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Dominion’s giant concrete paperweight

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(More attention needs to be paid to Virginia’s powerful, but little-known, State Corporation Commission. It’s a major problem. – promoted by lowkell)

The State Corporation Commission has approved Dominion Virginia Power’s proposal for a new gas-fired power plant in Brunswick County, rejecting arguments from the Sierra Club and others that ratepayers would be better served by a combination of low-cost energy efficiency and price-stable renewable energy.

The decision in the case (PUE-2012-00128) reflects the same discouraging themes we have seen from our regulators before: a tendency to believe everything Dominion tells them, coupled with an absolute refusal to acknowledge the climate crisis bearing down upon us and the changes in the energy market that make fossil fuels increasingly risky.

As the SCC put it in its order, “The relevant statutes… do not require the Commission to find any particular level of environmental benefit, or an absence of environmental harm, as a precondition to approval.” (Note to legislators: How about fixing that?)

The SCC’s state of denial is not just about the future. Since at least the 1980s, Dominion has consistently overestimated future demand growth.

A little skepticism might be in order when Dominion projects the same level of demand growth that keeps not materializing. But the SCC is not skeptical. Its order declares Dominion’s load forecasts “reasonable.”

Evidently one can be both reasonable and wrong. Demonstrating this in real time, only a few days after the SCC issued its order this month, Dominion CEO Tom Farrell had to explain to shareholders why electricity demand has not grown this year in line with company predictions.

Amnesia was also in evidence at the public hearing on the case, where proponents of the gas plant – everyone from Dominion employees to the SCC staff – kept insisting on the environmental advantages of natural gas.

But congratulating each other that at least it wasn’t a coal plant seemed odd to those of us who recall the fanfare surrounding the opening of Dominion’s newest Virginia coal plant, all of one year ago.

My, how quickly things change. No one is proposing to build coal plants any more. Now that natural gas costs half what coal does, people have suddenly noticed that burning dirty black rocks to make electricity is a terrible idea. “Look at all that pollution!” they say in wonderment. “How last century!”

But in this century, natural gas is already wearing out its welcome – and not just among unhappy landowners who say fracking has spoiled their drinking water. Scientists measuring methane escaping from extraction wells warn that high levels of “fugitive emissions” may make natural gas a major contributor to climate change.

The SCC takes no notice of climate change, but it ought to consider that others do, presenting a financial risk for any fossil fuel plant. A national plan to reduce carbon emissions could make gas very expensive.

Yet building the Brunswick plant commits Dominion ratepayers to paying whatever the market price is for natural gas for the next three decades. Worse, it’s effectively a baseload plant, designed to burn gas 24/7; it can’t ramp up and down quickly to supply power when needed on a short-term basis, such as to fill in around the power supplied by wind and solar.

Analysts predict wind and solar will increasingly become the first choice for new generation, as these renewables get steadily cheaper and offer long-term price stability as well as environmental benefits.

Indeed, wind turbines beat out natural gas plants as the largest source of new generating capacity nationwide last year. Companies are designing natural gas turbines now that integrate with renewable energy, allowing utilities to hedge their bets on gas.

Well before the end of its 36-year life, a 24/7 baseload plant like Brunswick may be reduced to a giant concrete paperweight.

It would seem wise to hold off on building this gas plant, and we could. Investments in energy efficiency would more than meet the demand the Brunswick plant is supposed to serve, at a lower cost.

The SCC brushed aside this argument, pointing out that it consistently swats down good energy efficiency proposals – and intends to continue doing it.

So Virginia ratepayers, prepare yourselves: You’ve already been stuck with one of the last coal plants to be built in America. Now get ready for 30 years of paying for a natural gas plant. As for your dreams of wind and solar, keep dreaming.

Originally published in the Hampton Roads Virginian-Pilot on August 29, 2013.

  • TBill

    Yes it seems that VA is behind other nearby states in roof top solar and on-shore wind.  I agree it is surprising the proposed new nat gas power plant is base-load only without flexibility to ramp down for low demand periods.  According to ClimateCentral.org (http://www.climatecentral.org/news/a-roadmap-to-climate-friendly-cars-2013-16318) our Virginia 2012 in-state power plant fuel mix was about 40% Nuke/35% Gas/20% Coal/5% other.  I find this data somewhat surprising; if true the VA grid is not so bad?  One of the governor candidates mentioned VA imports a lot of power, which I was not aware of.      

