by James A. Bacon
As the Democratic-dominated General Assembly considers legislation to transform Virginia’s electric grid, Dominion Energy has issued a statement setting a formal goal of achieving “net zero emissions” of carbon dioxide and methane by 2050.
That’s not an easy thing to do for a company that hopes to expand its 14,000-mile natural gas pipeline network by building the Atlantic Coast Pipeline. Under Dominion’s long-range plan, CO2 and methane emissions will be offset through the capture of methane from hog and dairy producers and investments in electric school buses and electric-vehicle infrastructure, among other strategies.
“Our mandate is to provide reliable and affordable energy – safely,” said Chairman Thomas F. Farrell. “But we recognize that we must also continue to be a leader in combating climate change. … I am confident we can … help solve this challenge and leave the world a better place for future generations.”
A topic not mentioned in the press release was how much this 30-year transformation will cost electric ratepayers in Virginia. As Steve Haner has reported, State Corporation Commission staff has estimated that Governor Northam’s proposed zero-carbon legislation will boost retail electric bills by 20%.
A reasonable interpretation of Dominion’s new policy is that it has thrown ratepayers to the wolves in order to appease the environmentalist wing of the Democratic party that now controls Virginia state government. The company is forging ahead with an $8 billion offshore wind farm at an elevated cost per kilowatt, and has signed on to Northam’s zero-carbon legislation for Virginia’s electric grid by 2050. Indeed, its corporate statement parallels that goal.
The electric grid can accommodate up to 30% renewable energy sources (wind and solar), but boosting renewables past that level creates grid stability issues. To compensate for the intermittent generation of wind and solar, Dominion originally proposed building new fast-reaction gas turbines that could ramp up and down with fluctuating supply. But if new natural gas capacity is off the table, Dominion will have to invest instead in new pumped-storage hydroelectric capacity or, if the price comes down, battery storage. In effect, ratepayers will have to pay for an multibillion-dollar back-up infrastructure. But for Dominion that’s a good thing. It provides an opportunity to invest more capital and generate a return on that investment.
In the meantime, the company has a delicate balancing act. It has vast holdings in natural gas distribution facilities, a Liquefied Natural Gas (LNG) plant, and numerous gas-fired generating plants, all of which contribute greenhouse gas emissions. The press release gives no indication that the company plans to divest or shutter any of these assets. Thus, the company remains vulnerable to attacks by environmentalists whose definition of “zero emissions” is zero emissions, not net zero emissions.
Under its “net zero emissions” commitment, Dominion has set the goal of reducing carbon emissions from its power generating facilities by 80% between 2005 and 2050. As the statement noted, the company has already cut carbon emissions 50% since 2005, mainly by closing down its coal-fired power plants and substituting natural gas. Those goals still leave Dominion 20% short of 100%, however. Clearly the company’s vision for the future of Virginia’s electric grid encompasses continued use of natural gas.
To offset emissions for ongoing gas combustion, Dominion would cut methane and CO2 emissions elsewhere. Under the net zero framework, the company would tighten up on methane leaks from its natural gas pipelines– 80% by 2040 compared to 2010 levels. The company also plans the following:
- A $700 million shared investment (previously announced) in projects to capture methane from hog and dairy farms.
- Developing the largest electric school bus program in the country.
- Promote the use of electric vehicles by investing in electric-vehicle charging infrastructure.
- Use liquefied and compressed natural gas to fuel long-haul trucks and maritime vessels. (Natural gas has a lower carbon footprint than petroleum-based fuels.)
- Convert oil- and coal-powered manufacturing facilities to lower-carbon natural gas.
Also critical to achieving Dominion’s net-zero goals is re-licensing of its nuclear power plants. Zero-carbon nuclear units would provide a stable base of power generation not subject to fluctuations like wind and solar. However, many environmentalists oppose nuclear power as well.
Dominion’s net-zero commitment is likely less than hard-core environmentalists would like to see. They want to shut down all fossil fuels, and some want to shut down nuclear as well. But the net-zero approach could play well with pragmatic environmentalists like Governor Northam. Either way, the wholesale restructuring of Virginia’s electric grid will cost billions of dollars and electricity consumers will pay for it.