Net-Zero vs. Zero Carbon

by James A. Bacon

The Rocky Mountain Institute (RMI), an organization advocating market-based solutions to environmental issues, has taken a close look at Dominion Energy’s pledge to become a “net-zero” company by 2050. The Institute sees the company’s commitment as a positive step forward, but concludes there is less than meets the eye.

Dominion’s net-zero pledge is to significantly curtail CO2 and methane emissions from its gas-pipeline and electricity-generating operations, and to offset what remains through outside initiatives, such as capturing methane from hog and dairy farms. (For background see, “Has Dominion Gone Full Climate Change Warrior?”)

On the positive side, RMI describes Dominion’s plan as “a novel development” that extends beyond CO2, which gets most of the attention as a greenhouse gas, by addressing leaks of methane, a more powerful greenhouse gas, from its roughly 100,000 miles of gas pipelines. Also worthy is the promise to invest hundreds of millions of dollars capturing methane from farm production, a source that has received little attention to date.

However, concludes the think tank, “It is important to not let Dominion’s work on methane leaks cloud larger issues. The utility’s plan to reach net zero is not the same as the zero-carbon pledges of electric utilities. … Even if Dominion plugs all the leaks in its transmission and distribution networks, its operations will still result in emissions at the point of combustion.”

Moreover, says RMI, Dominion’s commitment does not take into account methane emissions associated gas production, which account for 50% of the methane problem in the oil and gas value chain. Plugging leaks from pipelines will do nothing to plug leaks from gas wells served by those pipelines.

Bacon’s bottom line: Dominion is trying to thread the needle between appeasing environmentalists and preserving its huge investment in natural gas collection, transportation, distribution, and combustion. The company is pivoting decisively away from coal to renewables such as wind and solar, while trying to hang onto its investment in nuclear and natural gas.

Environmentalists who see climate change as an existential threat to mankind are not likely to back off their assault on natural gas. But Dominion has seen the same polls that the rest of us have: While the public is concerned about climate change and global warming in the abstract, the issue ranks relatively low in their list of priorities. Issues relating to jobs, prosperity, immigration, healthcare, and government rank higher.

And even public-priority polls tell us only so much. While the polls do document a generalized, free-floating anxiety about climate change, they reveal nothing about the trade-offs people are willing to make in order to combat it. If polls asked the public how they would rank “safeguarding the electric grid from collapse” or, in a less leading manner, “protecting the reliability and integrity of the electric grid,” I’m betting they’d give it a high priority.

There’s also the question of how much more people are willing to pay for their electricity. Asking the question, “Would you be willing to pay 20% bigger electricity bills to help fight climate change” (the percentage increase Virginians can expect from the latest iteration of the state’s clean power plan) would put a price tag on the issue that Gallup polls do not.

The cost of electric power is not a matter of tremendous concern to Dominion. If rates go up in order to reach the utopian goal of a zero-carbon electric grid by 2050, that’s not the company’s problem. On the other hand, Dominion is very much committed to maintaining the reliability of the electric grid. The mission of “keeping the lights on” is a deeply ingrained part of the corporate culture. Until someone develops battery storage technology that can provide backup for fitful solar and wind production, the company has no choice but to stick with natural gas. Dominion can compromise with environmentalists, but only so much without jeopardizing that mission. In the meantime, it’s good P.R. to look as green as it possibly can, even if groups like RMI see through the spin.

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14 responses to “Net-Zero vs. Zero Carbon

  1. Well done.

  2. Net Zero is just a marketing slogan. The legislation pending downtown is just another big capital building plan, this time for wind and solar and storage, which have their own rent-seeking lobbies. Will it save the world? Well if the world needs saving, net zero is meaningless…..If it doesn’t need saving, this is just a big rip off.

  3. Some of the airline companies are promising net zero.
    But of course jet fuel is their life blood and one of their most expensive costs of doing business. They always said they needed to have the cheapest jet fuel possible. Now some are using ultra-expensive bio-jet fuel, but I do not think they can afford to do that for more than a stunt, unless the biojet is subsidized somehow. But they are really talking about offsets such as planting trees. I want to compare their projected offset cost with fuel costs so see how much $$ per flight they are really talking about. If it is not a huge number, then I do not see how it helps offset in reality.

