Behind Dominion’s Shift to Renewables

Image credit: Style Weekly

By Peter Galuszka

Ever wonder why Dominion Energy found religion and announced a major shift to renewable energy?

The answer is that modern, high technology businesses want it and the Richmond-based utility wants to respond to their desires.

This one of the themes in this recent cover story I did for Style Weekly that explores how Dominion’s major shift in direction is part of several dynamics that are pushing solar wind and other renewables instead of keeping on with fossil fuel.

Here’s the reporting in a nutshell:

  • Virginia’s economy is being driven more by data centers, giant box-like warehouses loaded with servers that can handle tremendous amounts of data. Northern Virginia, the incubator of the Internet, already handles about 70% to 80% of the global Net traffic and has a mature and still growing network of data centers.
  • The Northern Virginia experience is shifting downstate. Henrico County now has a partially construction data center run by social media giant Facebook. Centers have been announced or are being planned in Southside and Southwest Virginia.

  • Demand for data processing is expected to increase dramatically as new generation 5G cell phones come into service and artificial intelligence goes into more complex areas. One is driverless cars which need to process lots of data very quickly.
  • Virginia is becoming a major hub of new undersea cables that are linking Europe, South America and soon, South Africa. Two new cables terminate in Henrico County outside of Richmond. Some of them are said to be the fastest and have the highest data capacity ever developed.
  • The New Economy barons such as Mark Zuckerberg, Bill Gates and Jeff Bezos want the data centers to be powered from exclusively renewable sources.
  • Dominion wants to accommodate them, hence the shift in emphasis towards renewables. Facebook officials, for instance have a deal with Dominion that Dominion will replace the 500 megawatts the new Henrico facility will use from renewable sources.
  • Doing so is in Dominion’s interest because its retail electricity sales have been flat and non-data center commercial facilities are seeing demand decrease, according to Prof. Bill Shobe of the Weldon Cooper Center for Public Service at the University of Virginia.

In other words, the world is moving beyond the Old Economy business interests that are complaining that shifting to renewables will mean potential loss of service and higher costs. The truth is that renewables are becoming cheaper and do much to address climate change, which many believe is an existential problem for the globe.

For my Style article, Ed Baine, president of Dominion Energy Virginia, wrote in an email, “We’re delivering on our commitment to net-zero carbon and methane emissions because our customers, policy makers and employees want more clean energy.”

Virginia joins a regional carbon trade program in January and plans on being carbon free by 2050.

To be sure, there are concerns about the shift to data centers. Ivy Main of the Virginia Sierra Club told me that utilities and the state will have to develop lots more renewable capacity faster to meet the digital demand.

She’s also concerned that localities may be too kind with incentives for the big social media firms, the centers permanently employ relatively few workers and if the power does go out, the massive centers will kick in diesel generators which are quite polluting. Other environmental groups are critical of the large spaces the centers need.

I have been following the evolving attitudes among corporations for renewables for at least five years. In this piece, I note that the Googles and Facebooks of the world want renewables while older industries are fine with natural gas. At the time, Dominion only had one megawatt of renewable energy and was resisting moving into wind and solar.

This wholesale shift in energy strategy has already provoked major changes in planning generating capacity. Last summer, Dominion and its partner, Duke Energy, killed the controversial, $8.5 billion Atlantic Coast Pipeline that would take fracked natural gas from West Virginia, through Virginia, and on into North Carolina.

Another shorter line, called a “header,” that would tap into existing natural gas pipelines has been delayed and may be dead. Proposed by Virginia Natural Gas, the pipeline would have taken gas from Northern Virginia to Hampton Roads and perhaps serve a new gas generating station in Charles City County.

One final thought: this story suggests that the powers pushing renewables are strong and are unlikely to change anytime soon. Those pushing natural gas, such as right-leaning think tanks in Virginia and Massachusetts that have been funded in part by the fossil fuel industry, are on the wrong side of history.

