Virginia Economic Review: Fourth Quarter 2023 by vedpvirginia

FOURTH QUARTER 2023

Leading the Transition to America’s Energy Future

PERSPECTIVES FROM THOUGHT LEADERS: Bob Blue, Dominion Energy, Inc. | Will Payne, Coalfield Strategies April Wade, Virginia Nuclear Energy Consortium

Contents 18 State of Acceleration

Virginia’s shift to cleaner energy sources has gone up-tempo thanks to efforts across multiple administrations

24 Preparing to Meet Virginia’s Long-Term Energy Needs The Commonwealth’s revamped energy plan aims to build capacity through flexibility, technological innovation

28 Coastal Virginia Offshore Wind Project Hits Major Milestones

The largest offshore wind project under development in the United States is a major pillar of Dominion Energy’s clean energy plans

34 A Hub for Energy Research in Southwest Virginia

In a region where coal once dominated, the Energy DELTA Lab will be a proving ground for clean energy advancements

46 Virginia’s Transformer Manufacturers Power Up

04 Facts & Figures 06 Selected Virginia Wins 10 Charting a Cleaner Energy Future for Virginia: A Conversation With Bob Blue 38

Betting on Energy Innovation: A Conversation With Will Payne

42 Nuclear’s Role in the Future of Clean Energy: A Conversation With April Wade 54 Making Up for Lost Time 56 Regional Spotlight 66 Economic Development Partners in Virginia

Record-high demand drives production expansions in facilities across the Commonwealth

50 New Industry, New Workforce

Inside the efforts to train talent for Virginia’s growing offshore wind needs

LEFT: Grayson County on the North Carolina and Tennessee borders is home to a wide variety of outdoor attractions, including a stretch of the Appalachian Trail and Grayson Highlands State Park, which includes Virginia’s two highest peaks, Mount Rogers and Whitetop Mountain.

Subscribe today. Visit www.vedp.org/Virginia-Economic-Review 1

Tank Hollow Falls is located within the Cleveland Barrens National Area Preserve in Russell County, which protects part of the Clinch River Valley, one of the top biodiversity hotspots in the country. The falls are easily accessed via a short walk, and two other waterfalls, Big Falls and Spring Falls, are located nearby.

Balancing Complicated Priorities While Meeting Tomorrow’s Energy Needs FULFILLING ENERGY NEEDS is

a crucial part of any area’s value proposition for new and existing businesses, and one that’s complicated by the need to produce power sustainably. The industry is often described as a three-legged stool, with success hinging on balancing three often-competing imperatives: reliability, affordability, and environmental stewardship. With a history of effectively serving energy-intensive industries, Virginia is looking to move to the next chapter of its energy story. Taken together, the Virginia Clean Economy Act of 2020 and the Commonwealth of Virginia’s 2022 Energy Plan offer a roadmap to that future. The Clean Economy Act mandated an increase in the use of renewable energy sources, and the 2022 Energy Plan refined that mandate while acknowledging the need to keep multiple power options on the table. These plans continue a decades-long shift toward sustainable power — more than half of Virginia’s total energy generation in 2000 came from coal, which is projected to provide just 3% of the Commonwealth’s power in 2025. In this issue of Virginia Economic Review, we detail the evolution of the energy industry in the Commonwealth, including a look at the 2022 Energy Plan and its efforts to shift more production to clean energy sources while ensuring sufficient power to meet increasing needs.

We also discuss a burgeoning energy research hotbed in Southwest Virginia, profile Virginia companies that are manufacturing crucial power equipment, and provide an update on the country’s largest offshore wind project — along with efforts from the Commonwealth’s world-class educational institutions to train a workforce for that nascent industry. Also included are discussions with three thought leaders with insight into how Virginia can fulfill tomorrow’s energy needs in sustainable fashion: Bob Blue, chair, president, and CEO of Richmond-based Dominion Energy, Inc., one of the largest electrical utilities in the country; Will Payne, managing partner of economic development firm Coalfield Strategies and an adviser to the aforementioned research hub, the Energy DELTA Lab; and April Wade, executive director of the Virginia Nuclear Energy Consortium. We hope you enjoy this look into Virginia’s energy industry, its strong record of serving power-intensive industries, and efforts to transform its energy production to meet the needs of the industries of the future.

Jason El Koubi President and CEO, Virginia Economic Development Partnership

Facts Figures

-27.6 %

35%

U.S. Energy Information Administration, 2023

U.S. Energy Information Administration, 2022

Commercial electricity price difference between Virginia and national average

Reduced Emissions, 2010–2020 Carbon dioxide: 20% reduction Sulfur oxides: 91% reduction Nitrogen oxides: 58% reduction

Percentage of U.S. coal exports handled by The Port of Virginia facilities, 2021

BATH COUNTY PUMPED STORAGE STATION

Largest Pumped-Storage Hydroelectric Plant in World

Virginia Department of Energy, 2022

U.S. Energy Information Administration, 2022

DOMINION ENERGY (ANNUAL REVENUE $14.2B)

Largest Electric Utility Companies in U.S.

