A “landmark” land development agreement announced Wednesday sets up a public-private framework aimed at transforming 65,000 acres of former coal mined land in Southwest Virginia into sites for new energy projects.
Under the agreement, the Energy DELTA Lab — in coordination with Wise County officials and the landowner, Energy Transfer — will serve as the primary developer and will work as a matchmaker with energy companies and electric utilities to “deploy a diverse range of conventional and innovative energy technologies” on the land, most of which is in Wise County, according to a news release from the governor’s office.
The release heralded it as a “landmark” agreement that aligns with Gov. Glenn Youngkin’s “all-of-the-above” energy plan to include nuclear, natural gas, renewables and new energy sources to meet the state’s increasing energy needs. Announced Oct. 3, 2022, the plan also includes deploying a small modular nuclear reactor in Southwest Virginia within 10 years.
The day after the energy plan was released, the Energy DELTA Lab in Southwest Virginia was announced. It is a first-of-its-kind energy technology testbed that will turn some former coal mining sites in Southwest Virginia into laboratories to promote energy innovation.
The agreement announced Wednesday has been in the works for about two years and culminated last spring in a meeting with Energy Transfer officials at its headquarters in Dallas, Texas. Youngkin made the final, formal pitch at the meeting and deserves a lot of credit for the deal, according to Will Clear, the managing partner of Virginia Energy Strategies who serves as an adviser to the DELTA Lab. Clear is a former chief deputy director with the Virginia Department of Energy.
“The Commonwealth’s power demand is skyrocketing, and now is the time to make strategic investments in energy infrastructure to meet our growing needs,” Youngkin said in the news release. “This agreement will make Virginia energy more reliable, affordable and clean while transforming Southwest Virginia into a hub for innovation.”
The hope is that the agreement will lead to high-quality, good-paying jobs for Southwest Virginia residents and will bring tax revenue to local governments that have been significantly affected by the downturn in the coal industry in recent years.
Clear said the agreement opens up a large portion of Southwest Virginia that would never be developed otherwise. Energy Transfer owns both the surface and subsurface rights, which is important because disputes over severed mineral rights can keep land from ever being developed, he added.
“Large portions of Wise County have often been difficult to develop given limited access due to private and federal ownership,” Wise County Administrator Mike Hatfield said in the news release. “This agreement will create game changing opportunities that simply did not exist before.”
The 65,000 acres — or roughly 100 square miles — are contiguous and are primarily in the northwest portion of Wise County, running from the Lee County border to the town of Pound.
Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the U.S. across 41 states, according to its website. Its property in Southwest Virginia is managed by Penn Virginia Operating Co.
Will Payne, managing partner of Coalfield Strategies and an adviser to the Energy DELTA Lab, said the team’s strategy is to leverage Southwest Virginia’s topography and its legacy energy industry assets — land, power and water — to develop energy projects.
It is currently working on about a dozen projects, including solar, wind, hydrogen, energy storage, pumped storage hydro and energy efficient data centers, although none has been given final approval. All are multi-year projects, he said.
Together, the projects total more than $8.25 billion in potential private capital investment and would create 1,650 jobs and nearly 1 gigawatt of new power generation and demand, according to Payne.
The DELTA Lab is already developing three “energy ready” industrial sites in Wise County. The latest site, announced Wednesday, is the 4,000-acre former Bullitt Mine property, which is near Appalachia on the Lee County border.
The Bullitt land is where DELTA Lab officials hope to locate the Data Center Ridge site. It would be a complement to Northern Virginia’s Data Center Alley, which is home to at least 300 data centers, Payne said.
According to Clear, the site is “our model energy-ready site development because it includes an energy user data center with adjacent energy generation. … That’s kind of the flagship of this announcement because it combines energy users and producers and that’s what we’re focused on is bringing those two together. A priority for us is fully developing that site.”
The plan is to try to attract multiple data centers, which rely on ample power as well as water to keep them cool because of the heat created by the servers. The Bullitt site features several abandoned mines that are filled with nearly 10 billion gallons of cool, clean water that can lower energy needs and save money, Payne said.
The Bullitt site was also one of seven studied as a possible site for a small modular nuclear reactor.
The second site is the 2,000-acre Junction site near Appalachia. This development will combine four different land uses on multiple parcels. The first focus will be a 350-acre industrial site for a clean energy project, according to Payne.
The third site that’s being developed is the 300-acre Meade Fork property near Pound that was announced a year ago. The plan is to locate a solar energy facility there. The Meade Fork site is the only one of the three not included in the 65,000 acres covered in the agreement.
Both of these sites are in the running to receive awards from the U.S. Office of Surface Mining Reclamation and Enforcement’s Abandoned Mine Land Economic Revitalization, or AMLER, program. The Junction site is expected to receive $2 million, the Meade Fork property $975,000.
“Energy DELTA Lab’s approach is quite literally the definition of an all-the-above-approach given coal and gas production is occurring concurrently with clean energy deployment across a vast footprint on Penn Virginia property,” said Del. Terry Kilgore, R-Scott County and majority leader in the Virginia House of Delegates. “Innovative energy projects will drive economic development in Southwest Virginia, and our legislative delegation is proud to see the vision for our region realized through this agreement.”
In addition to the governor, Payne and Clear thanked Wise County officials, those at the LENOWISCO Planning District Commission, federal lawmakers, the Southwest Virginia legislative delegation and the General Assembly for supporting the land agreement.
“This has been a team effort,” Clear said. “Without all of those partners helping us along the way, there’s no way we could have gotten to this point.”
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Correction Nov. 9, 2023: The Junction and Meade Fork sites are in the running to receive AMLER grants but are awaiting final approval. An earlier version of this story was incorrect on that point.