Dominion Energy Virginia is stepping up to the plate with a bold long-term strategy aimed at tackling the surging power demand in the state. This surge is largely fueled by the insatiable appetite of data centers, which have become a cornerstone of the modern digital economy. The utility’s recently filed 2024 Integrated Resource Plan (IRP) with both the Virginia State Corporation Commission and the North Carolina Utilities Commission paints a picture of a future where electricity usage could skyrocket by over 100 percent in the next 15 years. With the expectation of a 5.5 percent annual increase in energy demand over the next decade, the stakes couldn’t be higher.
In 2023 alone, Dominion made significant strides by connecting 15 data center campuses, which added a hefty 933MW to the grid. By August, that number had climbed to 949MW with 14 additional campuses connected, and the company anticipates reaching a total capacity of 1GW by the end of 2024. This rapid expansion underscores the urgency of the situation. Dominion is currently studying a staggering 7.5GW of demand at the Substation Engineering Letters of Authorization (SELOAs) stage, while another 5.8GW is linked to Construction Letters of Authorization. Although these projects are not guaranteed, they indicate a robust pipeline of potential energy needs.
The utility has also secured 8GW of contracted capacity through Electric Service Agreements with data center customers, ensuring that these clients will consume enough electricity to justify the costs of distribution infrastructure. However, it’s worth noting that this figure doesn’t account for data centers still in the early development stages, suggesting that actual demand could far exceed projections.
To tackle this unprecedented growth, Dominion’s IRP adopts an “all-of-the-above” strategy. This approach encompasses a broad spectrum of energy sources and infrastructure improvements. The plan emphasizes carbon-free energy, projecting that 80 percent of its capacity will come from renewable sources. This includes a planned 3.4GW of new offshore wind and a significant ramp-up in solar capacity to 12GW, representing a 150 percent increase from current levels. Additionally, 4.5GW of new battery energy storage capacity and the potential introduction of small modular nuclear reactors (SMRs) in collaboration with Amazon could further diversify the energy mix.
However, not everyone is on board with Dominion’s ambitious plans. Environmental organizations like the Sierra Club have voiced their concerns, arguing that the reliance on natural gas and the potential for increased electricity costs for Virginians are problematic. Critics like Connor Kish from the Sierra Club have challenged the notion that the public should foot the bill for new fossil fuel infrastructure when cleaner alternatives are available. Similarly, the Piedmont Environmental Council has warned that electricity bills could double over the next decade due to the massive investments required to support Dominion’s IRP.
In response to these criticisms, the Virginia State Corporation Commission has mandated that Dominion develop a least-cost alternative plan that excludes data center load growth. This requirement underscores the growing tension between the need for rapid energy expansion and the imperative for sustainable and affordable energy solutions.
As Dominion Energy Virginia forges ahead with its plans, the implications for the energy sector are profound. The utility’s commitment to a diversified energy portfolio could serve as a model for other states grappling with similar challenges. However, the pushback from environmental groups signals that the road ahead will be fraught with debate and scrutiny. As we move deeper into this energy transition, the balance between meeting demand and ensuring sustainability will be a critical conversation in Virginia and beyond.
