Tag Archives: Solar energy

Reliability, Clean Energy, and an Aging Grid

Concerns about the reliability of the U.S. electricity supply has popped into the news headlines recently. The problem isn’t terrorists or cyber-attacks, it’s the inability of electric grid to handle routine challenges. Earlier this month, a transformer fire in Manhattan knocked out electric power to about 73,000 customers. On the West Coast, PG&E is spending $2.3 billion to fix a backlog of deficiencies in its transmission and distribution system that contributed to the record outbreak of wild fires in California last year. Meanwhile, the company has announced its intention to preemptively turn off power on vulnerable circuits to limit wildfire risk.

The American Society of Civil Engineers gave U.S. energy infrastructure a D+ grade in its 2017 infrastructure report card. States the 2017 Infrastructure Report Card:

Most electric transmission and distribution lines were constructed in the 1950s and 1960s with a 50-year life expectancy, and the more than 640,000 miles of high-voltage transmission lines in the lower 48 states’ power grids are at full capacity. … Without greater attention to aging equipment, capacity bottlenecks, and increased demand, as well as increasing storm and climate impacts, Americans will likely experience longer and more frequent power interruptions.

Continue reading

The Latest Front in Virginia’s Energy Wars: Rural Electric Co-Ops

One in six Virginians get their electricity from a rural electric cooperative. In theory, because co-ops are owned by their electrical customers, the interests of owners and customers and owners are aligned — in contrast to Virginia’s investor-owned utilities, Dominion Energy and Appalachian Power Co., in which the interests of stockholders and customers often come into conflict. But in the real world, the agency problem intervenes: The electric co-ops are run by professional managers, and a question arises as to whether entrenched management is putting its own interests ahead of the owner-customers they serve.

The policies of Virginia’s electric co-ops has been the source of considerable consternation among environmentalists. As noted last month by Ivy Main, a Sierra Club of Virginia blogger and contributor to the Virginia Mercury, “While a few co-ops have adopted innovative customer-friendly programs, most actively resist change.”

By “actively resisting change,” Main refers to their reluctance to embrace the environmentalists’ clean energy agenda. Coal accounts for 75% of energy generated by electric cooperatives nationwide, compared to less than 28% for all utilities nationally. “Worse,” she writes, “failing to see the promise of distributed generation, most co-ops have locked themselves into long-term supply contracts that give them little room for self-generation with solar and wind. … In fact, stuck with the dirty black stuff, rural electric cooperatives are much more likely than investor-owned utilities to support coal and oppose climate regulations.” Continue reading

Does Facebook Solar Pay Its Own Way?

Dominion Energy has announced the construction of six new solar farms — three in Virginia and three in North Carolina – to offset the electricity demand of Facebook data centers in the two states. The 590 megawatts of new renewable energy generation will be enough to power 147,000 homes at peak output.

The partnership will support Dominion’s goal of having 3,000 megawatts of new solar and wind energy in operation or under development by 2022 and Facebook’s goal of supporting its  global operations with 100% renewable energy by the end of 2020. (See the press release here.)

In the abstract, I’m all in favor of generating electricity with clean, renewable energy sources like solar. But I’m still trying to understand the implications of the solar rush for grid stability and ratepayers. Continue reading

Bacon Bits: Centrists, Solar, and CNU

A force for centrism and pragmatism. While Virginia increasingly emulates the hyper-polarized politics of Washington, D.C., a new group has entered the fray. Unite Virginia, an arm of Unite America, held  a “Unity breakfast” yesterday in Richmond to honor four Republican and Democratic legislators for their bipartisanship. Unite America, launched in 2013, says it is building a movement to “elect common-sense, independent candidates” to serve people, not party bosses or special interests, reports The Virginia Mercury. The organization will make endorsements and contribute to Virginia General Assembly campaigns this year.

Giant solar project approved in Charles City County. sPower’s proposed solar mega-project in Spotsylvania County remains mired in controversy, but the solar developer has had better luck in Charles City County. The Board of Supervisors voted Tuesday to approve a special-use permit for the $415 million project. The solar farm will be built on 1,400 acres. Utah-based sPower will put an additional 800 acres at the site into conservation. The permit requires that the solar farm install a 100- to 300-foot vegetated barrier around the perimeter, reports the Richmond Times-Dispatch. Continue reading

Conservation Vs. Solar in Powhatan County

Conservation easements don’t just block projects like pipelines, highways and electric transmission lines. As demonstrated in Powhatan County Monday, they can block solar farms as well.

