Sunday, May 7, 2023

Our Grid, CO2 and Data Centers

Last week Dominion Energy filed its 2023 Integrated Resource Plan (IRP) with the State Corporation Commission(SCC).  In the submission, Dominion details how it plans to meet electricity needs and demands over the next 15 years. The picture they paint is that Dominion cannot both meet the power demand of the exploding number of data centers in Virginia and the mandates of the Virginia Clean Economy Act (VCEA).

The 2020 VCEA is the state’s law outlining a path to decarbonize the electric grid by 2050. VCEA requires the Commonwealth to retire its natural gas power plants by 2045 (Dominion) and 2050 (Appalachian Power). These facilities currently comprise 67% of the current baseload in-state generation as well as 100% of the power plants that meet peak demand. About 30% of Virginia’s generation is from nuclear. Basically, the utility can run carbon-emitting facilities until 2040 and must build a stated amount of solar and wind generation.  Only by petitioning the SCC and demonstrating a need to maintain grid reliability can they continue running their fossil fuel plants. When the VCEA was crafted, they did not foresee the explosive demand for electricity that unconstrained data center development would drive.

Dominion Energy Virginia does not produce all the electricity it delivers and sells. Dominion Energy is a member of PJM Interconnection, LLC (PJM), the regional transmission organization coordinating the wholesale electric grid in the Mid-Atlantic region of the United States. PJM other members supply a significant amount of the energy used in Virginia- about a fifth. PJM recently identified increasing reliability risks due to both the growing demand for power in Virginia and the profile of that power demand and from the premature retirement of dispatchable carbon generation facilities across the region.

The threat of premature retirements, and the resulting reduction to baseload and dispatchable generation capacity they produce, is magnified when the load growth of the Data Center uncontrolled expansion in Northern Virginia is considered. PJM’s revised load forecast reveals that Dominion’s load will grow at 7% annually. That means that electricity demand will more than double over the next 10 years. Dominion’s IRP identified that they cannot meet that demand for power and meet the scheduled retirements of current fossil fuel generators while maintaining Virginia’s current and future grid reliability.

In other words, Virginia plans to decarbonize the grid just ran into the brick wall of the exploding demand of the unconstrained growth of the data centers in Northern Virginia. You cannot plan to more than double electricity demand in 10 years while eliminating generation capacity. It has never been done, and Dominion admits that they need to not only keep all their fossil fuel power generation operating, but build more dispatchable fossil fuel generation to meet this forecast demand.

This switch mandated by VCEA has not been successfully accomplished anywhere in the world, yet. Advances in technology were always necessary to achieve the goals and those advances have not come fast enough. Dominion states that to retire all carbon-emitting generation by the end of 2045, the Company will need to build and buy significant incremental capacity to reliably meet customer load. Their plan to do that requires over 4,500 MW of incremental energy storage and more than 3,000 MW of incremental Small Modular Nuclear, SMR, (which does not exist yet and falls in the category of insert magic here). Even with these additional resources, Dominion would have to purchase 10,800 MW of additional capacity from PJM in 2045 and beyond, raising significant concerns about system reliability and energy independence, including over-reliance on out of-state capacity to meet customer needs. This Plan will also require a substantial increase in energy purchase limits from both PJM and the SCC; and it is questionable if they will be granted.

What is usually considered in these documents to be the most likely case, would require changes to the VCEA. This plan preserves the existing fossil fuel generation and includes several new gas combustion turbines to address future energy and system reliability needs. In addition, this plan requires the  development of SMRs. Due to an increasing load forecast, and the need for dispatchable generation, this plan shows additional natural gas-fired generation and preserves existing carbon-emitting units beyond statutory retirement deadlines established in the VCEA. So, you have it, either we modify the carbon reduction requirements of the VCEA or we stop the expansion of data centers in Virginia. There is no pathway to have both. 

Zoning and land use have always been left up to the counties. It is clear that there is no limit to the desirability of data centers to county supervisors and landowners. The counties of Prince William and Loudoun have been blinded by the windfall profits to the landowners and the prospect of increased tax revenue, but these windfall profits come at the cost of the data centers’ power demand flat profile essentially controlling our grid. They will represent half to two thirds of the power used in Virginia by 2030. We have granted data center companies who care nothing for us control over our environment. We are now getting ready to build 7 gas fired electricity generation facilities to serve them. The data centers will degrade our land and water resources and increase power and water costs for all Virginians.

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