SCC Approves Greensville Gas Plant

The Greensville power station will use technology similar to that used in Dominion's combined-cycle natural gas plant in Brunswick County, pictured here.

The Greensville power station will use technology similar to that used in Dominion’s combined-cycle natural gas plant in Brunswick County, pictured here.

by James A. Bacon

The State Corporation Commission (SCC) approved yesterday Dominion Virginia Power’s filing to build a $1.3 billion natural gas-powered power station in Greensville County. The power station will generate 1,588 megawatts of electricity, upping Dominion’s reliance on natural gas to 39% of its energy mix by 2020.

Construction, expected to begin later this year, is expected to be complete by 2019. The project will create roughly 1,0o0 construction jobs and 45 full-time positions, and it will generate $8 million a year in property taxes for Greensville County.

In approving the project, the SCC rejected the arguments of environmental groups that Dominion had failed to properly consider third-party alternatives for obtaining the electricity or alternatives such as energy efficiency, solar energy, a combined gas/solar hybrid facility or a portfolio approach. “The company’s choice of a natural gas facility appears prudent given the current natural gas market and forecasted gas prices,” stated the SCC in its final order.

Dominion said that customers will save $2.1 billion over the life of the power station through fuel savings compared to the project cost of purchasing electricity in the open market. Said Paul Koonce, CEO of Dominion Generation group: “This project will ultimately bring low cost, reliable energy to our customers … in addition to providing a major economic impact and good paying jobs for Southside Virginia.”

The Virginia Chapter of the Sierra Club, which opposed the filing, has not published a response on its website.

Bacon’s bottom line: To my mind, the most interesting question regarding the $1.3 billion investment is whether Dominion should be committing itself to a fixed, multi-decadal investment in an era in which the cost of solar energy continues to decline. Natural gas prices are incredibly low right now, and probably will continue to be for several years, but there are reasonable grounds for wondering if prices could rise sharply, as they have in the past, as a slew of proposed gas pipelines and gas liquefaction facilities start connecting the Marcellus and Utica gasfields to new markets, including those overseas.

Dominion is building a combined-cycle gas plant, which uses waste heat from the gas turbine to power a steam turbine, producing up to 50% more electricity from the same amount of fuel. With low gas prices, the economics are hard to beat at present. Assuming the Greensville plant runs most of the time, as it is designed to do, it will produce electricity far more cheaply than an industrial-scale solar facility, which generates no electricity when the sun goes down, and suffers diminished output in cloudy conditions.

The SCC found that Dominion had taken “serious and credible efforts to assess the cost and availability of third-party alternatives.” The company had issued an RFP and evaluated 5,000 megawatts of fully dispatchable, baseload or intermediate generation resources.

“We find that the Company’s RFP to be adequate for purposes of this proceeding,” states the SCC ruling. “Moreover, the Project was also compared to multiple unsolicited offers for solar, wind, landfill gas, and coal resources that were received outside of the RFP.”

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35 responses to “SCC Approves Greensville Gas Plant

  1. Interesting dollar figure $2.1 Billion savings in power imports. This highlights that Virginia imports an enormous amount of our power, I believe about 40% for the latest year we have figures (2014). Of course, most of the power imports are coal-based power, so use of natural gas reduces our carbon footprint.

    I agree we could do more solar in Va., but I do not see in-state solar meeting the overall needs. VA environmentalists are basically asking for a ban on future new Va. fossil fuel power plants, with the power deficit to be met by paying higher costs for renewal energy credits RECs from other states.

    • A big chunk of what Virginia “imports” is from DVP’s Mt. Storm plant in West Virginia. That plant provides service only to Dominion customers and none to West Virginia and is electrically connected only to Virginia. It’s hard to really see how that is an import in any true sense. The other big chunk comes from Apco plants located in West Virginia but which were designed for, built for and are paid for by customers from both states. Again, this is a consequence of putting the plant in the part of the service territory with both fuel and water in it, i.e., West Virginia.

      More solar is coming, but it will not displace the large capacity generating stations needed by DVP to meet its capacity obligations to PJM, or not entirely replace those plants.