Faced with skepticism from the Powhatan County Board of Supervisors, Cartersville Solar LLC has withdrawn a proposal to build a solar farm on a 3,000-acre tract of property, reports the Richmond Times-Dispatch.

The proposal had encountered opposition from Powhatan residents. Citizens commenting at public hearings cited negative ecological impact on protected wetlands — the only remaining wildlife corridor connecting the James and Appomattox rivers — and on rare and endangered species.

Cartersville Solar had acquired 2,998 acres near the intersection of Cartersville and Duke roads for the purpose of building a solar farm. (The RTD article does not say how much power it would generate.) In November, the Powhatan County Planning Commission voted to recommend denial of the project on the grounds that the proposed use is not consistent with the 2010 Long-Range Comprehensive Plan. Part of the project would fall into an area designed Priority Conservation Area and Protected Land. Continue reading

Bacon Bits: Incompetence and Failure Everywhere You Look

Where are the social justice warriors? SJWs are super sensitive to subtle signs of “institutional racism.” Perhaps they should focus on the widespread incompetence in Virginia’s local foster care systems. For instance: A Virginian-Pilot investigation has found “a pattern of mismanagement, retribution and poor performance” in Norfolk’s foster care program. “Employees say they saw the foster care program go from bad to worse. It started with  children languishing in foster care for years, with little done to get them adopted. In more recent years, case workers say they’ve been pressured to get kids off the foster care rolls by any means necessary, even if that sometimes meant putting the children in harm’s way.” Sometimes foster children have been placed in situations where they have been assaulted and sexually molested. These children are disproportionately African-American. Why hasn’t this failed system become a cause celebre of the Left? Could it be that it doesn’t fit The Narrative?

Metro free falling. Ridership on the Washington Metro system continues its steady decline, sinking to fewer than 600,000 average weekday trips for the first since since 2000, according to the Washington Post. Ridership peaked in 2008 at 750,000 weekday trips. The passenger rail system, plagued by safety and maintenance issues, has been engaged in a SafeTrack rebuilding program that may account for some of the loss. But the system suffers chronic problems, such as too few trains, too many service disruptions, and the emergence of ride-hailing alternatives such as Uber and Lyft.

Why so few starter homes? Why are home builders constructing so few starter homes (defined as those selling for $200,000 or less)?  Continue reading

Sow the Wind and Reap the Whirlwind

Environmentalists have created a monster. They have engendered a climate of hysteria by hyping risks for everything from global warming to coal ash, water quality to environmental racism. They have mastered the art of throwing every conceivable objection against the wall to see what sticks. They have perfected the strategy of question, question, delay, delay, obstruct, obstruct, sue, sue. Now, in the Spotsylvania County controversy over a solar farm, their tactics are biting them in the hindquarters.

After a nine-hour meeting at which more than 100 people spoke, reports the Virginia Mercury, the Spotsylvania Board of Supervisors delayed yesterday a decision on whether a 500-megawatt solar facility will be built in the western part of the county.

A large majority of the hundreds of people packing the Spotsylvania County auditorium opposed the sPower project, which would be the largest east of the Rocky Mountains and would almost double the amount of solar energy Virginia is currently producing. The concerns expressed seem utterly without merit, as far as I can tell. Yet hundreds of Spotsylvania citizens have convinced themselves that the 6,000-acre solar farm with 1.8 million solar panels would pose a hazard to their community. Continue reading

The Uncertain Economics of Offshore Wind

Source: “Lazard’s Levelized Cost of Energy Analysis.” Click graphic for more legible image.

As Virginia hurtles towards a renewable energy future with lots of solar and wind power, ratepayers and taxpayers should acquaint themselves with the complexities of Levelized Cost of Energy (LCOE) analysis. LCOE incorporates the costs associated with electricity generation — up-front capital costs, fuel costs, ongoing operations and maintenance costs — to compare the economic viability of conventional and renewable energy sources with very different characteristics.

