Virginia is looking to the sun and wind to help power state government operations under a contract with Dominion Energy that Gov. Ralph Northam says will be good for the state’s environment, economy and taxpayers.
The 20-year contract announced Friday commits the state to buying electricity from a proposed wind farm in Botetourt County — the first onshore in Virginia — and four solar power facilities under a purchased power agreement with Dominion, a Richmond-based energy company that operates Virginia’s largest electric utility.
Under the contract, the state will purchase enough electricity to run the equivalent of 105,000 homes, while generating credits that will help Virginia government meet the governor’s recent executive order to rely on renewable energy for 30% of its electricity needs by 2022.
“With this landmark contract, Virginia is leading by example and demonstrating how states can step up to combat climate change and advance a clean energy economy,” Northam said in announcing the contract on Friday morning at George Mason University’s campus in Arlington County.
Arlington also is the location of the $2.5 billion East Coast headquarters for Amazon. State officials say the renewable energy contract will help economic development because clean energy is a top goal of big technology companies. Facebook already is spending $250 million for renewable energy credits to offset the electricity demand at its new data center in eastern Henrico County.
“The positive impact that this procurement will have on Virginia cannot be overstated,” Secretary of Commerce and Trade Brian Ball said, “and we look forward to more clean energy businesses coming to the commonwealth as we take these proactive steps to promote this industry’s growth.”
Over its life, the contract also will save taxpayers money, the governor’s office said.
“This is a 20-year contract, and based on market projections and safety [provisions] built into the contract, we expect the state will save millions over the contract term,” spokeswoman Alena Yarmosky said. “We view this as a win-win — not only are we investing in renewable energy and moving towards a cleaner energy economy, we are saving the state money at the same time.”
The contract also could jump-start the development of onshore wind projects, just as a pilot offshore wind project Dominion is building off the Atlantic coast may enable the company to build a much bigger wind farm it plans to develop in federal waters there, said Jonathan J. Miles, a professor at James Madison University who is executive director of the Center for Advancement of Sustainable Energy.
“We think the first one is the most important one,” Miles said Friday. “For a state to go and get the first real wind farm is a huge accomplishment.”
Dominion packaged the power purchase agreement for the state and ultimately will own and operate four privately developed solar power facilities planned in Louisa and King and Queen counties, the city of Chesapeake and a fourth location that has not been determined. They will generate 345 megawatts of electricity, or enough to power the equivalent of more than 86,000 homes.
Dominion already owns Belcher Solar, an 88-megawatt facility in Louisa that was developed by a private joint venture between Virginia Solar LLC and MAP Energy LLC. Bedford Solar is a 70-megawatt facility being developed in Chesapeake by Lincoln Clean Energy, and Walnut Solar is a 90-megawatt facility that Open Road Renewables is developing in King and Queen.
“We will build and operate them long term,” said Dianne Corsello, director of business development at Dominion Energy Virginia, which serves about 2.6 million utility customers.
However, the solar facilities are “ring-fence” sites, meaning they are separated from Dominion’s regulated utility customers, who won’t pay for them or directly benefit from them. In contrast, the company is building two solar facilities in Surry County that will generate power for all customers, while producing renewable energy certificates for Facebook.
“It does not impact any of our customers’ rates,” said Corsello, who added that the projects will operate under permits from the Virginia Department of Environmental Quality and not require approval by the State Corporation Commission.
The 75-megawatt onshore wind farm will be owned and operated by Apex Clean Energy, a Charlottesville-based company that already has developed seven solar facilities in the state.
Botetourt adopted an ordinance and approved the Rocking Forge Wind project in 2016. Located just north of Eagle Rock, the project will include up to 25 wind turbines, each no higher than 550 feet, said Cody Sexton, assistant to the county administrator.
“The big takeaway for us is we’re happy to see it starting to move forward,” said Sexton, who estimated the project will employ about 100 people during construction and generate more than $1 million in annual revenue for the county.
Dominion will combine the energy produced by the wind facility — expected to be completed by the end of 2021 — with power produced by the four solar facilities and deliver it for the state to the PJM Interconnection, a regional electric transmission organization.
Virginia ultimately will pay the difference between the prices specified in the contract for electricity from the facilities and the revenues the state receives from PJM, Corsello said.
For Dominion, the contract with the state will help the company meet its commitment under a state law adopted in 2018 that requires it to develop 5,000 megawatts of power from new renewable energy projects by 2028.
The company says it is committed to producing 3,000 megawatts of renewable energy by 2022 as part of its push to reduce emissions of pollutants linked to global warming and climate change, such as carbon dioxide and methane.
“We share Governor Northam’s goal for a cleaner energy Virginia,” Thomas F. Farrell II, Dominion’s chairman, president and CEO, said in a company announcement.
“Partnerships like this one are vital to reducing carbon emissions, and we’re proud to be able to work with the commonwealth to provide clean energy for its operations across Virginia,” Farrell said.
Environmentalists welcomed the governor’s quick action to carry out the executive order on renewable energy he signed last month.
“This kind of decisive action is necessary to move Virginia to the forefront of clean energy,” said Will Cleveland, senior attorney at the Southern Environmental Law Center.
Kate Addleson, director of the Sierra Club’s Virginia Chapter, called it “a moment of sunshine on a rainy day,” but said it was overshadowed by pollution from Dominion power plants and the company’s plans to build the 600-mile Atlantic Coast Pipeline to transport natural gas from West Virginia to southeastern Virginia and eastern North Carolina.