  4. This is what is driving environmentalists opposition:

    ” Oil and Gas May Be a Far Bigger Climate Threat Than We Knew’

    By Hiroko Tabuchi
    Feb. 19, 2020

    Oil and gas production may be responsible for a far larger share of the soaring levels of methane, a powerful greenhouse gas, in the earth’s atmosphere than previously thought, new research has found.

    The findings, published in the journal Nature, add urgency to efforts to rein in methane emissions from the fossil fuel industry, which routinely leaks or intentionally releases the gas into air.

    “We’ve identified a gigantic discrepancy that shows the industry needs to, at the very least, improve their monitoring,” said Benjamin Hmiel, a researcher at the University of Rochester and the study’s lead author. “If these emissions are truly coming from oil, gas extraction, production use, the industry isn’t even reporting or seeing that right now.”

    Atmospheric concentrations of methane have more than doubled from preindustrial times. A New York Times investigation into “super emitter” sites last year revealed vast quantities of methane being released from oil wells and other energy facilities instead of being captured.”

    but this question: ” “Would you be willing to pay 20% bigger electricity bills to help fight climate change” should be phrased instead:

    ” Would you be willing to pay to install technology that would cut your use by 20% and reduce carbon emissions”?

    The premise of paying more and living colder is one way of looking at it. Another way is to cut use and not live “cold” – just insulate better and use more efficient HVACs and lighting, etc.

    We don’t have to live in caves and pay 3 times as much for electricity in order to reduce carbon – no more than we had to drive scooters to save gasoline – cars got more and more efficient.. with no loss of comfort and actually less for fuel since cars became so much more efficient.

    A more honest conversation is what can we REASONABLY do before we ever get anywhere close to draconian.

    Most people want to do what they can – which is more than what we are doing right now.

    • Larry, we need both: a reduction in emissions for a given quantity of electricity, and, a reduction in the quantity consumed. They are achievable!
      And given today’s wholesale energy market, distributed “homeowner” solar should lower the total cost of electricity to the consumer substantially, NOT raise it — even before taking the net metering subsidy into account. The only obstacle is the GA’s passing the investment cost, and risk of obsolescence, of new Dominion utility-scale generation projects on to its captive ratepayers in ways they can’t avoid regardless of whether they have their own alternatives. If the utility went to the SCC with that I’d call it shamelessly anti-competitive behavior — and the SCC should listen; the GA is in too much of a hurry to please Dominion’s lobbyists.

  5. This post is right on with the statement that Dominion is moving away from coal to wind and solar but trying to hang onto to gas and nuclear. The thing is that by doing that they are leaving VA in the past with primarily central generation and a more expensive system.

    RMI sees the spin and Dominion is ignoring the change in point of view across the US. Today, a majority of Americans say that dealing with climate change is a top priority. A Pew report says 78% of Democrats now say so, but many Republicans remain unmoved, especially older white male Republicans. The partisan gap in now the biggest it has been.

    A predicted cost rise of 20% for Virginians doesn’t come from going renewable. It comes from ‘sorta’ going renewable without changing the structure of the system. The way to cost reductions for customers is by cutting demand through efficient buildings, onsite and community renewables, and flexible demand response.

    Comparing rates across different climates is difficult but a recent comparison shows that … “Three of the 10 greenest states have residential electricity rates that were among the country’s 11 lowest; four were among states with the 10 highest rates. On the industrial side, four of the 10 greenest states were among the 10 lowest industrial rates, while three had rates among the 10 highest.” The comparison shows that the change to renewables is not an automatic rise in costs.

    Finally, yes, the company has no choice but to stick with natural gas, but not because we need to wait until storage technology improves. Dominion has no choice until we change the basic structure of the way our utilities make money.

  6. Thanks for reporting the RMI rebuttal of Dominion’s claims. I have been trying to find the time to do the research to set the record straight.

