Author Archives: James A. Bacon

Why Dominion Is Cautious about Solar

solar_panelsJames A. Bacon

Solar energy may account for a barely perceptible sliver of Dominion Virginia Power’s electric generating portfolio today, but the power company sees an increasing role for it in the future.

Even under its “low cost” scenario, Dominion foresees installing 1,000 megawatts of photovoltaic (PV) solar energy by 2041. Under a variety of other scenarios designed to meet the goals of the Clean Power Plan, which may or may not pass U.S. Supreme Court muster by 2041, solar could comprise between 2,100 megawatts and 8,000 megawatts of capacity. That compares to about 24,000 megawatts of current capacity across the utility’s power generation fleet.

Those numbers come from Dominion’s 2016 Integrated Resources Plan, a planning document filed last week in which the company lays out its expectations for electricity demand and its strategy for meeting that demand.

While the company expects a bigger role for sun-powered electric generation, the IRP raises concerns about the difficulty of integrating large amounts of solar, an inherently intermittent source of electric power, into a system that requires stability and predictability.

One commonly heard critique of solar is that it delivers electricity when the sun is shining, not when it is needed. (It is not “dispatchable.”) Therefore, the power company must either maintain backup power capacity or purchase electricity from elsewhere on the regional grid, both of which can be expensive. The 2016 IRP goes into great length elaborating upon a different problem: the difficulty of integrating large volumes of solar-generated electricity into the transmission and distribution grid.

In effect, says Dominion, the move to solar represents a paradigm shift in how electricity is generated and distributed. States the IRP:

All levels of the existing electric infrastructure, standards and operating protocols were originally designed for a dispatchable generation fleet (based on the market price as well as the topological condition of the electric network). This paradigm ensures system stability through control of frequency and voltage. PV generation systems, in contrast, only produce electricity when the sun is shining; therefore, energy output is variable and cannot be dispatched.

Conventional generating facilities are utility-scale, while solar panels installed by homeowners, businesses and public institutions bypasses the transmission grid and ties into local distribution circuits.

Therefore, the electric grid is evolving from a network where power flows from centralized generators through the transmission network and then to distribution systems down to the retail customer, into a network with generators of many sizes introduced into every level of the grid. The overall result is that traditional assumptions about the direction of power flows are no longer valid.

Meter readings from the Virginia Solar Pathways Project. (Click for larger image)

Meter readings from the Virginia Solar Pathways Project. (Click for larger image)

Fluctuations in electric power output cause variable power injections and losses on the grid, impacting frequency and voltage, which the industry must control within tight parameters. That’s not a problem when PV penetration is low, states the IRP, but it can be a problem when PV constitutes a larger percentage of power production. “On a multistate level, it is possible that the resulting sudden power loss from disconnection of distributed PV generation could be sufficient to destabilize the system frequency of the entire Eastern Interconnection.”

There are fixes for these problems — but they cost money. Static synchronous compensators (STATCOMs) can help prevent “voltage flicker” from solar power. Similarly, PV inverters, which invert the DC output of a solar PV facility into AC, continuously monitor the grid for voltage and frequency levels. High resolution meters, such as synchrophasors and digital fault recorder devices placed at the point of interconnection, support high-speed tripping to address power quality concerns.

So, how expensive would it be to upgrade the electric grid to accommodate a significantly higher contribution of solar power? The IRP alludes to a 2015 filing by Southern California Edison, estimating capital expenditures in the range of $1.4 billion to $2.5 billion to upgrade its current grid to facilitate integration of distributed solar.

The IRP also addresses energy storage technologies such as flywheels, batteries and compressed air energy storage. Of these, batteries are a potentially attractive option. States the IRP: “Batteries can be used to provide energy for power station blackstart, peak load shaving, frequency regulation services, or peak load shifting to off peak. … The primary challenge facing battery systems is the cost. Other factors such as recharge times, variance in temperature, energy efficiency, and capacity degradation are also important considerations for utility-scale battery.” Still, says the IRP, Dominion is “actively engaged” in evaluating the potential for energy storage technologies.

In conclusion, states the IRP, “Virginia’s potential maximum solar build out is relatively small compared to other states in the U.S. and countries in the world.”

The Graph Says It All…


Who has caused the explosion in health care costs since 1970? Physicians or runaway bureaucracy? This graph doesn’t leave much to the imagination. Hat tip Isaac Morehouse by way of Instapundit.