      • Good info. I know we are joined at the “hip” with WV on coal power. That’s why the proposed EPA Clean Power Plan, based solely on state boundary power generation, does not make perfect sense. EPA gave Virginia an extremely low carbon mass target, due to the fact that much of Virginia’s CO2 is actually released in West Virginia. If the Clean Power Plan is adopted as currently outlined, I seriously feel we need to consider a combined WV/VA approach, since that is the current situation.

        Dominion’s drive to reduce imports is a little questionable, I agree…sounds like they are tearing down bridges with the WV plants that were built exclusively for Dominion VA.

    • You are correct about Mt Storm as an important out-of-Virginia source, but I think you’re talking apples to Jim’s oranges re “imports.” This is not about $2.1 billion in savings from avoided “power imports” but from avoided buying in the (mostly PJM) regional wholesale energy market, which is a multi-state (12 states) market that already includes Mt Storm. Dominion’s problem is, it doesn’t have enough efficient mid-range generation compared to its neighbors. Anyway, I’d like to see if those $2.1B savings were extrapolated from current natural gas prices, or based on forecasts of relative fuel prices over the life of the Greenville plant.

  2. You would “harvest” solar when you could – to reduce using other fuels when that solar was available.

    it will never be a primary fuel…. but every kilowatt you produce from solar is one less kilowatt you need to generate from burning fuel.

    what is this such a hard thing to think about?

    solar is an optional alternative fuel – when available – that if it is cheaper should be used.

    when it’s not available, then you use the other fuels.

  3. Bingo, LtG! The environmentalists are so wrapped up in their thing that they’ve lost all semblance of common sense.

    For a Sierra Club eye-opener, look at https://www.activistfacts.com/organizations/194-sierra-club/.

  4. there are different kinds of environmental groups per one’s personal preferences.

    I prefer EDF and NRDC to the SC and Friends of Earth, etc.

    EDF considers natural gas to be a reasonable path.

    but those who want to find a path forward won’t find that path if all they want to do is point to the extremists…

    I’m still a skeptic of solar because I do not see it in significant use on islands that have to import fossil fuels to be burned at a cost of 50 cents a kilowatt hour. When I see solar utilized on Islands (that ought to be optimal in terms of solar exposure) – and fossil fuel as the other fuel to be used when solar is not available – I’ll believe solar has come of age.

    At the same time – one does not have to be a genius to see that solar can also be used in places like Virginia without it having to have 24/7 availability.

    Dominion and those that support such a narrative are just not being up front about the fact a fuel does not have to be 24/7 to be economic/useful and to restrict it to that as a requirement is not reasonable.

  5. taking the scc for their word on anything dom power related is naive at the very best, dangerous at worst. dom power owns scc, as with the rest of the state, and the scc is not going to bite the hand that feeds it.

    • Your opinion of the SCC is indistinguishable from John B’s stance on environmentalists, which you decry above, but at least he linked the basis of his views.

      If “dom power owns the scc” why did Dom Power work so hard to get SB1349 enacted, insulating itself from SCC rate reviews for 6 years?

  6. I should just stay out but…

    First – Ditto the comment on Mount Storm. It should not be counted as imported power. The bromide about imported power has lost all credibility. Just like the threats that CPP will close all the coal plants (did you see that recent article on the Chesterfield plant’s rosy future? )

    Second – the SCC is hardly owned by Dominion. In another major decision yesterday (something I don’t expect to read about on this arm of the Dominion PR machine) the company was deeply rejected in its effort to maintain a return on equity in excess of 10 percent. The approved ROE of 9.6 on several rate riders will not lead to any suicides down at company HQ, nor will stockholders flee the company. But the company was pushing for 10.7 or some such…..The SCC’s decision saved us all some pocket change and saved big users serious scratch. Every year riders get more and more important, and base rates less and less important.

    Glad to see this plant approved.

  7. I truly hope there are no golf trips for SCC folks like DEQ… bad karma

  8. The SCC is a court of record. It is run by three sworn judges. They and their staff members do not accept something like that from a litigant. The consequences for them would be far more severe than the consequences it would create for a politician or an agency appointee. There might also be consequences for anybody making such an invitation or offer.