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35 responses to “Behind Dominion’s Shift to Renewables

  1. And I thought Bacon was Dominion’s shameless tool once upon a time….

    Money drives this company. With the new state legislation, it will be spending tens of billions on duplicative generation technology, energy we do not need, all paid for by captive ratepayers at excessive guaranteed profits. When solar and wind turns out to be unreliable, which will happen, the fossil fuel options will still be available, because the 2020 bill left them all in place for decades. Thirty years is a long, long time and much will change even by 2030. The first thing all will notice is that the predictions of global doom will be proved (once again) to be silly nonsense.

  2. Nuclear energy is zero-carbon and zero-methane, and has a much better chance of supplying the needs of the future. Also, fusion is no longer a dream; check out MIT’s tokamak, SPARC.

  3. I really don’t see how I am “Dominion’s shameless tool.” Interesting that this comes from a person who is a senior fellow at the Thomas Jefferso0n Institute for Public Policy that “Sourcewatch” reports has been funded by pro-fossil fuel groups including the Bradley Foundation, the Kochs, Exxon Mobil, Alpha Natural Resources and others.
    More important, you either miss my point or are choosing to ignore it. I am reporting how the shift to renewables in Virginia is being pushed by successful high tech people from the West Coast who don’t see things the way the “Ole Virginny” Old Boy Network of old style companies does or did. Not exactly making this up. Why don’t you read the Style story and get back to me?

    • Saw one of the Kochs crying about how the Republicans are not what they want anymore. Of course, he still funds the Hell out them.

      Don’t listen to what they say. Watch where the put their money.

  4. Wahoo, I did not bring up nuclear and perhaps should have. I have some experience with Tokamaks when I was in Moscow. Back in the 1980s, the Soviets were always trying to get us correspondents to visit them. They are worth watching.

  5. The Sierra Club could win the WaPo award for stupidity. Data centers enable the e-commerce that is helping pick up the slack from brick and mortar stores. They also enable people to work from home, reducing traffic and greenhouse gas emissions. One of the long-term strategies of the Transportation Planning Board for the National Capital Region to reduce traffic jams and greenhouse emissions is to encourage teleworking. Or maybe we should all move to cave and become hunter-gatherers.

  6. “Ever wonder why Dominion Energy found religion and announced a major shift to renewable energy?”

    That’s a fitting description. It is indeed a religion.

    “Googles and Facebooks of the world want renewables”

    Yes, it pays to respond to your customers, and their religious needs.

  7. The world changes. A 1967 GTO was a pretty car, but really, nowhere near as dependible or as safe as would be a new Geo Metro. Mazda 3 if you’d prefer.

  8. Baconator with extra cheese

    I’ll also add the environmental justice movement… now Dominion can go from villian to savior…
    Nice marketing there!
    And as said above… Dominion doesn’t care how they generate electricity as long as it comes with guaranteed profits.
    Get ready for the power bill increases of 200% plus kids!

  9. Peter, solid reporting about the data centers. Your larger point about renewables being driven by West Coast corporate interests is well taken. But when you refer to those who are “pushing natural gas,” what do you mean? The statement “pushing natural gas” is so vague as to be meaningless. It’s like saying, “those who are pushing the environment.”

    I’m not aware of anyone who is pushing natural gas to the exclusion of renewables. Are you referring to those who think that natural gas is a necessary complement to renewable energy? Are you referring to those who disagree with the idea of mandating 100% renewables by 2050 without knowing if battery storage (the alternative to natural gas peakers) will be economical? Are you referring to those who support natural gas pipelines in order to meet the retail and industrial demand for gas in places like Hampton Roads? Or have you created another one of your straw men?

    • Not that long ago, the major cheerleaders for conversion to gas resided in the Obama Administration. And the plan has worked, rapidly retiring coal and greatly reducing CO2 emissions, since that was the goal. That is still the path if you want both abundant and affordable energy with minimal CO2. This new path is about scarce and expensive energy, an effort to force a lower lifestyle. These are the New Malthusians.

      • “This new path is about scarce and expensive energy, an effort to force a lower lifestyle. These are the New Malthusians.”

