Tag Archives: Wind power

What Virginia’s Electric Grid Could Look Like

A Next-Era Energy Resources battery storage facility.

by Jane Twitmyer

Virginia has all the tools it needs to build an inexpensive, reliable, clean energy future. We’re not talking about exotic technologies that might become available some day in the future. Solar power, wind power, battery storage, microgrids, energy-efficient buildings and other clean-power technologies are available right now at a cost competitive with fossil fuels and nuclear. The Old Dominion just needs a regulatory structure to match.

Virginia’s energy landscape has changed faster than many thought possible. Electricity-hungry data centers are demanding electricity generated from 100% renewable sources. As projected demand has shifted, Dominion Energy has canceled two planned large, base-load natural gas plants. In their place the company now plans to build 3,600 megawatts of gas-fired “peakers’” designed to back up the promised 5,000 megawatts of solar and solar power when clouds block the sun or there is a lull in the wind.

But the experience of other utilities is showing that even the peaker plants aren’t necessary. Consider the Moss Landing gas-powered plant in California. In 1998 PG&E sold Moss Landing to Duke Energy, which spent $500 million upgrading the plant before selling it to Dynergy. Last year Dynergy retired two super-critical steam units because they were no longer economically competitive. Now, a newly reinvented Moss Landing anticipates becoming an energy storage facility filled with 300 megawatt/1,200 megawatt-hour batteries.

In Vermont, Green Mountain Power has built a system of distributed stored energy. Solar customers pay $15 a month to host a utility-owned and-operated Tesla Powerwall in exchange for backup power. During peak energy days the utility pulls from 500 Tesla Powerwalls as well as energy storage facilities in Rutland and Panton. Vice President Josh Castonguay says these alternatives to gas work as planned this summer when the batteries took the equivalent of 5,000 homes off the grid.

In New Hampshire, Liberty Utilities wants to own and install 1,000 Tesla Powerwalls in the homes of its customers. The five megawatts of aggregated battery capacity would allow Liberty to reduce its load peak, saving an estimated $693,000 a year in transmission costs and potentially offsetting traditional wires upgrades.

Another approach to meeting peak demand is to combine offshore wind with solar. Rooftop solar combined with our extraordinary offshore wind resource can meet all of Virginia’s summer peak demand. Solar’s peak production ends as the wind picks up, and thanks to the sea breeze effect, an offshore wind farm is very productive when electric demand in the region is at its highest.

Virginia’s offshore wind has the potential to generate three times as much net energy as Dominion’s 2017 net energy load with no fuel required. Just the offshore leases acquired by Dominion in 2013 can provide the electricity equivalent of 2.5 nuclear plants. More leases will be available in the future, yet the utility’s 2018 Integrated Resource Plan anticipates building only two “demonstration” windmills on Dominion’s leased waters during the next 15 years. Offshore wind looks like a missed opportunity.

The Virginia coast is located on the Mid Atlantic Bight, the geological formation that runs from Cape Cod to Cape Hatteras. The Bight is the shallow, wide edge of the continental shelf 30 miles, more or less, from shore. Wind speeds on the Bight are higher, blades can be larger, and the “sea breeze effect” generates power during times of high demand onshore.

The Mid-Atlantic Bight has been called the potential “Saudi Arabia of Wind.” Bight wind installations are underway in Rhode Island, Massachusetts, and Maryland. The Governor of New Jersey Governor’s has signed an executive order setting a goal of generating 3,500 megawatts of offshore wind energy by 2030. New York Governor Cuomo has called for developing 2,400 megawatts of offshore wind by 2030, targeting 800 megawatts for this year and next.

The U.S. offshore wind industry will be built. A pipeline of wind projects totals 25.46 gigawatts, including 1.3 gigawatts added last year. Building Offshore Wind means building a whole new industry. Costs will drop rapidly as supply chains and construction capabilities develop. Gov. Ralph Northam’s recent hiring of the international energy consultants BVG Associates to analyze how the state can become a coastal leader for the offshore wind industry is important. The Hampton Roads area is well suited to becoming an offshore wind hub. According to the Natural Resources Defense Council (NRDC), it will bring 4,377 jobs and $641 million economic benefits to the state.