Why Dominion Sees Growing Electricity Demand in the 15-Year Future

electricity_demandby James A. Bacon

One of the more controversial forecasts contained in Dominion Virginia Power’s 2016 Integrated Resource Plan (IRP) is a projection that average electricity demand and peak demand in its service territory will increase at an annual rate of 1.5% annually over the next 15 years. If that forecast pans out, demand will outstrip the company’s 12.5% reserve margin when the current round of building projects is complete around 2021, and would create a supply shortage of 4.6 million megawatts by 2031 if no new capacity were added.

Setting aside questions of whether or not Dominion should include more renewable energy in its generation mix, environmentalists find the growth forecast problematic, arguing that electricity consumption is decoupling from economic growth nationally as new technologies become available, industries invest more capital in energy-efficiency, and some states adopt policies that promote efficiency.

I am agnostic on the issue but I believe this is one of the most important debates taking place in the electricity policy arena today. A higher demand forecast would justify a bigger investment by Dominion and Virginia’s other electric utilities, Appalachian Power and the Old Dominion Electric Coop, in new generating capacity. A lower demand forecast would support a more constrained approach to capital spending. The debate also raises the question of whether Virginia’s power companies should be moving more aggressively to implement energy-efficiency measures.

With this blog post I present the findings from Dominion’s 2016 IRP. I think it’s fair to say that Dominion has spent more man-hours and more dollars analyzing electricity demand in Virginia than anyone else. That’s not to say its forecasts are more reliable. Dominion concedes the enormous uncertainty regarding Clean Power Plant regulation, and the company may have institutional biases favoring faster demand growth. But it’s the best analysis we’ve got at the moment. I summarize Dominion’s discussion with the aim of stimulating discussion.

Dominion’s econometric model utilizes hourly DOM Zone data — the DOM Zone is the PJM Interconnection-designated zone inside which there are relatively few transmission constraints) and simulates both time-trend variables (electricity demand over time) and weather variables such as wind speed, cloud cover and precipitation. The model factors in time of day, day of week, holidays and seasonal effects, as well as unusual events such as hurricanes.


Graphic credit: Dominion. Click for larger image.

Overall, Dominion’s service territory is a summer-peaking zone, meaning that the highest demand is normally experienced during the summer. However, Dominion also has a weaker, winter peak, which on rare occasions such as the polar vortex a couple of years ago, is stronger than the summer.

While electricity demand has slowed in some sectors as energy-efficiency makes inroads, Dominion expects growing consumption in other areas — PCs, laptops, tablets and other digital devices; electric vehicles (primarily during evening hours); and data centers.  Consolidating data storage in hyper-efficient cloud facilities work to reduce overall overall demand, but the trend displaces consumption from scattered locations in the East Coast to Northern Virginia, which may be the most competitive location in the world for data storage due to its access to high-capacity fiber cable. While data centers do not create many jobs, economic developers like them because their enormous capital investment in servers contributes millions of dollars in local government tax revenue.

Moreoever, the Virginia economy is more dynamic than the national average. Going forward,” states the IRP, “the Virginia economy is expected to rebound considerably within the Planning Period. The 2015 Budget Bill approved by the President and the U.S. Congress has significantly increased the level of federal defense spending for fiscal years 2016 and 2017, which should benefit the Virginia economy.” All other things being equal, a more vibrant economy means higher electricity consumption.

Dominion makes its 1.5%-per-year forecast despite committing to a 2007 Electric Utility Reregulation Act goal of reducing retail electricity consumption by 10% (based on 2006 consumption levels).

To advance that goal, the company has put into place energy-efficiency measures ranging from air conditioner recycling and residential low-income energy assistance to demand-response tariffs for households using smart meters. Also, to curb increases in peak demand, Dominion has instituted a Standby Generation rate schedule providing incentives for businesses to switch to backup generators if demand is overwhelming supply. The size of the standby program is relatively small, however. According to an IRP table, there were 16 events in the summer of 2015 and 12 in the winter, reducing demand by on average by two megawatts. (That compares to about 24,400 megawatts of generating capacity across the utility’s fleet.)


In the chart above, Dominion displays its calculations of how much various energy-efficiency and alternative-energy programs will cost on a per-megawatt of power conserved or generated. In many cases, the energy-efficiency programs provide the most bang for the buck. But they are limited in scale.

Moreover, it is difficult to calculate the benefits of investments in energy efficiency, states the IRP, because the pilot programs are under-enrolled and small numbers make it difficult to extrapolate to a larger scale. The analysis for one program showed a negative impact on consumption from an energy-efficiency program, while another suggested that for every 1% increase in the price of electricity, household cut consumption by 0.75%. The company considered both to be outliers. More typical is a finding that  1% increase in price leads to a 0.1% cut in consumption  — a ten-to-one ratio.

