cleveland, Southern Environmental Law Center (SELC) attorney. “While Dominion is taking a good step toward expanding solar, they are simultaneously taking two steps back by doubling down on dirty fossil fuels.”

In related news, Appalachian Power Company also filed its IRP, forecasting the addition of 500 megawatts of universal solar by 2031, 1,350 megawatts of wind energy by 2031, and 10 megawatts of battery storage resources by 2025. “Universal” solar is the term for generating capacity that feeds into the broader system, not reserved for the use of a single customer or set of customers.

Dominion executives attributed the company’s rhetorical about-face to continued improvement in the economics of solar energy and a conviction that, despite the Trump administration’s antipathy toward the Clean Power Plan, some form of CO2 regulation will remain in place.

“We believe this balance … of solar, natural gas, and nuclear hits the sweet spot in terms of cost, environmental performance, and reliability for our customers,” Koonce said.

Dominion graphic shows the declining carbon footprint as the company’s four gas-fired power plants came online, replacing coal units and displacing out-of-state energy purchases.

Modernizing the grid. Aside from boosting the efficiency of solar panels, new technology enables utilities to better handle fluctuations of frequency and voltage on the electric grid caused by variable solar output.

“For the first time, our long-range plan discusses the need to modernize the energy grid in order to accommodate the changes in how power will be produced as well as to meet the needs and desires of our customers,” said Bob Blue, CEO of Dominion Virginia Power.

The existing transmission and distribution grids were built to facilitate a one-way flow of electricity from a handful of large power plants to millions of distributed customers. “The energy company produces a large amount of electricity at a relatively small number of locations,” Blue explained. “It then sends that power across big wires, then medium-sized wires, then small wires.”

Solar output will be more distributed. “When solar is connected, the distribution grid must become a two-way network so we can deliver energy seamlessly to everyone, including people with solar panels on their rooftops,” Blue said.

Modernizing the grid, Blue said, entails investing in:

Dominion provided no estimate of how much such a grid overhaul would cost or how long it would take to phase in.

No reversing CO2 regulations. The press conference addressed another issue that has been dogging the power company in recent months — the argument that a freeze of base rates enacted two years ago in response to the Clean Power Plan should be repealed now that the Trump administration has expressed its intention to reverse the Obama-era regulatory initiative.

“We expect future national and state energy policy to include some form of limitations on greenhouse gas emissions,” said Koonce. The U.S. Supreme Court has upheld the authority of the federal Environmental Protection Agency to regulate carbon emissions under its endangerment finding — a finding that the Trump administration cannot ignore. Meanwhile, he said, the McAuliffe administration “has work underway” that could well lead to state restrictions on carbon emissions.

“Dominion will continue moving to cleaner power sources with lower emissions, whether the Clean Power Plan lives or dies,” Blue said.

Gas and solar in growth mode. In its annual Integrated Resource Plan, Dominion makes its best-guess forecast for capital expenditures anticipated over the next 15 years. This year the company looked at eight scenarios, each with its own assumptions for prices, demand and regulatory policy. Several key assumptions span all eight scenarios, including the re-licensing of existing nuclear units, construction of another base-load natural gas plant around 2024, negligible wind capacity, and continued load growth averaging 1.3% per year. A third nuclear unit for North Anna, said to approach $20 billion in cost, is included only in the scenario that assumes the most draconian regulatory restrictions on fossil fuels.

Koonce made the case that gas and solar go together. “Gas-fired generation is clean, dependable and can even out the variable energy flows from solar and wind,” he said. Big combined-cycle plants like the Brunswick County Power Station and an even bigger plant under construction in Greenville County are base-load facilities that generate electricity at low cost, but cannot respond flexibly to fluctuations in demand. To balance variable solar output, Dominion will rely upon combustion turbines (CTs) — essentially jet engines hooked up to generators — that can ramp up to full output within 10 minutes. Dominion did not indicate whether it plans to build the CTs itself or rely upon independent power producers.

The shift from coal to gas and solar will result in a 46% reduction in CO2 emissions between 2007 and 2027, Dominion said. That period encompasses the shutdown or conversion of six coal-fired stations in response to the pollution-cutting Mercury and Air Toxics Standards; takes into account the improved efficiency of its new gas powerhouses at Brunswick and Greensville, which extract a higher percentage of heat value from each BTU of gas; and incorporates some increased production from solar.

Some of the CO2 gains come from substituting super-efficient Virginia-based generation with higher-carbon electric power now purchased from other states. The energy mix of out-of-state electricity is a mixed bag, incorporating coal plants and older natural gas units as well as wind and solar.

Dominion’s increasing reliance on home-generated electricity — both solar and natural gas — also will provide an economic boost to the economy, said Chet Wade, vice president-corporate communications. Building gas and solar generation in the state supports construction jobs, creates permanent jobs, and gives a boost to localities’ tax base.

The environmentalist critique. The SELC accused Dominion of inflating electricity demand projections in order to justify increased gas consumption and construction of the Atlantic Coast Pipeline.

“It becomes more and more clear that Dominion is using the Atlantic Coast Pipeline to paint its customers into a corner,” said Greg Buppert, SELC Senior Attorney. “Locking Virginians into another enormous capital investment and another 70 years of fossil fuel doesn’t make sense.”

The environmental group vowed to intervene in the SCC review of the IRP to dig into Dominion’s assumptions and to get a clearer picture of Dominion’s energy plans for Virginia.

“Last year, when we finally got a look at the data, Dominion was projecting an 83 percent increase in carbon pollution by 2040 for its preferred scenario,” said William Penniman, conservation co-chair for the Sierre Club Virginia Chapter. “Climate scientists tell us we need to decrease carbon pollution by 80 percent by 2050 if we are to avoid the worst impacts of climate change.”

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