  • Offshore Wind is Off the Auction Block in Virginia, But How Long Will Dominion Sit On its Hands?

    Beth Kemler, Virginia State Director at the Chesapeake Climate Action Network, had the following response to the Bureau of Ocean Energy Management’s announcement that Dominion Resources has won today’s auction for the rights to develop Virginia’s 112,800-acre offshore wind energy area:

    “We’re excited to see that offshore wind power is inching closer and closer to being a reality off Virginia’s coast. We’re anxious to see this massive resource start powering Virginia homes and businesses with clean energy.

    “While Dominion came out on top today, that unfortunately doesn’t guarantee that the company will actually erect a single turbine. The company could rent the wind energy area for years without moving forward with any development, preventing a more eager company from doing so. In fact, Dominion Virginia Power’s recently released long-range energy plan prioritizes new fossil fuel projects over offshore wind power development, rejecting offshore wind power even as a back-up plan. This doesn’t leave us with high hopes for Dominion’s speedy development of this clean energy resource.

    “The longer Dominion waits to put steel in the water, the longer Virginians wait for much-needed jobs. The longer Dominion waits to put steel in the water, the more likely it is that another state will become the offshore wind manufacturing hub of the East Coast.  The longer Dominion waits to put steel in the water, the more fossil fuels it burns for power and the more planet-heating pollution it releases.  

    “Virginians are already being hit by the impacts of climate change.  We’re seeing more and more flash flooding, sea levels rising toward coastal homes and ever-increasing threats of being hit by category 4 and 5 hurricanes.  As we continue to burn more and more fossil fuels, releasing more and more planet-heating pollution, the impacts will continue to get worse. According to the International Energy Agency, to avoid temperature increases to a catastrophic level, we have to keep at least two-thirds of the world’s known fossil fuel reserves in the ground.  Tapping our massive offshore wind energy resource is key to making that happen.”

  • Statement of Governor Bob McDonnell on Second in Nation Offshore Wind Lease Sale Off Virginia

    Bureau of Ocean Energy Management (BOEM) Auctioned over 112,000 Acres Off the Coast of the Commonwealth

    Area Anticipated To Produce Enough Electricity To Power 700,000 Homes

    RICHMOND – Governor Bob McDonnell issued the following statement this afternoon following news that the Bureau of Ocean Energy Management completed its live auction to lease an area off the coast of Virginia as the site of the nation’s second offshore wind energy lease sale. The winner of the lease sale is Dominion Virginia Power who bid $1.6 million for the lease.  Today, the Department of the Interior auctioned 112,800 acres offshore of the Commonwealth in a competitive lease sale as one single lease that is anticipated to support 2000 megawatts of wind generation and enough electricity to power 700,000 homes.  The lease area, composed of 19 full Outer Continental Shelf (OCS) blocks and 13 sub-blocks and located 23.5 nautical miles from the Virginia Beach coastline, was selected after intensive work with the Commonwealth and stakeholders to avoid existing uses of the OCS offshore Virginia, including sensitive ecological habitat and shoals along the coast north of the mouth of the Chesapeake Bay, military training areas, marine vessel traffic, a dredge disposal site, and areas of concern specified by the National Aeronautics and Space Administration Goddard Space Flight Center’s Wallops Flight Facility.

    “I want to congratulate Dominion Virginia Power on winning the lease for 112,800 acres of federal land off the coast of Virginia for offshore wind development.  Dominion is one of the largest energy producers in the country and a great corporate partner in Virginia.  I applaud the Department of the Interior and Secretary Sally Jewell for holding the second competitive lease sale for offshore wind on the U.S. Outer Continental Shelf.  This again puts Virginia at the forefront of an ‘all-of-the-above’ energy development and security strategy to meet the needs of a growing America.  I want to thank Interior Secretary Sally Jewell and her team at BOEM for moving this project forward as part of a comprehensive approach toward meeting our nation’s energy needs and creating more good jobs.”