Price has been an issue but onshore support for the new industry changes the pricing picture. Block Island’s wind farm, built only last year without onshore support facilities, cost $244 per megawatt-hour. Recent bids for Vineyard Wind have come in at $74/megawatt hour, demonstrating the financial value of onshore support facilities. In Massachusetts the old whaling port of New Bedford is undergoing a commercial makeover of more than $200 million, including the construction of a marine commerce terminal financed by the state, to prepare for the offshore wind industry.

The clean energy economy is being created around the world. Virginia needs to diversify away from gas as its primary, centrally distributed resource. We all want Virginia’s privately owned utilities to remain profitable, but it will take writing basic new rules to avoid the “death spiral” of declining monopoly utility sales and rising electricity rates. A utility-owned multi-directional grid that can accommodate a multiplicity of solar and wind is proving to be the most reliable and affordable choice for other states, and can be for Virginia, too.

Jane Twitmyer is a member of Renewable Loudoun. She has been a renewable energy consultant and advocate since 2011.

Dominion Seeks Approval for Experimental Wind Turbines

Dominion Energy rendering of the experimental wind turbines.

Dominion Energy Virginia has submitted to the State Corporation Commission a proposal to build two wind-generating turbines 27 miles off the coast of Virginia Beach — arguably the most expensive research project ever funded by the Commonwealth. The experimental turbines will not produce 12 megawatts of electricity at a remotely economic cost. But they will provide data that could pave the way for a vast wind farm that would produce electricity far more economically.

The project will test new designs to anchor the turbines in seabed conditions found off the Virginia coast and to withstand hurricane-force winds. The feedback is necessary before anyone undertakes utilizes the technology in a wind farm with dozens of turbines potentially costing billions of dollars.

The power company has been trying to advance the two-turbine project for several years but refrained from filing with the SCC for fear that the Commission would reject it as too risky and expensive. What’s different this time? First, it has lined up an experienced partner, Ørsted, a Danish company that has installed more than 1,000 turbines in European waters, to manage the project. Second, it has brought down the cost to about $300 million, significantly lower than previous iterations. Third, with the enactment of the Grid Modernization and Security Act, the state has declared wind power to be in the public interest.

And fourth, Dominion says that it can build the turbines without increasing rates. The project, said CEO Thomas F. Farrell II at the announcement in Norfolk yesterday, “will not increase customer rates even a penny.”

Here’s how I understand how that works. Before enactment of the Grid Transformation Act, Dominion would have paid for a large capital project like this one through a Rate Adjustment Clause, in which capital costs would be passed along to customers. The selling point of the Grid Transformation Act is that rates remain frozen but Dominion will apply excess earnings, which normally would be returned to customers, to renewable energy, energy-efficiency and grid-upgrade projects instead. It’s a convoluted way to go about things, but it has the virtue of stability.

I’ll be interested to see how Steve Haner, Bacon’s Rebellion’s electric consumer advocate, responds to this development. 

One last point: Just because the General Assembly has declared wind energy to be in the public interest, that’s no guarantee the SCC will go along. The SCC still has to balance cost, reliability and environmental sustainability — along with risk. Three hundred millions dollars is a lot of money to spend on what amounts to a research project. In analyzing the pros and cons of the experimental wind turbines, the SCC presumably will look also at the pros and cons of the wind farm that the experimental turbines would make possible. Given the lack of an established wind-power infrastructure on the East Coast, how much would a full-fledged wind farm cost to build? How would the cost of electricity compare to other energy sources? And would such an intermittent energy source improve or diminish the reliability of Virginia’s electric power supplies?

Virginia Has Hired Its Own Offshore Wind Guru

Andy Geissbuehler

Getting serious about making a Virginia a major player in the offshore wind energy, the Northam administration has engaged international energy consulting firm BVG Associates. BVG Advisory Director Andy Geissbuehler made his first public appearance in a public listening session in Newport News yesterday on the topic of wind development.

“Everyone knows the U.S. will be a massive offshore wind market, and the U.S. will be very fast in picking up and catching up with some of the current market leaders, and will probably develop to one of the No. 1 markets globally,” said Giessbuehler, as reported by the Daily Press.