        I agree. I would add that the central driving force here, unlike with the Old Malthusians, is the opportunity seized a few people in positions of power to vastly enrich themselves for free: do it by raiding the public treasury and by hijacking the taxing regulatory power of the state, to enhance their own private wealth, status and power.

        In that sense, those who ran and now run Dominion power have shown their true colors. They care not a wit about the best interests of the people of Virginia, only about themselves. The elites’ abandon public ethics, and use instead state power to engorge themselves, by hijacking the state for personal interest and advantage.

        • The proof of my allegation here is simple. This Virginia offshore project makes no rational sense at all, except by reason of the allegation. I say this with great disappointment, having by and large supported Dominion for years on the blog. Steve was right all along. And I was wrong.

        • Yes, Dominion has shown its true c0lors. It is a business that “cares not a wit [sic] about the best interests of the people of Virginia, only about themselves.” Isn’t that what capitalism is all about, maximization of profits for its owners and stockholders? Those colors were there all along for anyone to see.

          • “Isn’t that what capitalism is all about, maximization of profits for its owners and stockholders? ”

            Smells like bacon.

          • I don’t see how we can blame “capitalism” for behavior of a state-controlled monopoly.

  10. Good reporting but I’m not ready to chalk up Dominion’s new attitude to consciousness or west coast techies. They saw the renewable writing on the wall, pulled their puppet strings and the General Assembly danced. The Democratic majority, led by Dominion Dick Saslaw, made sure that Dominion would profit handsomely from renewables. After that, Dominion turned green as the grass.

    In the end analysis it may work out for the best. We need cleaner air and fossil fuels pollute. Of course, air is fungible and we’ll see how everybody else does in switching to fossil fuels. I get the distinct impression that Biden isn’t very interested in put any pressure on China, for example.

    • This is not capitalism. It’s the reverse. Crony Capitalism the Virginia Way. Hence we got Dick’s Good Old Boy Buddy Dominion Dick’s fingerprints deep in the bloody bowels of this gnarly snarling beast, Virginia’s latest subspecies of a throughly corrupted Democratic Machine despoiling Virginia’s offshore waters and onshore public treasure for private gain.

  11. Good point, Don. I had been suspect of Dominion’s change in stance.

    • You all keep ignoring the fact that Dominion got the General Assembly to let it have both, new renewable and the old natural gas standby plants, thus further enriching its stockholders. You also keep ignoring that building these new projects with captive ratepayer dollars is the most expensive and inefficient way — and those states that get third-party providers doing it will be paying less per unit of energy, far less. This is all about making Dominion richer.

  12. Haner. I am not covering the general assembly and I am not addressing material important to you as a lobbyist or a Republican apparatchik. Please make your point. Thank you.

    • I think Steve made his point pretty clearly–the General Assembly has chosen the wrong model. Instead of using third-party providers to produce the renewable energy on their own dime and at their own risk, our legislature has delegated that responsibility to Dominion at a guaranteed profit, using money from customers. Great for its stockholders–good profits, no risk.

  13. Virginia gives large $$$ elec discount to businesses.

    Business is demanding green power that they do not have to pay the full cost for. It is we the residential rate payers accept that green energy cost burden in the name of business friendliness.

    The state of Virginia further dictates, aside from residents paying more than their fair share cost of green energy, we are going to go full-out on the most expensive form of green energy (offshore wind), whereas the rest of RGGI is more focus in cheaper, proven onshore wind, readily available off the PJM grid. I will be driving by the Appalachians wind turbine range maybe today if I can before it freezes.

    I do not feel the way Virginia is managing this is what the cloud players are saying we have to do. Just give business (and people) the right to purchase onshore wind, like most of PJM, for Pete’s sake.

  14. I think the debate is even more basic. Do we have/want to have a competitive market or a monopoly? From what I’m seeing, competitive isn’t delivering expected results. Dominion is smart enough to manipulate the system so it gets the best of all worlds. They’ve largely hamstrung our regulator and designed a system that benefits the company and hurts the rest of us. It’s not a balanced playing field. Not a single other state has embraced the hybrid system Dominion designed for Virginia more than a decade ago. Every year they tweak it to get more.