    Dominion will make reductions in GHG emissions in the next 30 years – good for them. But not nearly as much as they make it seem – that’s misleading and self-serving.

    They are also opportunists. By latching on to the Clean Economy Act they are appearing to promote clean energy, but they really only raise energy prices.

    If an independent developer built the offshore wind project it would cost $8 billion, and the cost plus profits would be recovered by selling the energy to utilities and others at a fixed price over the life of the project.

    Dominion would hire an independent developer to build the wind facility for $8 billion, then add its costs plus profits for a total of $14 billion. No advantage occurs if Dominion owns it. The project produces the same amount of clean energy and the same number of jobs. Shareholders gain added profits and ratepayers pay $6 billion in unnecessary expense. And Dominion makes more profit by selling the electricity.

    Many are focused on increasing supply and the variable nature of renewables. Solar and wind are good complements. Solar peaks from mid-morning to late afternoon and wind is usually greatest around midnight.

    First, demand has always fluctuated. ISOs are well equipped to deal with it. Especially PJM, which will have 35% surplus capacity in 2023 and 60% surplus capacity in 2028. It appears we don’t need to build any more fossil-fired units in Virginia to maintain reliability. Variations in output from renewables can be predicted at least 30 minutes ahead of time. That gives plenty of time for PJM to make adjustments in supply.

    We don’t need to add $500 million peaking units that will run just 5%-10% of the time. That is a ploy to get 35-years of guaranteed profits.

    NERC and PJM will assure reliable operations.

    Increased productivity is a sign of an advanced economy. Assuming that demand will continue to grow means we are doing a mediocre job and Virginia is falling behind other states.

    If we have a surplus of conventional capacity in Virginia now and demand remains stable, how does adding at least 3,000 MW of wind and as much as 16,000 MW of solar make us short of capacity?

    It is the way it will be added that is the problem. Dominion plans to own or control nearly all of the solar in Virginia. The Clean Energy Act says that over 93% should be added at the transmission level.

    Compared to independently-owned solar, at least half of which would be installed at the distribution level, the Dominion plan greatly increases the cost (by being in the ratebase and requiring more transmission lines and substations). It also continues a old-style grid design of hub and spoke central station generation far away from where the electricity is used.

    This is more expensive and far less reliable than using a significant portion of distributed resources in a network-like modern grid.

  7. Handing over development of renewables to utilities for the next 30 years is a serious mistake.

    The average Power Purchase Agreement for a new utility-scale solar facility in the U.S. is 2.47 cents per kilowatt-hour. This is skewed a bit lower than what might occur here because many of the solar projects are being built in states with a bit more sunshine than Virginia.

    But compare that to your current residential rate of about 12 cents/kWh, which will be increased by a RAC every time a new Dominion-owned solar project is developed.

    Which future would you prefer?

  8. Jim says, “The mission of “keeping the lights on” is a deeply ingrained part of the corporate culture.”

    I would agree with that. The people I worked with at two different utilities were very conscientious about that. But that is not at risk here.

    It will be years before there is a sufficient amount of renewables in Virginia that would require batteries or other type of storage to maintain typical operation. This is an argument from the utilities because renewables will displace conventional units from being dispatched as much. This cuts into vertically-integrated utilities’ (like Dominion and APCo) profit stream.

    The ratepayers are already paying for the plants in full plus a profit. But the utilities sell energy on the wholesale market at well above their costs for most of the day. High solar contributions during times when peakers might have run reduce the payout to all generators operating at that time.

    That is one reason, besides the guaranteed profits, that Dominion wants to own and control renewables in the state. Even if it is to the detriment of their customers.

    Otherwise, why would it be so important to cut the SCC out of the picture by claiming the projects are “in the public interest” if Dominion owns them. Are the proponents of the bills and the utility so uncertain of the value of what they are trying to do that they are worried that SCC scrutiny would upset their plans?

  9. Pingback: Roundup of Climate and Energy News: Feb. 23 : Augusta Free Press

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