Although his company is expanding use of natural gas in power generation, Dominion (NYSE: D) Chairman, President and CEO Thomas Farrell II has a real fear of domestic over-reliance on gas for electricity.
Farrell is concerned that between 2020 and 2040, utilities will “build gas plant after gas plant after gas plant,” Then the question of the future is going to be “what were those people thinking,” Farrell said Oct. 19.
He made his comments in a webcast sponsored by Energy Central’s EnergyBiz magazine.
Dominion is building 1,300 MW of new combined-cycle generation in Warren County, Va., and next month it will file an application with the State Corporation Commission (SCC) to construct a new natural gas power plant in Brunswick County, Va.
At the same time the Richmond, Va., -based company is not abandoning its coal and nuclear foundation for baseload power.
Earlier this year Dominion commissioned a new coal-and-wood waste power plant in Wise County, Va., which can generate about 600 MW. Known as the Virginia City Hybrid Energy Center, the project can burn coal, waste coal and biomass from wood waste.
Farrell still likes nuclear power and would like to develop a new nuclear plant in Virginia by 2025. “We are working to develop a third reactor at our North Anna site, which is in central Virginia,” Farrell said.
Nuclear power currently generates 20% of the nation’s electricity. “In 30 years it will provide zero” unless new nuclear units are built, Farrell said.
Virginia imports too much of its electricity from neighboring states, Farrell said. Unlike other utilities, Dominion’s Virginia Electric and Power is seeing plenty of native demand growth. That’s why it needs more generation of all types, he said.
CEO talks biomass, offshore wind, gas
Dominion currently has only about 5% renewables, but can grow that ratio with biomass in the short term and offshore wind in the longer term, Farrell said.
In Virginia, the solar and wind resource is modest so Dominion is looking more toward biomass, Farrell said. Several of Dominion’s older, in-state coal plants are being converted to use biomass.
Virginia could also eventually support probably support 2,000 MW of offshore wind power.
At the same time, Dominion is very interested in distributed generation. The company has formed an Alternative Energy Solutions unit to help evaluate distributed generation options.
“Something is going to work there and we want to make sure we are a part of it,” Farrell said.
“We are in two worlds,” Farrell said. Dominion provides monopoly electricity service in Virginia and parts of North Carolina. It also has some merchant generation in New England and the Midwest. Farrell noted that Dominion recently moved to divest the remainder of its coal-fired merchant generation business.
Dominion is also possibly the largest natural gas storage company in the nation.
“There is no doubt the shale gas revolution is real. It is going to be long-term,” Farrell said. Dominion also has a sizable network of natural gas pipelines.