Tag Archives: Wind power

Rocky Forge Wind Turbines Not a Threat to Aviation


Simulated view of Rocky Forge Wind turbines. Source: Apex Clean Energy

The Federal Aviation Administration (FAA) has ruled that 549-foot wind turbines, as tall as the Washington Monument, will not pose a danger to passing aircraft, thus putting Apex Clean Energy one step closer to building Virginia’s first commercial wind farm.

As proposed, the Rocky Forge Wind project would string 25 turbines along a ridge line in Botetourt County, generating enough electricity to power 20,000 homes. Charlottesville-based Apex still must obtain a permit from the Virginia Department of Environmental Quality, which will review the project for impact on wildlife and its habitat. Also, reports the Roanoke Times, the company is still looking for a utility or other customer to purchase the electricity.

Initially, the FAA had ruled against the turbines, declaring that they would pose a threat to aviation. But further evaluation of each individual turbine found that the Rocky Forge Wind project would pose no adverse effects. The closest airport is Ingalls Field in Hot Springs, 17 miles away.

As a condition of approval, the FAA said the turbines should be equipped with white paint and synchronized red lights to make them more visible to aviators. However, making the turbines more visible to pilots will make them more visible also to Botetourt residents who oppose the project on the grounds that the turbines will be an eyesore.

Apex selected the 7,000-acre site because of its remote location. The closest home in the area is more than a mile away.


The Market-Driven Path to Renewables


Texas wind turbines. Photo credit: Wall Street Journal

by James A. Bacon

Texas, one of the most conservative states in the country, is not exactly what you’d call a hotbed of environmental activism. Yet the Lone Star state has added more wind-based generating capacity than any other; wind turbines and other renewables account for 16% of electrical generating capacity — and as much as half of electricity production at night. Now the state is anticipating a surge in solar power, reports the Wall Street Journal.

Moreover, Texas, long associated with the oil & gas industry, has become a pace-setter in renewable energy while moving from an average retail electricity rate higher than the national average to a rate below the national average — 8.6 cents per kilowatt hour compared to 10.4 cents nationally.

Oh, and it did so within the context of a free-market-based electricity system — no  state subsidies. (Federal subsidies still apply.)

“Texas officials didn’t invoke global warming to sell the program,” writes the Journal. “They touted renewable energy as a consumer-choice issue, jobs producer and a way to pump money into rural economies.”

Consumer choice: Residents of Houston can pick from 107 rate plans offering 5% to 100% renewable power. Reliant, a unit of NRG Energy Inc., charges 7.1 cents per kilowatt-hour for an all-renewable plan compared to 5.9 cents for one that’s 5% green.

Jobs: The Texas Workforce Commission estimates that the state now has more than 100,000 people working in renewable energy, which includes manufacturing, construction and ongoing operations. Construction of wind turbines and power lines  created jobs in rural counties and gave landowners new sources of income.

How did this transformation occur? The Journal doesn’t delve into details, but here are the highlights. In 1999 then-Governor George W. Bush signed legislation overhauling the Texas power market. Deregulation broke the grip of monopoly utilities that controlled generation, transmission and retail sales of electricity and introduced competitive auctions for wholesale power. Texas also mandated at least 2,000 megawatts of renewable generating capacity by 2009, not an idea inspired by free market principles, but the mandate wasn’t a major factor. Texas blew past that goal by 2005.

State government also charged electric-system users billions of dollars to build transmission lines to wheel power from windy west Texas where the wind turbines were to urban centers where the demand resided.

The Journal article doesn’t address the issue of service reliability, other than to note that Texas officials are “obsessive” about anticipating changes in the weather that might affect wind-powered production.

Bacon’s bottom line: It would be a mistake to portray the Texas approach as purely market driven. The state did enact mandates (although they apparently were not decisive) and it did dun ratepayers to upgrade transmission lines. But the deregulation of retail allowed Texas greenies to exercise their consumer power by purchasing renewables at a modest premium. And the development of wholesale electricity auctions ensured that new wind and solar producers had someone to sell to.

The big question for Virginians is whether the Texas model can be replicated here, and I’m just not sure of the answer. Some of the necessary elements are in place. For example, Virginia does participate in wholesale electricity markets; we’re part of PJM Interconnection, a cooperative zone of a dozen states in the Midwest and Mid-Atlantic. On the other hand, building transmission lines is exceedingly contentious. It’s one thing to install high-voltage towers in empty Texas ranchland; it’s quite another to build them in a Virginia countryside rich in historical, cultural and environmental resources where landowners value the land not only for its productive capacity but for its viewsheds.

Virginia also experimented with retail deregulation, which was deemed a failure. But it’s been a decade since re-regulation, and times have changed. Thanks to the success of retail deregulation in places like Texas, there are enterprises with proven business models that might make retail competition more meaningful here in Virginia.

Finally, there are important climatic differences between Texas and Virginia. With its vast, windy plains, Texas is superbly suited to on-shore wind. Except along isolated mountain ridges, Virginia is not. While the Old Dominion potentially could tap off-shore wind, the business infrastructure to support it does not exist. As for solar, Texas is an arid state where solar panels get more direct sunlight than in Virginia.

