Dominion Energy is a publicly listed company headquartered in Virginia, USA. In 2019, its revenue was US$16.57 billion and installed capacity was 27.1 GW. As a vertically integrated, regulated utility with a renewable merchant generation portfolio, Dominion Energy’s low-carbon transition planning focuses on how current and anticipated regulation options can be met with minimum cost to consumers.
Dominion Energy is counting on the lower carbon intensity of gas compared to coal to carry forward its decarbonisation plans. Yet permanent greenhouse gas removal technologies will be required by the mid-2040s for the company to align with its well-below 2-degrees pathway. R&D is the principle action companies can take to develop the new low-carbon technologies the electric utilities sector needs for decarbonisation. Dominion Energy could better demonstrate financial commitment to decarbonisation by increasing its R&D spend on non-mature mitigation technologies.
Dominion Energy is developing low-carbon business options such as scaling up renewable power generation with the Virginia Offshore Wind Technology Assessment Project, deployment plans for 2.1 million smart meters and new pumped storage and utility-scale battery storage system pilots. So far, uptake of renewables has been small (just 4% of generation in 2018, mainly solar), although costs continue to drop. The company could be left holding numerous gas assets in a policy environment with strengthening carbon pricing. Exposure to such regulatory costs could be reduced if the company ramped up development of its low-carbon business segments.
Dominion Energy is awarded a trend score of -. If the company were reassessed in the near future, its score would likely worsen. Dominion Energy is not currently on track to meet its own 2030 emissions reduction target unless it takes additional action. It needs to ramp up efforts to better align with the pathway required for well below 2-degree alignment. The emissions reductions expected from the company’s lower fossil fuel generation (particularly coal) will gain significance throughout the 2020s. However, between 2018 and 2023, the emissions intensity trend is not expected to keep up with the reductions required under the company’s well-below 2-degree pathway. As a regulated public utility (albeit with some merchant power generation), Dominion Energy’s low-carbon transition planning is influenced by external factors. Current strategic choices, for example to replace coal power with gas, do, in the short term, leave Dominion Energy on an emissions pathway within the cumulative emissions budget traced by its decarbonisation pathway. However, additional decarbonisation actions are needed for the company to remain within this budget longer term.
Dominion Energy has set itself a target of reducing generation emissions intensity by 60% by 2030 as compared to 2000. However, a more rapid rate of decarbonisation is needed to bring the company’s low-carbon transition in line with its well below 2-degree pathway.
Dominion Energy plans to permanently close, or put into cold reserve, high-intensity generating assets at Bellemeade, Bremo, Mecklenburg, Chesterfield and Possum Point. Low-carbon business models such as renewables, smart metering and storage are being adopted, but there are no plans to reduce gas power.
New nuclear at North Anna is on hold, but new gas plants are going ahead. The 2018 spend on non-mature mitigation technologies, such as carbon capture and storage, was significantly below what is required for decarbonisation alignment – particularly given Dominion Energy’s ongoing commitment to gas power.
Dominion Energy successfully reduced emissions intensity from 360 gCO2e/kWh in 2013 to 273 gCO2e/kWh in 2018. The proportion of coal in the generation mix has reduced from ~27% to ~12% in recent years, whereas gas has increased from ~27% to ~39%. Renewables have grown from ~1% to ~4% of the mix, and nuclear now provides ~43% of generation.
Clear milestones for decarbonisation were not identified in Dominion Energy’s planning. Targeting is not forward-looking enough to cover the majority of the company’s assets’ lifetimes. With new nuclear on hold and a strong commitment to gas in the business model, it will become ever more challenging to decarbonise at the rate required.