Aug. 30–WHITE SULPHUR SPRING — Representatives from electric generators and energy suppliers were on hand at the 2018 West Virginia Chamber’s Annual Meeting and Business Summit at The Greenbrier on Wednesday to discuss how they are looking beyond coal.
While largely discussing the impact of natural gas on the market, at its heart the discussion was about diversification.
“For years coal was the base of everything we did,” said Bob Orndorff, the West Virginia state policy director for Dominion Energy. “It still is. It still has a role, but we also need to talk about wind, we need to talk about solar because the Procter and Gambles of the world want that. If we are to recruit companies to work in West Virginia, we need to meet their needs.”
Orndorff called Dominion’s view as an all-in strategy, meaning using all sources of available energy. He called for the state to do the same.
When specifically discussing renewable sources of energy, Orndorff said the Mountain State needed to take a “quantum leap.”
“Change is hard sometimes to accept but there’s a market for every source of energy,” Orndorff said.
Chris Beam, the president and chief operating officer of Appalachian Power, also took time to discuss the changing face of energy production.
“This is probably the fastest changing dynamic that we have seen in the power industry in probably the last 100 years,” Beam said of the shifting energy sources used for power generation.
With what Beam called a “vast supply of gas available,” he said that his company still has a large coal-fired presence, along with gas and wind facilities.
After discussing a possible solar project in Virginia, Beam said how consumers receive their power will likely change in the near future.
“We do not have any solar yet,” Beam said. “We are working on putting solar into our portfolio, but another thing we are looking at, and it is very strategic, is (energy) storage.”
According to Beam, the possibilities of energy storage will fundamentally change how electric service will look.
“It is changing and it is changing very fast,” Beam said.
—-While looking for renewable and gas options, Beam said that many of Appalachian Power’s existing power facilities will remain coal-fired if existing conditions persist.
Though Beam’s company did convert a coal-fired plant to natural gas in Virginia, that plant was relatively small. The remaining coal-fired plants in Appalachian Power’s portfolio are large and expensive to convert with current coal prices compared to the cost of natural gas.
“They’re economical and they are competing in the market,” Beam said.
The power executive also shared his company’s coal use this year.
Beam said that 2017 was the mildest weather year in Appalachian Power’s records in 32 years but added that 2018 has had the greatest shift between cold and hot that the company has ever seen.
According to Beam, that shift between cold and hot has led to increased demand and increased coal burn with demand in the company’s three classifications — residential, commercial and industrial — all up for the first time in five years.
Along with the weather, Beam associated the demand with a bounce back in the economy.
While still heavily invested in coal, Beam said Appalachian Power will continue to look toward renewables. He added that the company has learned from a Greenbrier County wind farm investment that was denied by state regulators this year.
“We will continue to look for renewable options, but they have to be economical,” Beam said.
—-While renewables were on the table for discussion, the underlying current of the discussion was a shift to natural gas.
Chris Weikle, the senior manager of West Virginia government relations for Southwestern Energy, a natural gas driller, said that his company was looking toward the next legislative session to address what he called “barriers to development.”
According to Weikle, those barriers are permit timelines, deep-well spacing requirements, severance taxes and lease confusion.
“In West Virginia, we are paying more for permits that we are getting less quickly,” Weikle said, adding that the perceived problem was a legislative one.
Comparing the Mountain State to Pennsylvania, Weikle said that when drilling 100 wells, drillers are paying $49 million more to drill in West Virginia because of severance taxes.
“When you have executives looking to where they’re going to invest their dollars, that barrier of $49 million out the door before we see anything is something that they are looking at.”
In closing, Orndorff said the future of the state is based on bringing companies into the state that will stay in the state, keeping liquified gases in-state and creating a manufacturing base that creates a symbiotic relationship between energy production and consumption.
“Really our future is bright,” Orndorff said. “But we really need to look out beyond the horizon and make sure the investments that we are making and the companies we are recruiting to West Virginia are the ones that are going to stay here for a long time and actually create additional jobs for our future generations of West Virginians.”
— Email: email@example.com; follow on Twitter @mattcombsRH
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