As Dominion Energy Virginia continues to adapt its generating fleet to the realities of cheaper solar and abundant natural gas, the utility has decided to mothball nine of its older, less efficient power-generating units — all but one of them either coal-fired or converted from coal to gas. Because the units rarely run, they provide only one percent of the company’s current generation, reports the Associated Press.
As part of a month-long review of its power generation group initiated to increase its competitive position in the energy market, Dominion also decided to eliminate about 390 positions, including about 100 from its nuclear operations. The company expects many employees will be reassigned to other operations.
“When we look at the time, the materials, the people, when we look at the thermal inefficiency of these plants, and we look at the advancement of renewables, we look at continued gas-fired build, we just think this is a progressive step we can take to ensure that our fleet remain competitive,” said Paul Koonce, president and CEO of the power generation division.
In technical language, Dominion is putting the nine units in “cold reserve storage,” in which they are drained of oil and water, provided minimal staffing to ensure that they remain safe, and are capable of being restarted in about six months if market conditions warrant. Dominion will maintain all environmental permits and continue to pay local taxes.
Most of the units — those at the Bremo, Chesterfield, and Possum Point power stations — were commissioned in the 1950s and early 1960s. One, a combined-cycle gas unit at the Bellemeade power station was constructed in 1990. All told, they were capable of producing 1,200 megawatts of electricity, roughly comparable to a new, state-of-the-art gas-fired power plant.
In a handout, Dominion said the shutdowns reflected the changing economics of electric power industry:
- Economics. Natural gas prices remain historically low, and forecasts call for supplies to remain plentiful. Gas and renewables have displaced coal and older, smaller gas units. And the cost to build large-scale solar has dropped 90% in the past six years.
- Public policy. Virginia is considering policies that would mandate a 3% annual reduction in carbon-dioxide emissions over ten years, which would rule out running the older, inefficient power units even as a backup.
- Technology. Energy efficiencies such as LEDs, EnergyStar appliances, and LEED certification are impacting demand across PJM Interconnection, which administers wholesale energy markets for a multi-state region. New round-the-clock generation technologies, such as those in the new Greensville County power station, are significantly more efficient than older-generation gas units.