6 Aug 2014

Will politics consume these clean energy recommendations in Virginia?

Written by Jim Pierobon

Stakeholders in Virginia have mapped a plan to enable the state to catch up with clean energy markets flourishing globally and throughout much of the U.S.  But will most of it be taken seriously?

More than 60 advocates for jump-starting clean energy policies and markets, under the banner of the Virginia Advanced Energy Industries Association (VAEIC), worked this past spring and summer to forge more than 70 recommendations for consideration by recently-elected Democratic Gov. Terry McAuliffe and the Republican dominated General Assembly.

The recommendations are very ambitious. So ambitious are some of them that a handful of observers say they are not worth submitting given the politics in Virginia.

The recommendations range from a 50% renewable electricity requirement and a solar “carve-out” of 100 megawatts (you read both right), establishing state-of-the-art building codes and requiring state agencies switch to electric and alternative-fuel vehicles, to building a clean energy workforce, creating an energy efficiency utility and decoupling utility distribution rates.


Solar canopies similar to this one could sprout throughout the Commonwealth of Virginia if some recommendations by the Virginia Advanced Energy Industries Coalition become policy. CREDIT: Virginia Advanced Energy Industries Coalition

Virginia has steered clear of clean energy policies that are creating jobs and businesses in dozens of states. Perhaps the biggest reason is that the state’s energy policy – and the only market for electricity – is run by investor-owned Dominion Virginia Power which serves 70% of the state’s electricity load. Curiously, that’s not the case for natural gas, where households and businesses can shop prices and supply contracts offered by several for suppliers.

Some of VAEIC’s recommendations would begin to undo the monopoly that Dominion long ago secured and has defended for more than 75 years. The General Assembly several years back briefly considered enabling markets for electricity supply but, according to many political observers, punted on the idea at the behest of Dominion’s top brass.

Many of those political observers do point out that the electricity rates charged by Dominion are very competitive, if not lower, than those paid by residences and businesses up and down the East Coast. Some clean energy advocates seem to ignore that reality. But this is 2014 and the most forward-looking state energy policies that are creating markets not only don’t require significantly higher rates, they enable users to significantly reduce their monthly bills.

So do the VAEIC recommendations stand a change of being adopted, or even seriously considered?Check back here at TheEnergyFix.com for more assessments of the clean energy challenges and opportunities in Virginia.  I’m spotlighting what I consider the most far-reaching recommendations and related developments on TheEnergyCollective.com.

This post delves into the first of the four main components of the VAEIC’s recommendations: solar and other sources of renewable electricity. Future posts will report on energy efficiency, conservation and demand management; alternative fuels and advanced vehicles; and lastly workforce development and R&D.

The Future of Renewable Energy in Virginia

The Renewable Portfolio Standard (RPS) in Virginia aims to generate 10% of electricity sales statewide from renewable sources such as solar, wind, certain forms of biomass by 2020. Note: this is only voluntary. If the state’s utilities come up short: there is no penalty under current law. Curiously, while calling for a 50% RPS by 2030, VAEIC stopped short of calling for a mandatory quota. Instead, it recommended a “program with stronger pressure or incentives to meet RPS goals.” To help achieve that goal, VAEIC wants to add renewable combined heat and power systems.

A 50% by 2030 RPS would catapult Virginia into the top tier of states striving to clean up their energy supply chain. For that reason alone, some clean energy advocates are curious whether this particular recommendation may not only dead-on-arrival, but it may undermine VAEIC’s credibility in Richmond, the state capital.

“The renewable team developed this recommendation as an aggressive but achievable recommendation,” Francis Hodsoll, Founder and Chairman of VAEIC, said in an email.  “I believe we would all like to see a mandatory RPS which defines state goals and allows the market to determine how to achieve this goal most cost effectively.”

Hodsoll could play an integral role in persuading Gov. McAuliffe and the General Assembly to adopt at least some of VAEIC’s recommendations. He serves on both the Governor’s Energy Council and his Climate Change and Resiliency Update Commission.

Kevin DeGroat, an energy efficiency and renewable energy consultant to the U.S. Department of Energy at Antares Group Inc., led a VAEIC working group on the renewable energy recommendations. He said jump-starting renewable energy in Virginia is “not something you can do half-way.

“Low-cost, high performance renewable energy comes from reliable markets that result in economies of scale and innovation.  With these policies we would be creating a stable enough market so clean energy technologies can keep on progressing,” DeGroat said.

As part of the RPS, VAEIC recommends establishing “carve-outs” for solar energy and wind energy. Those carve outs would require a certain percentage of the overall renewable resource requirement be met by those technologies.  VAEIC calls for a five-year goal of 100 megawatts of solar and a 10-year goal of 1 gigawatt (1,000 megawatts). THAT, is a lot of power from the sun.

“Technically, 100 MWs is very achievable,” Hodsoll said. “If you look at other states, 100 MWs is a very conservative goal.”

A carve out for wind energy could start with the huge potential for this resource off the coast of Virginia Beach.  Conveniently, Dominion has a $51 million demonstration grant from the U.S. Department of Energy to build a pair test wind turbines there.

DeGroat asserted that clean energy stakeholders can “turn” Dominion’s relatively low rates “on its head: that gives us a great base for preparing the next generation of technologies. Current rates and our robust energy system have room to allow prudent investment in new options. We aren’t acting out of desperation, so we can act strategically.”

Some analysts, DeGroat included, say they see electricity rates rising in Virginia and elsewhere under the U.S. Environmental Protection Agency’s newly proposed amendments to Section 111(d) of the Clean Air Act “unless we maximize innovation in renewable energy and efficiency.”

The VAEIC is mindful of cleaner energy sources located within Virginia. It recommends developing incentives for resources that could bring with them multiple state economic development benefits.

“Virginia needs to look to more of its own resources,” DeGroat said. “Natural gas isn’t always the best answer to every issue. Let’s think intellegently about the challenges we’re facing and respond strategically.”

Among Virginia’s cleaner energy resources spotlighted by the VAEIC’s recommendations are:

  • biomass repowering and co-firing at coal plants that can create stable rural jobs. These could offset any impact of the U.S. Environmental Protection Agency’s newly proposed carbon limits on existing power plants;
  • woody, herbaceous and aquatic energy crops from Virginia farms and industry;
  • equipment or fuels from areas designated as high priorities for economic development assistance;
  • equipment or fuels from companies involved in Virginia clean technology incubators, including a smart grid incubator by Virginia Tech for its hometown of Blacksburg.
  • projects that bring environmentally compromised lands such as reclaimed mine lands, brownfields and closed landfills into higher value uses by hosting renewable energy systems; and
  • renewable energy from companies that have offices or operations in Virginia.

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