Despite the uncertainties, Dominion stated in its “short term action plan” that it will “continue to implement cost-effective DSM programs in Virginia and North Carolina.”

Strictest Clean Power Option Would Cost Customers $12.8 Billion, Dominion Says

transmission_lineby James A. Bacon

Meeting the strictest compliance option of the Clean Power Plan would cost customers of Dominion Virginia Power an estimated $12.8 billion in higher electric rates over the next 30 years, the power company revealed in its 2016 Integrated Resource Plan, which it submitted to the State Corporation Commission (SCC) today.

Three lower-cost options would pack a punch as well, costing an additional $5.1 billion to $6.0 billion more than the least-cost plan, which the SCC requires Dominion to examine.

Implementing the strictest plan would increase residential electric bills (with 1,000 kilowatt hours per month usage) by 26.5% in 2022, with a declining impact through 2030.

“Our assumption is that some kind of carbon regulation is coming,” Katherine Bond, Dominion’s Dominion director of public policy said in a press briefing. However, she added that there is enormous uncertainty over what direction that regulation will take. The company examined options based on four broad approaches the Environmental Protection Agency allows states to pursue.

A legal challenge to the Clean Power Plan appears to be headed to the U.S. Supreme Court, which could derail the whole regulatory initiative. However, the McAuliffe administration, which backs the plan, has ordered the Department of Environmental Quality (DEQ) to determine which regulatory option would be best for Virginia if the Clean Power Plan clears the high court. No consensus has developed among the stakeholders who have been meeting for several months to advise the administration.

The Virginia Chapter of the Sierra Club and other environmental groups are backing a “mass-based emissions” approach, which would cap carbon-dioxide emissions on utilities’ existing and new generating facilities. A second mass-based approach would cap emissions from existing power plants only, while two other strategies would limit CO2 emissions using intensity-based goals that limit CO2 emissions per kilowatt hour of power produced. The intensity-based approach would provide more flexibility and give Virginia room to grow its economy, but it would allow greater CO2 emissions.

“We are pleased to see that Dominion is now considering one alternative plan in compliance with the Clean Power Plan, Plan E, that includes capping new and existing fossil fuel sources,” said Glen Besa, director of the Virginia Sierra Club in a statement responding to the IRP. “While Dominion claims that Plan E is the most expensive alternative, it is important to note that most of this cost is attributable to Dominion’s inclusion of a new $19 billion nuclear reactor at North Anna.” That reactor alone could raise customer rates by as much as 25%, found an analyst for the Attorney General’s office.

Also, Besa told Bacon’s Rebellion this afternoon, the IRP Dominion submitted last year recommended a plan that would increase CO2 emissions by 60%. He had not had a chance to examine the 2016 IRP, but he doubted the low-cost plan differed enough to change the percentage by much.

The low cost plan includes the following:

  • Three combined cycle gas units one one location: 3,183 megawatts
  • Two combined cycle gas units at a second location: 1,062 megawatts
  • Combustion turbine: 2,288 megawatts
  • Solar: 1,000 megawatts
  • Offshore wind: 12 megawatts

By contrast Dominion’s Plan E (the lowest carbon-emitting scenario) envisions the addition of the following capacity:

  • Two combined-cycle natural gas units: 3,186 megawatts
  • Combustion turbine: 1,373 megawatts
  • Solar: 8,000 megawatts
  • Nuclear: 1,452 megawatts
  • Offshore wind: 12 megawatts

Dominion cites two reasons for the high expense of the lowest carbon scenario. First, it relies heavily upon solar energy. Although the “fuel” — the sun — is free, its capacity rating, or the percentage of time a solar facility actually generates electricity is lower than for other fuel sources. Moreover, it is intermittent, which means Dominion cannot necessarily call upon it when needed, which means it must maintain backup capacity. Second, the low-carbon approach rules out coal and most new natural gas, leaving only one low-carbon alternative to provide base generation — nuclear. The lowest-carbon scenario is the only one in which Dominion envisions building the North Anna 3 unit.

Dominion did not recommend any of the alternatives it examined, but it did recommend against the mass-based programs because they offer the least flexibility in achieving compliance.

While electricity consumption has leveled off nationally, Dominion sees it continuing to grow in Virginia at an average 1.5% growth rate over the next 30 years, creating a large and growing capacity gap. Environmentalists contend that the growth rate could be reduced significantly if Dominion pursued energy efficiency strategies more aggressively. Dominion counters that Virginia’s population and economy are growing, driven by a significant degree by the growth of the energy-intensive data center industry in Northern Virginia.

