The carbon footprint for a typical Dominion Virginia Power customer would shrink by as much as 25 percent over the next eight years under a plan the company presented today. When added to reductions already made by Dominion, carbon emissions to meet the energy needs of a typical residential customer would fall by up to 46 percent between 2007 and 2027.
The main drivers of these improvements are a significant drop in the subsidized cost of utility-scale universal solar power, the ability to support the variable output of solar and wind with highly efficient natural gas generation, and Virginia’s two nuclear power stations. This combination is expected to provide the lowest cost and best environmental performance while maintaining around-the-clock reliability.
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 sweeping reductions in power station carbon emissions in August 2015 through its Clean Power Plan. That plan is now under federal court review and President Trump has ordered the EPA to review the rule and to begin the process of revising or rescinding it. Nonetheless, the federal government remains under a legal requirement to address carbon as a regulated pollutant. EPA Administrator Scott Pruitt has said these rules should be “enforced and respected,” thus creating great uncertainty about the future of environmental regulations and how they will impact power plants.
At the state level, the Virginia State Air Pollution Control Board is currently considering a petition on carbon limitations. Also, a taskforce set up by Governor McAuliffe is developing proposals to reduce carbon emission in Virginia, regardless of what happens with federal Clean Power Plan rules.
“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 in announcing the Company’s annual Integrated Resource Plan.
“This plan also highlights the vital roles of natural gas and nuclear generation. 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 for a low-carbon future.
“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.”
Koonce noted that Dominion already has made significant investments in solar and other renewables primarily through agreements with specific customers.
And, the company has lowered carbon emissions in recent years through a number of other measures. It has converted four coal-fired power stations to natural gas or renewable biomass; built highly 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. The company’s newest coal-fired station, the Virginia City Hybrid Energy Center, can use biomass for up to 20 percent of its fuel.
Today’s announcement came at the time of the filing of the company’s annual “Integrated Resource Plan,” a long-term energy forecast required by state law. The IRP is a planning document based on current information and projections regarding energy markets, regulatory requirements and other major factors. While the document represents the company’s current plan for meeting the future energy needs of its customers, it is not a commitment to build or to request regulatory approval for any particular project.
The document examines options to meet the electricity needs of customers over a 15-year “planning period,” while also considering a longer 25-year study period. The document was filed simultaneously with the North Carolina Utilities Commission. In light of current uncertainty around the future of federal and state regulatory policies, the study models different regulatory scenarios.
As it has in recent years, the 2017 plan includes potential alternatives based on different assumptions about future carbon regulations and other factors. This year’s report outlines eight alternatives.
At least 5,200 megawatts of new solar generation could be added under each alternative during the 25-year study period. Solar eventually could generate electricity at maximum output to serve more than 1.3 million homes when there is sufficient sunlight.
Together with the company’s North Anna and Surry nuclear facilities, over a third of Dominion’s Virginia service territory could be powered with carbon-free electricity by 2032. Most of the rest of the demand would be served by low-emitting, low-cost natural gas, a critical partner to solar, given the variable nature of solar energy and the around-the-clock capability of natural gas.
The Virginia General Assembly earlier this year adopted legislation that supports the company’s plans to seek a second federal relicensing for the reactors at North Anna and Surry. Surry’s reactors are licensed until 2032 and 2033, respectively, and North Anna’s are licensed until 2038, and 2040. Together, they have a generating capacity of 3,349 megawatts.
“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,” said Robert M. Blue, president and CEO of Dominion Virginia Power. “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. Having a robust energy grid is absolutely vital and will become even more important in the future.”
In addition to advancing renewable energy, grid modernization also will help strengthen the grid against cyber or physical attacks, provide more control and information for customers, and will improve our ability to restore power promptly after outages.
Increased adoption of solar energy will require extensive upgrades to the energy grid—the network of large transmission lines and smaller distribution lines that carry electricity to homes and businesses—as utility-scale universal solar, smaller private solar, and other distributed energy resources present new operational challenges and opportunities. For this reason, the company’s long-range forecast discusses the need to modernize the energy grid to create a more dynamic system better equipped to respond to both cost-effective utility-scale universal solar facilities and the expected increase in smaller, widely dispersed solar generation.
Additionally, modernization will ultimately be able to provide customers with more information on their energy consumption and new opportunities to manage their usage. In Virginia and across the country, today’s energy grid is primarily a one-way system that delivers electricity from power stations to homes and businesses. Today’s plan sets a course for the two-way system of the future.
The 2017 plan advances the company’s current solar commitments. In February 2015, Dominion committed to developing 400 megawatts of utility-scale universal solar generation in Virginia and placing them in service by 2020. The company’s current solar investment in Virginia has already nearly met this commitment and approaches $1 billion, with a dozen new solar projects being built, enough to power 100,000 homes.
“Dominion will continue moving toward cleaner power sources with lower emissions, whether the Clean Power Plan lives or dies,” Koonce said. “Our customers want more renewable energy, and changing economics make the transition to renewable resources easier, with the ‘installed cost’ of solar having dropped 50 percent over the past four years. This makes variable solar an economically viable source of power when complemented by cleaner-burning natural gas and nuclear power, which maintain production of reliable electricity when the sun is not shining. This is why natural gas infrastructure—including the Atlantic Coast Pipeline—is such an important part of a comprehensive energy strategy.”
Major common elements through the 15-year planning period of 2018-2032 include:
By 2022, the addition of at least 990 megawatts of solar capacity owned by third-party generators in northeastern North Carolina and Virginia under long-term contracts;
At least 3,200 megawatts of new solar capacity by 2032 (enough to power more than 800,000 homes at maximum output), and at least 5,200 megawatts by 2042 (enough to power 1.3 million homes at maximum output);
Bringing Greensville County Power Station into service by 2019. Greensville will be one of the largest and most environmentally friendly power stations of its kind anywhere in the world, governed by the country’s most stringent air permit limiting CO2 emissions, according to Virginia’s Department of Environmental Quality. (Construction is expected to be complete in late 2018.);
Addition of approximately 1,374 megawatts of new natural gas-powered combustion turbine units by 2032;
Re-licensing of the four nuclear units that have provided Virginia reliable, carbon-free energy since the 1970s;
Development of the 12-megawatt Virginia Offshore Wind Technology Advancement Project, testing two wind turbines off the coast of Virginia Beach, as early as 2021; and
Implementation of “demand-side management” programs that are forecasted to reduce the annual energy consumption of Dominion Virginia Power customers by over 1,200 gigawatt-hours by 2032.
All of the alternative plans, except for one plan required by the State Corporation Commission, assume the future will include some carbon restrictions resulting in the potential closures of certain fossil-fueled generating plants. The IRP references the potential retirements of the oil-fired unit in Yorktown and two coal-fired units in Chesterfield by 2022. Two of the alternatives reference the potential retirements of the Clover and Mecklenburg coal-fired stations in 2025.