Renewable energy is an increasingly important aspect of Dominion’s generating portfolio. In the near term, green power could help lower the company’s carbon intensity and increase our fuel diversity. Longer term, renewable energy is an important aspect of our environmental stewardship and the nation’s transition to a lower-carbon economy.
Renewable Energy Portfolio
We currently have renewable energy assets in Virginia, North Carolina, West Virginia, Indiana and Illinois that include wind, hydro and wood biomass. We are evaluating additional opportunities to harness the wind, sun and biomass resources.
When completed and fully operational, the combined output of our existing and planned renewable facilities could produce at full power more than 1,600 megawatts of clean energy – enough to supply more than 400,000 typical homes.
In 2011, hydroelectric power provided almost half (47 percent) of our operational renewable energy capacity. Wind power accounted for about 41 percent of the total, with the remaining 12 percent coming from wood biomass.
Meeting Renewable Energy Standards
Dominion is committed to meeting renewable energy standards set by the states in which it provides electric service – Virginia and North Carolina. Virginia’s voluntary program calls for 15 percent of the power delivered to customers to come from renewable sources by 2025. North Carolina’s statutory requirement calls for 12.5 percent of power deliveries from renewable energy by 2021.
In October 2011, we applied for regulatory permission to build and operate up to 30 megawatts of solar power in our Virginia service area. The demonstration program would allow Dominion to install solar power units on leased rooftops and open spaces at various commercial, industrial and community locations.
The program will target specific sites on our distribution system, including those in constrained or high growth areas, and will evaluate the benefits of solar generation beyond its green attributes. We estimate that the program will include from 30 to 50 installations, ranging from 500 kilowatts to 2 megawatts in size. Virginia regulators have scheduled a hearing on the solar proposal for September 2012.
We also plan to ask for regulatory approval of a special rate tariff that would allow us to purchase up to 3 megawatts of power from customer-owned solar installations. The special rate would serve as a pricing incentive to encourage our Virginia customers to install solar power at their home or business.
Biomass refers to an assortment of renewable organic materials, such as wood and agricultural crops, that are readily available and can be burned directly as an energy source.
Work is underway to convert three of Dominion’s small coal stations to waste-wood-fueled facilities. The three stations are located in or near Virginia’s “green basket” of abundant forestry resources and will have a combined output of about 153 megawatts. Converting them to biomass will improve our environmental footprint by reducing nitrogen oxides, sulfur dioxide and particulate emissions. The conversions are scheduled to be completed in 2013.
In addition, the company’s 585-megawatt Virginia City Hybrid Energy Center in southwestern Virginia began producing power in June 2012. Although the facility is powered primarily by clean coal technology, it is capable of producing up to 20 percent of its output from waste wood biomass.
We are also exploring other opportunities to develop generating facilities using biomass as a fuel source.
We currently have interests in two operating merchant wind farms in West Virginia and Indiana capable of producing up to 282 megawatts of green power. And we are continuing to explore the development of 300 additional megawatts of merchant wind power at the Prairie Fork facility in central Illinois. In our regulated utility fleet, we continue to evaluate the feasibility of adding more than 240 megawatts of wind generation at various ridge-top sites in Virginia.
Offshore wind is potentially one of the largest sources of carbon-free, renewable energy in Virginia. Although high costs continue to be a significant obstacle, Dominion is taking an active role in pursuing the commercial possibilities of offshore generation.
In March 2012, we notified the U.S. Bureau of Ocean Energy Management that Dominion would be interested in obtaining leases off the Virginia coast. If we are awarded lease blocks, the company will perform site surveys and other studies to gauge the potential for offshore wind development.
Dominion is also leading a group of interested parties that received a $500,000 federal grant in 2011 to identify technologies needed to reduce the cost of offshore wind power.
We are also a partner in both the Virginia Offshore Wind Coalition, a group of developers, manufacturers, utilities, municipalities and others interested in offshore development, and the Virginia Offshore Wind Development Authority, created by the Virginia legislature in 2010.