  9. Thanks Steve for pointing out the distinction and perhaps some day we’ll see that same ethic across the board for all govt – no corporate money – for any State Agency including the GA.

  10. Solar and other renewables will never be primary fuels that we depend on 24/7 , they will always be fuels that we take advantage of when they are available and cost-effective.

    when we premise the usefulness of those fuels on the basis that they have to be available 24 hours or they are not viable – we’re turning it into an all or nothing proposition instead of dealing with it on a realistic and practical basis that allows us to use what is available when it is available – not unlike how we deal with pump-storage dams.

  11. We need to know the efficiency of the proposed new plant (lbs CO2/mWhr). I know one of our participants here says it’s relatively low efficiency, which is not my preference.

  12. Here is what you all, and the SCC are missing.

    The primary rationale cited by Dominion for the additional natural gas electricity is their projection of electricity demand. That projection is challenged in a variety of places even though the State Corporation Commission’s Greenville approval included a belief that “increased energy efficiency does not have the potential to defer or satisfy the company’s need for the additional capacity the project is expected to provide.”

    Their conclusion fails to take into consideration the reduction in demand that will occur when distributed generation, especially cost effective solar PV, is included in that calculation. Distributed generation and secure micro-grids, under development at the DOD and in New England where Sandy did so much grid damage, are central grid demand reductions too. They should be included in any future grid demand projections. Storage will make them even more attractive.

    The UCS view of future grid based electricity demand is echoed by CitiGroup. “Combining the declining size of the electricity market in terms of volumes with the declining market share for conventional generation, we could see utilities in their current form suffer a 50%+ decline in their addressable market.”

    – 30-40% – Distributed resources (solar, CHP, wind) both for households and industry
    – 20-40% – Renewables (onshore wind, offshore wind, biomass, hydro) to constitute a big portion of centralized energy that could cover 30-40% of demand.
    – 20-40% – Conventional generation (nuclear, CCGTs, coal) to cover some of the base-load demand as well as provide back up to the system.”

    CitiGroup’s conclusion is based on their analysis of the changing structure of our utilities around the country, a structure and rate setting process incorporating distributed generation that has not occurred in Virginia, but which is inevitable.

    A new report has reevaluated the potential of rooftop solar. In Virginia our potential for on-site solar electricity generation is now ranked at 35% of total demand, a large reduction in centralized grid requirements. The new estimate also reminds us that that solar PV’s dramatic price drop will make solar competitive with utility rates, especially when compared to the cost of peak production.

    If Greenville is built Virginia will be stuck relying on natural gas for central grid demand that today looks like 40% but when distributed generation and storage too becomes cost effective in the next few years, that 40% could turn into 80% of grid generated electricity.

    • Neither the UCS, nor CitiGroup, appeared and offered evidence to the SCC about the potentiality of distributed generation or micro-grids.

      • Sorry, was interrupted while responding. To my knowledge, no evidence regarding distributed generation or micro-grids has ever been offered in Virginia as a reason to deny a petition for construction. These may both eventually become viable technologies to augment (or, in limited instances, replace) central generation, but while the pie is still in the sky, the utility has a continuing duty to supply reliable power to its customers 24/7/365.

        No one installing rooftop solar has to share any of its production.

  13. Many commenters either ignore the fact or don’t understand that the grid is very complex and fragile.

    You can’t say “lets use solar” and flip a switch when the sun goes away. The gas turbines and other types of plants (including coal) have to be continuously running to make certain the grid does not crash. Solar may resolve this someday, but that someday is far, far away.

    In the meantime, we need reliable power. I am certain the solar proponents won’t accept the blame if the grid crashes, and people suffer or die as the inevitable result.

    • Additionally VA already has a relatively large % of our in-state coal plants slated to shut down, before we even talk about how the proposed Clean Power Plan may impact the remaining coal plants.

      In short, Dominion is proposing to shift much of it’s coal power base (including out-of-state WV coal plants) to inside-Va-state-boundaries natural gas.