Still, while politically “blue” states from California to New York give extensive thought to what the electric grid of the future will look like, Virginia needs to do so as well. Texas’  market-oriented model might be one that Virginians are more comfortable with.

Fed Official Still Optimistic about Offshore Wind

Wind turbines off the Danish coast.

Wind turbines off the Danish coast.

by James A. Bacon

As the cost of offshore wind energy in Europe continues to decline, Abigail Ross Hopper, director of the federal Bureau of Ocean Energy Management, believes that offshore wind will come to the United States eventually.

Responding to a question by Dave Mayfield with the Virginian-Pilot what prospect she sees for ocean wind energy by 2050, she said:

I think there will be turbines running up and down the coast, the Eat Coast and the West Coast, and I don’t think it will be a big deal. Just like I’m looking out the window right now and there’s power lines along the side of the road that I ordinarily don’t see because I’m used to them.

Recently, the Dutch government auctioned rights for two large wind farms in the North Sea. The winning bid came in at the equivalent of about $95 per megawatt hour generated — $40 per megawatt hour below the previous low set by a Danish project just last year. That’s still higher than the cost of other energy sources, but the trend-line is moving in a positive direction.

The U.S. has a lot of catching up to do, Mayfield notes. Compared to the 500 wind turbines off the coast of tiny Denmark, there are five turbines off the East Coast of the U.S. — off Block Island, R.I.

Bacon’s bottom line: Europe is driving down costs now because national governments used massive subsidies to build a large and competitive wind industry, with all the supporting infrastructure and expertise required to install wind turbines in the open sea. That scale and expertise does not exist in the U.S. yet, and given the fact that offshore energy policy is driven mainly by uncoordinated state initiatives, there is no sign that it will develop any time soon.

If all East Coast states could coordinate their policies, they conceivably could generate a critical mass sufficient to entice European major players to set up shop in the U.S. For whatever reason, no one has undertaken the task of getting all the states working together.

Here in Virginia, Dominion Virginia Power investigated the cost of building two experimental turbines off the Virginia Beach Coast. That project would have tested, among other things, innovations designed to help the turbines stand up to hurricane-force winds, thus laying the groundwork for the large-scale deployment of offshore wind power. But the cost of the two experimental turbines was so high that the power company did not think it could get State Corporation Commission approval to build. Progress has stalled since the feds pulled a $40 million research grant.

Virginia has the most to gain of any U.S. state from building a vital offshore wind energy industry because Hampton Roads, centrally located along the East Coast and home to a large ship repair industry, is the most logical location for companies to operate. But the McAuliffe administration has done little — at least nothing visible — to build the interstate cooperation needed to achieve European-style economies of scale. Perhaps that’s because the McAuliffe team has chosen to focus on solar energy, for which the economics are considerably more favorable and the development lead times are much shorter. Given the string of recent solar project announcement, the administration arguably made the right decision.

Want more Solar and Wind Power? Then You Need More Gas Backup.

transmission_lineby James A. Bacon

Elona Verdolini, Francesca Vona and David Popp are deeply concerned about climate change and the need to deploy more renewable energy sources. “Decoupling economic activities from fossil-fuel use (and hence, from anthropogenic carbon emissions) is the only way to avoid severe and pervasive impacts from climate change while sustaining economic growth,” they write in a paper just published by the National Bureau of Economic Research.

But they also acknowledge a reality typically missing from economic studies of renewable energy. Wind and solar are not “dispatchable,” that is, they do not generate electricity upon demand; they generate electricity when the wind is blowing and the sun is shining. “This translates into high system costs of renewable generation, as it requires holding significant back-up capacity to ensure a balanced energy supply throughout the day. In fact, these challenges will only further increase as the share of energy generation increases to levels never witnessed before.”

Unless cheap electricity storage options become widely available in the immediate future, “the penetration of renewable energy will increase system costs, as a significant amount of capital-intensive and under-utilized back-up capacity will have to be maintained,” write the authors, who hail from Italy, France and the United States respectively.

Delving into data for 26 Organization of Economic Cooperation and Development (OECD) countries between 1990 and 2013, the authors found that an 0.88% increase in renewable energy capacity is associated with a 1% increase in the share of fast-reacting fossil generation capacity.

“To date [fast-reacting fossil] technologies have enabled [Renewable Energy] diffusion by providing renewable and dispatchable back-up capacity to hedge against variability of supply.  Our paper calls attention to the fact that renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.”

Bacon’s bottom line: This is essentially the argument that the utility industry has been making, although the implications for Virginia of this high-level conclusion drawn from 26 OECD countries, many of which are far farther along in the deployment of renewables than the United States, are not immediately apparent.

PJM Interconnection, the regional transmission organization that supports wholesale electricity markets for Virginia, has estimated that the electric grid can accommodate up to 30% renewables without threatening the integrity of the electric grid. The current level of wind and solar in Virginia is a tiny percentage of that level, and even Virginia’s voluntary Renewable Portfolio Standard for 2025  is only 15%. So, it’s not as if wind and solar are likely to create the reliability issues seen in countries that heavily committed to renewables.

