Dominion Virginia Power could increase solar capacity by 5,200 megawatts over 25 years

Dominion Virginia Power executives rolled out a long-term energy plan Monday that would dramatically expand its use of solar power, shrinking the carbon footprint for customers and paving the way for extensive upgrades to the state’s energy grid.

With the installed cost of large-scale solar projects dropping by 50 percent over the past four years, solar is now more cost competitive with traditional forms of power generation. Dominion wants to capitalize on that trend by adding at least 3,200 megawatts of new solar capacity by 2032 and at least 5,200 megawatts, cumulatively, of new solar generation by 2042.

Put another way that means that in the next 25 years solar eventually could generate enough electricity to power more than 1.3 million homes, or about half of the company's customers in Virginia and North Carolina. Currently, Dominion has developed 400 megawatts of utility-scale solar generation and has a dozen new projects underway, enough to power 100,000 homes.

“For the first time, the subsidized costs of utility-scale universal solar power are expected to be low enough to make it a component of future generation additions at reasonable cost to our customers,” Paul Koonce, CEO of Dominion Generation Group, said during a press conference Monday at the company’s headquarters in Richmond.

The conference coincided with Monday’s release of Dominion’s annual Integrated Resource Plan (IRP), a 15-year energy forecast Dominion is required to file with the state’s utility regulator.

Besides solar, added Koonce, natural-gas generation and Dominion’s two nuclear power stations are key to a low-carbon future.

“Gas-fired generation is clean, dependable and provides balance to the variable energy flows from solar and wind. Nuclear, with its 24/7 operations and no-carbon emissions, provides a solid base … We believe this balance of solar, natural gas and nuclear hits the sweet spot in terms of cost, environmental performance and reliability for our customers,” said Koonce.

More natural-gas infrastructure, including the proposed Atlantic Coast Pipeline, is needed, he said, “as an enabler to deploy this much solar.”

 One environmental group,  the Southern Environmental Law Center, said that Dominion's IRP fails to transparently address the question of the need for the pipeline. “Rather than deliver a clear energy plan, this document only serves to raise more questions about what Dominion really wants to do over the long-term and who really stands to benefit,” said Will Cleveland, a SELC attorney.  “While Dominion is taking a good step toward expanding solar, they are simultaneously taking two steps back by doubling down on dirty fossil fuels.”

On the nuclear front, Dominion is seeking federal relicensing for its reactors at North Anna Power Station in Louisa County and Surry Power Station in Surry County. Together, they have a generating capacity of 3,349 megawatts.  Under one of eight alternative plans listed under its IRP, the company also calls for a possible third nuclear unit at North Anna if certain conditions are met, including approval by the federal government of a construction license for that project.

Another alternative calls for the development of two 6-megawatt offshore wind turbines off the coast of Virginia Beach as early as 2021. The project was dropped from a federal Department of Energy demonstration program, making it ineligible for $40 million in funding because Dominion couldn't guarantee the project would be in service by 2020.

The IRP examines options to meet electricity needs of customers over a 15-year planning cycle, while also considering a longer 25-year study period. However, it did not make a commitment to build or request regulatory approval for any particular project.

With the combination of solar, natural-gas and nuclear power, Dominion said that more than a third of its Virginia service territory could be powered with carbon-free electricity by 2032.

A greater reliance on solar would shrink the carbon footprint for a typical customer by as much as 25 percent during the next eight years, the company said. When added to reductions already made, officials said carbon emissions would fall by up to 46 percent between 2007 and 2027. “We think this is very good news for our customers and the environment,” said Koonce.

Proponents of solar power welcomed Dominion’s plans for expansion, but they noted that, even with the growth the company plans to implement, Virginia would remain far behind other states in terms of solar development.

“We see the announcement from Dominion as a positive sign that they are beginning to take solar more seriously as the viable energy resource that it is,” said J. R. Tolbert, Virginia’s vice president of state policy for Advanced Energy Economy, a group based in Washington, D.C.  “However, at the end of the day, the numbers that Dominion puts forward in the IRP are still way far behind what other states are doing. “

For instance at the end of 2016, Tolbert said North Carolina had more than 3,000 megawatts of solar capacity installed. “It’s definitely a good thing that Dominion is doing this, but it’s not all that accurate for Dominion to be cheerleading this proposal when, really, what it is is a move for Virginia to get into the game when we’re already well into the second quarter.”

 
Expanding solar use would require updates to the grid. Robert M. Blue, president and CEO of Dominion Virginia Power, talked about what changes would be needed.  “Widespread solar use — both utility-scale universal solar and private systems — will require a modern energy grid, upgraded from the one-directional grid system that has worked so well to deliver power to generations of customers,” he said. “When the variable nature of solar becomes a major factor on the grid, it must become a flexible, two-way network, so we can deliver energy seamlessly to everyone.”

Dominion officials didn’t have an estimate on how much such upgrades would cost. Blue said that modernization would not only advance the development of renewable energy, but also help strengthen the grid against cyber or physical attacks, provide more control and information for customers, and improve Dominion’s ability to restore power promptly after outages.

Asked about the possible demise of the Clean Power Plan (CPP) and how that might affect Dominion’s plans, Koonce said, “Dominion will continue moving toward cleaner power sources with lower emissions, whether the Clean Power Plan lives or dies. Our customers want more renewable energy …”

The company said it anticipates future national and state energy policy to include limitations on greenhouse gas emissions in some form. The U.S. Environmental Protection Agency (EPA) imposed major reductions in power station carbon emissions in August 2015 through the CPP.  However, that plan is now under federal court review, and President Donald Trump has ordered the EPA to review the rule and to begin the process of revising or rescinding it.

Still, Koonce noted, the federal government remains under a legal requirement to address carbon as a regulated pollutant.

Because of the possible repeal of the CPP, some Virginia legislators have called for an end to a rate freeze put in place by the General Assembly in 2015 for Dominion that was predicated in part on the CPP and stricter emission rules.

The freeze on base rates, which represents about 60 percent of the typical residential bill, is supposed to be in place for five years. It was designed to provide price stability for customers at a time when Dominion expected to be dealing with stricter air-quality federal regulations. Since that’s now in question, though, some legislators want the freeze rescinded.

The rate freeze was part of a bill that required Dominion to develop 400 megawatts of large-scale solar generation facilities in Virginia by 2020. The company has invested more than $1 billion in solar and already has reached that goal, officials say.

Dominion officials pointed out Monday that the Virginia State Air Pollution Control Board is considering a petition on carbon limitations.  Also, a taskforce set up by Gov. Terry McAuliffe is developing proposals to reduce carbon emission in Virginia, regardless of what happens with federal CPP rules.

Dominion says it has lowered carbon emissions in recent years through a number of measures. It has converted four coal-fired power stations to natural gas or renewable biomass; built efficient natural gas power stations in Virginia to reduce imports of electricity from higher-carbon sources outside the state; encouraged energy conservation; and increased efficiency of its existing stations to produce more energy with the same amount of fuel.