Appalachian amps up solar power
Appalachian Power has expanded its renewables portfolio with the addition of 20 megawatts of solar power, coming through Leatherwood Solar, a new solar project in Virginia.
By Tony Kryzanowski
The state of Virginia recently announced through legislation that it is serious about moving away from fossil fuel-generated power to commercial-scale, renewable power, setting targets for local power utilities to ensure that renewable power benchmarks are met during the transition.
The Virginia Clean Economy Act (VCEA) was passed in 2020 with the goal of achieving 100 percent carbon-free status in the state’s power generation by 2050. It also requires power utilities to file annual plans with the Virginia State Corporation Commission outlining how they plan to grow their renewable power generation portfolios.
Virginia is the first state in the U.S. South to have established the goal of achieving full, clean energy production. However, it still has a distance to travel before it reaches that objective.
According to the Solar Energy Industries Association (SEIA), only about 3.25 percent of the state’s power supply now comes from solar power, although about 35 percent is generated by four nuclear power plants. Most power generation in Virginia is from natural gas.
Solar and wind developers have recognized the current opportunity and have ramped up their development plans. Power utilities have also announced numerous Requests for Proposals, looking for developers interested in signing power purchase agreements (PPAs) with them. Suffice to say that Virginia has become a fruitful development market.
Some PPAs have already been signed and others are being negotiated. Local utilities are also purchasing renewable power generation sites outright.
One company subject to the requirements of the VCEA is Appalachian Power, Virginia’s second-largest power provider. It is a division of the large American Electric Power (AEP) company and it has recently launched a major campaign to expand its renewable energy
It recently signed its first 15-year PPA with Energix Renewables to purchase renewable power from the 20-megawatt (MW) Leatherwood solar facility located in Henry County, Virginia, southeast of Martinsville. Martinsville is about 175 miles southwest of the state capital, Richmond.
Set in the foothills of Virginia’s beautiful Blue Ridge Mountains, Henry County is home to major industries, NASCAR Cup Racing, and—as the county itself says—an unsurpassed quality of life. And it is now home to a new solar project that will supply renewable power to approximately 3,600 homes.
Energix Renewables is a subsidiary of an Israeli-based company, but its American headquarters is conveniently located in Arlington, Virginia. It has over 170 MW in production with over 6 gigawatts in the pipeline. These projects are planned roughly in the same geographic region of Virginia, Pennsylvania, West Virginia and Kentucky.
Currently, the company has seven solar farms in Virginia with an investment of over $300 million in the state.
Energix Renewables was actually active in the state long before the adoption of the VCEA, as planning for the Leatherwood project began in 2016. The company also signed its PPA with Appalachian Power prior to this legislation, working closely with county officials throughout the development and construction process. Building this project provided more than 130 construction jobs.
“While the VCEA provided a push to the solar industry, our commitment to the Commonwealth of Virginia is not dependent on the legislation,” says Yarden Golan, Director of Public Affairs and Communications in the U.S. for Energix Renewables.
“Virginia has considerable sun irradiance throughout the year, which coupled with the mild eastern climate, creates great development potential across the region for solar projects,” he adds.
The company chose to use a tracking system on the Leatherwood project to capture the most sunlight possible and maximize its energy production. It connected to the Appalachian Power grid in August 2021.
Golan says that the company experienced no significant issues during the construction phase of this particular project despite the COVID-19 pandemic. The Leatherwood location offered great terrain and soil type, and strong support from the community.
What has helped Energix Renewables advance its construction program and weather some of the current challenges being experienced throughout the industry is that it is building long term relationships with some of the industry’s top suppliers.
“Like the rest of the industry, we are seeing supply chain constraints and cost increases,” says Golan. “As a long-term owner, we were able to create long lasting partnerships with leading suppliers to minimize such risks and costs.”
The company works with what he described as Tier 1 suppliers. The solar panels on the Leatherwood project were supplied by First Solar, inverters were supplied by SMA, and the tracking system was supplied by Array Technologies.
|Appalachian Power’s short term goal is to add another 500 MW of solar and wind power to its renewables portfolios over the next three years, with a longer-term goal of adding approximately 3,300 MW of solar, 2,600 MW of energy storage, and nearly 3,000 MW of onshore wind to its current portfolio by 2040.
