Two Virginia lawmakers said Wednesday that they will reintroduce legislation this year to boost the development of energy storage in the commonwealth following the veto of a similar proposal last year.
Energy storage facilities store electricity during off-peak hours when it’s cheaper to produce and release it during high-demand periods when it would otherwise be more expensive to make. Examples include Danville Utilities’ battery storage, a Dominion Energy-owned battery system at a Powhatan County solar facility and Dominion’s hydroelectric Bath County Pumped Storage Station.
Supporters say energy storage helps manage the ups and downs of electricity demand, especially as renewables such as solar and wind produce power intermittently, which reduces costs. Critics say that the expense of energy storage construction would be passed on to ratepayers and would negate any savings.
Del. Rip Sullivan, D-Fairfax County, and Sen. Lamont Bagby, D-Richmond, said during a Wednesday press conference that their legislation to increase state-level targets for adding energy storage to the power grid using batteries and other technology would make electric service cheaper and more reliable.
“No matter what kind of energy generation you prefer … it’s become widely acknowledged — in fact I think I can use the word ‘consensus’ — that more and better energy storage is going to be required to get Virginia to where it needs to be with respect to an affordable and reliable energy grid,” Sullivan said.
Their legislation also would create a minimum safety standard for energy storage projects, provide support to localities reviewing such projects and increase government oversight to ensure value for ratepayers, Sullivan said.
The lawmakers’ proposal comes as Virginia sees a rising demand for electricity, particularly in the service territories of Dominion Energy and electric cooperatives that serve the commonwealth’s growing data center market. Meanwhile, Appalachian Power bills have risen in recent years, and Dominion bills are set to increase this year.
Bagby said that his and Sullivan’s proposal focuses on affordability.
“As demand on our electric grid grows, Virginia has a choice: We can keep doing what we’ve been doing, and experience what we’ve been experiencing, or make the decision to do something different and drive these costs down and find solutions that will lower bills and strengthen reliability,” Bagby said.
Bills would raise energy storage targets under Clean Economy Act
Sullivan and Bagby’s proposal would modify the Virginia Clean Economy Act, which mandates that Dominion Energy and Appalachian Power work toward carbon-free energy portfolios. The act includes benchmarks for adding new solar and wind power generation, as well as new energy storage.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
Sullivan said that the proposal would mean a “dramatic increase” in the VCEA’s energy storage targets, but that specific numbers and other details are still being finalized.
Legislation that Bagby and Sullivan carried last year would have more than tripled the amount of new energy storage that Dominion and Appalachian would need to propose adding to their portfolios, from a combined 3,100 megawatts by the end of 2035 to 10,000 megawatts by the end of 2045.
As of early last year, Dominion had asked the State Corporation Commission, which regulates utilities in Virginia, for permission to build nearly 100 megawatts of company-owned energy storage and to buy more than 450 megawatts of storage capacity through power purchase agreements.
Appalachian Power was set to build a 7.5-megawatt, four-hour battery energy storage system across two sites in Grayson and Smyth counties at a cost of $57.3 million, but the utility canceled the project this past summer.
Sullivan and Bagby’s legislation last year would have created separate targets for short-duration energy storage, which generally holds power for less than 10 hours, and long-duration storage, which holds power for longer and has seen increased technological development in recent years. Sullivan said this year’s bills will do the same.
Last year’s legislation passed the House and Senate, but Republican Gov. Glenn Youngkin vetoed it, citing a need to “be vigilant to limit cost increases to Virginia’s residents.”
“Long-duration energy storage is an expensive technology and if utilities believed it to be the best technology to meet demand, they would be actively seeking permission to build them,” Youngkin said in his veto statement.
Cost, benefit at heart of energy storage debate
House Minority Leader Terry Kilgore, R-Scott County, said Wednesday that he isn’t opposed to battery storage but believes that with the current technology available, the cost would outweigh the benefit.
“I don’t think it will line up with the initial cost,” Kilgore said. “Folks may say it might, but it’s just like taking our consumers’ money in the left hand and then in the right hand we’re saying, ‘OK, here’s a few cents of your dollar back because you actually saved a little bit more money during that peak time that you were using.’ That’s the concern I have.”
Kilgore said Republicans during this General Assembly session will focus more on getting new sources of electricity online, such as gas and nuclear power plants.
“This, I think, is going to be our view in the Republican caucus, is we want two things: that when you go to the light switch, it comes on, and that you’re able to afford it,” Kilgore said.
Sullivan said Wednesday that new energy storage is cheaper than new sources of power generation, such as natural gas plants, although specific costs of energy storage systems were not discussed during the press conference.
John Zahurancik, chief customer success officer for the Northern Virginia-based battery energy storage provider Fluence, said Wednesday that his company has delivered nearly 300 energy storage systems worldwide and that the cost of the technology continues to decrease.
“Every system that we’ve gone in and built has immediately had an impact on reducing the cost and improving the reliability of the power system they operate in,” Zahurancik said.
Sullivan said that states such as Illinois and Texas are adding energy storage, saving their customers money, and Virginia is falling behind.
“In order to meet the challenges our commonwealth faces, we must do more,” he said.
Democratic Gov.-elect Abigail Spanberger will succeed Youngkin during this year’s General Assembly, which will see Democratic majorities in both the House and Senate. Spanberger’s energy affordability plan supports the deployment of more energy storage.
Second proposal focuses on speed of adding new energy projects
Also at Wednesday’s press conference, Del. Phil Hernandez, D-Norfolk, said he and Sen. Schuyler VanValkenburg, D-Henrico County, will introduce bills to speed up the process for adding energy projects in places with surplus transmission capacity.
For example, a power plant might be sending less electricity to the grid than it has been approved for, meaning another energy project could be built nearby and use the remaining transmission capacity.
Their bills would direct the State Corporation Commission to identify such locations and lay out a process to get new energy projects up and running more quickly there, Hernandez said.
The General Assembly is scheduled to convene Jan. 14 in Richmond. In even-numbered years, sessions typically last 60 days.