In almost anybody’s analysis, the cost of utility-scale solar power in Virginia is highly favorable. The up-front capital costs are modest, fuel costs are zero, and ongoing operations and maintenance costs low. A heavy reliance on solar, an intermittent energy source that varies with the level of sunlight, does raise issues of system reliability. But as an energy source, it’s the cheapest around. However, the same cannot be said of smaller-scale solar projects or wind power.

The Lazard Levelized Cost of Energy Analysis is widely regarded as one of the most authoritative comparisons of LCOE. The chart above shows Lazard’s calculation of LCOE for the major categories of conventional and renewable energy. Utility-scale solar is the least expensive. Community solar and commercial & industrial rooftop solar are considerably more expensive but potentially competitive, and residential rooftop are not remotely competitive on cost. Nearly all of Virginia’s solar is utility-scale. Although environmentalist and activist groups are fighting for more community and residential solar, those categories are likely to remain marginal contributors to Virginia’s energy mix — options for those whose environmental consciences weigh heavier than their pocketbooks.

Wind power is a trickier issue. Lazard shows the LCOE ranging from $30 to $60 per megawatt/hour (or 3 to 6 cents per kilowatt/hour). Even the higher-cost wind is cheaper than all conventional sources excepting combined-cycle natural gas (large gas plants that burn gas with jet-like turbines and recycle the waste heat to run steam generators).

However, LCOE analysis depends upon various assumptions that may or may not pan out. Lazard’s “wind” numbers are based primarily upon the cost of generating wind on land, not establishing an offshore wind sector on the Atlantic Coast from scratch. The only thing we know for certain is that early adopters of offshore wind, who build before a supporting infrastructure is fully established, will pay more.

Another critical question is how many years wind turbines last before they must be retired. Coal, gas, and nuclear power sources are assumed to last 30 to 40 years, although some have lasted longer. The National Energy Energy Laboratory, accused by some of having a fossil fuel bias, says solar has a 25-year to 40-year economic life, but wind turbines only a 20-year life. I don’t know what life span Lazard assumes for wind, but I did find a LCOE analysis for wind power in Iceland that assumes a 25-year life.

Writing in the Center of the American Experiment, Isaac Orr notes, however, that 14 turbines in an industrial wind facility in Kewaunee County, Wisconsin, “has been decommissioned after just 20 years of service because the turbines are no longer cost effective to maintain and operate” — confirming the NREL assessment.

If the NREL numbers are accurate, the implications for Virginia’s energy future are significant. The Grid Modernization and Security Act of 2018 enshrined the goal of increased wind power as in the “public interest.” The State Corporation Commission has protested the cost of electricity generated from two proposed experimental wind turbines would be astonishingly high but approved the project anyway because the General Assembly, without conducting any of its own analysis, had declared it to be necessary.

The two experimental turbines are mere prelude to development of a much larger, 2-gigawatt offshore wind farm at cost of billions of dollars. Thanks to economies of scale in erecting offshore turbines, the levelized cost of the larger wind project will be a fraction of that of the experimental project. But if the 20-year life span of the Wisconsin turbines is any guide, wind turbines may not last as long as assumed, and may cost more. Moreover, we still don’t have any data on how well wind turbines will hold up in East Coast conditions — especially when buffeted by hurricane winds and waves.

Complicating the analysis, a kilowatt of electricity generated by a conventional fuel source upon command is worth more for maintaining grid reliability than a kilowatt generated by a renewable energy source delivered only when the sun is shining and the wind is blowing.

Not that it matters. In its wisdom, the General Assembly has mandated wind generation with no clear idea of what it will cost.

New Virginia Energy Plan Ramps Up Commitment to Carbon-Free Future

The Northam administration’s 2018 Virginia Energy Plan is the environmental movement’s dream come true. The administration is going “all in” for solar power, offshore wind energy, distributed energy resources, energy efficiency, and electric vehicles. Under the plan, Virginia won’t be as aggressive as California, which has set a goal of a 100% carbon-free electric grid by 2045, but it would follow the same trajectory.