    • No one is talking about flipping a switch for grid integration. However a lot of integration is going on in a variety of places. 20% was originally seen as the problem break for adding distributed solar. Now PJM says they will be fine up to 30%. Virginia has a long way to go to get to 30%.
      NREL has been working with Hawaii since 2008 as the island was run on diesel electricity and very expensive. The report: Hawaii Solar Integration Study.
      Jon Wellinghoff has a unique view of new utility structure and NY state’s REV is leading the way. The utility structure will change and most believe that the utility that doesn’t will loose…grid defection, analyzed by RMI is not the best solution to employing solar and storage at the local level.

      PJM/GE reports a interesting effect …
      High penetrations of solar generation significantly reduced the net loads during the day and resulted in economic operation which required the peaking turbines to run for a few hours prior to sun up and after sun set rather than committing larger intermediate and base load generation to run throughout the day.

    • John BR, you are very much correct. As one commenter said earlier, when the sun goes down, “you run other fuels when solar is not available… simple.” No, it’s not that simple. The system operator must have night-time-only units up and running that will take over as the sun sets (or any other limitation kicks in). Phasing them in is tricky, and there is a loss of efficiency associated with the transition. Moreover, if the fossil units run only at night, they have to be cycled on every evening, off every morning. Some generation isn’t built to do that efficiently; some, in fact, take hours to heat up, more hours to cool off. So-called “cycling” generation can do this relatively rapidly, but it is less efficient; it costs more to run (if you’re not going to cycle it) than a true “baseload” unit. “Peaking” units are the least efficient to run, but the most flexible. In other words, there is a tradeoff between cost efficiency and operational flexibility.

      My understanding is that Dominion’s Greenville plant is an efficient gas-fired plant that is cycling capable, not as efficient as a 24/7 baseload unit but close. Whether CA&W is correct about the future generation mix or not, the Greenville plant is as good a design to hedge your bets with as any. The weakness of any natural gas unit is the soft long-term forecast for natural gas prices, not its inherent operating flexibility.

      I still maintain the numbers CA&W cites, 30-40% DG plus 30-40% renewable power on the Grid plus 20-40% conventional generation, are wildly overoptimistic for renewables penetration over the lifetime of the Greenville plant. Germany’s Energiewende program is the only attempt I know of to come close to numbers like those and it projects them as “goals” for 2050, amidst huge skepticism even within Germany that such high renewables percentages are achievable. Moreover, the Energiewende movement began in the 1970s(!) and that amounts to a 30-40 year head start over the US renewables movement, whatever the ultimate feasibility of 60-80% renewables. Personally, I think a US renewables penetration above 20% overall by 2030 is unlikely, and that’s the easy part.

  14. re: ” No, it’s not that simple”

    then that’s the argument you have to make INSTEAD of saying that SOLAR is not reliable 24/7.

    because – …. people are going to use SOLAR if it is cost effective to them no matter what anyone says about it being “not reliable”. they’re not going to buy the “not reliable” argument as long as they can use it, save money, and then use the grid when they need it.

    or are you going to try to charge those who use solar – a different price for grid power?

    I’m not advocating for or against here. I’m just saying that forces are going to overwhelm those who make the “solar ain’t reliable” argument.

    • No, no, no different price, nothing like that. I simply intended to say that what you plan and build for backing up solar is somewhat different than what you plan and build as generic baseload. If you plan for the wrong circumstance, you will cost everybody more than you should have. The cost of that nighttime power will be higher than it should have been. So it isn’t as simple as “you run other fuels when solar isn’t available.” A well-designed grid has the right amount of power in each category to yield the lowest overall cost of electricity. I fully agree there’s a significant role for DG solar and even a little DG wind in that lowest cost mix; but using the right sort of generation to back it up at night is an important part of the cost savings. You can’t plan to back it up with nuclear or most coal units, for example, because the coal units require too much lead time to cycle, and some NGCC units also, and nuclear can never be cycled.

      As for reliability, who mentioned that? I would never say, have never said, solar isn’t reliable!! It’s very reliable, and cheap too; however it comes with a significant operational limitation that affects everything ELSE on the grid.