The idea of making Virginia an East Coast leader in offshore wind and a center of the supply chain supporting an offshore wind sector, has been a prominent goal of Virginia governors since at least the time of Bob McDonnell. But what was once a lofty aspiration for the distant future is becoming an urgent priority. Other East Coast states are promoting offshore wind, and they, too, want to exploit a first-mover advantage to become the operations center for the offshore wind industry. As the Wall Street Journal reported earlier this week:

In Fall River, a former textile hub on the Massachusetts coast, Bristol County economic development director Kenneth Fiola touts waterfront land and a workforce rooted in manufacturing as reasons the city would make a perfect base for the American offshore wind industry.

In Providence, R.I., officials are promoting their port’s experience helping build the country’s first offshore wind farm off Block Island. In Virginia, representatives are selling the advantages of a waterway with no bridges that would ease the transportation of enormous pieces of the building-size wind turbines.

All along the East Coast, politicians and economic development officials are beginning to pitch their communities as potential hubs for the burgeoning U.S. offshore wind industry. Offshore wind developers, which have largely focused on coastal Europe thus far, have plans to build a dozen utility-scale farms off the U.S. side of the Atlantic in coming years, spurring billions in investment and thousands of jobs.

The competition has ratcheted up this year, with leaders in some states, including New York and New Jersey, pushing aggressive wind-energy procurement goals and pledging financial support to develop the necessary infrastructure and workforce.

In Virginia, the big hold-up has been a need to design wind turbines suited to the geological conditions of the seabed off the Virginia coast and capable of withstanding hurricane-force winds. Dominion Energy has proposed building two test turbines offshore as a demonstration project that, hopefully, would prove the viability of a coastal Virginia location. That project has been stalled due to the astronomically high cost per turbine, which the State Corporation Commission could never justify on a cost-per-kilowatt basis alone. But political winds have shifted with the enactment of the Grid Modernization and Security Act of 2018, which declared offshore wind to be in the public interest.

Dominion says that offshore wind could generate as much as 2,000 megawatts of electricity, roughly equivalent in capacity to one-and-a-half modern combined-cycle natural gas plants. Virginia touts its mid-Atlantic location and the presence of an existing ship repair industry as reasons for the wind construction and repair industry to locate in Hampton Roads.

Presumably, Geissbuehler has been hired as an advocate for Virginia’s offshore wind ambitions, although it is not clear from the Daily Press article whether he will be spending most of his time as an economic developer seeking to entice offshore-wind companies to Virginia, as a wind champion to build political and regulatory support within Virginia, or something else entirely.

Dominion Long-Range Plan: More Solar, More Gas

Dominion’s 15-year plan affirms more solar in Virginia’s energy future.

Dominion Virginia Energy filed this afternoon its 2018 Integrated Resource Plan (IRP), an updated 15-year strategic plan. The IRP reiterates the utility’s commitment to more natural gas and more solar power as a path to a lower carbon future. There’s a lot to cover here, so I will just hit the highlights today, and I’ll dig deeper into the report tomorrow.

The key assumption behind the plan is that “carbon emissions regulation is virtually assured in the future, either through new federal initiatives or through measures adopted at the state level.”

A proposed regulation from the Department of Environmental Quality, if adopted by the State Air Pollution Control Board, would make Virginia a participant in the Regional Greenhouse Gas Initiative, which would ratchet down carbon dioxide emissions by 30% over 10 years. “Compliance with carbon regulation could, unless mitigated by other public policies, lead to an increase of between $2.23 and $5.81 in 2018 dollars in the typical residential customer’s monthly electric bills by 2030,” stated the company in a press release.

The IRP also incorporates legislation enacted by the General Assembly this year, the Grid Transformation and Security Act of 2018,” under which earnings above the allowed return on investment would be plowed back into investments in renewable energy, energy efficiency, and smart grid upgrades. The plan contemplates construction of the 12-megawatt Coastal Virginia Offshore Wind project to demonstrate the viability of wind turbines off the Virginia coast, license renewal for the Surry and North Anna nuclear units, the roll-out of new energy-efficiency programs, and the possible retirement of older, less-efficient coal, oil and gas power plants.

Dominion’s press release highlighted the growing role for solar energy. Depending on Virginia’s regulatory path, the company could add 4,720 megawatts of solar capacity over the next 15 years — enough to power 1.18 million homes at peak sunlight, and a nearly 50% increase over last year’s 3,200 forecast.