    We need to look at distributed generation systems and ways to allow consumers and others to own generation – not just the power company. You’re describing how Dominion is responding to the big players – and to a much lesser extent, small players, by moving to more renewables. We took the most expensive way possible to get off-shore wind built. They’ll do anything if you guarantee them enough money.

    The bottom line is they control the process. As long as they have the upper hand in every situation, decisions are going to mostly go their way. The current system works exactly as it was designed to work. The balance of power needs to be adjusted and we need to look to new strategies like distributed generation.

  15. “The New Economy barons such as Mark Zuckerberg, Bill Gates and Jeff Bezos want the data centers to be powered from exclusively renewable sources.”

    Bwahaha, it should read the New Economy barons want the PR boost that comes with purporting to operate their data centers with exclusively renewable energy sources.

    “Dominion wants to accommodate them, hence the shift in emphasis towards renewables. Facebook officials, for instance have a deal with Dominion that Dominion will replace the 500 megawatts the new Henrico facility will use from renewable sources.”

    Double Bwahaha, see Haner’s comments because he is dead on.

    “Doing so is in Dominion’s interest because its retail electricity sales have been flat and non-data center commercial facilities are seeing demand decrease, according to Prof. Bill Shobe of the Weldon Cooper Center for Public Service at the University of Virginia.”

    Triple Bwahaha, See immediately above.

    What the hell are you drinking and/or smoking. Bezos and company don’t give a rat’s ass how their power demands are met, so long as they are met. They are bulk load consumers that pay an incredibly discounted rate to Dominion (or whatever other utility is supplying their needs). Of course that discount rate is subsidized by the average, run of the mill utility customer.

    As to their “requirement” for power generated exclusively by renewables, that may be one of the greatest shamockeries of the past decade. If they truly wanted their facilities to be powered that way, they would necessarily locate those facilities in close proximity to the electrons generated by those “green” power generating facilities. Instead, particularly in NOVA those power hogs are largely powered by coal fired plants and gas fired plants in places as far away as WVA, all they need is to be connected to the PJM system.

    To make matters worse, our “green” benefactors like Bezos then engage in large scale virtue signaling campaigns that extol their efforts to create industrial scale solar farms on cheap agricultural lands that they claim will power their data center facilities. The ugly truth is that they only generate a fraction of the power required, the power generated doesn’t get anywhere near the data centers, the impact of industrial scale solar is likely not very “green” with respect to the open space it consumes, Dominion will grudgingly buy the power added to the grid and charge the rate payer for that as well.

    Sleep well and dream green dreams tonight tinkerbell knowing that Dominion as well as Bezos and Co. have it all sewn up and the average rate payer take it ups the ass coming and going.

  16. As usual, many of this comments are curious and counter intuitive. Some argue that Dominion has the wrong business model for renewables. It would be better for an independent consortium be formed so its investors shoulder the risk and expense. Odd that few of these commenters said anything when Dominion and its partners pushed the Atlantic Coast Pipeline, a obvious $8.5 billion boondoggle that was cancelled after millions of ratepayers money were spent on it. Why didn’t Dominion have an independent group do it?
    Bitching about costs of renewable is a red herring. It is meant to deflect from the clear trends towards renewable.
    Another dilemma is that you have tech firms like Google, Microsoft and Facebook among others going green but some split of Bezos and make a big deal about him which I gather is that some hate the WaPo so much. Take about conflating the issues. Talk about dog whistles.
    One commenter complained that wind turbines off Virginia Beach would mar the coastline. Gee, they are going to be about 25 miles offshore. They might ruin your beachfront view if you have binoculars.
    Lastly, I get so weary of the same old arguments that climate change is a hoax. There’s really no point in discussing it on this blog any more. No one’s mind is going to be changed. The sad part is that if you present science, you confront the views of right wing think tanks stabled with lobbyists. No science. No economics. Just bullshit.

  17. Pielki is a political scientist.

  18. Missed how “reliable” it is, like with California’s rolling black outs. Not enough batteries?

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