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Virginia utilities move ahead with energy storage, offshore wind efforts

Highlights

Dominion Energy's pilot project generating

Southwest Virginia coal sites in the mix

Houston — As Virginia's largest utilities continue to grow their renewable portfolios, they have partnered with some nonprofits and government entities to expand renewable energy storage in Southwest Virginia.

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Dominion Energy said in an Oct. 14 statement that it plans to use the permitting, design, installation and operations experience from a 12-MW pilot project -- now supplying power to the grid, but not on a commercial basis -- to its proposed 2.6-GW offshore Coastal Virginia Offshore Wind project, with construction to start in 2024.

On Oct. 13, Dominion and Appalachian Power, a unit of American Electric Power, announced a public-private partnership with InvestSWVA, the Appalachian School of Law, Mountain Empire Community College and the Southwest Virginia Energy Research and Development Authority "to advance energy storage technology" and encourage economic development.

Offshore headwinds

However, the probability of success and time line for these efforts are questionable, industry observers said.

"The start up of the 12-MW offshore wind should be a positive for this source on the East Coast but at the same time it should be noted a preceding offshore project serving Block Island still ran into trouble after it commenced operation off of Rhode Island," said Matthew Cordaro, a former Midcontinent Independent System Operator president and CEO who now resides in New York.

Dominion Energy said its two-turbine pilot project -- part of the proposed 2.6-GW Coastal Virginia Offshore Wind project -- have completed reliability testing, while survey work continues on the larger effort. The next big step will be to submit the pilot project's final documentation to the federal Bureau of Ocean Energy Management for technical review, which Dominion expects to complete by the end of 2020.

Dominion Energy Virginia's most recent long-term forecast calls for about 16 GW of solar in the state over the next 15 years.

"With the greater proliferation of renewables, energy storage expansion will be a vital component in providing stability to our grid and support our customer's needs," Dominion Energy Virginia President Ed Baine said in an Oct. 13 news release.

But in an Oct. 14 email, Cordaro said "the extrapolation of 12 MW of offshore wind to thousands of megawatts raises problems in scaling, dependence on the successful operation of smaller preceding projects, cost (including the economic demands and consequences of the covid crisis), a complicated partnership arrangement, and evolving permit problems with a contentious election about to take place."

Kieran Kemmerer, a power market analyst at S&P Global Platts Analytics, said, "Dominion's offshore pilot project will prove as an effective method of testing operational parameters in the region, but will provide little perspective in how to overcome the larger obstacles posed to large-scale offshore wind development, which include the necessary local supply chain development as well as interconnection and congestion risks."

Southwest Virginia

Dominion said it has the third-largest solar fleet among US utility holding companies and soon plans to build four central Virginia energy storage projects, while it "continues to evaluate the potential for a pumped storage facility in the Southwest Virginia region."

In 2019, Appalachian Power produced about 2.4 TWh of energy from wind and hydropower, and it has operated the Smith Mountain pumped storage facility for more than 50 years, according to the InvestSWVA news release.

"Virginia's pursuit of a 100% clean energy target will result in substantial renewable build out, particularly solar, which will provide opportunities for both stand-alone and co-located storage resources," Platts Analytics' Kemmerer said in an Oct. 14 email. "Energy storage is critical to Virginia meeting it's renewable energy targets without relying on the flexibility of natural gas in the long term."

Asked when the storage effort could start having a significant impact on power markets, Appalachian Power spokeswoman Teresa Hamilton Hall said, "A lot of it is going to depend on research, and that is where Appalachian Power ... comes in, ... being able to bring in a lot of minds who have such a wealth of experience in the energy field."

InvestSWVA, SVERDA and a local planning commission are now working to use pumped hydro at small scale and geothermal water cooling in new applications, which "benefit largely from the region's considerable inventory of reclaimed surface-mined properties plus adjacent underground mines," InvestSWVA said in statement.

"The private-public partnership is very early on, having just been announced yesterday, so we don't have any firm expectations on when it would be able to impact power markets," Dominion Energy spokesman Rahan Daudani said Oct. 14. "Our hope is that it leads to greater development opportunities for energy storage projects in Southwest Virginia to provide grid stability and complement our increasing renewable portfolio."

Platts Analytics' Kemmerer said pumped hydro offers energy capacity advantages, but "costs, round-trip efficiencies and substantial lead time (potentially 10-plus years) will likely make batteryt storage a more attractive option in the near future."