The Virginia Energy Plan embraces the same carbon-reduction goals incorporated into the 2018 Grid Transformation and Security Act (SB 966) but treats them as a starting point. The plan calls for an overhaul of the regulatory process and state priorities to advance goals in five broad areas:

  • Solar and onshore wind. Of the 5,000 MW of solar and wind resources deemed in the public interest under Senate Bill 966, 3,000 MW should come from solar and onshore wind. Specific proposals include expanding corporate clean energy offerings; enhancing collaboration on the siting of large solar and wind facilities; and expanding the net metering program, the power purchase agreement program, and the community solar program. The Energy Plan recommends increasing the Commonwealth’s renewable energy procurement target to 16% by 2022.
  • Offshore wind. The Energy Plan calls for building the 12 MW offshore wind demonstration project — two test turbines to show how well novel designs can withstand hurricane conditions — and then to develop 2,000 MW of offshore wind potential by 2028.
  • Energy efficiency. The plan calls for increasing utility-funded energy-efficiency programs to $100 million per year for Dominion Energy and $15 million per hear for Appalachian Power Co., as well as expanding state-sponsored energy-efficiency programs. The Commonwealth should set a goal of reducing retail electricity consumption by 10% by 2022 (using 2006 as a baseline) and consumption in state buildings by 20%.
  • Energy storage. Recognizing that intermittent wind and solar energy sources pose threats to the stability and reliability of the electric grid, the Energy Plan discusses pumped hydroelectric storage, lithium-ion batteries, and solid-state batteries. However, the plan makes no specific recommendations on which technologies or approaches should be adopted.
  • Electric vehicles. The Energy Plan calls for promoting the deployment of electric vehicles and using their battery storage capabilities to shift electric load to times that better align with solar and wind output. The state should adopt the Advanced Clean Cars program, develop a comprehensive electric-vehicle transportation plan, and set targets for building an electric-vehicle charging infrastructure.

The Energy Plan provides no estimate of what the sum total of these initiatives would cost nor who would pay for them. While the plan does address the challenge of matching solar and wind output with daily electric load, it does not explore how the system would hold up under rare-but-recurring extreme weather events such as hurricanes or the Polar Vortex.  The document can best be seen as a roadmap for where the Northam administration and its allies in the environmental movement would like to take the state.

Bacon Bits: In with the New, Out with the Old

In with the new…

Data Center Alley too hot to handle. The Metropolitan Washington Airports Authority (MWAA) has sold 424 acres west of Dulles International Airport to data-center developer Digital Realty Trust for an eye-popping $236.5 million — $558,000 per acre. MWAA will place $207 million in a segregated account used to reduce costs that airlines pay to do business at the airport. The transaction expands the large and growing data-center presence of Digital Realty in Loudoun County, reports the Washington Business Journal.

Virginia’s next big solar project? Solar developer Community Energy has applied to build 125-megawatts in solar capacity in Augusta County, reports PV magazine. To offset concerns about neighborhood impact, Community Energy plans to surround the facility with a buffer of vegetation and put into place measures to diminish the limited audio output. Instead of purchasing the land, the power company is leasing it from landowners, providing farmers an ongoing revenue stream rather than a lump-sum payment.

Out with the old..

Gutted newsrooms. Ned Oliver with the Virginia Mercury has quantified the shrinkage of news staff at Virginia’s largest daily newspapers in recent years. After quietly laying off another eight newspaper employees at the beginning of the month, the Richmond Times-Dispatch newsroom has gone from 42 news and sports reporters in 2010 to 26 today, from nine to six photographers, and from 20 to 13 editors. The Virginian-Pilot has dropped from 67 reporters to 33, 35 editors from to 22, and eight photographers to five. Newsroom staff at the Roanoke Times has eroded by 35% to 25 reporters, 11 editors, and three photographers.

“Meanwhile,” writes Oliver, “there is still no clear model for metro and community newspapers to make up for the loss of all that ad money to digital giants like Google and Facebook.”

Tarheel coal ash overflow. In an event sure to impact the debate over coal ash in Virginia, heavy rains from Hurricane Florence eroded a coal ash facility at a Duke Energy power plant near Wilmington, N.C. The utility is investigating the possible release of about 2,000 cubic yards of the material — enough to fill two-thirds of an Olympic-size swimming pool, according to the Herald-Sun. It was not clear whether any of the ash, which contains traces of heavy metals, reached public waterways.

