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Tag: Energy Delta Lab

All in good time

For decades, the promise of economic revitalization has tantalized Southwest Virginia. The sparsely populated region, once home to booming coal mining and tobacco industries, has had money and resources thrown at it by local, state and federal governments, but it’s still had a difficult time finding its footing.

As the region’s economy has declined, so too has its population, with the University of Virginia’s Weldon Cooper Center for Public Service predicting Southwest Virginia’s headcount will have dropped by more than 10% between 2020 and 2030 and will decline more than 23% by 2050. What’s more, just over half of Southwest Virginians participate in the labor force — about 12% lower than the state average, according to the Virginia Employment Commission. That’s due to a variety of factors, including child care, transportation, housing and the opioids epidemic.

And that’s in normal times — not taking into account the impact from disasters such as Hurricane Helene, which damaged or destroyed more than 500 homes and 80 businesses across the region in September and shut down a l.5-mile segment of U.S. Route 58, a key regional artery for commerce and travel that stretches from far Southwest Virginia to Hampton Roads. The Virginia Cooperative Extension has estimated that agricultural damage in the region could surpass $125 million.

Despite Southwest Virginia’s challenges, billions of public dollars have been invested regionally during the past several years, including $3.8 billion in planned Interstate 81 improvements, $8.2 million in affordable housing support, and $1.48 billion in federal funds to expand broadband access. And that’s not to mention Highlands Community Services’ new mental health crisis center, which opened in Abingdon in May, or Emory & Henry University’s new state lab school, SWVA HEALS (Southwest Virginia Healthcare Excellence Academy Lab School), which launched in August and prepares regional high school students for careers in health care.

Plus, considering the region’s historic connection to the energy industry and its ample supply of vacant land, economic development officials have been marketing Southwest’s abandoned coal mining lands for renewable energy and data center projects. While industries like those could provide investments in jobs and capital the region needs, the situation won’t change overnight, experts caution.

“We hear all the time, ‘Oh, you guys have all this land. You can do solar everywhere. You can do projects everywhere,’” says Will Payne, director of InvestSWVA and managing partner of regional economic development consulting firm Coalfield Strategies. “And … if that was true, where are the projects right now?”

Payne is heavily plugged into Southwest Virginia politics and his work is focused on marketing the region for economic development projects.

Fighting against time

Completely revitalizing a region’s economy takes time. Energy projects are complex and can take years to get off the ground, considering the due diligence involved.

“There are no quick wins in energy generation projects,” Payne says. “There are no quick wins in data center projects.”

Even developing a solar farm can take four years to complete, and that’s “probably really aggressive,” says Will Clear, managing partner of Bristol-based consultancy Virginia Energy Strategies and a former chief deputy director of the Virginia Department of Energy.

Clear and Payne are advisers for Energy DELTA Lab, a regional nonprofit collaborative initiative to market more than 65,000 acres of previously mined land in the region to develop into renewable energy projects, such as solar, wind or hydrogen, and data centers. Partners in the initiative include energy companies, InvestSWVA, the Southwest Virginia Energy Research and Development Authority, and the Virginia Department of Energy.

“The idea of using mine lands — it makes a lot of sense … using brownfield sites, but the real issue is not that simple,” Clear says. “There’s a lot of complexities associated with land that has been previously mined and currently mined [and] potentially under permit. There’s a lot of things you have to tackle.”

In November 2023, Gov. Glenn Youngkin announced an agreement between Wise County, the Energy DELTA Lab and Dallas-based Fortune 100 energy company Energy Transfer to aid in developing a variety of energy projects that would attract private investment and fit Youngkin’s all-of-the-above strategy for fulfilling the Virginia Clean Economy Act’s renewable power mandates.

Youngkin also announced a new initiative this year, Accelerate Southwest. Aimed at improving the region’s economic development, infrastructure, housing and cost of living, the initiative focuses on existing programs like improvements to I-81 and the DELTA Lab.

On the economic development front, although it requires a great deal of time and investment to bring data centers and renewable energy projects to fruition, next year could be a turning point for such developments in the region, Clear and Payne say.

