Dominion lays out plan to retain fossil units, add clean energy resources

Dominion Energy Virginia would delay fossil fuel retirements, add natural gas-fired generation and incorporate new clean energy technologies over the next 15 years as part of resource planning scenarios filed with state regulators.

The Dominion Energy Inc. utility subsidiary, known legally as Virginia Electric and Power Co., on May 1 filed its integrated resource plan (IRP) with the Virginia State Corporation Commission and North Carolina Utilities Commission. In sharp contrast to its 2020 IRP, Dominion does not forecast any generation retirements over the 15-year planning period, which runs from 2024 through 2038.

While the 2020 IRP was designed to align with the Virginia Clean Economy Act, which requires Dominion Energy Virginia to procure 100% of its electricity from renewable resources by 2045, the new plan incorporates generation scenarios selected without regard for the targets established by the law.

Instead, Dominion's resource planning is modeled along the lines of Virginia Gov. Glenn Youngkin's "all of the above" energy plan and the latest load forecast by the PJM Interconnection LLC.

"This 'all of the above' approach ensures we can reliably serve our customers 'around-the-clock,' especially on the hottest and coldest days of the year," Ed Baine, president of Dominion Energy Virginia, said in a news release.

The governor praised the plan.

"We support an all-of-the-above approach that embraces the use of innovative generation technologies to bring more capacity online, while also thoughtfully managing the retirement of existing generation capacity, to satisfy the growing needs of the Commonwealth," Youngkin said in a written statement.

The 1,032-MW Chesterfield coal-fired plant and the oil-fired 792-MW Yorktown unit 3 are still expected to retire in May. Dominion previously forecast the retirement of its Altavista, Hopewell - Polyester and Southampton VA biomass plants by 2028, but now expects to keep them online for the entire 15-year planning period based on legislation that eliminates a statutory requirement to retire all biomass-fired units that do not co-fire with coal.

All of Dominion's plans assume Virginia exits the Regional Greenhouse Gas Initiative by the end of the year.

Load growth

Both Dominion and Youngkin pointed to load growth and reliability concerns in PJM tied to the clean energy transition as support for an "all of the above" approach.

In its filing, Dominion pointed out that PJM's 2023 load forecast shows summer peak demand and net energy in the Dominion transmission zone increasing at a compound annual growth rate of about 4.4% and 6%, respectively, between 2023 and 2038. "This is markedly different from the 2022 PJM Load Forecast that showed an increase at a CAGR of approximately 2.0% and 2.9%, respectively, between 2022 and 2037," Dominion wrote.

Over the next 10 years, PJM's forecast shows annual peak and energy load growth of nearly 5% and 7%, respectively, the company noted.

Environmental groups, however, voiced concerns over the proposed resource mix, including keeping the 881-MW Clover coal-fired power plant online until 2040. The plant, which began operating in 1995, is co-owned with Old Dominion Electric Cooperative and was previously slated for retirement in 2025.

"Dominion is using the rapid growth of data centers as justification to over-rely on fossil fuel energy generation, instead of using it as an opportunity to accelerate the booming clean energy economy and invest in energy efficiency commitments to help lower-income customers," the Sierra Club said in a news release. "Put simply, Dominion's plan irresponsibly misses the mark on the economics and the urgency of the climate crisis."

The plans

Dominion presented five "alternative plans" to meet the electricity needs of its customers, but noted that the Plan A option is for "cost comparison purposes only" and is not "a true alternative path forward."

Plan B adds 2,900 MW of combustion turbine generation including 970 MW in 2028, followed by 485-MW units each year from 2035 through 2038. The plan also includes about 10 GW of additional solar capacity by 2038 with another 1,035 MW of distributed energy resources. These additions would be complemented by 2,600 MW of additional offshore wind capacity in 2033, 440 MW of onshore wind by 2038 and about 2,370 MW of energy storage. The 15-year plan also includes about 800 MW of small modular reactors (SMRs) and 21,900 MW of capacity purchases.

Plan C is similar to Plan B but with slightly less energy storage and no assumption of distributed energy resources. It also calls for 28,200 MW of capacity purchases over the next 15 years.

Plan D would retire all of Dominion's carbon-emitting generation by the end of 2045, thus resulting in zero CO2 emissions from the generation fleet in 2046. Plan D shows the company building comparable solar, wind and storage over the next 15 years as Plan B but only 970 MW of gas-fired generation with 1,608 MW of SMRs in the late 2030s. This option, however, calls for more solar, storage, SMRs and capacity purchases over a 25-year horizon.

"Plan D results in the company purchasing over 10.8 GW of capacity and 13 GW of energy in 2045 and beyond, raising concerns about system reliability and energy independence, including reliance on out-of-state capacity to meet customer needs," Dominion wrote.

The plan shows the need for 25,100 MW of capacity purchases from 2024 through 2038.

Plan E is similar to Plan D but includes less distributed energy resources, about 2,910 MW of energy storage, 1,072 MW of SMRs and 29,100 MW of capacity purchases through 2038.

Near-term additions

As part of its short-term action plan for 2024 through 2029, Dominion said it expects to complete construction of the 2,587-MW Coastal Virginia Offshore Wind project. Dominion plans to build the 176-turbine wind farm, with a price tag of $9.8 billion, in three phases off the coast of Virginia Beach, with operations to begin by the end of 2026.

The company also said it will meet the targets under Virginia's mandatory renewable portfolio standard, which is tied to the Virginia Clean Economy Act, and North Carolina's renewable energy portfolio standard.

In addition, Dominion is seeking second 20-year license extensions for its North Anna nuclear units, which came online in 1978 and 1980. The utility also is proposing a backup LNG facility to support its Greensville Power Station.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.