  15. Re: “they’re not going to buy the “not reliable” argument as long as they can use it, save money, and then use the grid when they need it. Or are you going to try to charge those who use solar – a different price for grid power?”

    Let’s be clear: those who fall back on the grid at night should pay their FAIR SHARE of the grid’s costs. That does not mean, gouging them because they have no alternative!

    At the extreme of “fair” some might argue that, but for solar, we’d have the cheapest base-load units running more of the time, so the lowered efficiency of those cycling units should be charged 100% to solar and other customers should receive the benefit of a baseload efficiency price since that’s the cost they are imposing on the grid. I don’t buy that, simply because the utility’s generation mix has always been designed to meet the ‘average’ customer’s demand and I see no philosophical reason why we should depart from that principle even when part of the mix is backup for customers who have their own (DG) generation. But that argument will be raised, and you have to be prepared to address the pros and cons.

    Another differential in pricing grid power for solar backup would reflect the solar customer’s atypical (mainly night-time) grid usage. For this you could argue they should pay less, since they are not using as much on-peak and off-peak generation generally costs less. There are two responses: first, the solar backup grid user OCCASIONALLY uses on peak (as in major storms, when solar is “blacked” out) so they have a stake in peak generation requirements, and second, their negative effect on grid efficiency mentioned above; these two effects probably more than cancel out the argument for a discount on the ‘demand’ charge. Note, I am presuming that the utility has the grid backup customer on a rate that splits the demand component and the energy component into separate monthly charges; on the energy side, the solar backup customer would still get a good deal by using mainly the night-time (off-peak) energy rates.

    There are those utility monthly adders for grid backup that you read about and that Dominion has asked the SCC to approve; but those apply ONLY to “net-metered” solar customers. Net metering is an egregious and grossly overdone subsidy for DG and should never have been allowed to begin with and I will not defend anyone who thinks they should get net metering PLUS grid backup at no extra charge. But that extra charge is strictly tied to the net metering and should not apply to any other grid customer, solar backup or not.

    • re: ” Let’s be clear: those who fall back on the grid at night should pay their FAIR SHARE of the grid’s costs. That does not mean, gouging them because they have no alternative!”

      you mean like cable TV or cell phones?

      😉

      how about this. Someone takes significant steps to reduce their water consumption. Would you argue that they should still pay what others pay for water as their “fair share”?

      or how about this – for those folks who want electricity during peak demand periods when Dominion has to fire up more expensive generation plants – should those folks pay more for their fair share instead of all other ratepayers even the ones who did not use more power at peak demand or for that matter – those who actually lowered their demand because they were using solar and thus helped reduce peak demand?

      I think when you get into the “fair share” concept – you then ought to be allocating costs for those that use more overall or more during peak demand – also …. like we do with water services or toll roads… right? People that use more electricity – impose costs on others and so far – those costs are allocated to others even those than conserve. right?

      essential right now – we’re telling solar they have to pay more for their “fair share” but those that want more power than base load provides – during higher demand periods – don’t pay more – they get electricity that costs more to produce – for the same price as base-load electricity.

      what would be their “fair” share?

      should that concept extend to ALL ratepayers – per their usage – solar or peak load?

  16. You are all selling solar and wind short, especially offshore wind that actually peaks when energy use peaks on the east coast and is synergistic with solar. My point is … building these reduces grid demand dramatically and other states are way ahead of Virginia.

    Here is an evaluation of solar in the states ….
    The word for Virginia …. Laggard!
    “Incentives to participate in this state’s voluntary renewable portfolio standard program were eliminated in 2014, and the state has been a laggard on efficiency measures.
    BOTTOM LINE: Virginia is stuck on fossil fuels and making little headway in achieving its voluntary statewide efficiency goal, proving the argument that voluntary goals are often the hollowest kind.”
    CA 3,319,000 homes 13,241 MW # 1
    NC 223,000 homes 2,087 MW
    NJ 257,000 homes 1,632 MW

