Brian Ball: Time to seize Virginia's energy opportunity

Op-Ed by Brian Ball
The Virginian-Pilot

The Commonwealth is moving in the right direction by diversifying our economy and securing positive economic growth across all corners of the state. We have enlisted a variety of tools to do this, including building an innovation economy that helped us land Amazon’s new headquarters and developing creative workforce initiatives to meet the needs of our employers. These tools include near-term investment in our people and in our infrastructure that will produce long-term economic gain for the commonwealth. There is no industry where this is more salient than the energy industry.

Virginia is at the cusp of updating and modernizing our electric grid. Stakeholders throughout the commonwealth understand that to remain competitive, we must have an electric grid that is reliable, cost-effective, sustainable, and positioned to meet the energy needs of the future. We need a regulatory environment that promotes these goals and allows for market innovation.

A modern grid inherently requires investments in technologies that are considered new and innovative — without a legacy of such investments we might still be burning kerosene to light our homes as investing in electric transmission infrastructure was expensive and uncertain when first constructed in the late 1800s. Present day innovations include the recent approval of the Coastal Virginia Offshore Wind project (CVOW). Unfortunately, there have been some misguided claims made about the need and value of this project for Virginians. I think it is important to make clear what CVOW could mean for Virginia’s economic and energy future and why it is a prudent investment of ratepayer dollars.

The offshore wind industry offers significant economic potential for Virginia and for the entire the east coast. The federal Department of Energy estimates the industry could employ up to 40,000 people by 2030. With our low tax burden, highly skilled workforce and world class port infrastructure, Virginia is well-positioned to capture these economic benefits and become a hub for the offshore wind supply chain.

We also recognize that the commonwealth cannot simply sit back and expect the opportunity to come to us. In 2015, when Virginia had only 18 megawatts of solar installed in the entire state, Virginia’s utility regulator, the State Corporation Commission, rejected the first proposed utility-scale solar facility. Many in the state understood the need to move forward on deploying clean energy but were frustrated by the lack of progress.

To move the project forward and signal that Virginia was open for business, the commonwealth executed a first-in-the-nation public private partnership with Microsoft and Dominion Energy to build the project the SCC rejected. That decision became a major catalyst for the significant influx of solar resulting in over 3,000 megawatts of cost-effective solar resources currently in operation or under development. Because of the leadership represented by that first deal, not only is the solar industry a significant job creator in Virginia, it also helps to attract other major job creators like Facebook and Amazon that desire renewable energy to locate and power their operations.

Building upon this momentum for clean energy deployment, Gov. Ralph Northam and the General Assembly have now crafted a policy to accelerate the development of offshore wind. This policy includes the CVOW project, which is intended to serve as a research and development project that will act as a catalyst to large-scale, cost-effective offshore wind projects like we see off the coastlines of other countries around the world. The CVOW project was subject to competitive bidding, and the current agreement provides that nearly 90 percent of the costs are fixed. When approving the project, the SCC placed a cost cap on the overall price tag to further reduce ratepayer exposure to cost overruns.

I have heard from local and state leaders, as well as many in the business community who see offshore wind as a tremendous economic opportunity. It is an industry we must proactively embrace through innovative policy solutions if we are to reap the economic benefits and transition to the electric grid of the future..

Brian Ball is the Virginia secretary of Commerce and Trade