Achieving Clean Electricity Generation at Least Cost to Ratepayers by 2045

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December 11, 2021

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The Virginia Clean Economy Act (VCEA)1 passed in 2020 requires the elimination of most CO2 emissions from Virginia’s electricity sector by 2050. The VCEA relies on four key pillars for accomplishing electricity sector decarbonization: (1) a clean energy standard, (2) joining the Regional Greenhouse Gas Initiative (RGGI) carbon pricing program, (3) a set of capacity targets for specific renewables technologies and (4) shutting down most CO2 emitting power plants by 2045. The VCEA requests that the Secretary of Natural Resources and the Secretary of Commerce and Trade report to the General Assembly by January 1, 2022 recommendations “to achieve 100 percent carbon-free electric energy generation by 2045 at least cost for ratepayers. Such report shall include a recommendation on whether the General Assembly should permanently repeal the ability to obtain a certificate of public convenience and necessity for any electric generating unit that emits carbon as a by-product of combusting fuel to generate electricity.”

To identify potential strategies for achieving least-cost decarbonization by 2045, the Virginia Department of Energy (Virginia Energy) and the Virginia Department of Environmental Quality (DEQ), with the support of the Georgetown Climate Center, led a research project to model possible strategies to achieve least-cost elimination of CO2 emissions by 2045. A research team at Resources for the Future (RFF) in consultation with the Weldon Cooper Center for Public
Service at the University of Virginia (Cooper Center) used RFF’s electricity planning model, Haiku, to explore potential strategies for lowering the costs of meeting VCEA emissions targets. The Cooper Center had the primary responsibility for reporting the modeling results and evaluating other potentially important elements of a least-cost approach to decarbonizing Virginia’s electricity sector.

The results of this investigation suggest a number of key strategies for lowering the costs of decarbonization. The modeling results are broadly consistent with the results of other studies of least-cost emissions reduction. Underlying many of the specific suggestions in this report are the principle that flexibility in technology, timing and geography all contribute to lower costs. Strategies that focus directly on reducing aggregate greenhouse gas emissions tend to have
lower costs than strategies that specify particular techniques or locations for achieving those emissions. Elements of a flexible approach might include:

  • Technology-neutral, competitive procurement of non-emitting generation
  • Procurement of non-emitting generation from the PJM interconnection region
  • Emphasizing market-based approaches such as the Regional Greenhouse Gas Initiative