West Virginia’s Largest Utility Sees Renewables — Not Coal — in its Future
The Mountain State may be the heart and soul of the coal industry, but West Virginia will see more renewables incorporated into its electricity grid in the coming years. Appalachian Power, West Virginia’s largest utility, recently indicated that more solar and wind power will be part of the state’s future. In a recent interview with the Charleston Gazette-Mail, Chris Beam, who became Appalachian Power’s president in January, said that clean-energy technologies are crucial to the utility’s future, in addition to cheaper natural gas, if it hopes to attract more corporate customers. Those companies include the likes of Google and Amazon, which are interested in areas of West Virginia as potential sites for data centers. But those new facilities will only come to the state if these companies are guaranteed that they can be powered by 100 percent renewables. Beam’s business case for renewables includes the fact that more customers in other markets Appalachian serves, such as Tennessee and Virginia, are looking to power their homes and businesses with clean energy. To that end, the power company filed its latest long-term electricity blueprint, or Integrated Resource Plan (IRP), with the state of Virginia. The plan outlines several goals for the next 15 years, which include bringing 500 megawatts of solar and 1,350 megawatts of wind power online and implementing more energy storage and grid efficiency technologies. Mindful of the reactions this shift could spark across West Virginia, Beam explained the political reasoning behind the company’s position. No matter who is in the Oval Office or at the governor’s desk in Charleston, the reality is that energy companies look ahead to 10-, 20- and even 50-year cycles. Instead of trying to comply with four- or eight-year policy shifts, utilities like Appalachian and its parent company, American Electric Power, must gauge the direction in which the overall power markets are headed. “Our investments have to span what could be multiple governors in the governor’s mansion or multiple presidents sitting in Washington, D.C.,” Beam told the Huffington Post. “We don’t get into the four-year swing based on who is sitting in what chair, but more around what is the best thing to do from our customers’ perspective.” And that means coal will be used less in West Virginia moving forward. Compared to much of the country, which has ridden the natural gas boom, Appalachian Power generates about 60 percent of its generates from coal. But even that is a drop from previous years, and Beam projects that share will decrease to 50 percent by 2020. But overall, coal remains king in West Virginia: The most recent figures from the U.S. Energy Information Agency estimate that over 96 percent of the state’s electricity was generated from coal in 2014. Appalachian Power has a long path ahead in order to match deeds with words. Last year the utility reached an agreement with a wind farm in India to source 120 MW of power. That brought the utility’s total amount of wind power to 495 MW, which is distributed across West Virginia and Virginia. The company does not yet generate or sell any solar power. It will come as no surprise that West Virginia is a laggard on the solar power front, but the state’s nascent renewables sector is steadily growing. According to the trade group Solar Energy Industries Association (SEIA), the state ranked 42nd in the U.S. with a 2015 installed solar capacity of 3.4 MW – but that was a 61 percent increase from the previous year. The reality Appalachian and other utilities face is that no matter where their political realities lie, economics will drive their investment decisions. And as electricity storage technologies advance and solar and wind become even cheaper and more scalable, these new sources of power will win out – even in coal country. Image credit: O Palsson/Flickr Published earlier today on Triple Pundit.