But this is not an issue we can ignore in the Old Dominion. If solar penetration is merely 1% or 2% of Virginia’s electricity, the need for back-up capacity is de minimus; any needed power can be purchased from wholesale markets. But what happens if solar and wind reach 15%? There is a finite amount of electricity that can be purchased from outside Virginia because there is a finite amount of transmission capacity. At what level of solar/wind penetration would Dominion Virginia Power, Appalachian Power and the smaller electric utilities be required to maintain expensive backup capacity? I don’t know of anyone who has even asked that question.

The question goes to the heart of the debate over energy policy in Virginia in the era of the Clean Power Plan, which will accelerate the phase-out of coal-powered electricity production. Environmental groups have pushed not only for more wind and solar, but they oppose the construction of new gas-fired plants, new pipelines to supply them, and new nuclear units. Some even oppose extending the life of existing nuclear units. Again, that’s fine when solar/wind is a negligible component of electricity output, but it creates problems if renewables come to dominate the system. The NBER paper reminds us that we need to understand the tradeoffs better as we make decisions that we’ll live with for decades. Right now, I fear that we lack the information needed to make intelligent choices.

A Major Setback for Virginia OffShore Wind

We won't be seeing any of these off the Virginia coast any time soon.

We won’t be seeing any of these off the Virginia coast any time soon.

The U.S. Department of Energy (DOE) has withdrawn $40 million in funding from the Virginia Offshore Wind Technology Advancement Project (VOWTAP), dealing a major blow to plans to build two experiment wind turbines off the Virginia coast and jeopardizing the prospect of major offshore wind development in the foreseeable future.

Dominion Virginia Power had hoped to build turbines incorporating features capable of withstanding Category 3 hurricane winds, considerably stronger than those faced by wind farms in Europe. Demonstrating the viability of the technology would reduce a major element of risk and, hence, the cost of financing construction of a large-scale wind farm capable of supplying hundreds of thousands of homes.

Dominion’s early estimate to build the two turbines was $230 million, which would generate enough power to supply 3,000 homes. The first solicitation yielded a bid of $375 million. Subsequent efforts to squeeze costs out of the project resulted in bids ranging from about $300 million to $380 million. Dominion has said that even a cost as low as $230 million would be a challenge to win approval from the State Corporation Commission. The cost per kilowatt hour for electricity would be astronomically high compared to other energy sources, and the project was justifiable only as a proof-of-concept opening the way for cheaper, large-scale wind development.

The loss of DOE’s $40 million project puts the VOWTAP project that much further out of reach.

“Naturally, we are disappointed in the DOE’s decision because we still believe that offshore wind has a great potential to deliver clean, renewable energy to Virginia,” said Mary C. Doswell, senior vice president‒Dominion Energy Solutions in a press release. “However, we also recognize the unique regulatory and cost challenges involved in our project and appreciate the DOE’s desire to support other projects that may have an earlier opportunity for fruition.”

DOE made its decision after Dominion could not guarantee an in-service date for the project earlier than 2020, according to Doswell. The inability to get firm construction contracts and the increasing complexities of gaining regulatory approval for energy infrastructure projects have made it impossible for Dominion to guarantee an earlier date.

“This project is a first in many ways,” Doswell said. “As such, you need to account for many variables when attempting to lock in on a date with any degree of certainty.”

Dominion said it would consult with other VOWTAP stakeholders on how to proceed.

A World Where Bats and Blades Coexist

by James A. Bacon

Critics have long lambasted wind turbines for killing hundreds of thousands of birds and bats. Charlottesville-based Apex Clean Energy, which seeks to build a wind farm in Botetourt County north of Roanoke, has submitted a plan that it says will mitigate the worst effects of its 25 whirling turbine blades.

Apex would turn the turbines off from dawn to dusk every year between May 15 and Nov 14 when bats are foraging for food reports the Roanoke Times. But they would keep the turbines running when winds exceed 15 miles per hour or when the temperature drops below 38 degrees, conditions when bats tend not to fly.

“There are proven steps we can take to build and operate projects in an environmentally responsible manner,” said Apex spokesman Kevin Chandler.

Local conservation groups like the Rockbridge Area Conservation Council have opposed the wind farm on the grounds that the blades could cause the death of migratory songbirds, bats and perhaps golden eagles. Bird conservationists assert that wind turbines kill an estimated 600,000 birds a year in the United States and that the number could rise to two million with the deployment of more wind energy. Wind advocates say the number is miniscule compared to the 600 million or more killed each year by flying into buildings or hitting cars and trucks, but concerns remain an obstacle to widespread deployment of the turbines in Virginia.

Apex believes that damage to wildlife can be managed. The company hired professional birdwatchers to log the number of warblers, sandpipers, owls and other threatened or endangered species around its proposed wind farm. The surveys, conducted in consultation with the U.S. Fish and Wildlife Service and the Virginia Department of Game and Inland Fisheries, found that most North American birds would not be impacted. Eagles, hawks and falcons were not seen in large enough numbers to raise concerns.