The release reinforces the necessity of removing coal ash from unlined, uncapped containment ponds where electric utilities have been restoring the coal-combustion residue for decades. Environmental Protection Agency regulations were designed to prevent incidents like this by consolidating and capping coal ash ponds. While environmentalists, regulators and utilities haggle over whether it’s better to store the material in lined landfills, a process that could take two to three decades, existing containment ponds remain vulnerable to extreme weather events like Florence.

Virginia’s Competitive Advantage in Green Power

Solar power is looking better and better by comparison to wind power, and that’s a good thing for Virginia.

In Germany, a global pioneer of wind power, hundreds of wind turbines are experiencing metal fatigue and other issues as they pass their 20- to 25-year design lives — and they are literally falling apart. Turbines are falling to the ground. Blades are snapping off and flying hundreds of feet. Razor-sharp glass fiber splinters have been documented to have flown 800 meters away. So far, no one has been hurt, but one expert speaks of a “ticking time bomb.” (Die Welt has the story here.)

Problems with an energy-production source often don’t become evident for decades. That certainly was the case with coal and oil. Now, a couple of decades after the widespread deployment of wind turbines, we’re learning about a downside of wind. Compared to Deepwater Horizon-scale oil spills and mountaintop-removal coal mining, flying turbine debris may be small potatoes. But as we think about our energy future, the comparison isn’t between wind and coal or oil — no one is building new coal or oil plants — it’s between wind and solar. The great virtue of solar panels is that they just sit there… except when hurricanes tear them off their mountings. But, then, high winds are a problem for wind turbines, too.

Assuming we can design and test turbines to withstand hurricane-force winds, there will be a place for wind in Virginia’s long-term energy future. Wind turbines work at night, which solar panels do not, so they can partially offset the daily drop-off in solar production. Furthermore, if Virginia taps large-scale wind resources, most turbines will be located offshore. Flying turbine blades are less of a problem when people are 20 miles away. But solar power poses none of these issues, and solar is being rolled out on a large scale today. Right now.

The biggest barrier to solar power in Virginia isn’t technology, it isn’t grid reliability (not at this stage of development) and it isn’t obstruction in Richmond. State law now proclaims large volumes of renewable energy to be in the public interest, and Virginia’s largest utility, Dominion Energy Virginia, is forecasting the deployment of more than 5,000 megawatts of solar in its service territory alone. The biggest barrier is local zoning codes, as we are reminded by a story today in The News Virginian.

The Augusta County Board of Supervisors adopted an ordinance yesterday by a narrow 4-3 vote that allows for the leasing of county land for solar energy use. However, critics said the requirement for a 1,000-foot setback from other residences will discourage solar development. The ordinance also does not allow for solar projects on land zoned industrial.

Roger Willetts, who owns the 44 acres in Stuarts Draft, said his property is taxed $6,000 a year by the county. But he said if a solar farm is allowed, he could generate $60,000 in revenue a year. “I think it is an appropriate use. It won’t employ anybody and it won’t have any bathrooms,” Willett told supervisors.

But under the ordinance approved Wednesday, Willetts’ property would be excluded because solar energy on industrial land is not allowed.

Augusta County, situated in a once-beautiful stretch of the Shenandoah Valley, is not a “rural” county with pristine viewsheds of farms and forests. It is characterized by what I call “rural sprawl” — scattered, low-density residential, commercial and industrial development smeared across the countryside. The viewsheds are despoiled already. Sad to say, solar farms aren’t any uglier than what’s already there.

Everywhere a developer proposes to build a solar farm — arguably the most benign form of energy production known to man — the NIMBYs come out and call for restrictions. NIMBYs don’t want gas pipelines. They don’t want electric transmission lines. They don’t want wind turbines. They don’t even want solar farms.