Less Hysteria in the Coal Ash Debate, Please

A Dominion employee holds a container of treated coal-ash wastewater at the company's Bremo facility. The water was treated to be safe for aquatic life, not for people to drink. It would make no sense to do so.

A Dominion employee holds a container of treated coal-ash wastewater at the company’s Bremo facility. The water was treated to be safe for aquatic life, not for people to drink. It would make no sense to do so.

by James A. Bacon

Yeah, I have a problem — a big problem — when people like Marion Kanour, an Episcopal priest from Nelson County and a member of the Knitting Nannas of Virginia, are quoted uncritically in newspaper articles like today’s Richmond Times-Dispatch coverage of an environmental protest.

Referring to treated coal-ash wastewater released into the James River from Dominion Virginia Power’s Bremo Power Station yesterday, Kanour said:

I’m not sure how many parts per million you’re willing to ingest, but I’m not willing to ingest any. I guess it was much less expensive to poison the rest of us.

There are environmentalist professionals who know what they’re talking about, and then there are local activists who don’t. The professionals are careful what they say. The activists spew crazy stuff that clouds the debate. Kanour’s quote is a classic example of crazy stuff.

No one will be “ingesting” wastewater in parts per million or any other detectable level. The discharge will flow into the James River at a maximum rate of 1,500 gallons per minute and mix with a river flow of 5.5 million gallons per minute under normal conditions. The nearest water intake for a municipal treatment facility is 50 miles downstream. Any water taken into the Richmond water treatment plant undergoes an extensive treatment to make it suitable for drinking. A critical step is adding chlorine to kill bacteria. The Bremo wastewater is not treated with chlorine because adding that chemical to the river…. (drum roll)… would be harmful to aquatic organisms.

The kinds of statements Kanour makes have nothing to do with the real debate. The battle line is not over whether to put toxic swill or clean, drinkable water into the river, but over how frequently to test wastewater quality and what protocols to follow to ensure the water meets DEQ standards. The parameters of the dialogue between DEQ, Dominion and environmental groups are extremely narrow. If the Bremo controversy were a football field, the question is whether the football belongs on the 49 yard line or the 47 yard line, not the 10 yard line.

Talk about “poisoning” people with undrinkable water is hysterical nonsense that alarms people unnecessarily and makes it more difficult for the professionals — and by that I include the environmental groups who do know what they’re talking about — to do their jobs.

Update: Bacon eats crow. In the original post, I chastised Marion Kanour for spouting “crazy stuff,” such as saying that heavy metals discharged into the James River would be measured in “parts per million” instead of “parts per billion.” Well, in that instance, I’m the one who spouted crazy stuff, for, in fact, effluent levels are measured in micrograms, which are units equivalent to one-millionth of a liter. So I formally apologize for my rash statement, and I have removed the offending paragraph.

The rest of my criticism stands.


Where the Grass Is Always Greener…

underwater_grassThe abundance of underwater grass in the Chesapeake Bay rebounded 21% between 2014 and 2015, reaching the largest extent in more than 30 years of aerial mapping by the Virginia Institute of Marine Science (VIMS) and surpassing the Chesapeake Bay program’s 2017 restoration goals two years ahead of schedule.

Aerial imagery revealed a total of 91,600 acres of underwater grasses, a number that fluctuates considerably year to year, depending upon weather conditions, and had not shown any marked improvement since 1990 or so, the Chesapeake Bay program announced earlier this week.

Underwater grasses are critical to the Chesapeake Bay ecology, providing a habitat for aquatic species, keeping waters clear by trapping suspended solids, and buffering shoreline erosion. The Chesapeake Bay program has set a goal of achieving 130,00 acres of underwater grasses by 2025 and an ultimate goal of 185,000 acres.


From the Frying Pan into the Fire?

byrd_midde_schoolSo, the Henrico County School Board has done the politically correct thing and re-named Harry F. Byrd Middle School to Quioccasin Middle School. Quioccasin, a Native American word meaning “the gathering spot,” is a local place name used for the road on which the school is located.

I’m OK with re-naming the school, which is located in western Henrico County near where I live. Virginians should re-think they way they honor former segregationist governors (even one who enacted the first law in the United States banning lynching). But given the tenor of our times, I wonder how long the new name will remain politically correct. Can’t the use of Native American names be condemned as “cultural appropriation?”

If calling a football team “the Redskins” is outre, how long until people begin calling for re-naming of all the places names stolen from displaced and exterminated native peoples? Where is the logical point at which enough is enough?