Once again, a spell of hot weather has proven that our economy and comfort depend on hydrocarbon fuels. As you can see from these simple pie graphs from the PJM regional energy market, two-thirds of the electricity sustaining Virginia on a recent hot afternoon was produced by natural gas, oil and coal.
At noon on Thursday, 67% of electricity within PJM was coming from natural gas, coal, oil or a combination (almost 96 of the 143 gigawatts.) Another almost 23% was generated at nuclear power plants, and just over 10% came from various renewable sources.
One graph shows wind and solar provided a pittance of power, a nominal, merely symbolic amount. Wind energy is notorious for fading during hot spells. And the disappearance of solar from the grid as the sun sets can produce incredible spot prices for additional megawatts of electricity that then become needed. The marginal price in Virginia exceeded $3,000 within the PJM trading network earlier this week.
That is $3 per kilowatt hour, not the 15 cents per kilowatt hour most Virginians usually pay for the power itself. Yes, sometimes solar power is cheap. Then it dies in the dark and the cost to replace it will crush our economy and wallets. Gas, coal and nuclear power run our world and cool our houses, and they don’t go down at sunset or when the wind dies.
The PJM Interconnection, which includes Virginia among its 13-state operations region. apparently functioned well in the hot spell. It was not any hotter than we see most summers, but PJM was hitting records. There were times on the public metering of PJM when it was clear the reserve margins were getting tight. An unexpected disruption – a failed power plant or transmission line – could have triggered brownouts or worse.
Additional generation is needed, preferably inside Virginia, and it must be reliable and dispatchable (works on demand). The time to start was two or three years ago, but so far only solar and wind are being added. The quickest dispatchable option is natural gas. The impediment to getting it is the obsolete Virginia Clean Economy Act (VCEA).
The VCEA is the problem because it is openly hostile to adding any new natural gas generation (although it would not interfere with new nuclear power). Worse, the VCEA is not only limiting new generation, but it is demanding the retirement of very reliable and affordable hydrocarbon generators, no later than 2045 in the Dominion Energy territory. Who will build a plant designed to operate for 30 or more years in 2028 or 2032 just to have to shut it in 2045?
And the VCEA compounds its problem by imposing major financial penalties on Dominion and Virginia’s other major electricity provider, Appalachian Power. They are mandated to use larger and larger amounts of the least reliable wind and solar power or go to the market for renewable energy certificates from elsewhere to make up for missing these artificial targets.
That one part of the Virginia Clean Economy Act – the Renewable Portfolio Standard (RPS) – will cost Dominion’s customers $609 million over the next twelve months, according to an application pending at the State Corporation Commission, on the final glide to approval. That $609 million will buy renewable energy certificates, but not one actual watt of electricity. Another part of your bill buys the juice.
The SCC hearing examiner’s report on the RPS application recently posted includes a long-term estimate for the cost of the RPS mandate. On Page 11 we read that the 50-year cost to consumers for the RPS shell game – remember there is no electricity acquired – could be $220 billion. This is Dominion’s number, confirmed by the SCC staff. In 2022 Dominion had pegged the 45-year cost at $141 billion and in two years it has jumped to $220 billion over 50 years.
That $220 billion would be far better spent on new power plants in Virginia, not renewable energy certificates subsidizing wind or solar generation elsewhere.
There is no other word to apply to this but insanity. If Virginia’s voters really want to do that to their grandchildren, they should at least understand what is happening. They should at least be asked, five years after passing VCEA, are you still convinced wind and solar power are going to support our homes, our economy and run all those data centers?
The exploding electricity demand from that data center industry is the principal reason PJM is setting new records in this otherwise run-of-the-mill heat. This challenge to the electric grid was not on many radars when the Virginia Clean Economy Act was passed, and that has given some Democrats some cover, allowing them to say maybe the law should be tweaked to face the new reality.
But a huge proportion of their voters and the deeply committed climate alarmists of the modern news media will not let them stray. One Virginia pundit who has his own platform is pushing lightly for more details, but in his long report this week it was clear the Democrats he talked to are not giving any details of what they might do if they remain in control post-election.
And once again, the report ignored the obvious lesson of the PJM graph, the proven reliability and affordability of our current gas-dominated generation fleet. If Dwayne Yancey of Cardinal News asked all those Democrats about adding natural gas, he failed to report their answers.
He focused instead on the one remaining Dominion-owned coal plant in Southwest Virginia. It is an insignificant and highly inefficient plant, seldom operated. Democrats keep around for one reason and one reason only – to hogtie Southwest Virginia legislators who think it is the most important Dominion asset, even though none of their constituents are served by Dominion and few inside Dominion’s territory care about that plant.
On this key energy question for 2025, every Virginia candidate must take a stand. Do they say yea or nay on the quick approval of substantial new natural gas generation in the state? Will they at least amend the VCEA to allow it to compete with wind and solar? Have the PJM graph handy as you ask them.
Steve Haner is a Senior Fellow for Environment and Energy Policy. He can be reached at [email protected].