But four endangered or threatened species — the northern long-eared bat, the Indiana bat, the tricolored bat and the little brown bat — were spotted during the surveys. In addition to restricting wind-turbine operations, Apex proposes to avoid cutting trees within five miles of the bats’ cave or within 150 feet of summer roosting trees for northern long-eared bats.

Bacon’s bottom line: Apex’s proposal is an idea worth exploring. On the one hand, it is desirable to minimize wildlife deaths, especially of rare and endangered species. Wind farms should be held to the same standard as pipelines, transmission lines and other energy projects when it comes to mitigating their impact on the environment. On the other hand, it appears that Apex has proposed a reasonable plan to minimize wildlife deaths. The company wisely initiated the wildlife surveys two years ago, long before the issue could become a deal-killer, and it has tailored a response to the local ecosystem. The solution isn’t perfect: Presumably a number of birds and bats still could die, and the company definitely will lose revenue by curtailing production. But, barring some tweaking in negotiations with regulators and conservationists, the proposal could well represent the optimal tradeoff.

Can the rest of us learn anything from this? Virginia will have to build a lot of infrastructure — wind farms, solar farms, pipelines, transmission lines, and who knows what else — as it to re-tools the electric grid to a low-carbon, low-pollution future. Inevitably, some of the projects will conflict with ecological, historical and cultural resources that Virginians want to protect. Collectively, we need to adopt a problem-solving mindset that allows critical infrastructure to be built while protecting those resources. There will never be perfect, pain-free solutions. But some solutions will be clearly preferable to others, and we need to find them.

Appalachian Power Proposes Green Power Tariff

west_virginia_turbinesby James A. Bacon

Appalachian Power has proposed an alternative rate for customers who want to purchase 100 percent of their electricity from renewable sources. A rider attached to the company’s Virginia tariff bundles the energy output of renewable generators to provide around-the-clock, carbon-free generation.

The company, whose service territory encompasses the southwestern third of the state, designed the green tariff so that subscribing customers would not be subject to charges relating to fossil-fuel energy generation, and standard retail customers would not subsidize renewable energy.

“We are increasing the amount of renewable energy in our generation portfolio and developing programs to help our customers meet their energy needs with renewables,” said James Fawcett, Appalachian’s manager for energy efficiency and alternative energy initiatives in a press release yesterday.  “The proposed Rider REO is the latest addition to our renewables strategy.”

Initially, the portfolio will consist of 423 megawatts of Appalachian’s current wind and hydroelectric resources. As new renewable resources—including wind and solar—are added, the subscribed portion of those resources will be assigned to Rider REO.

Who will buy this product? Appalachian suggested that the main appeal may be to industry. Said Fawcett: “We expect that the ability to deliver 100 percent renewable energy will also provide economic development benefits to potential commercial and industrial customers seeking that requirement.”

Bacon’s bottom line: If one overlaid Appalachian Power’s territory with an electoral map, it would skew heavily Republican red, with a Trumpian tint. Buchanan County, once a major coal producing county, was recently profiled in the Wall Street Journal for the highest percentage of votes cast for Donald Trump anywhere in the country. I can’t imagine that the company anticipates a surge in retail demand for higher-priced green energy.

The real play is for industry. Just as Amazon Web Services and other data center providers in Northern Virginia are being pressured to use more solar electricity, so are many of the industrial and warehousing companies (think Walmart) that might consider investing in western Virginia. Thus, Appalachian is converting the liability of higher cost electricity into an economic development asset. Very clever. It will be interesting to see what kind of issues arise in the SCC deliberations.

One issue, I expect, would focus on how Appalachian allocates the cost (if any) of (a) upgrading the transmission and distribution grid and (b) maintaining fossil fuel backup capacity for when the wind isn’t blowing and the sun isn’t shining. The accounting discussions, I expect, could get very arcane. Another question is what happens if Appalachian can’t find subscribers for 423 MW of pure-play renewable energy. Do regular ratepayers shoulder the costs, as they undoubtedly would if the green tariff didn’t exist?

Clean Power Plan Stalled, Green Energy Still Viable

In a five-to-four vote, the U.S. Supreme Court derailed, at least temporarily, President Obama's Clean Power Plan. Regulatory uncertainty ensues.

In a five-to-four vote, the U.S. Supreme Court derailed, at least temporarily, President Obama’s Clean Power Plan. Regulatory uncertainty ensues.

by James A. Bacon

The U.S. Supreme Court has halted implementation of the Clean Power Plan until challenges to its constitutionality can be resolved, creating uncertainty at the state level, including here in Virginia, on how to proceed.

The high court gave no explanation for its stay, but foes of the plan, which would compel electric power companies to make major cuts to CO2 emissions by 2030, argued that it would “force massive … changes in terms of state policies and resources, power plant shutdowns, and investments in wind and solar power,” which could not be reversed if it were later declared unconstitutional.

