Virginia Lawmakers Advance Legislation to Boost Energy Storage Initiatives

Virginia lawmakers advocate for increased energy storage initiatives

The Virginia General Assembly has enacted legislation aimed at encouraging investments in energy storage across the commonwealth. These energy storage facilities are designed to store electricity during off-peak hours when generation costs are lower, and then release it during peak demand periods when costs rise. Proponents argue that these facilities can help stabilize electricity demand fluctuations, particularly as reliance on intermittent renewable sources like solar and wind energy increases. This, in turn, could lessen the need for new power plants.

Del. Rip Sullivan Jr., D-Fairfax County, emphasized the importance of attracting energy storage technologies to Virginia during a House subcommittee meeting on Jan. 28, discussing his bill, HB 2537. He stated, “With the long-term benefits of this technology, it’s essential for Virginia to find ways to promote these advancements, and passing this bill will significantly aid in that effort.”

The push for enhanced energy storage comes against a backdrop of soaring electricity demand in Virginia, primarily driven by the expansion of data centers and advancements in artificial intelligence. Sullivan’s bill, along with a companion bill, SB 1394, introduced by Sen. Lamont Bagby, D-Richmond, establishes new targets for energy storage that Virginia’s two largest utilities—Dominion Energy and Appalachian Power—must aim to incorporate into their portfolios over the next two decades.

Energy storage technologies are diverse, encompassing systems that use batteries, thermal energy storage, and reservoirs of water or compressed air that can be deployed as needed to generate electricity. These systems can be utilized to manage daily fluctuations in electricity demand or provide backup power for specific buildings or areas with less reliable service. Traditional hydropower storage, which involves pumping water into a reservoir to later release it for turbine generation, has been in use for decades. Notable examples in Virginia include Dominion Energy’s Bath County Pumped Storage Station and Appalachian Power’s Smith Mountain Project.

As battery technology continues to evolve, its application in energy storage is becoming increasingly prevalent. Virginia’s initial utility-scale battery energy storage projects included a 2-megawatt facility owned by Rappahannock Electric Cooperative in Spotsylvania County, launched in 2021, and a 12-megawatt project at a Dominion Energy solar facility in Powhatan County, initiated in 2022. Last year, Appalachian Power received regulatory approval to construct a battery energy storage system in Southwest Virginia.

The new legislation is set to significantly increase the energy storage targets for Dominion and Appalachian, raising their collective goal from 3,100 megawatts of new energy storage by 2035 to 10,000 megawatts by 2045. The law also differentiates between short-duration and long-duration energy storage, with the latter typically holding power for over 10 hours.

The State Corporation Commission, which oversees utilities in Virginia, will have the authority to adjust these targets based on the technological feasibility of the storage solutions. Chrissy Noonan, representing Dominion Energy, noted at the Jan. 28 meeting that long-duration energy storage could be vital for future reliability. She expressed support for the legislation’s approach to establishing new targets.

The legislation has now moved to Governor Glenn Youngkin for approval, amendment, or veto.

Dominion Energy operates one of the largest pumped hydropower storage stations in the world, the Bath County Pumped Storage Station, which has been in service since 1985. With a maximum capacity of approximately 3,000 megawatts, this facility aids in balancing electricity demand across six states. It consists of two reservoirs where water is pumped to the upper reservoir during off-peak hours and released during periods of higher demand.

Appalachian Power has been running the 636-megawatt Smith Mountain Project since the 1960s, which created Smith Mountain and Leesville lakes for its reservoirs. In terms of newer battery storage, Dominion operates four facilities, but only one—a 20-megawatt system—counts toward the Virginia Clean Economy Act targets due to its operational timeline. Recently, Dominion initiated a 50-megawatt storage project at Dulles International Airport, which is set to be paired with 100 megawatts of solar capacity. Additionally, three new projects have received state approval, including two focused on long-duration energy storage.

Appalachian Power is also planning a 7.5-megawatt battery storage project to enhance reliability for its customers. Both utilities are actively seeking bids for new energy storage initiatives. Sullivan highlighted that the passage of the new legislation signals Virginia’s intent to establish itself as a national leader in energy storage.

In the realm of innovative energy storage solutions, Toronto-based Hydrostor specializes in long-duration compressed-air storage. This method involves compressing air into underground caverns and releasing it to generate electricity. Hydrostor’s executive vice president, Scott Bolton, noted, “We compress that air, remove the heat, and store it underground. When it’s time to generate electricity, we release water into the cavern to push that air back up, where it combines with heat to generate power.”

Hydrostor is exploring opportunities in Virginia, recognizing its growing demand and favorable public policies for storage development. The company’s facilities could offer a more compact alternative to traditional solar projects, which often require extensive land use.

Despite the potential advantages, cost remains a significant concern. Hydrostor estimates its 500-megawatt facilities, like the Willow Rock project in California, could cost around $1.5 billion, backed by a conditional loan from the U.S. Department of Energy. At a recent meeting, Brent Vassey, president of the Virginia Manufacturers Association, emphasized the need for cost controls, urging lawmakers to consider the financial implications for consumers.

As discussions continue in the Senate regarding energy storage legislation, lawmakers are weighing the cost implications of the Virginia Clean Economy Act on energy prices for Virginians. Senate Majority Leader Scott Surovell, D-Fairfax County, acknowledged the uncertainty surrounding feasibility and cost, affirming that the State Corporation Commission has been tasked with evaluating these factors.

This article encapsulates the ongoing efforts and discussions surrounding energy storage initiatives in Virginia, highlighting the importance of innovation and planning in meeting future energy demands.