    “Earlier in our Administration we were pleased to accept the invitation of then-Secretary of the Interior Ken Salazar to join the Department’s Offshore Wind Consortium, and we worked with the Secretary on the ‘Smart from the Start’ program.   Together with the General Assembly, we created the Virginia Offshore Wind Development Authority (VOWDA) to oversee the data gathering, research and planning that must be done to support offshore wind development off of Virginia’s coast. As part of that effort we are currently working toward final approval of two offshore wind research leases.  

    “Virginia’s coast is ideal for wind development. The gradual slope of the Outer Continental Shelf and consistent offshore wind speeds make this a natural geographic location for the commercial utilization of offshore wind resources. At the same time, Virginia enjoys a robust commercial ship building industry poised to become the center of construction for the component parts needed to build the specialized ships, turbines and towers necessary for these upcoming leases, and potentially for additional future wind leases on the east coast.  This will result in millions of dollars in industrial activity and the creation of many new high-skilled jobs in our state.

    “Today is another great step forward in ensuring Virginia is the ‘Energy Capital of the East Coast’ and in the development of offshore wind off the coast of the Commonwealth.  We must utilize all of our energy resources, from wind to oil to gas to coal to nuclear, to create good jobs for our people and provide greater energy security for our country.”

    The Department of the Interior release is available here.

    The McDonnell Administration has taken numerous steps to position the Commonwealth as a national leader in offshore wind energy including:

    ·         Proposing successful legislation to create the new Clean Energy Manufacturing Incentive Grant (CEMIG) program to focus existing resources for energy development incentives on targeted nuclear, wind, solar and biomass alternative energy projects. The legislation expanded Virginia’s economic incentive programs for those companies willing to locate and innovate right here in the Commonwealth and will help make Virginia a hub for clean and renewable energy production.

    ·         Proposing successful legislation to create a Green Job Creation Tax Credit, an annual $500 tax credit for every green job created with a salary of $50,000 or more, for five years and up to 350 jobs.

    ·         Joining and supporting the work of former Interior Secretary Ken Salazar’s offshore wind consortium to reform the permitting process and develop leasing and permitting timelines that would support financing and actual project development; led to the Secretary’s “Smart from the Start” program.

    ·         Adopting a “first of its kind” in the nation Permit By Rule to streamline permitting of small (< 100 MW) land-based and offshore (state waters) renewable energy projects by addressing all issues of species and habitat, water quality and other state regulatory issues in a single permitting process agreed upon by all interested agencies and other stakeholders.

    ·         Creating the Virginia Offshore Wind Development Authority (VOWDA) which oversees the data gathering, research and planning that must be done to support offshore wind development off of Virginia’s coast and track issues as they arise, and makes recommendations for promoting Virginia offshore wind development.

    ·         Conducting several studies to quantify Virginia’s offshore resource, and the transmission resources needed and available to support development of that offshore resource.

    ·         Partnering with the BOEM to conduct a regional ocean geological survey, which will provide data about the ocean floor that will be made available to developers.

    ·         Filing applications with BOEM for research leases of federal waters so that Virginia can gather data and support new technology development and testing to lead to offshore wind development.

    ·         Requesting and receiving $500,000 from the General Assembly to support offshore wind development projects, allowing the Commonwealth to continue its efforts to develop data and additional information concerning the resource available in Virginia’s Wind Energy Area, and to make that data available to reduce the costs of development and assist developers in the federal leasing process.

    ·         Leveraging $300,000 of the appropriation noted above to obtain equal matching funds from the BOEM to engage a geological/geotechnical contractor to conduct surveys of the ocean floor to help determine what sorts of turbine foundations to use in the construction of a commercial wind generation project off the coast of Virginia.

    ·         Supporting a team led by Dominion Virginia Power in receiving a $4 million competitive grant from the US Department of Energy for research and technology development related to offshore wind turbine foundations.  Additional partners include the National Renewable Energy Lab, Alstom, Huntington Ingalls-Newport News Shipyard and others.  The project will make use of one of Virginia’s research leases.