As a practical matter, the decision will delay implementation of the plan until the next administration. A federal appeals court is not expected to hear the case until June. If the case were appealed again, the Supreme Court likely could not render a decision until 2017, reports the Washington Post. While a Democratic president probably would press on with the plan, a Republican president likely would reverse it even if the Supreme Court ruled it to be constitutional.

The stay could create a dilemma for the McAuliffe administration, which supports the plan and has been working to implement it. Under the Clean Power Plan, Virginia’s Department of Environmental Quality is required to submit a state plan by June 2016, with the possibility of an extension until June 2017, or June 2018 if it adopts a multistate plan.

The response here in Virginia is mixed.

“Today’s unfortunate decision by the Supreme Court hits pause on the country’s strongest action to lower harmful carbon pollution, but it won’t stop the massive shift to cleaner, cheaper energy already underway in the Southeast and across the nation,” says Frank Rambo, senior Attorney and clean energy leader for the Southern Environmental Law Center. “The goals of the Clean Power Plan reflect this energy shift: we’re embracing cleaner energy options that would be happening with or without this plan. ”

“This comes as no real surprise,” says Dominion Virginia Power spokesman David Botkins. “It continues to be a legal and policy cloud of uncertainty for the country and the energy industry.” But Dominion will continue to move forward with the Clean Power Plan. “We will work constructively with the Commonwealth and other stakeholders on a compliance plan that has our customers as the first priority, ensures reliability, and maintains a diverse mix of electric generation.  We continue to prepare for implementation (of CPP) unless we are notified that Virginia is delaying or halting their development process.”

What does this mean for green energy in Virginia?

While a stay of the Clean Power Plan will slow the transition of Virginia’s electric grid to cleaner energy sources, it will not halt it. Dominion still is planning to shut down two aging, coal-fired units at its Yorktown Power Station, and its long-term investment plan calls for more gas-fired electric power, which emits less CO2 per unit of electricity than coal, and more solar. Indeed, Dominion announced plans two days ago to partner in a 20 megawatt solar facility in Chesapeake that will produce the energy equivalent needed to power 5,000 homes. (Substantial reliance on offshore wind energy still seems to be a distant prospect.)

The economics of wind and solar continue to improve, and many energy consumers — ranging from Amazon Web Services to the Norfolk Naval Station here in Virginia — are willing to pay a premium for renewable energy. Meanwhile, expansion of the electric transmission grid may make it realistic for Virginia power companies to import cheap wind-powered electricity from the Midwest.

Update: I have updated the Dominion quote to reflect company’s assertion that it will continue to move forward with the Clean Power Plan.

Update: A statement from Governor Terry McAuliffe: “Over the last several months my administration has been working with a diverse group of Virginia stakeholders that includes members of the environmental, business, and energy communities to develop a strong, viable path forward to comply with the Clean Power Plan. As this court case moves forward, we will stay on course and continue to develop the elements for a Virginia plan to reduce carbon emissions and stimulate our clean energy economy.”

A quote from John Shepelwich, spokesman for Appalachian Power Co.:  “The Supreme Court’s decision confirms that the legal justification for the Clean Power Plan should be examined by the courts before scarce state and private resources are used to develop state plans. The accelerated schedule for briefing and argument in the lower court assures that the case will be heard promptly.”

The Electric Grid Just Got Smarter

Interesting development… Dominion Voltage, Inc., a subsidiary of Dominion Resources and sister company of Dominion Virginia Power, has announced the launch of a new product, EDGE Stabilizer, to help electric utilities manage the reliability impact of solar, wind and other distributed energy resources (DER) on the electric grid.

“Market forces are significantly increasing the amount of DER, and utilities need cost effective ways to safely and efficiently integrate DER into their grids,” said Todd Headlee, executive director of DVI. “In areas with high levels of DER, EDGE Stabilizer minimizes the need for additional costly hardware devices or other distribution system upgrades by orchestrating the use of existing residential smart inverters, large scale inverters, load tap changers, capacitors, voltage regulators and AMI/smart meters to ensure utility customer voltages remain in compliance.”

EDGE Stabilizer also integrates detailed weather forecasts to anticipate voltage volatility on a circuit by circuit basis.

Bacon’s bottom line: It will be interesting to see how Dominion’s right hand and left hand work together. Will Dominion Resources use its smart-grid technology to help Dominion Virginia Power, its regulated subsidiary, better integrate wind and solar into its generating mix? Or will regulatory obstacles and/or strategic considerations hamper the application of the technology? Another way of phrasing the question: Will a smart-grid technology invented in Virginia be applied in Virginia? I’ll be posing those questions to Dominion when I get the chance.

Gas Worse Carbon Polluter than Coal, Says Sierra Club

global_warmingby James A. Bacon

The Sierra Club has attacked the idea of natural gas as a “clean fuel” in a new broadside against the proposed construction of the Atlantic Coast Pipeline (ACP) and the Mountain Valley Pipeline (MVP) through Virginia. When viewed over the “natural gas fuel cycle” — including production, transportation and combustion — natural gas would be a bigger contributor to climate change than the existing electric generating fleet, including coal-fired plants, the environmental organization charged late last week.

