The Virginia General Assembly has recently passed new legislation aimed at boosting energy storage investments by the state’s two primary utilities. HB2537, introduced by Richard C. “Rip” Sullivan, Jr., and SB1394, introduced by Lamont Bagby, seek to enhance the energy storage capacity targets that Appalachian Power and Dominion Energy are required to petition the State Corporation Commission to approve for construction, acquisition, or procurement. The legislation also extends the timeline for meeting these targets.
Under the 2020 Virginia Clean Economy Act, Dominion and Appalachian Power were tasked with a combined goal of adding 3,100MW of energy storage capacity by the end of 2035. With the new legislation, Appalachian Power is expected to add 780MW of short-duration energy storage capacity by 2040 and 520MW of long-duration energy storage (LDES) capacity by 2045. Meanwhile, Dominion aims to add 5,220MW of short-duration energy storage capacity and 3,480MW of LDES capacity by 2045. The law also grants the State Corporation Commission the authority to modify these goals based on the feasibility of procurement.
The legislation mandates that the State Corporation Commission conduct a technology demonstration program for long-duration energy storage resources. It also requires the Commission to determine the viability of such technology and assess whether the established targets are realistically achievable, with a final order due by March 1, 2030.
Virginia’s energy demands are on the rise, largely driven by the growing number of data centers in the state. A 2023 study from the Joint Legislative Audit and Review Commission (JLARC) revealed that while energy demand in Virginia remained stable from 2006 to 2020 due to energy efficiency gains, an independent forecast suggests that the state’s power demand could double in the next decade, primarily due to the data center industry. The report highlighted that significant new power generation and transmission infrastructure will be necessary to meet both the unconstrained energy demand and even half of that demand.
Legislators hope the increased energy storage procurement targets will encourage energy storage developers to engage with the state. The new bill allows Dominion to collaborate with higher education institutions for deploying energy storage resources. Additionally, it requires the U.S. Department of Energy, along with the Department of Environmental Quality and the Department of Fire Programs, to develop model ordinances for local regulation of energy storage projects and to submit a report by December 1, 2025.
Currently, both Dominion and Appalachian are soliciting bids for wind, solar, and battery energy storage systems. The state has also established the Virginia Solar Energy Development and Energy Storage Authority to enhance financing for solar and storage projects, promote the growth of related industries, and position Virginia as a leader in these sectors. The Authority is set to expire on July 1, 2025 and has previously published reports detailing battery pilot programs and the potential for battery storage in the state.
Toronto-based Hydrostor is proposing advanced compressed air energy storage (A-CAES) projects as a viable solution for increasing storage capacity in smaller areas.
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