To back up the solar farms when the sun isn’t shining, Dominion forecasts the need to build eight new gas-fired combustion-turbine (CT) units capable of producing up to 3,664 megawatts of electricity, enough to supply the needs of more than 900,000 homes. Unlike combined-cycle gas plants, which ramp output up and down slowly, the CT units provide surge capacity that can nimbly adjust to fluctuating solar and wind output.

The exact details vary with five scenarios reflecting different federal and state regulatory approaches. The scenarios include:

  • No CO2 tax — no new regulations, the least-cost baseline.
  • RGGI participation — compliance achieved by importing “more carbon intensive out-of-state energy and generating capacity;” $1.5 billion more expensive than the baseline plan.
  • RGGI (unlimited imports) — Virginia becomes a full RGGI member, CO2 allowances cost more; costs $3.71 billion more than the base-line plan.
  • RGGI (limited imports) — Virginia becomes full RGGI member, but builds low-carbon capacity rather than imports it; costs $4.04 billion more than the base-line plan.
  • Federal CO2 program — assumes federal CO2 legislation beginning in 2026; costs $3.09 billion more than the base-line plan.

Predictable flashpoints. Inevitably, there will be pushback in the environmental community to Dominion’s plan. First, skeptics likely will dispute the utility’s forecast for increases in peak electricity demand and the need for more generating capacity; Virginia, they will say, needs to deploy energy-efficiency measures more aggressively. Second, they will argue that the re-licensing of the four nuclear units is unneeded. Third, they might contend that battery storage will be more cost effective than gas-fired CT units in offsetting fluctuations in solar production. Fourth, they will say that Dominion is exaggerating the cost of CO2 regulation; indeed, they will argue that the RGGI carbon trading regime will have little impact on costs to rate-payers, and might even reduce their monthly bills.

I’ll dig into each of these issues in the days and weeks ahead.

PJM to Analyze Long-Term Grid Resilience

PJM Interconnection, operator of the regional transmission grid of which Virginia is a part, says the electric grid handled the 12-day bout of extreme cold weather in January with plenty of margin to spare. But given the evolving energy mix in the multi-state region serving 65 million Americans — more gas, wind and solar, less coal and nuclear — PJM has embarked upon an analysis to assess future fuel security.

“The PJM grid remains reliable even with the resource retirements analyzed to date and investment in new, increasingly more efficient gas-powered generation sources,” said the grid operator in a press release yesterday. “While the grid also remains fuel secure given these changes, the potential for continued evolution of the fuel mix underscores concerns … about the need to examine the long-term resilience of the grid.”

PJM’s initiative follows findings by the National Energy Technology Laboratory (NETL) last month that a surge in coal-generated electricity helped the Mid-Atlantic and Northeastern regions get through the Bomb Cyclone deep freeze, while nuclear, gas, wind and solar output remained largely static. NTEL argued that gas-fired electricity output was somewhat constrained by pipeline capacity and the necessity of competing with natural gas as a home heating fuel. PJM responded that demand for gas pushed up the price to the point where coal became cost competitive to burn, but there never was a shortage of gas.

That’s this year. What about the future as the energy mix continues to evolve? Virginia appears poised to participate in the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade market designed to ratchet down utility carbon emissions by 30% over 10 years. For participating states, that will require the phasing out of power plants reliant upon the most carbon-intensive energy sources, coal and oil. Furthermore, increasing production of wind and solar power continue to undermine the economics of nuclear power. Here in Virginia, environmental and left-wing activist groups have signaled their opposition to re-licensing the Surry and North Anna nuclear plants over the next decade or two. Bottom line: the long-range energy mix could be far more dependent upon gas and renewables than it is today.

PJM places a premium on fuel diversity as a way to mitigate risk. “No generation resource is free from risks that can negatively impact the electric power sector,” states a 2017 report, “PJM‘s Evolving Resource Mix and System Reliability.” “These risks are global and can affect any geography or political construction.”