“I think that in 2025, it’d be fair to say that we’re going to see real movement here based on a lot of due diligence that’s been going on for the last three years,” Payne says.

Data center storage rack manufacturer Tate is investing $15 million in a new manufacturing facility in St. Paul, with plans to add 170 jobs over four years, says Virginia Coalfield Economic Development Authority’s Jonathan Belcher. Photo by Tim Cox

From mining to manufacturing

Energy and data center projects are eyed as key remedies for the economically ailing region, which has seen its coal production fall off dramatically during the past three decades. The region’s coal production, which occurs mostly in Buchanan, Dickenson and Wise counties, fell from 46.6 million tons in 1990 to fewer than 10 million tons in 2020, according to the Virginia Department of Energy.

“Coal’s not dying. We’re producing more coal than we’ve ever produced. It’s just with fewer people,” Sen. Travis Hackworth, R-Tazewell County, said during the Southwest Virginia Economic Forum at the University of Virginia’s College at Wise in May.

“If you look back at that 20-year period, there were definitely highs and lows for that industry, [but] it’s continued to be a significant part of the economy,” says Randall Rose, associate vice chancellor for community and economic development at U.Va. Wise. “However, there also has been a very strategic effort looking at diversifying the region so that if there is a decline in the coal industry, it doesn’t make such a major impact on the economy and the lives of individuals.”

At U.Va. Wise, Rose is responsible for fostering the symbiotic relationship between the university’s pool of student talent and the region’s employers, as well as assisting in larger economic development and entrepreneurship-focused goals for the region.

U.Va. Wise is also part of Opportunity Southwest, a regional collaborative initiative for promoting entrepreneurship. It was formed in 2012 to create the Blueprint for Entrepreneurial Growth & Economic Prosperity in Southwest Virginia, a strategic planning document for developing a regional entrepreneurial ecosystem.

“That blueprint really set the stage for not only local economic developers and small business developers, but also regional and statewide and even federal partners to see what that future could look like and where the areas of focus would be for the Southwest region,” Rose explains.

Additionally, U.Va. Wise has been working with localities and economic development officials to research the feasibility of renewable energy and data center projects at specific sites in the region.

“We want to support in any way possible the economic developers in the region [and] the private sector,” Rose says.

Another focus of economic development efforts in Southwest Virginia has been manufacturing.

“A lot of that goes back to the blue-collar heritage of the region with the coal mining history. That workforce adapts very well to manufacturing positions, so we focus very heavily on that,” says Jonathan S. Belcher, executive director and general counsel for the Virginia Coalfield Economic Development Authority (VCEDA). Established by the General Assembly in 1988 to enhance and diversify Southwest Virginia’s economy, VCEDA works closely with the Virginia Economic Development Partnership and local economic development officials to secure new projects for the region.

Most of the manufacturing companies VCEDA seeks to recruit are advanced manufacturers using specialized equipment that requires specific training and experience. “They’re not just basic assembly positions or something that would be a lower skill level or lower-paying position,” Belcher says.

One such project was announced in November 2023, when data center storage rack manufacturer Tate announced it would establish a new 270,000-square-foot manufacturing facility in St. Paul, along the Russell and Wise counties border. The nearly $15 million project is expected to create 170 full-time jobs over the next four years, Belcher says.

The region’s manufacturing industry has started paying off — literally. Since early 2022, average annual wages in Southwest Virginia have been growing at a higher rate than the rest of the commonwealth, according to data from Chmura Economics & Analytics.

Growing tourism, small business

While Southwest Virginia continues to struggle with challenges such as its low workforce participation rate and obstacles to economic development, the region still attracts tourists to its large swaths of unspoiled, natural beauty. For that reason, tourism has continued to grow in Southwest Virginia during the past couple of decades, Belcher says. Much of the tourism in the region is centered on outdoor recreation such as hiking, ATVs and horseback riding — but it’s also home to The Crooked Road Heritage Music Trail. The scenic, 330-mile driving route connects a variety of music venues and festivals including the Birthplace of Country Music Museum in Bristol and the Floyd Country Store, which features live Appalachian music and a weekly Friday Night Jamboree.