Ironically, solar power could be a boon to the sluggish economies of Virginia’s non-metropolitan cities and counties. Not only do Virginia’s electric utilities envision more solar, the potential exists for Virginia, long a net importer of energy from other states, to export solar power. Virginia is the southern-most state (excluding the northeast corner of North Carolina) in the PJM electric transmission region. For both political and business reasons, there is an insatiable demand for more renewable power within that 13-state region, which stretches from Virginia north to New Jersey and Illinois. Much of that demand comes from Virginia itself, the nation’s leading location for data centers, because West Coast cloud providers insist upon renewable energy sources. PJM creates a  wholesale market for that region, which makes it easier for energy producers located within it to sell into the wholesale market than it is for energy producers on the outside.

While wind-swept Midwestern states in the PJM region are better situated for wind, Virginia is the best situated for solar. As the southern-most state, the Old Dominion has greater solar energy potential — more sunny days and a latitude closer to the equator — than its northern neighbors. As seen in the table above, Virginia has the highest percentage of sun — defined as the percentage of time between sunrise and sunset that sunshine reaches the ground — as well as the largest number of annual hours of sunlight of any PJM state.

Local government officials in Virginia should think of solar power as an economic development tool. Solar farms provide a royalty-income stream to landowners, and they augment the local tax base. While they create few long-term jobs, they do deliver a burst of short-term construction work. As utilities invest in grid modernization, Virginia can provide solar energy for its own needs — up to 30% of the electricity supply, some say, without diminishing grid reliability — and it can export green power to states to the north. This looks like a once-in-a-generation economic opportunity for rural Virginia. Let’s not blow it!

Solar Farms and Rural Blight

Non-solar visual blight in rural Virginia

Governor Ralph Northam is committed to solar energy in Virginia. So is the General Assembly. So are Virginia environmentalists, investor-owned utilities and entrepreneurial solar developers. Now all we have to do is convince the people of rural Virginia that installing massive arrays of solar panels in their neighborhoods poses no threat to their quality of life.

I’ve documented numerous instances of resistance to solar projects around the state on this blog. Here are a couple more.

Campbell County. The Campbell County Board of Supervisors is moving forward with an ordinance to regulate solar farms, three of which have been proposed for the Central Virginia county, reports the News & Advance. Much of the discussion at a hearing yesterday focused on the noticeable hum emitted by solar inverters, which convert the electricity from solar panels into a form that can enter the electric grid. One supervisor argued for a 200- to 300-foot setback for the devices, which can generate noise at a level comparable to an air conditioner or dishwasher. Other supervisors rejected the idea, but the ordinance does require solar projects to conduct traffic studies and decommissioning studies.

More non-solar visual blight in rural Virginia.(Image credit: Hamell.net.)

Culpeper County. Meanwhile, a standing-room-only crowd turned out for a public hearing yesterday on a proposed 1,900-acre solar farm in Culpeper County. Concerns included impacts to view sheds in the area, screening, construction noise, setbacks and property values, reports the Free Lance-Star.

Bacon’s bottom line: I find noise concerns laughable. If inverters required 200-foot setbacks to mitigate an air conditioner-level hum, so would every new house constructed in Campbell County! Is construction work on solar panels louder and more objectionable than construction work on convenience stores, housing subdivisions and manufacturing plants? As for traffic impact, c’mon, a solar farm might generate two or three trips on a typical day. Solar farms are about as low-impact an activity as it’s possible to get. Even cemeteries see more action! 

Even more non-solar visual blight.

People may have a point about the aesthetic impact of solar farms upon bucolic rural views. But, dude, why just pick on solar farms? I’ve seen plenty of run-down shacks, gas stations, and industrial structures barns in rural Virginia that no one gets exercised about. Why not clean them up, too?

Solar’s time has arrived. Virginia was prudent to not mandate solar power when the technology was more primitive and the electric output far more expensive than it is today. But costs have plummeted, and a big chunk of solar in the electric-generating mix makes economic sense. Plus, solar is clean. Even if you don’t lay awake at night worrying about global warming — which I certainly don’t — that’s a major bonus. Get with the program, people! Solar farms bring tax and royalty revenue into your community. Find something else to worry about!

Virginia’s Date with RGGI

RGGI states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont

There’s a good chance that Virginia will participate in the Regional Greenhouse Gas Initiative (RGGI) to cut utility CO2 emissions. The impact of the cap-and-trade system would be mostly symbolic.