“Natural gas only seems like a cheap and easy fix for climate change,” said Glen Besa, director of the Sierra Club Virginia Chapter, in a statement accompanying the white paper. “In reality, methane pollution is a serious problem that makes natural gas a dead-end solution. We have to stop kidding ourselves. Virginia should be investing in wind and solar and energy efficiency, not expanding infrastructure for more fossil fuel burning.”

The Sierra Club issued the report as the Virginia Department of Environmental Quality makes important decisions about how the state should implement the federally imposed Clean Power Plan, which calls for a massive reduction in carbon-dioxide emissions from Virginia power plants by 2030. The Sierra Club and other environmental groups have called for the most aggressive options, which would require more solar and wind and less natural gas than proposed by Dominion Virginia Power. Backers of the ACP and MVP pipelines have justified the projects on the grounds that they will supply gas-fired power plants in Virginia and North Carolina with cheap shale gas from West Virginia and Ohio.

“The overwhelming consensus of state and federal policymakers – which the Virginia chapter of the Sierra Club ignores – is the increased use of natural gas for electric generation is essential to meeting the Clean Power Plan,” responded Jim Norvelle, director-media relations for Dominion Energy, the managing partner of the ACP.

“This is the view of President Obama and elected officials from states across the country,” he said. “It is also the clear guidance of the [Environmental Protection Agency], which identified increased use of natural gas generation as one of three key building blocks for meeting the goals of the Clean Power Plan.”

Because the combustion of natural gas releases less CO2 per unit of heat than the combustion of coal, it is commonly argued that a switch to gas, while less helpful than a shift to solar and wind in reducing CO2, does make a significant contribution as a “bridge” fuel in the fight against global warming. But the Sierra Club argues that such a combustion-only analysis excludes the impact of the release of gas during fracking operations and pipeline leaks. Summarizes the Sierra Club statement:

In addition to emitting large amounts of CO2 when burned, natural gas is a major contributor to climate change in the extraction and transmission stages, where significant amounts of methane escape from wells and pipeline leaks. Methane is a much more powerful greenhouse gas than CO2, and these “fugitive emissions” of methane have emerged as an area of serious concern that undercuts the case for natural gas as a cleaner substitute for coal. …

Greenhouse gas emissions for Atlantic Coast Pipeline would be more than five times the annual emissions from Dominion’s Chesterfield Power Station, the largest coal fired plant in Virginia, and equal to more than 80% of the total carbon pollution from all 177 stationary sources in the EPA’s 2014 inventory of GHG emissions in Virginia, states the Sierra Club.  The impact of the Mountain Valley Pipeline would be even greater.

Critics of renewable fuels counter that solar and wind farms produce electricity only  when the sun is shining and the wind is blowing, not when there is a demand for electricity. Natural gas generation can be dialed up and down quickly as electricity demand changes. That flexibility is particularly critical if electric utilities are to adopt “demand-response” rate structures that encourage users to conserve energy during periods of peak demand. Gas advocates also note that the gas infrastructure has less impact on the landscape. Solar and wind requires far more land to generate comparable amounts of electricity; wind turbines and vast expanses of solar panels also are more visually intrusive than buried pipelines.

Wind Power Breakthrough

Mountaintop wind farm in West Virginia.

Mountaintop wind farm in West Virginia.

Virginia could finally get a wind farm.

In a unanimous vote, the Botetourt County Board of Supervisors voted Tuesday to grant a permit to build 25 wind turbines on the ridge of North Mountain, clearing the way for construction of the first wind farm in Virginia. The 550-foot-tall turbines had sparked objections that they would be a noisy eyesore and harm wildlife. As a condition of receiving the permit, project owner Apex Clean Energy must abide by 17 conditions that limit the height of the turbines and how much noise they can make, reports the Roanoke Times.

Botetourt County arguably was the biggest obstacle but the Rocky Forge Wind project still needs to obtain state and federal regulatory approval. The Federal Aviation Administration has said that the turbines could pose an aviation hazard.

Rocky Forge is expected to generate 75 megawatts of electricity, enough to power 20,000 homes.


Speaking of Storing Electricity…

battery_storageIn the previous post, I quoted Dominion Resources CEO Thomas F. Farrell II as alluding to the impracticality of storing electricity on a large scale. He is indubitably right about the high cost of storage today, but scientists and entrepreneurs are looking for ways to drive the costs down.

Battery storage of electricity is no more than a niche business at present. In our part of the country, it is used mainly to help PJM Interconnection, which maintains wholesale electricity markets, make tiny, fine-tuned adjustments to equalize the supply and demand of electricity on the grid. But some say that advances in battery technology will make it economical one day to store large amounts of surplus electricity generated by wind and solar power during periods of peak production for use during other times of the day.