“There’s also a lot of historical attractions in the area going back to the Colonial time period,” Belcher says. And much of Southwest’s tourism development has been “building upon those assets … building small businesses that support that.” As a result, more colleges in the area have also started to implement hospitality management and outdoor recreation management programs.

Some of these small businesses and economic stimulation comes from Airbnbs, campgrounds, restaurants and food trucks, he says. Many restaurants, coffee shops and other small retailers have emerged from seed capital programming and regional Small Business Development Centers. One such small business that’s found success is a drone photography business run by Dickenson County native Brad Deel. He received a $10,000 grant from VCEDA, and now his photography is used to market the region and promote tourism.

“We really feel like small business development is a key part of the economic development strategy as well,” Belcher says. “Relying just on larger industrial recruitment projects is a really misplaced strategy to rely solely on. The activity [we’re seeing is] really helping with the stability of the economy.”  

Southwest Virginia at a glance

Known for its rural, mountainous landscapes and as the birthplace of American country and bluegrass music, Southwest Virginia includes Bland, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington and Wythe counties, as well as the cities of Bristol, Galax and Norton. Formerly known mostly for coal mining, the region is turning its efforts toward attracting ecotourism, alternative energy projects and data centers. The University of Virginia’s College at Wise, Emory & Henry University and Mountain Empire, Wytheville and Southwest Virginia community colleges are also located in the region.

Population

335,847

Top employers

  • Walmart 
  • CGI
  • Lee, Russell, Scott, Tazewell and Wise county school systems
  • Tempur-Sealy
  • Coronado Coal

Notable hotels

The Bristol Hotel (Bristol)
65 rooms, 3,800 square feet of event space

The Inn at Wise (Wise)
49 rooms, 5,000 square feet of event space

The Martha Washington Inn
& Spa (Abingdon)
63 rooms, 3,200 square feet of event space

The Primland Resort (Meadows of Dan)
53 rooms, 12,149 square feet of event space

The Sessions Hotel (Bristol)
70 rooms, 2,311 square feet of event space

Western Front Hotel (St. Paul)
30 rooms, 2,000 square feet of indoor and outdoor event space

Dining

Burger Bar (Bristol)
American, theoriginalburgerbar.com

The Tavern (Abingdon)
American, abingdontavern.net

Graze on Main (Wytheville)
Southern, bollingwilsonhotel.com/index.php/graze-on-main

Major attractions

One of the premier attractions of Southwest Virginia is the Appalachian Trail, which runs through 14 states and through the heart of the region. SWVA is also home to the 300-mile gospel, blues and bluegrass music heritage trail The Crooked Road and Bristol’s Birthplace of Country Music Museum. In Damascus, up to 20,000 people attend the Appalachian Trail Days Festival each year. On Nov. 14, the Hard Rock Hotel & Casino Bristol is set to host a grand opening of its $515 million permanent facility, including the Hard Rock Live entertainment venue. For live stage performances, visit The Barter Theatre in Abingdon, the nation’s longest-running Actors’ Equity theater.

Southwest Va. Big Deal: Land ho!

The largest business deal announced during the past year in Southwest Virginia is an agreement between Dallas-based Fortune 100 natural gas and propane pipeline transport company Energy Transfer, Virginia’s nonprofit Energy DELTA Lab and Wise County to develop energy infrastructure in the region.

Under the agreement, the partners will work with energy companies and electric utilities to promote development of 65,000 acres of reclaimed coal mining lands as part of a public-private regional economic development campaign.

The partnership will pursue development using an “all-of-the-above” energy technology strategy. This aligns with Gov. Glenn Youngkin’s 2022 Virginia Energy Plan, which aims to fulfill the 2020 Virginia Clean Economy Act’s 2050 mandate for generating electricity statewide from renewable, carbon-free energy sources by harnessing a mix of energy sources such as nuclear, hydrogen and natural gas in addition to wind, solar and battery storage supported by Virginia Democrats.

It’s hoped that the deal could attract up to $8.25 billion in private capital investment and generate more than 1,650 jobs, according to a news release from the governor’s office.