Barring litigation, Virginia could start participating later this year in the Regional Greenhouse Gas Initiative (RGGI, pronounced Reggie), a cap-and-trade program designed to reduce CO2 emissions of electric utilities and large industrial customers by 30% over a 10-year period. All it will take is for the State Air Pollution Control Board to approve regulations, now undergoing public comment, that have been drafted by the Department of Environmental Quality (DEQ).

Cap-and-trade programs have proven highly cost effective at bringing down emissions in sulfur dioxide and nitrous oxide, and proponents say that a similar approach could work just as well for carbon-dioxide, widely held to be the primary driver of global warming. Cap-and-trade, they say, avoids the inefficiencies of bureaucratic command-and-control regulations. Instead, the auction arrangement steers power output to entities that can reduce CO2 emissions the most cost effectively. Not only will RGGI cut emissions, they contend, it will flatten electric rate increases, lower electric bills, and stimulate economic growth.

There’s just one problem. Virginia’s largest electric utility, Dominion Energy Virginia, doesn’t believe it. In fact, in its 2018 Integrated Resource Plan, the utility fired a broadside against the regulatory initiative. The company maintains the following:

  • The program could impose $530 million in additional costs on Virginia customers between 2020 and 2030.
  • In effect, Virginia will subsidize other RGGI states through lower compliance costs to the tune of $876 million over the decade.
  • Virginia’s linkage to RGGI will not reduce CO2 emissions. To the contrary, the auctions will increase CO2 output by 5.7% more than it would have been otherwise.

PJM service territory

A big reason RGGI proponent’s optimistic forecasts won’t pan out, Dominion says, is that there is a geographic mismatch between the RGGI states and PJM Interconnection, the wholesale market of which Virginia is a part. The nine RGGI states are concentrated in the Northeast; the 14 states of PJM are located in the Mid-Atlantic and the Midwest. The only overlap between the two are Virginia, Maryland, and Delaware. Because Dominion, Appalachian Power Co., and other electricity producers don’t control which power sources are dispatched to meet electric demand — PJM does — generators in Virginia would suffer a cost disadvantage compared to competitors in neighboring states not subject to RGGI, such as North Carolina and West Virginia.

“The effect of RGGI-equivalent reduction requirements in Virginia is likely to limit the dispatch of highly-efficient and lower-emitting [natural gas combined-cycle] facilities in Virginia and to encourage the dispatch of higher-emitting resources and increased emissions in neighboring states outside of the RGGI region,” states the IRP.

But environmentalists insist the cap-and-trade program will be beneficial. “Carbon pollution is a big contributor to climate change. Cap-and-trade is a market-based way of dealing with that environmental problem,” says Will Cleveland, an attorney with the Southern Environmental Law Center.

“We think this is a really good opportunity,” says Harry Godfrey, Virginia director of Advanced Energy Economy. “To the extent that there are still older, coal-fired plants online, we foresee … less utilization of those assets in the future. But we see less utilization anyway. All of our analysis shows a coal-to-gas shift. … Our analysis shows that you can limit cost impacts, and even reduce rates in the process.”

How RGGI works

In 2009 ten Northeastern and Mid-Atlantic states accounting for one-eighth of the U.S. population and one-seventh of its economic activity created the Regional Greenhouse Gas Initiative as an interstate cap-and-trade program. Broadening the geographic scope of the trading system beyond the boundaries of a single state, it was thought, would create a bigger pool of CO2-cutting opportunities.

Under RGGI’s “direct” auction trading system, RGGI sets a regional limit on the total amount of CO2 that power plants in member states are allowed to emit. Owners of fossil fuel power plants with capacity greater than 25 megawatts are assigned an allowance to release a certain amount of CO2. Then they are required to purchase pollution permits at quarterly auctions sufficient to meet that output. The plan is for RGGI to ratchet the CO2 allowances by 3% each year over a decade. Utilities and big industrial producers who can’t find ways internally to cut their CO2 emissions can go to the auctions to buy extra allowances. Power generators who can find ways to cut emissions economically can sell their excess allowances to those who need them.

