Gov. Abigail Spanberger on Thursday unveiled her administration’s energy plan, outlining multiple ways that she said Virginia’s power sector could achieve net-zero carbon emissions by 2050 while keeping electricity affordable and reliable.
The nearly 200-page plan describes different outcomes for Virginia having no energy policy, continuing its current policies or pursuing one of three new paths that emphasize distributed resources such as rooftop solar and having large customers such as data centers reduce or shift their energy consumption during peak times, which is known as demand flexibility.
It lays out a seven-point strategy for Virginia’s energy future that includes focusing on the “lowest cost, fastest, and cleanest energy solutions” such as utility-scale solar and storage, reducing carbon emissions and building a “homegrown workforce and supply chain to power Virginia’s energy economy.”
“This plan in particular arrives at a moment unlike any in our recent past. Electricity demands are rising and our energy system will need to grow at a pace that we have not seen in more than 80 years,” Spanberger said during a press conference Thursday. “We knew that this year’s energy plan needed to do more than present a single prescriptive path forward.”
Generally speaking, a net-zero energy system refers to one that aims to cut greenhouse gas emissions and increase carbon-free renewable energy, with the goal of ensuring that any emissions produced are balanced by efforts to remove them from the atmosphere.
State law requires the commonwealth to update its energy plan every four years. This year’s edition was developed in-house by Virginia Energy, a state agency, using input from the public and stakeholders.
Spanberger’s office said in a news release that while the plan does not set electric rates or approve projects, “it is a tool to guide the policies, investments and coordination that shape those decisions as they move through legislative, regulatory and local processes.”
While electricity demand is growing, future needs remain uncertain, particularly when it comes to data center buildout.
Spanberger’s plan models hypothetical annual growth rates between 2.3% and 3.5% through 2050, showing how five possible policy paths would impact what types of power generation Virginia uses and what costs it could incur, including by quantifying the impacts on health and the environment.
One scenario, called the “no policy” case, imagines no Virginia Clean Economy Act — a law passed in 2020 that directs the commonwealth’s two largest electric utilities, Dominion Energy and Appalachian Power, to achieve carbon-free energy portfolios by 2045 and 2050, respectively — and no participation in the Regional Greenhouse Gas Initiative, a multistate program that aims to reduce emissions by requiring fossil fuel-fired power plants to buy carbon allowances.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
“What would Virginia’s system look like if the state had no energy policy shaping it?” Vince Maiden, director of Virginia Energy, said in describing that scenario at Thursday’s press conference.
The “no policy” scenario would add 27 gigawatts of new natural gas power generation and nearly double carbon emissions over the next two decades, according to the plan. It would be the most expensive of all the scenarios, according to Spanberger’s plan, largely because it would carry the highest costs related to health and environmental impacts.
A second scenario, dubbed the “current policies” case — “exactly where we’re at now,” Maiden said — has Virginia continuing under the VCEA and RGGI. The commonwealth would add solar, battery storage and offshore wind along with new nuclear and “some” natural gas, according to the plan. Assuming moderate demand growth, Virginia would need to triple its generation capacity.
Finally, the plan evaluates three “distributed flexibility” scenarios involving distributed energy resources and demand-flexibility policies.
One of those scenarios “demonstrates the lowest total cost pathway for meeting Virginia’s growing electricity needs with reduced health impacts,” according to a 22-page executive brief of the plan. It calls for noncombustion natural gas resources such as fuel cells to provide energy in the near term while more renewable energy sources are built.
Maiden said Thursday that the plan “tells us whether today’s laws are working for Virginians or if there are solutions available outside of the current solutions.”
“This will give lawmakers a fair way to judge and to evaluate before new decisions are made,” he said.
House Minority Leader Terry Kilgore, R-Scott County, said that Spanberger’s energy plan “is the strongest argument we’ve seen yet for repealing the Virginia Clean Economy Act and getting Virginia out of RGGI.”
Spanberger’s plan breaks down the various scenarios by the cost of the systems that provide power, the cost of health impacts from various forms of power generation and the “social cost of carbon,” a metric that attempts to quantify the impact of carbon emissions and climate change.
While the “no policy” scenario — under which Virginia has no VCEA and is not in the RGGI — is listed as the most expensive overall at $725 billion through 2050, it has the lowest system cost, at $295 billion. The social cost of carbon accounts for $285 billion, while health-related costs from increased air pollution account for $145 billion.
“The governor’s plan only becomes the ‘affordable’ option when it includes ‘social costs,’ something that doesn’t show up on power bills,” Kilgore said.
State Sen. Mark Obenshain, R-Rockingham County, said the dollar figures tied to the health and social costs of the various scenarios in Spanberger’s plan “are based on wildly speculative assumptions that environmental extremists have long cited as their justification for saddling us with ever more expensive green energy.”
“Virginians deserve a full examination of the assumptions behind that extraordinary claim. A modeled health-impact estimate does not erase the additional cost of generating electricity or demonstrate lower electric bills,” Obenshain said in an emailed statement.
[Read more reactions to the energy plan.]
When Virginia’s last energy plan was released in 2022, then-Gov. Glenn Youngkin also criticized the VCEA, saying it “introduced uncertainty into the commonwealth’s energy landscape, placing additional costs on consumers and raising concerns regarding the reliability of the electrical grid.”