“It’s safe to assume that energy jobs on average are going to exceed the median household income for Wise County of approximately $47,000 and per capita income below $24,000,” says Will Clear, managing partner of Bristol, Virginia-based consultancy Virginia Energy Strategies and an adviser to DELTA Lab.

The Energy DELTA Lab will be the primary developer of the project, and more than a dozen projects that could generate nearly 1 gigawatt of power were under consideration as of November 2023.

Energy Transfer’s vast land holding, which is managed by Penn Virginia Operating Co. (PVOC), is primarily located in Wise County and includes ownership of surface and subsurface rights.

“The important thing about the agreement is that there is now something in writing with PVOC, so we can go to investors, developers or grant providers and show them that the landowners are onboard with leveraging the land for potential energy-related projects,” Clear says. “I expect 2024 to be a year when land-lease deals will get done, the first of which would be around midyear. There are regulatory steps that first must be taken.”

Clear declined to name the companies eyeing the land for development but added, “I can say they have done transmission studies and have spent hundreds of hours evaluating this land.”

U.S. Rep. Morgan Griffith, R-9th District, who represents much of Southwest Virginia, Martinsville and parts of the New River Valley, says energy has been the foundation of the area’s economy for more than 100 years.

“This deal will bring hundreds of jobs related to so many energy sources such as nuclear, wind, solar and hydro,” Griffith says. “This is a huge parcel of land. … It has the potential to have a positive and dramatic effect on our area. We are striving to bring cutting- edge technology to old energy sources.”

Much of the surface of this land hasn’t really been utilized, Clear says: “It’s been mined — and so, it’s been disturbed — but it’s in a great position to deploy alternative energy assets such as solar and perhaps wind power.

“Because of the land disturbances that have been made, the rock is easy to move around,” Clear explains. “The land is essentially flat. Very little additional excavation is necessary.”

Wise County Administrator Mike Hatfield said in a statement, “Large portions of Wise County have often been difficult to develop, given limited access due to private and federal ownership. This agreement will create game-changing opportunities that simply did not exist before.”

One of three industrial sites that the Energy DELTA Lab is developing in Wise County, including on land owned by Energy Transfer, is the 4,000-acre Bullitt site on the border of Lee County. The site could hold multiple industrial projects with adjacent energy sites to power on-site demand, and the complex is situated over abandoned mines that contain nearly 10 billion gallons of water.

The team also plans to develop the Data Center Ridge campus on the Bullitt site, converting a 400-acre previously mined property to a 1-gigawatt, multi-tenant data center campus that would be powered by the planned adjacent energy projects.

Associate Editor Katherine Schulte contributed to this story. 

Clean energy development could draw $8.5B in investments

Wise County and neighboring localities may become home to a massive clean energy development that could attract up to $8.25 billion in capital investments, Gov. Glenn Youngkin announced Nov. 1.

An agreement between Wise County, the Energy DELTA Lab and Dallas-based Fortune 100 energy company Energy Transfer aims to develop 65,000 acres of former coal mining property into a hub for generating power from a variety of sources — including wind, solar, pumped storage hydropower, nuclear, natural gas and hydrogen — as well as energy storage. That “all-of-the-above” approach is in alignment with the Youngkin-backed Virginia Energy Plan, which aims to fulfill the Virginia Clean Economy Act’s renewable power mandates through a mix of energy sources beyond wind and solar.

The 2022 Virginia Energy Plan launched the nonprofit Energy DELTA Lab, which will be the primary developer of the Southwest project. More than a dozen projects are under consideration — they total $8.25 billion in potential private capital investment, according to the governor’s office, and could create 1,650 jobs and generate nearly 1 gigawatt of power.

Energy Transfer owns the 65,000 acres, which is primarily in Wise County, while Penn Virginia Operating Co. manages the land. Neighboring Lee, Scott and Dickenson counties and the city of Norton also could see related development, as the DELTA Lab conducts due diligence on several projects.