Given the strategic importance of power storage, it is interesting to note the submission of HB 452 by Del. Patrick Hope, D-Arlington, to create a Virginia Energy Storage Consortium. Here is a summary of the bill:

Establishes the Virginia Energy Storage Consortium as a political subdivision of the Commonwealth for the purpose of positioning the Commonwealth as a leader in research, development, commercialization, manufacturing, and deployment of energy storage technology. The powers of the Consortium include (i) promoting collaborative efforts among Virginia’s public and private institutions of higher education in research, development, and commercialization efforts related to energy storage; (ii) monitoring relevant developments nationally and globally; and (iii) identifying and working with the Commonwealth’s industries and nonprofit partners. Staff support shall be provided by the Department of Mines, Minerals and Energy. The measure expires on July 1, 2021.


The Throne behind the Power


PJM operations center, Audubon, Pa. Photo credit: PJM

Who runs Virginia’s electric power industry — the SCC? the General Assembly? or an obscure Pennsylvania company that doesn’t own a single megawatt of generating capacity or mile of transmission line? 

by James A. Bacon

AUDUBON, PA–Some of the most important decisions affecting the price and reliability of electric service in Virginia aren’t made in Dominion Virginia Power’s headquarters in Richmond or Appalachian Power Company’s in Roanoke but in a nondescript office park in Audubon, Pa., a dozen miles northwest of Philadelphia.

That’s where PJM Interconnection oversees the electric transmission grid in a 13-state region that includes Virginia. Its job: safeguarding the integrity of the system by keeping the supply of and demand for electricity in precise balance, and creating wholesale electricity markets that allow members to buy and sell electricity with each other.

As one of ten regional transmission organizations in North America, PJM oversees a $50 billion-a-year electricity market for 61 million people in a territory stretching from New Jersey to Illinois. The company currently estimates that it saves the economy $2.8 billion to $3.1 billion a year by making the grid operate more efficiently. Its capabilities will be in demand as never before as states and power companies gear up to meet stringent new regulations imposed by the Obama administration to combat climate change.

The Clean Power Plan (CPP) mandates sharp reductions in carbon-dioxide emissions nationally. Across the country dozens of CO2-intensive, coal-fired plants will be replaced by generating units using natural gas, nuclear fuel, wind and solar. The transmission grid, erected to connect those coal plants to major population centers, will have to be reconfigured to accommodate electricity supplied from new locations. Drawing upon data showing where the transmission bottlenecks are occurring and where new capacity needs to be installed, PJM will orchestrate the grid restructuring.

Integrating green power sources into the system will be especially challenging. Solar and wind, which don’t emit CO2 and create no radioactive waste, are the cleanest energy sources available to replace coal on a large scale. But both are intermittent, with electric output varying widely by season, time of day and weather conditions. A single utility operating within a confined service territory would be hard-pressed to deal with these fluctuations. A regional approach will make the task easier. PJM can even out some of the localized, weather-driven flux in green power by drawing upon wind and solar plants across its 240,000-square-mile region.

Appalachian Power joined PJM in 2004 and Dominion joined in 2005, yet in Virginia hardly anyone outside the electric power industry has heard of the company, knows what it does or comprehends how it shapes the choices available to politicians and regulators as they juggle the competing imperatives of price, reliability and environment.

To understand the larger context in which Virginia energy issues are debated, I traveled earlier this month to Audubon, Pa., to see PJM operations first-hand. The company rolled out the red carpet, making available the managers who oversee the region’s wholesale energy markets and electric grid to answer my questions. The following report details what I learned.

Day-Ahead Markets

Trading stocks and cattle futures is child’s play compared to buying and selling electricity on the wholesale market.

Every day at noon, PJM holds a next-day electricity auction. Buyers submit how much electric load they want to purchase at a particular node in the PJM system, at what time they want the electricity, and how much they are willing to pay. Power companies and merchant generators with power to sell enter bids for how much power they will commit to providing, during which hours of the day, and at what price. PJM cranks all this data into a model that runs through successive iterations of analysis and spits out a ranking, from low price to high, of which power facilities will be called upon to supply each additional increment of demand for each customer.

“Our job is to make things as consistent between day-ahead and real time as possible,” says Michael Ward, manager of day-ahead market operations. “We get all the loads coming in. We get all the generation bidding in. And we match them, making sure the transaction physically can happen.”

That’s the simple version. Continue reading

SCC Asks Tough Questions about Nukes, CO2 Emissions

2015IRPby James A. Bacon

Given the legal and regulatory uncertainties associated with Clean Power Plan, which requires Virginia to reduce CO2 emissions 30% by 2030, Dominion Virginia Power’s 15-year strategic plan filed in July 2015 is reasonable and in the public interest, the State Corporation Commission (SCC) ruled in a final ruling released today. However, the SCC also detailed substantial additional analysis it would like to see in the Integrated Resources Plan (IRP) Dominion files next year.

The electric company had filed four broad options for responding to the mandates of the Clean Power Plan, including one that relied heavily upon nuclear power. The power company did not recommend one option over the others in July because it did not know precisely how the Clean Power Plan would impact Virginia. While the Environmental Protection Agency has finalized Virginia’s CO2 emission targets since then, the state still has yet to choose between two possible approaches, whether to focus on the absolute volume of CO2 emissions or CO2 emissions on a kilowatt-hour basis. That decision could have significant impact on how power companies respond to the mandates.