However, in an analysis of a wide variety of power-source portfolios with different mixes of coal, nuclear, gas, wind, solar and “other,” the study found that “natural gas and, to a lesser degree, coal” contributed more to system flexibility and reliability than the competing power sources. The study drew no conclusions regarding an ideal power-generating portfolio. In other reports, PJM has said that the existing transmission system can accommodate up to 30% contribution from wind and solar.

PJM’s new analysis will involve three phases:

  • Identify system vulnerabilities and determine attributes such as dual-fuel capability that can ensure that peak demands can be met during extreme scenarios.
  • Model those vulnerabilities as constraints in PJM’s wholesale market for guaranteed capacity.
  • Work with federal agencies to ensure that PJM is meeting security needs for military installations.

Stated the press release: “The intent of the vulnerability assessment is to stress-test the system under various fuel supply disruption scenarios to better understand potential future reliability concerns.”

(Hat tip: Allen Barringer)

Emerging Lines of Conflict in Virginia Energy Policy

The General Assembly may have ushered Virginia’s energy sector into a new era with its passage of the Grid Transformation and Security Act of 2018, but the battle over energy policy is far from finished. It’s just entering a new phase under new ground rules.

New battlefronts are emerging over energy efficiency and onshore wind power, and the potential exists for controversy to erupt over the necessity (or non-necessity) of preserving coal and nuclear generating capacity.

The grid-modernization legislation declared it a matter of public benefit to promote clean solar and wind power, to invest in energy efficiency, and to upgrade the electric grid so it will be more secure and better able to handle intermittent power sources like wind and solar. To pay for these priorities, the General Assembly agreed to let Dominion Energy and Appalachian Power Co., reinvest earnings over and above allowable rates of return instead of returning the money to rate payers.

The ink has hardly died on the governor’s signature on the legislation before new conflict points became painfully clear.

Energy efficiency. The new law commits Dominion to spend $870 million on regulated efficiency programs over the next 10 years and contribute $6 million annually to a state weatherization fund — and that doesn’t include money spent by Apco. Advocates of a low-carbon energy future envision funds flowing to programs that allow customers to buy smart thermostats, add insulation, and replace inefficient lighting and appliances.

“Unfortunately, all of that potential could easily slip away,” Chelsea Harnish, executive director of the Virginia Energy Efficiency Council, told Energy News Network. Likewise, Harrison Godfrey, executive director of Virginia Advanced Energy Economy, said he is “not convinced utilities will invest in technologies that are real game-changers.”

It seems to have dawned upon energy-efficiency advocates that the real obstacle is not the electric utilities but the State Corporation Commission, which takes a hard-nosed view on the value of energy-efficiency programs. Last month, SCC staff rejected a lighting program, appliance recycling program, and three other proposals submitted by Apco on the grounds that they did not pass cost-effectiveness tests.

“I think there is a concern that the SCC will continue to ov­­erly scrutinize these programs in a way that they’ll continuing being rejected,” Harnish said.

Energy efficiency advocates say the conservation programs will reduce electricity demand, thus delaying the need to add new generating capacity at great expense to rate payers. But the SCC likes to see solid evidence that the programs actually deliver the promised benefits at reasonable cost to rate payers. The big question: Now that the General Assembly has declared energy efficiency to be in the public interest, will the SCC modify its cost-benefit methodology and become more receptive to utility submissions?

Photo credit: Kent Mason

Onshore wind power. In an effort to create a lower-carbon electric generating portfolio, Apco announced plans last July to buy the Beach Ridge II Wind Facility in West Virginia and the Hardin Wind Facility in Ohio. The company proposed to finance the development of the two projects with an $84.6 million construction surcharge spread out over 10 years to ratepayers.

According to the Charleston Gazette-Mail, in early April the SCC denied Apco’s request to recover its costs from Virginia ratepayers. The commission said the company doesn’t need the additional power generation.

Apco argued that its electricity-demand forecast expects CO2/greenhouse gas regulation to be implemented by 2024. Indeed, Virginia appears to be poised to participate in the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program that would shave Virginia utility CO2 emissions by 30% over 10 years. Final regulations are being drafted for approval by the State Air Pollution Control Board.

“The Companies would be justly faulted if, in their planning, they ignored likely and expected developments simply because they hadn’t yet occurred,” Apco said. “There are many influential elements in American society today that favor such regulation.”

