Remington power station. Photo credit: Dominion Virginia Power
by James A. Bacon
This should make PeterG happy: Dominion Virginia Power has announced its intention to build the first commercial solar energy plant in Virginia. The $47 million project, to be built in Northern Virginia, will generate 20 megawatts of electricity, enough to power about 5,000 homes.
The project will increase the average residential customer’s bill, based on average monthly consumption, by about four cents per month during construction and two cents per month once the facility goes into service.
According to the Richmond Times-Dispatch, Virginia environmentalists applauded Dominion’s move, although some wish that the company would be more aggressive.
I wondered, what if Dominion were more aggressive? How much would electric rates rise? Dominion Virginia Power has 2.1 million accounts. Assuming that the utility could provide solar electricity as economically for all 2.1 million as for the 5,000 homes served by the proposed Remington solar facility, it would take approximately 2,000 more Remington-scale facilities to provide electricity system-wide. That would translate into increased electric bills of $40 a month, or $480 per year.
Of course, nobody is saying that Dominion should go 100% solar. But that simple exercise gives you an idea of how incredibly expensive solar electric power is in Virginia. And my calculations probably under-state the cost of large-scale conversion to renewables. First, Dominion is saving money in Remington by building on land that it already owns. Second, it’s building adjacent to an existing power-generating station, which means it is spending less on transmission infrastructure. Third, the solar capacity will be coupled with an existing natural gas-powered generating plant, which will allow Dominion to easily ramp up production or scale in back, depending upon the variable production coming from the solar unit. That obviates the need to build expensive back-up surge capacity to compensate for when the sun’s not shining.
Bacon’s bottom line: I interpret the Remington solar plant as a P.R. stunt that throws a sop to environmentalists who have criticized the company for adding so little to its renewable energy portfolio. At the same time, the small scale of the project limits the damage to the rate base. Two cents more per month per household doesn’t sound like much. Nobody will care.
I’m not a big fan of Dominion’s approach to generating and transmitting electric power, but I’m glad to see that it’s not rushing pall mall into uneconomical renewable power sources. Sooner or later, those power sources will become competitive with fossil fuels. At that point in time, I have every confidence that Dominion will make the shift on a much larger scale. In the meantime, electric rate payers will appreciate the utility’s priority of keeping rates low.