Consumer and environmentalist groups had urged the SCC to reject the IRP on the grounds that the projected $19.3 billion cost for a third nuclear unit at the North Anna power station was excessive under any scenario. A project of that magnitude, the SCC noted, would roughly double the size of Virginia’s electric rate base.

While the SCC saw no need to amend the 2015 IRP, it noted pointedly that it views the IRP only as a planning document, “not as a document that will determine future Commission decisions on future resources or the recovery of specific expenditures.”

The commission instructed Dominion to take a very different approach to its 2016 IRP. With this ruling, the tight-lipped commissioners signaled what they see as the major issues facing Virginia’s electric power industry response to the Clean Power Plan.

Nuclear power. The proposed North Anna 3 nuclear unit tops the list. The company has incurred approximately $580 million in development costs through September, a portion of which has been passed on to rate payers already, and Virginia’s share of the final project cost could reach $19.3 billion in capital investment. If passed on to rate payers, wrote the SCC, “that investment would represent a large enough increase in electric bills for residential and business customers to impact Virginia’s economic climate.”

Acting as consumer counsel in evidentiary hearings, the Attorney General’s office raised  what the SCC deems to be a “serious concern”: Should Dominion come to the SCC in a future hearing having already incurred billions of dollars in development costs on North Anna 3, will it cite the sunk costs “as a compelling reason for the Commission to approve the application”? Accordingly, the SCC ordered Dominion to answer the following questions in its next IRP:

  • Why might Dominion believe that it should be entitled to recover from customers North Anna 3 costs incurred before being granted formal regulatory approval?
  • Is there a dollar limit on how much Dominion intends to spend on North Anna 3 before seeking that regulatory approval?
  • Without a guarantee of cost recovery, how much can Dominion spend on North Anna 3 without negatively impacting its fiscal soundness and cost of capital?
  • Why does Dominion continue to spend money on North Anna 3 development costs? Is it mainly to seek Nuclear Regulatory Commission approval?

In the next IRP the SCC wants Dominion to “quantify the tradeoff between operating cost risks that may be increased and the  cost savings that may be realized by delaying the construction of North Anna 3.” Continue reading

If You Like Wind and Solar, You’d Better Like Transmission Lines, Too

If you want more of this....

If you want more of this….

by James A. Bacon

Wind and solar power are becoming increasingly competitive with fossil fuels and nuclear as an electric power source. As Virginia integrates more renewable energy sources into its electric generation mix, a big question is how much can the power grid handle before the intermittent nature of blowing winds and sunny skies threatens the reliability of electric service. The answer, according to PJM Interconnection, is quite a lot.

... you need to build more of this.

… you need to build more of this.

PJM, the Pennsylvania-based entity that oversees the reliability of the electric grid in a multi-state region in the Mid-Atlantic and Midwest, including Virginia, commissioned GE Energy Consulting to examine the issue. The conclusion:

The PJM system, with adequate transmission expansion and additional regulating reserves, will not have any significant issues operating with up to 30% of its energy provided by wind and solar generation. … No insurmountable operating issues were uncovered over the many simulated scenarios of system-wide hourly operation. …

Bacon’s bottom line: This is not news to anyone in the electric power industry — the study is a year old. But it’s news to me, as I slowly climb the learning curve on this topic, and it may be news to readers who have been moving up that learning curve with me, not to mention legislators who shape the regulatory environment for Virginia utilities.

There is one critical caveat in the quote above that bears close attention: “with adequate transmission expansion.”

PJM’s grid could handle 20% renewable penetration with modest requirements for new transmission lines, the study states, but costs soar at the 30% level. Depending on the scenario, PJM estimates that the regional grid would require construction of between 754 and 2,946 total miles of transmission lines ranging in cost between $3.7 billion and $13.7 billion.

Under the 30% renewable-penetration scenario, PJM assumes that much of the power will originate in Midwest states with strong, steady winds where wind power is most economical, and the grid will need transmission capacity to move electricity to markets in the east. But even with solar-intensive scenarios, new transmission lines also may be needed on a local level as power companies reconfigure the flow of electricity from decommissioned coal, nuclear and, eventually, gas-fired generating stations to the solar facilities.

And that raises a new question: Can power companies build those transmission lines on a timely basis? Environmental and landowner groups put up staunch resistance to the construction of intrusive high-capacity transmission lines through wilderness, countryside and areas of historic value, as has we have seen on numerous occasions in Virginia. These conflicts can be protracted. Friday night, for instance, the U.S. Army Corps of Engineers held another public hearing on the proposed Surry-Skiffes Creek transmission line, even as Dominion Virginia Power warned that the line will take at least 18 months to construct and will create a months-long window of vulnerability when it shutters two coal-fired units at its Yorktown Power Station. Residents and businesses on the Virginia Peninsula face a high likelihood of rolling blackouts in 2017.

The re-engineering of the electric grid to address the global problem of climate change could result in more intense conflict at the local level over disruption to wildlife habitat, soil erosion, water quality and other environmental values — not to mention economic disruption. Virginia has only begun to grapple with this contradiction.

(Hat tip: Kevin Chandler.)