    VA 2,100 homes 21 MW #32

    Regarding the fragility of the grid and the issues with integrating large quantities of intermittent wind and solar ….
    March 31, 2014, wind output reached 39.4% of total ERCOT load for a short period of time.
    May 24, 2013, wind provided electricity equivalent to 60.5% of Colorado’s total demand, eclipsing an earlier record of 56.7%.
    The gold standard … Denmark-2014 with wind contribution of 39.1%

    “The success to date of ERCOT and Xcel Energy Colorado shows that integrating variable renewable energy at penetration levels of 10-20% on average and at times above 50% … by adopting approaches similar to those used (or planned) in ERCOT and Xcel Energy Colorado. … While infrastructure changes will likely be necessary in the longer term, the shorter-term integration challenges in many cases can be addressed with modest operational changes… accommodating these increasing levels of variable renewable generation in ways that preserve high levels of reliability should be possible at a cost (excluding the cost of any incremental transmission) that represents a modest share of the total cost of the electric system.”
    https://mseia.net/site/wp-content/uploads/2012/05/AEEI-Renewables-Grid-Integration-Case-Studies.pdf

    Dominion hasn’t thought beyond central grid and being a gas company … a position that has dangers in today’s market.

  17. per CleanAir&Water remarks:

    one could well argue that Dominion is seeking a path to sell more electricity and doing so in a way that all ratepayers are paying for that expansion – no matter their individual uses – everyone will have to pay for the new plants which are predicated on higher use – of which solar and wind are competitors that undermine Dominions dual goal of selling more and allocating those costs across all ratepayers including those that keep their use down or even use less – they still have to “share” in the costs of the new plants – whether those plants are actually needed or not.

    and if Dominion actually intends to market the available unused capacity to PJM in a bidding scenario – who is actually paying for the capital costs of the plants – the low bid folks or Va ratepayers?

  18. Guess the answer to who pays is both, provided gas price stays low and demand doesn’t fall too far and fast. Efficiency and onsite demand reduction is the cheapest electricity.

    We can’t find really good answers tinkering with net metering rules and grid tied charges. Net metering was designed for an antiquated billing system, “where the mechanical utility meter could only tell the utility how much energy was consumed since the last time it was read,” and where the net use number could only be calculated by a rotating disk that went forward or backward.
    http://blog.renewableenergyworld.com/ugc/blogs/2016/01/is_socialism_whats.html?cmpid=renewable01272016&eid=290998723&bid=1292492

    Our old rate based system encourages our utility to over-build, as Larry points out. Distributed generation has more value than just the kw hrs it produces. Last month, the PSC in NY rolled out the Benefit Cost Analysis Order, a methodology for how electric utilities should weigh the costs and benefits of proposed investments that affect the grid. Utilities will now be required to calculate the net benefits associated with portfolios of distributed energy investments, such as rooftop solar and energy storage, and compare them with traditional utility investments, like substations, power lines, and poles.

    New York’s utilities must now value the environmental benefits of distributed energy sources, and quantify how these different alternatives can work together to create a cost-effective, resilient grid. For example, in the face of severe congestion on the grid, utilities could expand the electric system to meet growing demand with utility scale wind and solar, or fossil driven, insecurely market-priced fossil resources. Alternatively, they could incentivize a number of different distributed resources to help bring demand down by, for instance, encouraging customers to install solar panels, participate in demand response programs, or invest in energy efficiency to avoid a grid expansion.
    http://blog.renewableenergyworld.com/ugc/blogs/2016/01/is_socialism_whats.html?cmpid=renewable01272016&eid=290998723&bid=1292492

    In 2013, nine states had wind and solar generation in excess of 10% of total demand: Iowa, South Dakota, Kansas, Idaho, Minnesota, North Dakota, Oklahoma, Colorado and Oregon. http://www.eia.gov/electricity/data/state/).
    Why isn’t Virginia getting ready to throw out the old centralized business model? A new one will be better for the environment and for the pocketbooks of consumers too.

  19. I think it’s pretty clear if electricity were sold like residential water is – with an escalating rate proportional to higher use – that consumers would do the same thing with their electricity use – that they do with their water use.

    that certainly ought to be one of the options to consider when considering new plants…

    It works in NY and California where people use 1/3 less electricity than in Va.

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