Still, the SCC appears to be acting as a guardian of the rate payer’s interests, and it needs to be persuaded that the acquisition or construction of new power sources can be economically justified. Whether the Grid Transformation and Security Act changes the commission’s calculus remains to be seen. Continue reading

Mighty Morphing Power Turbines

If Virginia ever develops a large fleet of offshore wind turbines, we may have a team of researchers led by the University of Virginia to thank.

Funded by the Advanced Research Projects Agency-Energy, the research team expects to build prototypes this summer for a 50-megawatt offshore wind turbine that is nearly six times more powerful than the record-setting turbine deployed off the coast of Scotland in April, reports Greentech Media.

The massive turbine takes a radically different approach to wind turbine design. Conventional turbine blades face the incoming wind. By contrast, blades for the Segmented Ultralight Morphing Rotor (SUMR) would face downwind and fold together as the wind force increases. The design was inspired by palm trees, which have evolved to survive hurricane-force winds. And surviving hurricane-force winds is exactly what the SUMR is supposed to do.

One of the major barriers to developing a wind farm off the south Atlantic coast is the uncertainty of whether conventional turbines, which can withstand North Sea gales, would hold up to extreme hurricane winds. Before Dominion Energy Virginia is willing to build scores of turbines off the coast of Virginia Beach, it wants to erect two turbines in the so-called Virginia Offshore Wind Technology Advancement Project (VOWTAP) to test a hurricane-resistant design. But the utility was unable to get the project cost, last estimated at $300 million, low enough to win approval by the State Corporation Commission. The project has been effectively shelved.

The ultralight SUMR blades will be 200 meters long, almost twice as long as conventional blades, but will be possible to assemble in pieces, thus avoiding problems shipping them from the factory site to the project site. Because the blades would be constructed of more malleable materials, they also would be capable of morphing downwind.

“We’re trying to have the turbine blades be more aligned along the load path, so we can get away with lower structural mass and have less fatigue and less damage,” said Eric Loth, chair of the department of mechanical and aerospace engineering at UVa and project leader.

The UVa-led consortium plans to test its turbine this summer at the National Wind Technology Center in Colorado and complete the design within a year.

Loth, the design leader, hopes that the new turbine will be transformative. The innovative design could reduce the levelized cost of offshore wind energy by as much as 50% by 2025, he says. “We need to come up with turbines that are not necessarily more efficient but will cost less to build and maintain.”

Bacon’s bottom line: If this research pans out, Virginians should thank their lucky stars that Dominion didn’t commit to spending billions of dollars on what in retrospect can be viewed as risky and outmoded wind technologies. Hopefully, this project will spark renewed interest in offshore wind. It would be doubly cool if Virginia could not only participate in the creation of the SUMR blades but be the first to deploy it on a commercial scale and the first to reap its benefits.

As we think about Virginia’s long-term energy mix (see previous post), we should factor the potential of this new wind technology into the equation.

Correction: Al Christopher, director of the state Department of Mines, Minerals and Energy, informs me that the VOWTAP project has not been shelved. Rather it morphed last July into Virginia Coastal Offshore Wind. “Dominion has said publicly several times recently that it plans to file for cost recovery with the SCC very soon.”

No, Coal Did Not Save the Grid in January


Contrary to a recent report that coal-generated electricity prevented a system collapse during January’s “bomb cyclone” deep freeze, PJM Interconnection, the regional transmission organization of which Virginia is a part, says it had plenty of reserve capacity. The reason PJM dispatched so much electricity from coal-fired units was that it was cheaper than electricity generated by natural gas, the price of which surged during the cold spell — not because there were inadequate supplies of gas.

“Natural gas and nuclear units were not unreliable or otherwise unavailable to serve increased customer demand, nor would PJM have faced ‘interconnected-wide blacksouts’ without the particular generating units dispatched, states PJM in a response forwarded to U.S. Energy Secretary Rick Perry. (Hat tip: Albert C. Pollard, Jr.)

Last week Bacon’s Rebellion summarized key findings of a report by the National Energy Technology Laboratory (see “How Coal Saved the Electric Grid,”) which noted that coal-fired generation increased dramatically during the extreme, 12-day chill. Nuclear energy output didn’t change (nukes run flat-out all the time, regardless), wind/solar output declined slightly, and gas output was constrained by pipeline constraints and other factors. The NETL report argued that without the backup coal capacity, “a 9-18 GW shortfall would have developed, depending on assumed imports and generation outages, leading to system collapse.”