Youngkin’s plan also was noteworthy for calling for a commercial small modular nuclear reactor, or SMR, to be deployed in Southwest Virginia within 10 years. He later said that Virginia’s first SMR likely would not be in Southwest after all.
Other key takeaways from Spanberger’s energy plan:
Data centers’ share of power consumption keeps growing
Data center growth is not just the largest driver of rising electricity demand — the data center industry in Virginia now consumes more electricity than either the commercial or industrial sectors.
Virginia has been dubbed the “data center capital of the world” due to Northern Virginia’s outsized quantity of the buildings full of computer servers that power the online world.
The data center industry is spreading to Southside and Southwest Virginia, with at least nine projects publicly known to be in development and others rumored to be in the works. Appalachian Power has said it is seeing “explosive” demand for electricity from large potential customers, “primarily” data centers.
Spanberger’s plan calls for data centers to pay for the energy infrastructure they require, rather than those costs being passed on to residents and other utility customers, and says data centers could “drive investment in clean energy, grid modernization and demand flexibility.”
The commonwealth needs a lot more electricity generation
Across all models that aim for a net-zero power sector, Virginia will need to more than double its existing electricity generation — adding 1.2 to 1.8 gigawatts of solar and 1 to 2 gigawatts of energy storage each year for two decades.
Spanberger’s executive brief of the plan says this is “an increase from Virginia’s historic levels, but it is achievable.”
“It will require removing barriers and accelerating permitting, interconnection, workforce development and supply chains to ensure efficient project delivery at the pace and scale needed,” according to Spanberger’s executive brief.
That buildout also represents a “significant economic development opportunity,” the brief states.
Electricity prices are rising
Inflation-adjusted electric prices declined from 2019 to 2024 but have begun to rise again as demand growth outpaces supply, according to Spanberger’s plan.
About 550,000 households in Virginia, or 17% of households, face high energy burdens, which the plan defines as home energy costs exceeding 6% of their total household income.
Last year, state regulators gave Dominion permission to raise its rates, increasing the average residential customer’s monthly bill by $13.60 over two years.
The first part of that increase, amounting to $11.24 per month for the average residential customer, took effect on Jan. 1 of this year, while the next part, amounting to $2.36 per month, takes effect next year.
This month, regulators will consider a request from Appalachian Power to raise its rates in a move that would increase the average residential customer’s monthly bill by $9.10.
Staff writer Elizabeth Beyer contributed information to this report.
More reactions to Spanberger’s energy plan
The Virginia League of Conservation Voters said in an emailed statement that Spanberger’s administration “has its work cut out for them, and this energy plan recognizes the challenges ahead.”
Blair St. Ledger-Olson, the league’s director of advocacy and campaigns, called for pausing the approval of new data centers “until robust community and environmental protections are in place,” which St. Ledger-Olson said in the statement would “go a long way in ensuring we’re making the right kinds of energy investments and that our utilities aren’t overbuilding and overcharging Virginians because of Big Tech.”
Brandon Smithwood, vice president of policy for Dimension Energy, praised the plan’s support for shared solar, which allows people to buy electricity from a participating solar company without the customer needing to own solar panels themselves. Dimension is the largest provider of shared solar in Virginia.
“As data centers continue to drive energy demand in Virginia to new heights, shared solar projects are one of the fastest ways to add new power to the grid, lowering electric bills for Virginia families while keeping vital agricultural land in use,” Smithwood said in an emailed statement.
Sen. Glen Sturtevant, R-Chesterfield County, said on social media that Spanberger’s plan “is to carpet Virginia with another 300,000 acres of solar panels to provide electricity for unchecked data center growth.”
“Get ready for more transmission lines running next to your neighborhood!” Sturtevant said.
The Chesapeake Climate Action Network applauded Spanberger’s plan, saying that the policy recommendations “strongly depart from the gas and nuclear-heavy approach” taken by Youngkin.
“The plan clearly prioritizes low-cost, clean energy resources and the development of a modern, flexible grid. It is high time we thoughtfully grapple with the short- and long-term costs of pollution to health and communities, as this plan does,” Victoria Higgins, the group’s Virginia director, said in a statement emailed by the organization. “We further appreciate that the plan ensures that utility incentives and compensation are aligned with performance outcomes, and renewable procurement is competitive and results in the low-cost projects we see nationwide.”
Jim Purekal, Virginia director of Advanced Energy United, a national trade association, praised the plan’s emphasis on flexibility.
“By putting distributed energy resources, storage, virtual power plants, and demand flexibility to work, Virginia can get more miles out of the grid it already has while giving customers more ways to manage their energy use and costs,” Purekal said in an emailed statement.
Peter Anderson, director of state energy policy for Appalachian Voices, called the plan “a major step forward for Virginia.”
“For the first time the commonwealth uses technical modeling to guide the policy direction, and the plan places the true societal and public health costs of our energy system front and center. The plan makes clear that load growth from the data center industry is driving difficult tradeoffs for Virginians — even when the Virginia Clean Economy Act is honored — tradeoffs between key factors like economic cost, land use and public health,” Anderson said in a statement emailed by the nonprofit.
