The state’s new energy plan calls for greater development of renewable energy sources and reducing energy consumption, though it would come at a higher cost to consumers and businesses.
The 2014 Virginia Energy Plan, released Wednesday, “will lead our efforts to grow, strengthen and diversify Virginia’s economy,” Gov. Terry McAuliffe said in a letter laying out his priorities and what he hopes to accomplish over the next four years.
McAuliffe’s goal is a state economy that will be “stronger ... and fueled by cleaner and more abundant Virginia energy.”
The state must put in place policies that include traditional energy sources, renewable sources and energy efficiency, the plan said.
The 461-page document focuses on four themes:
- Growing untapped areas of the energy sector, including wind and solar generation, biofuels, offshore energy development and nuclear technology
- Reducing greenhouse gas emissions and lowering energy consumption in the public and private sectors
- Investing in energy infrastructure to provide statewide access to low-cost power and promote economic development
- Preparing the state’s workers to fill shortfalls in the energy sector due to an aging workforce
The Virginia Energy Plan drew mixed reaction from organizations interested in the increasingly contentious energy debate.
“We appreciate and agree with the governor’s commitment to an all-of-the-above energy strategy and his recognition of the need for new energy infrastructure investments,” said David Botkins, spokesman for Dominion Virginia Power. But the company has concerns about the rate impacts on customers of some recommendations.
Richmond-based Dominion Virginia Power is the state’s largest electric utility, with nearly 2.4 million customers.
“We don’t really look at all-of-the-above as a strategy,” said Glen Besa, director of the Sierra Club’s Virginia Chapter. “The governor’s made it pretty clear he wants to address climate change, and all-of-the-above doesn’t help us address climate change as aggressively as we need to.”
The governor’s support for offshore drilling, and expanding gas pipelines and coal technology exports, Besa said, “seriously undercuts his intentions to address climate change.”
Jackson Reasor, president and CEO of the nonprofit Old Dominion Electric Cooperative, served on the Virginia Energy Council, which advised the governor on the state plan.
“It is a good basic energy plan, perhaps ambitious in some areas and very practical in others, and I’d call that a good mix for a plan like this,” Reasor said. “We’ll just have to see how it plays out practically.”
McAuliffe will discuss the plan in Richmond on Oct. 14 at an event on Virginia’s energy future co-hosted by the Virginia Chamber of Commerce and the League of Conservation Voters.
“There’s more at stake this time in the plan,” Besa said, “because this time the plan may actually be implemented.”
With changes in the electrical generation mix, the state can comply with the federal Environmental Protection Agency’s clean power targets, although Virginia will need to make large reductions in carbon emissions from power plants to do so, the state energy plan said in a section prepared by the Virginia Center for Coal and Energy Research at Virginia Tech.
The carbon dioxide reductions “can be met with an energy policy shift in power generation to natural gas as the predominant base-load fuel,” the plan said.
Expansion of renewable energy at a rate compatible with the EPA’s goals is possible, the plan said, “and will result in a higher cost to utilities and consumers.”
According to the EPA, the Clean Power Plan would increase electricity prices by 2.4 percent in 2020 and 3 percent in 2025 and 2030. The total costs for Virginia electricity customers range from $229 million to $484.5 million, the plan said.
“Increasing renewable generation in Virginia is vital to ensuring a healthy and diverse fuel mix,” it said. “Given the relatively small deployment of renewable generation in Virginia, this industry has the potential to grow substantially and increase diversity within the energy sector specifically and the overall economy generally.”
The state must create a regulatory and business environment allowing renewable energy to prosper, the plan said. “A signal must be sent that Virginia is supportive of and enthusiastic about the role of renewable energy in the economy.”
Under the plan, the governor will form a board of leaders in the energy efficiency industry to develop a plan to meet the 2007 voluntary goal of a 10 percent reduction in retail energy consumption in Virginia by 2020, two years faster than originally proposed. The governor will also appoint a chief energy efficiency officer for the public sector.
With 40 percent of the nation’s energy workforce either eligible for retirement or departing their jobs during the next five years, the plan said, the energy sector needs to develop programs to train new workers.
“Clean energy jobs are the next generation of employment opportunity,” it said. “Not having a properly trained and ready workforce has prevented some clean energy companies from moving their businesses to Virginia.”
Virginia’s transportation sector is responsible for more than 50 percent of the state’s greenhouse gas emissions, the plan said.
“Creating a strategy to promote alternative fuel and advanced technology vehicles makes economic sense, diversifies the transportation fuel mix for improved energy security and resiliency, utilizes domestic resources and has the potential to substantially reduce air emissions, especially in areas of high population density,” the plan said.