But PJM says that the regional electricity transmission system maintained significant reserves during the bomb cyclone. “PJM reserves were over 23 percent of peak load demand, and there were few units that were unable to obtain natural gas transportation.” The reason coal-fired output leaped was that it was cheaper than gas — not that the gas was unavailable.

During the cold snap, the region experienced an increase in the price of natural gas, which made coal resources (which often did not run under periods of lower natural gas prices) the more economic choice during times of high gas prices. But one cannot extrapolate from these economic facts a conclusion as to future reliability within PJM. …

The fact that additional coal resources were dispatched due to economics is not a basis to conclude that natural gas resources were not available to meet PJM system demands or that without the coal resources during this period the PJM grid would have faced “shortfalls leading to interconnect-wide blackouts.”

The PJM report did confirm other parts of the NETL analysis. Electricity from nuclear power plants stayed constant through the 12-day weather event. Wind and solar output declined ever-so-slightly. And natural gas did suffer minor supply-related outages… but they accounted for less than 2% of the total load requirement at the time.

Bacon’s bottom line: Coal-fired units kicked in 13,000 megawatts of additional output during the deep freeze. That was roughly one-third of the system’s 32,600 megawatts in reserve capacity. In the absence of the coal surge, customers in Virginia and across the multi-state PJM system would have paid more for their natural gas, but they would not have faced blackouts in January. It seems safe to say that the impression created by the NETL analysis was wrong.

But PJM did not address the longer-term outlook in its report. The political reality is that in the U.S. and in Virginia, powerful interest groups seek to curtail coal production. There is a strong likelihood that Virginia will enter the Regional Greenhouse Gas Initiative, a cap-and-trade arrangement designed to cut carbon emissions, most likely through the closure of additional coal plants. Looking out a decade or more, some environmental and consumer groups oppose the plans of Dominion Energy Virginia to re-license its four nuclear power units that currently produce 30% of the company’s electric power. Furthermore, the same groups, worried by the contribution of natural gas to CO2 emissions, want to slam the door on construction of any more gas-fired power plants.

As can be seen in the chart above, which details the breakdown of electricity by fuel type in the PJM system before and during the deep freeze, coal and nuclear accounted for 65% of the interstate region’s electricity production before the event and 66% during the cold snap.

Put another way, coal accounted for 45,900 megawatts of system-wide output during the freeze, and nuclear contributed another 35,400. Compare that to the system’s 32,6oo megawatts in reserve capacity.

While PJM has plenty of reserve capacity today, we have to ask ourselves, will the system have plenty of reserve capacity 10 or 15 years from now if coal- and nuclear-powered units continue to shut down? While the pipeline capacity exists today to supply today’s natural gas demand, will it be sufficient to meet demand when gas picks up much of the load for shuttered coal and nukes? While we can always purchase out-of-state electricity through PJM, will there be sufficient transmission-line capacity to get that electricity to Virginia load centers?

I don’t know the answers to these questions. Perhaps everything will turn out fine. But we can’t assume that it will just because PJM has ample reserve capacity today. As Virginians calibrate the balance between coal, nuclear, gas, hydro, solar, wind and battery storage, we need to consider the long-term outlook. The future will be upon us before we know it.

The Great Grid Grab

Who gets what from a Dominion-backed legislative package overhauling Virginia’s electric grid? At this point, there are more questions than answers.

Last week lawmakers friendly to Dominion Energy Virginia introduced sweeping legislation, The Grid Transformation and Security Act of 2018, which would increase investment in Virginia’s electric grid with the goals of increasing renewable energy, reducing power outages, and guarding against cyber-sabotage. Backers say the three-bill package also would restore rate-setting oversight by the State Corporation Commission after three years of a rate freeze, and return a cumulative $1 billion in refunds and rate reductions to customers over eight years.

The response from some of Dominion’s traditional foes was negative. Critics suggested that the legislation would neuter the SCC’s oversight powers even while nominally restoring them, thus allowing the utility to keep hundreds of millions of dollars due the rate payers.