“The commonwealth’s power demand is skyrocketing, and now is the time to make strategic investments in energy infrastructure to meet our growing needs,” Youngkin said in a statement. “This agreement will make Virginia energy more reliable, affordable and clean while transforming Southwest Virginia into a
hub for innovation.”

The DELTA Lab is developing three industrial sites in Wise County, including on land owned by Energy Transfer:

  • The Nature Conservancy and Sun Tribe Solar are locating a solar farm on the 300-acre “Meade Fork” site near Pound;
  • A mixed-use development project, including an industrial clean energy component, will be built on the 2,000-acre “Junction” site near Appalachia;
  • The team will convert a 400-acre prev-iously mined property into a 1-gigawatt, multitenant data center campus on the 4,000-acre “Bullitt” site on the border with Lee County, which can hold multiple industrial projects with adjacent energy sites to power on-site demand.

“This is opening up land that otherwise would not be developed,” said Will Payne, managing partner of Coalfield Strategies and director of InvestSWVA.

A longer version of this story ran online on Nov. 1.

SWVA clean energy development could draw $8.5B in investments

Wise County and neighboring localities in Southwest Virginia may become home to a massive clean energy development that could attract up to $8.25 billion in capital investments, Gov. Glenn Youngkin announced Wednesday.

An agreement between Energy DELTA Lab, Dallas-based Fortune 100 energy company Energy Transfer and Wise County will involve the development of 65,000 acres of former coal mining land for “all-of-the-above” energy technology — including natural gas, nuclear, renewable energy and other emerging energy sources. That’s in alignment with the Youngkin-supported Virginia Energy Plan, which aims to fulfill the Virginia Clean Economy Act’s mandates by including a mix of energy sources beyond wind, solar and battery storage supported by Virginia Democrats.

The 2022 Virginia Energy Plan launched the nonprofit Energy DELTA Lab, which will be the primary developer of the Southwest project, and more than a dozen projects are under consideration for the land — they total $8.25 billion in potential private capital investment, according to the governor’s office, and could create 1,650 jobs and generate nearly 1 gigawatt of power. By contrast, Dominion Energy’s Coastal Virginia Offshore Wind project is expected to produce 2.6 gigawatts of power.

Energy Transfer owns the 65,000 acres, which is primarily in Wise County, and owns surface and subsurface rights, while Penn Virginia Operating Co. manages Energy Transfer’s land. Neighboring Lee, Scott and Dickenson counties and the city of Norton also could see development and have projects undergoing due diligence with the DELTA Lab.

Development could include wind, solar, nuclear, hydrogen and pumped storage hydro, as well as energy storage technologies.

“The commonwealth’s power demand is skyrocketing, and now is the time to make strategic investments in energy infrastructure to meet our growing needs,” Youngkin said in a statement. “This agreement will make Virginia energy more reliable, affordable and clean while transforming Southwest Virginia into a hub for innovation.”

The partnership plans to develop energy projects at scale, with its primary goals being creating jobs and local tax revenues. Other goals include creating career pathways for the regional workforce and manufacturing opportunities.

Readying industrial land

The Energy DELTA Lab is currently developing three industrial sites in Wise County, including on land owned by Energy Transfer: the 300-acre “Meade Fork” site, the 2,000-acre “Junction” site and the 4,000-acre “Bullitt” site.

The Meade Fork site is located near the town of Pound, and the Energy DELTA Lab is working with The Nature Conservancy and Sun Tribe Solar to locate a solar energy facility on it. The project received a $975,000 grant from the U.S. Office of Surface Mining Reclamation and Enforcement’s Abandoned Mine Land Economic Revitalization program, administered by the Virginia Department of Energy.

The Junction site, located near the town of Appalachia, will be a mixed-use development pilot combining four land uses on multiple sites of a singular property, including industrial, clean energy generation, agriculture and conservation uses. The initial focus is developing a 350-acre industrial site for a clean energy project.

The Bullitt site on the border of Lee County could hold multiple industrial projects with adjacent energy sites to power on-site demand, and the complex is situated over abandoned mines that contain nearly 10 billion gallons of water.

