Virginia, your ‘Green New Deal’ price tag is showing
BY DAVID T STEVENSON:
Progressives in Virginia held power by a slim margin for two years and succeeded in passing a “green new deal” similar to what the US Congress is trying to do. Virginia politicians had adopted aggressive measures to reduce carbon dioxide emissions, including a 100% wind and solar mandate and a carbon tax on emissions from power plants.
Virginia’s carbon tax started in January 2021, and their solar power generation more than doubled to 4% of electric demand. The bottom-line result was that there were no “emissions” saved, and residential electric bills would likely rise to $80 per year in just the first year.
Virginia is heading toward doubling electric rates.
However, Virginia’s new Governor Glenn Youngkin is doing the right thing pulling out of the “carbon tax” Regional Greenhouse Gas Initiative (RGGI) program by executive action. Next, he should work to repeal or modify the electric generation plan.
According to the US Energy Information Agency, ten months of real data shows the fallacies of Virginia’s progressive carbon tax program when compared to the same ten months in 2020.
In-state electric generation fell 9% as natural gas-fired power plants lost against regional electric grid bids from non-carbon tax states with 10% to 13% lower cost. Virginia generators will lose about $330 million in generation revenue.
The reality of the “carbon tax.”
The “carbon tax” actually increased global emissions by about 390,000 tons as imports have higher emissions after transmission losses, and the generation system mix are considered. Increased solar generation replaced zero-emitting nuclear and hydroelectric power 58% of the time, with the balance of offsets coming from low emission natural gas leading to, at best, 340,000 tons of emission savings.
So, in reality, there may have been no emissions savings as intermittent solar power usually requires increased backup power from less efficient, fast start oil and natural gas generators. Even if the 14 million ton emission goal for 2030 was met, an EPA calculator shows global temperatures would only fall 0.004° F.
Virginia is part of the multi-state RGGI program that requires power plants to buy emission allowances for each ton of carbon dioxide emissions with allowances sold in quarterly auctions. I conducted a multi-state study which came to the same conclusion as a Congressional Research Center study. The RGGI program, begun in 2008, has resulted in no significant additional emission reduction compared to non-RGGI states with similar energy policies.
The loss of in-state generation will continue as RGGI allowance prices continue to rise and perhaps double. Importing power adds cost to cover the greater transmission losses and congestion at key transmission sub-stations. Well-paying jobs at the power plants would be lost, which has secondary impacts on the economy. RGGI may have a cumulative direct negative impact on Virginia’s economy of $8.5 billion by 2030, or $19.5 billion if indirect and induced effects are included. Local power plants are needed to maintain voltage stability for reliability, and longer transmission lines could face more likely storm damage and outages.
Dominion Energy provides 80% of Virginia’s electricity and plans to replace natural gas generation with wind, solar, and battery backup power to meet state mandates. The utility commission determined that the plan would raise residential electric rates by $800 a year by 2030, with industrial rates rising by millions.
The residential cost estimate rises to $1,500 a year, adding in needed transmission and distribution line additions to bring wind and solar power from distant locations, using actual residential demand, and removing the utility commission assumption customers in North Carolina will share the cost. Large increases in industrial electric bills would likely lead to companies moving elsewhere taking high-paying jobs with them.
Using “carbon capture” systems could help meet energy mandates.
The potential doubling of electric rates is linked to an expected capital expense of $57 billion by Dominion Energy to meet the energy mandate. The same emission reduction could be met by adding carbon dioxide capture equipment to existing coal and natural gas power plants for about $7 billion.
Carbon capture has been thought of as a someday thing. However, an energy company in Texas owned and operated by Calpine Texas CCUS Holdings has just entered the engineering design phase to add a carbon capture system to its natural gas combined cycle power plant in Deer Park, TX. The system will capture 5 million tons of carbon dioxide per year to be used at a neighboring chemical plant.
David T Stevenson is Director of the Center for Energy & Environmental Policy at the Caesar Rodney Institute