“This bill is bad policy and dangerous, giving Dominion even more power over our lives and our future,” responded Tom Cormons, executive director of Appalachian Voices, a group that has helped lead the fight against Dominion’s Atlantic Coast Pipeline project, in a press release. “For far too long, the legislature has gone along with the monopoly’s plans, and it’s high time for our elected representatives to finally say ‘no’ to Dominion.”

In a Washington Post op-ed, Stephen D. Haner, a lobbyist representing the Virginia Poverty Law Center (and a frequent contributor to this blog), described the proposals as a “preemptive attack” on the SCC’s independence. “The outcome Virginia consumers should be hoping for is a return to full SCC authority and an almost immediate rate case to review the earnings during the recent regulatory holiday.”

However, environmental groups such as the Virginia Chapter of the Sierra Club, the Southern Environmental Law Center, and the Chesapeake Climate Action Network, which have combated Dominion over the pipeline, solar power, and coal ash disposal, have refrained so far from blasting the bill — at least in official statements. By packing environmental desiderata such as renewable power, energy conservation, electric vehicles, energy storage systems and microgrids into the bill, Dominion may have disarmed some of its critics.

The most comprehensive description of the package comes from Dominion. The summary that follows comes from an “overview” prepared by the company’s communications team.

Refunds and rate reductions. Refunds and rate reductions for rate payers  totaling more than $1 billion over the next eight years include:

  • $133 million in one-time credits.
  • $740 million in rate reductions achieved through elimination of the biomass rider and other riders.
  • $100 million annually from lower taxes resulting from the recently enacted federal tax reform.

State Corporation Commission oversight. The legislation restores SCC review of Dominion base rates but reviews base rates every three years instead of every two years, as it did before the freeze. The bill also adds SCC reviews before and after grid transformation investments are undertaken.

The legislation will reduce future riders (also called RACs, or Rate Adjustment Clauses), which are surcharges for new projects. States the Dominion summary: Before future riders can be added for new investments, the SCC will determine if there were overearnings. If there are overearnings, SCC will use them to offset the cost of future riders.

Grid transformation investments

The package allows for investments to build a more sustainable and resilient grid. These investments, summarizes the Dominion outline, aim to “reduce outages or restoration times, secure energy assets, enhance tools available to customers, and increase investments in renewable generation.” The investments can be grouped as follows:

Reliability investments

  • Automatically reporting of outages when they occur.
  • Prediction of certain outages before they occur so crews can be dispatched to equipment nearing failure.
  • Isolation of outages so fewer customers are impacted.
  • Reduction of voltage fluctuations to improve power quality for industrial and other customers.
  • Dispatch of crews more precisely to restore power more quickly.
  • Automated routing and restoration of service.
  • Better integration of renewable generation.
  • Installation of energy storage systems and microgrids
  • Strategic undergrounding of outage-prone lines.

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Rocky Forge Wind Project Stalled: No Buyer for Its Electricity

Simulated view of Rocky Forge wind project.

The developer of what could be Virginia’s first commercial wind farm has lined up all the regulatory permits it needs, but it hasn’t started site work yet because it can’t find a buyer for the electricity. Apex Energy will not start construction by the end of this year, as planned, on the Rocky Forge project in Botetourt County, reports the Roanoke Times.

“We’re working to find the right partner to commercialize Rocky Forge,” said Apex spokeswoman Brooke Beaver wrote. “We do not yet have a specific date for the start of construction, but are working steadfastly toward that goal.”

On the positive side, Beaver said a later start date would allow Apex to take advantage of “even newer technology that will make the project even more competitive.”

Project critic Steve Neas told the Roanoke Times that he believes the wind farm’s 75-megawatt capacity is not enough to make it attractive to either a power company shopping for renewable energy or investors willing to commit to the project. “My guess is that they’re having a hard time lining up people to buy their power.”

Continues the Roanoke Times:

Apex contended in its statement that with the latest delay, the company has “the opportunity to utilize newer turbine technology, making Rocky Forge even more competitive in the market and further decreasing the cost of the energy it can produce.”

“Virginia has experienced tremendous growth in solar energy in the past year, and we look forward to adding wind energy to the generation mix.”