There they go again.
Despite having the know-how to do right by Virginians and invest in pro-consumer technology like energy efficiency to lower bills and pollution, Dominion's very worst instincts have led it to instead pursue overpriced, outdated technology in a blind quest to goose Wall Street profits at Virginia's expense.
This time, it’s an outrageous, not-to-be-believed proposal to spend two billion dollars of other people’s money (read: mine and yours) on a “pumped storage” hydropower project. Their enterprise would not only take a whopping decade to build and come online, it would also be powered by an uneconomic, climate-changing coal plant.
Dominion’s Tazewell County pumped storage project, once completed in a decade, would generate hydropower electricity by releasing water from an upper reservoir to a lower reservoir. Dominion’s VCHEC coal plant would then pump the water back uphill to repeat the process over and over, at a significant net loss of energy due to the basic laws of physics.
Initially pitched to starry-eyed Virginia legislators a few years ago as a mere $300 million project, the price tag to everyday Virginians has already ballooned six times over. (It is unclear whether that new figure of $2 billion includes the hundreds of millions in profit Dominion will collect from its Virginia customers.) The only reason Dominion is able to propose this project in the first place, apparently with a straight face, is due to the project's status as a legislative pork project: under a law passed in 2017, Dominion’s project has a leg up over more rational projects by being summarily declared to be “in the public interest.” Even worse, Dominion shielded itself from the usual regulatory oversight by the State Corporation Commission (SCC), through removal of the sensible, longstanding requirement that Dominion perform a cost-benefit analysis of any project as compared to alternative investments.
The cartoonishly stratospheric cost of the decade-long construction project is not the only thing seriously wrong with this picture. Dominion’s pumped hydro project would also drive significant coal-generated carbon pollution, just to foolishly (or as some might quip “fuelishly”) pump water back uphill over and over again, using coal power from the uneconomic VCHEC coal plant that is so expensive to run that it operates only half of the time. Worse, that increased coal pollution would begin spewing in the 2030s, decades after Virginia, and the rest of the world, recognized the need to ratchet down the climate-changing pollution from outdated coal plants.
With a staggering two-billion dollar price tag, a decade-long construction period, and coal-based carbon pollution factored in, no amount of PR can make this pig fly.
But Dominion is certainly trying. In addition to the pro forma "job creation and tax revenue" claims summarily tacked on to the worst subsidized projects, Dominion touts the project as intended to support zero-carbon clean renewable energy, positing that the pumped storage can “balance” large amounts of variable renewables (i.e. solar and wind) by discharging at night when solar resources do not generate or when the wind stops blowing.
There Is a Better Way to Store Renewable Energy Today: Batteries
The glaring hole in Dominion's strained rationale is that we already have, today and not a decade from now, a much cheaper storage option to balance the small but growing amount of solar energy in Virginia: batteries. Just as the cost of solar and wind has plummeted to make them fully cost competitive with carbon-belching resources like gas and coal, so too are batteries showing increased cost-effectiveness, particularly when directly paired with solar. For example, an Arizona utility signed a power purchase agreement (PPA) for 30 MW of storage (smartly paired to 100 MW of solar), for a cost of under $45 per MWh, which makes the project cheaper than a new natural gas plant. Recognizing these advantages, other states are rightly assessing the full potential of batteries in their power mix and finding they can displace their dirtiest and least economic “peaker” plants at times of high demand.
If Dominion were actually serious about storing (and therefore growing) renewable energy, it should instead invest in battery storage that can be deployed now, rather than rely on legislative pork to ram through an expensive bit of last century’s technology that won’t operate for another decade.
The Good News
Thankfully, if Dominion is unable to bring itself to take a serious look at how it can best invest in energy storage, Virginia’s Department of Mines Minerals and Energy (DMME) is.
DMME is currently undertaking an extensive study to assess the overall value and potential of energy storage in the Commonwealth. That report is due to lawmakers early this fall. Given the billions of dollars at stake, DMME’s report should provide legislators with a clear-eyed comparison of, on the one hand, a $2 billion pumped hydro project coming online in 2030, to investment in battery storage deployed and paired with solar now.
Assuming legislators read the study’s findings, they may see fit to remove Dominion’s pork-barrel giveaway from the statute and rightfully consign the project to the dustbin of history’s worst ideas.
If that were to happen, Dominion will be liberated to move on from this debacle-in-the-making and get back to providing lowest-cost service to Virginians, while also tackling—rather than worsening—climate change. Just as exciting, Dominion could get back to its roots as a genuinely innovative company on the cutting edge of battery storage that can truly transform our grid.