Energix Renewables is also actively participating in Appalachian Power’s renewable growth plan beyond the Leatherwood installation.
The utility will soon add another 35 MW to its renewables portfolio, having signed PPAs with Energix Renewables for solar power generated from its 20 MW facility in Wythe County, Virginia and with another 15 MW facility being developed by Depot Solar Center in Campbell County, Virginia. The second project is owned by Coronal Energy.
Furthermore, the utility’s short-term goal is to add another 500 MW of solar and wind power to its renewables portfolios over the next three years, with a longer-term goal of adding approximately 3,300 MW of solar, 2,600 MW of energy storage, and nearly 3,000 MW of onshore wind to its current portfolio by 2040.
The PPA with Energix Renewables for power generated from the Leatherwood solar installation was an important milestone for Appalachian Power which has one million customers in Virginia, West Virginia, and Tennessee. Most of its power generation comes from burning fossil fuels. At present, it supplies 64.5 percent of its power from coal, 19.1 percent from natural gas, and 16.4 percent from hydro and wind. Although it owns no coal-fired power plants in Virginia, it draws power from coal-fired plants in neighboring West Virginia, which is the second largest coal-producing state in America.
“We certainly have become more active since the passing of the Virginia Clean Energy Act,” says David Nance, Customer Service Manager for Appalachian Power in Virginia. “On the one hand, we’ve shut down some coal-fired generation and on the other hand, we have renewables that are coming on line and we have an aging transmission system.”
So for the past several years, the company has been shutting down its coal-fired plants in Virginia and making significant upgrades to its transmission system, anticipating the impact that renewables could have as its portfolio grows. One of its coal-fired power plants was shut down while a second was converted to burning natural gas.
|Set in the foothills of Virginia’s beautiful Blue Ridge Mountains, Henry County is home to major industries, NASCAR Cup Racing, and—as the county itself says—an unsurpassed quality of life. And it is now home to a new solar project that will supply renewable power to approximately 3,600 homes, with the 20 MW Leatherwood Solar project.
Appalachian Power is also seeking partnerships with larger commercial-scale renewable power developers going forward.
In January, it issued a Request for Proposals for up to 1,000 MW of wind and/or 100 MW of solar generation resources with optional battery energy storage systems. Facilities must be at least 50 MW in size and achieve commercial operation by mid-December 2025.
Also in January, it announced plans to purchase Firefly, a 150 MW solar facility being built by Recurrent Energy LLC in Pittsylvania County, Virginia. Recurrent Energy is a subsidiary of Canadian Solar Inc.
Construction is expected to start on the project under what is called a Build Transfer Agreement in early 2023 and is expected to be completed in the second quarter of 2024. Appalachian Power will take ownership of the project once built and at present, it is the largest solar facility being added to its portfolio.
Appalachian Power’s parent company, AEP, owns utilities in 11 states and has a goal of achieving half of its total power generation capacity from renewables by 2030.
One issue that Appalachian Power is trying to manage is complaints from customers about increases to power bills. Bills increased roughly $11.50 per month last year for transmission improvements. The company also requested a rate increase because of the rising cost of natural gas and coal, which increased power bills by about $3 per month for 1000 kilowatt hours (kWhs) of monthly usage.
Bill increases will also result from the company’s purchases of renewable power facilities and entering into PPA’s with others.
“Customer bills are expected to increase as the company adds more renewables to comply with the VCEA’s requirements,” the company says, with residential customers consuming 1000 kWhs a month witnessing an approximate $2.37 increase to their monthly bill.
The utility acknowledges the need for significant community engagement as the number of renewable power projects expands within its service area.
“Different counties have different feelings about this (renewable power) these days, I can tell you,” says Nance. “I think as time goes on and we start to have more of these projects, depending on the specific locality, there will probably have to be a lot more community engagement.”
Even coal-producing states like neighboring West Virginia are making it easier to develop renewable power as in April 2021 its legislature legalized the signing of PPAs with generators of renewable power.
Appalachian Power recently issued a Request for Proposals to build 150 MW of solar power capacity including battery energy storage systems in that state.