The team will develop the Data Center Ridge site on the Bullitt site, converting a 400-acre previously mined property to a 1-gigawatt, multitenant data center campus that will use the planned adjacent clean energy developments.

The lab’s “Oasis Mine-Based Water Cooling System,” an HVAC closed-loop water cooling system that uses water below 55 degrees Fahrenheit in underground mine cavities, can reduce energy requirements and costs for data center cooling. Data Center Ridge has a single deposit of nearly 10 billion gallons of naturally replenishing cold water.

The data center model is based on a 36-megawatt facility that would be owned and operated by the company it supports, such as Amazon Web Services, Alphabet or Microsoft. The 250,000-square-foot model has a raised floor space of 150,000 square feet to house IT equipment and servers, with remaining building space holding office space, telecom equipment, electrical/mechanical rooms, shipping/receiving areas and security.

For Wise County, one 36-megawatt facility is estimated to create $15.7 million in real estate and property tax revenues over the first five years of operation, support 2,048 jobs during the 18-month construction period, and create 40 data center jobs and support 59 additional jobs once data center operations begin, according to a Mangum Economics analysis.

“This is opening up land that otherwise would not be developed,” said Will Payne, managing partner of Coalfield Strategies, director of InvestSWVA and adviser to the Energy DELTA Lab. “That’s a huge game changer for them and their own development and the surrounding area.”

Energy Transfer is the largest operator of natural gas pipelines in the U.S. by revenue, according to Fortune, and reported $89.9 billion in 2022 revenue.

Energy DELTA (Discovery, Education, Learning and Technology Accelerator) Lab is a 501(c)3 nonprofit focused on deploying new and clean energy technologies to diversify Southwest Virginia’s economy and provide energy companies speed to market with testing and project development. The lab is a collaborative effort of energy industry companies, electric utilities, business development initiative InvestSWVA, Southwest Virginia Energy Research and Development Authority and the Virginia Department of Energy.

SWVA projects recommended for $10.6M in federal funds

Eight Southwest Virginia economic development projects totaling $10.6 million have been recommended for federal funding under Virginia’s Abandoned Mine Land Economic Revitalization grant program, Gov. Glenn Youngkin and U.S. Rep. Morgan Griffith announced Friday.

Referred to the federal Office of Surface Mining and Reclamation Enforcement for approval, the projects include $2.347 million to develop a 23.5 acre build-ready pad at the Chip Mill Industrial Site in Dickenson County; $2 million to leverage previously mined properties to support the Energy DELTA Lab in Wise County; and another $2 million to create campsites and connector trails at Devil’s Bathtub in Wise and Scott counties.

Under the Biden administration’s Bipartisan Infrastructure Law, Virginia already expects to receive $22.7 million in federal funds to reclaim abandoned mine lands during the next 15 years. The Abandoned Mine Land Economic Revitalization, or AMLER, grant program is separate from that in that it seeks to advance economic development opportunities from the development and repurposing of abandoned mine lands. Virginia was one of nine states and tribal programs picked by Congress to receive $10 million in fiscal 2020 under the program. Will Clear, deputy director of the state’s Department of Energy, told Virginia Business that the commonwealth is slated to receive $13 million in federal funds for fiscal 2023.

Other projects recommended for funding include:

  • $525,000 to expand manufacturing at medical supplier Bird Dog Distributors, in Dickenson County;
  • $750,000 to create a sporting complex on abandoned mine land in Dickenson County, including archery, rifle/pistol and shotgun shooting ranges;
  • $1.6 million to create a pad-ready housing development site in Wise County;
  • $500,000 for the expansion of Maine Five Distributors LLC’s sewing operations in Buchanan County; and
  • $925,000 for workforce center upgrades and program expansion of Mountain Empire Community College’s Center for Workforce and Innovation of Appalachia in Wise County.

“These projects selected support our goals of immediate job creation and the development of new business-ready sites that will be the fuel that drives new business investment in these Southwest Virginia communities,” Youngkin said in a statement. “There is great innovation in these proposals that will make Virginia the best place to live, work and raise a family.”

Clear told Virginia Business Friday that he expects a response from the federal mine office on the funding in the first or second quarters of 2023.