The Greensville power station will use technology similar to that used in Dominion’s combined-cycle natural gas plant in Brunswick County, pictured here.
by James A. Bacon
The State Corporation Commission (SCC) approved yesterday Dominion Virginia Power’s filing to build a $1.3 billion natural gas-powered power station in Greensville County. The power station will generate 1,588 megawatts of electricity, upping Dominion’s reliance on natural gas to 39% of its energy mix by 2020.
Construction, expected to begin later this year, is expected to be complete by 2019. The project will create roughly 1,0o0 construction jobs and 45 full-time positions, and it will generate $8 million a year in property taxes for Greensville County.
In approving the project, the SCC rejected the arguments of environmental groups that Dominion had failed to properly consider third-party alternatives for obtaining the electricity or alternatives such as energy efficiency, solar energy, a combined gas/solar hybrid facility or a portfolio approach. “The company’s choice of a natural gas facility appears prudent given the current natural gas market and forecasted gas prices,” stated the SCC in its final order.
Dominion said that customers will save $2.1 billion over the life of the power station through fuel savings compared to the project cost of purchasing electricity in the open market. Said Paul Koonce, CEO of Dominion Generation group: “This project will ultimately bring low cost, reliable energy to our customers … in addition to providing a major economic impact and good paying jobs for Southside Virginia.”
The Virginia Chapter of the Sierra Club, which opposed the filing, has not published a response on its website.
Bacon’s bottom line: To my mind, the most interesting question regarding the $1.3 billion investment is whether Dominion should be committing itself to a fixed, multi-decadal investment in an era in which the cost of solar energy continues to decline. Natural gas prices are incredibly low right now, and probably will continue to be for several years, but there are reasonable grounds for wondering if prices could rise sharply, as they have in the past, as a slew of proposed gas pipelines and gas liquefaction facilities start connecting the Marcellus and Utica gasfields to new markets, including those overseas.
Dominion is building a combined-cycle gas plant, which uses waste heat from the gas turbine to power a steam turbine, producing up to 50% more electricity from the same amount of fuel. With low gas prices, the economics are hard to beat at present. Assuming the Greensville plant runs most of the time, as it is designed to do, it will produce electricity far more cheaply than an industrial-scale solar facility, which generates no electricity when the sun goes down, and suffers diminished output in cloudy conditions.
The SCC found that Dominion had taken “serious and credible efforts to assess the cost and availability of third-party alternatives.” The company had issued an RFP and evaluated 5,000 megawatts of fully dispatchable, baseload or intermediate generation resources.
“We find that the Company’s RFP to be adequate for purposes of this proceeding,” states the SCC ruling. “Moreover, the Project was also compared to multiple unsolicited offers for solar, wind, landfill gas, and coal resources that were received outside of the RFP.”