In the first auctions between 2009 and 2011, RGGI sold 395 million tons worth of CO2 allowances. The cap was a generous one, so the auction price for allowances was low — ranging between $1.86 and $3.35 per ton — according to the Center for Climate and Energy Solutions. As the CO2 allowances tightened, prices increased, reaching a high of $7.50 per ton in 2015. Prices fell after the Trump administration nixed the Clean Power Plan but the next round of CO2 emissions cuts — 30% by 2030 — likely will push the price back up. Continue reading

Supply, Demand Aligning for Solar in Virginia

Four percent of the nation’s power supply is used to power data centers. That figure will increase to 10% within the next decade. Meanwhile, major cloud providers are demanding clean energy sources consistent with their corporate values. For example, Microsoft, Google, Apple, and Facebook have joined the RE100 initiative committing them to generate 100% of their power from renewable sources.

Those numbers come from Garret Bean, vice president of development for sPower, the group behind Sustainable Power Group LLC’s proposal to build a 500-megawatt solar farm in Spotsylvania County. He spoke yesterday at the 2018 Virginia Energy Conference. Virginia Business has the story here.

It’s a lot easier to “live your values” when the price of generating a kilowatt of solar power has dropped from $96 in 1970 to about 4 cents today. Between developments on the supply side and the demand side, the potential exists to build a whole lot of solar in Virginia. Indeed, Bean counts some 212 solar companies and 22 manufacturers in Virginia vying for a piece of the action.

What makes Virginia a particularly attractive place to prospect, despite solar’s slow start here, is that the state is ground zero for building new data centers. High bandwidth connectivity is critical infrastructure for data centers, and 70% of the world’s internet traffic flows through the commonwealth.

At present Virginia gets about half of one percent of its electricity from the sun. Inherently variable solar output doesn’t create grid reliability issues until it accounts for 20% or more of the electricity supply, so there’s plenty of room to grow.

Industrial-Scale Solar Comes to Virginia

Industrial-scale solar farm in California.

If you’re curious what an industrial-scale solar farm will look like, check out Sustainable Power Group LLC’s proposed 3,500-acre solar facility in Spotsylvania County. The Utah company wants to build a 500-megawatt electric power generating station that would entail building approximately 1 million solar panels.

Writes the Free Lance-Star:

The proposed facility would produce enough energy to power all of Spotsylvania’s nearly 46,000 homes nearly twice over, but the company plans to sell the power to corporations throughout Virginia and possibly other states. Microsoft Corp. has said it plans to buy more than half of the energy produced by the solar farm to power its data centers in Virginia.

Think about it: 3,500 acres is more than five square miles. That’s a lot of land. Virginia, by way of reference, is 42,775 square miles. Let’s say the solar farms can supply electricity to 90,000 homes (at peak sunlight). It would take nearly 500 square miles of solar panels to supply all the homes in the state — and considerably more to supply all the businesses. We could be talking about solar panels covering 1% of Virginia’s land mass. This is a major land use issue.

In the early stage of Virginia’s solar development, developers are cherry-picking the prime sites — land located near existing transmission lines that spares the necessity of building power lines to tie into the grid. Rural residents seem to be highly ambivalent about solar farms as it is. Just imagine what will happen if all the good sites are taken and developers have to begin building transmission spurs to connect to the grid. Not only would that add a significant cost, it would require running the regulatory gamut. Inevitably, landowners would complain, especially if the solar developers resorted to eminent domain to cross their property. Opponents would draw upon the array of legal, regulatory and P.R. innovations pioneered to thwart projects initiated by Dominion Energy and Appalachian Power. Under such conditions, would independent solar developers have the financial staying power to slog through those battles?

Perhaps the question is academic. Solar will not likely exceed 25% of Dominion’s electric power generation over the next couple of decades. I have no idea if developers will run out of suitable sites for solar farms by then. But who knows? If the Sustainable Power Group is talking about selling green power into the PJM grid, and if other developers follow its lead, perhaps the market for solar is bigger than what it would take to supply Virginia residents alone. The day the Old Dominion runs out of easily cherry-picked sites might come sooner than we think. Once solar reaches critical mass, it could well create a new set of conflicts and controversies.