Top 35 Companies, Annual Green Power Usage

P3 Cost Analysts, 2023 U.S. Environmental Protection Agency, 2023

Selected Virginia Wins Lyon Shipyard, a full-service ship repair and industrial services provider, will invest $8.5 million to expand its operation in the city of Norfolk in the Hampton Roads region, creating 134 new jobs. The company is increasing capacity to operate on commercial ships and vessels that service offshore wind farm operations. Virginia successfully competed with Maryland and North Carolina for the project. Founded in 1928, Lyon Shipyard has two facilities in Norfolk along the eastern branch of the Elizabeth River. Lyon supplies commercial and government customers with services including marine electronics repair, barge repair, and pier-side repairs. The company also hauls vessels out of the water for underwater repairs to equipment like propellers, tail shafts, and rudders. Commercial customers include tug and barge operators, dredging and marine construction contractors, ferry and cruise ship operators, research vessels, and commercial fishing operations. Government customers include the U.S. Navy, Army, Coast Guard, the Military Sealift Command, and the Maritime Administration. Support for Lyon’s job creation will come from the Virginia Jobs Investment Program, which provides consultative services and funding to support employee recruitment and training activities. The company is also eligible to receive benefits from The Port of Virginia Economic and Infrastructure Development Zone Grant Program.

The support and partnership Lyon Shipyard receives from the Commonwealth of Virginia has been astonishing…We want to be the change so many other companies just talk about. Lyon Shipyard wants to lead the charge and help transform the socioeconomic landscape for the city of Norfolk and its residents. NIKOLE DUNKLEY Vice President, Human Resources, Lyon Shipyard

Lyon Shipyard, Norfolk

Selected Virginia Wins Greater Richmond Virginia Artesian® Bottling Company

Northern Virginia Ross Industries Inc.

Jobs: 24 New Jobs CapEx: $7.5M Locality: Fauquier County

Jobs: 13 New Jobs CapEx: $3M Locality: Hanover County

Roanoke Region

Hampton Roads

Wells Fargo & Company

Amazon

Jobs: 1,000 New Jobs Locality: City of Virginia Beach

Automatic Coating Ltd. Jobs: 50 New Jobs CapEx: $22.8M Locality: City of Suffolk

Jobs: 1,100 New Jobs CapEx: $87M Locality: Roanoke County

Shenandoah Valley Leiber

Hermes Abrasives USA

Jobs: 30 New Jobs CapEx: $5.6M Locality: City of Virginia Beach

Lyon Shipyard

Jobs: 134 New Jobs CapEx: $8.5M Locality: City of Norfolk

Jobs: 35 New Jobs CapEx: $20M Locality: Rockingham County

Northrop Grumman Corporation

Jobs: 300 New Jobs CapEx: $200M Locality: City of Waynesboro

Southwest Virginia

Lynchburg Region Parkland Direct

Jobs: 41 New Jobs CapEx: $10M Locality: Bedford County

Tate

Jobs: 170 New Jobs CapEx: $14.9M Locality: Russell County

Virginia’s Gateway Region

New River Valley

PGT Innovations, Inc.

Camrett Logistics

Jobs: 659 New Jobs CapEx: $54.3M Locality: Prince George County

Jobs: 58 New Jobs CapEx: $2M Locality: Pulaski County

Roanoke Region New River Valley

Southwest Virginia I81-I77 Crossroads

Northern Shenandoah Valley

Washington, D.C.

Northern Virginia Shenandoah Valley Central Virginia

Greater Fredericksburg

Northern Neck

Middle Peninsula Greater Richmond Lynchburg Region

Eastern Shore South Central Virginia

Southern Virginia

Virginia’s Gateway Region Hampton Roads

Charting a Cleaner Energy Future for Virginia A Conversation With Bob Blue

Bob Blue is chair, president, and CEO of Dominion Energy, Inc., an integrated energy utility headquartered in Richmond that operates in 15 states and provides energy to 7 million customers. He started his career with Dominion in the company’s public policy department and held several positions before being named CEO in 2020. VEDP President and CEO Jason El Koubi spoke with Blue about the company’s history serving commercial and residential customers and its efforts to shift the balance of its portfolio toward clean energy sources as it works toward its goal of net zero carbon emissions by 2050. Jason El Koubi: Tell us a little bit about Dominion Energy — the organization, its footprint, and its various capabilities. Bob Blue: We serve 7 million homes and businesses with electricity and natural gas. About half of those customers are electric customers in Virginia, North Carolina, and South Carolina, while the other half are natural gas customers in Ohio, Utah, and the Carolinas. We also operate some electric generation in states where we do not serve homes or businesses directly, but we sell that electricity to utilities who do. All that adds up to a diverse portfolio of energy that we strive to ensure meets our mission, which is providing reliable, affordable, and increasingly clean energy. El Koubi: You’re charged with meeting the energy needs of people and businesses, reducing carbon emissions, and keeping rates affordable for those customers. How do you strike that balance and manage those different competing imperatives? Blue: We think we’re doing pretty well. On the reliability front, let’s talk about Virginia, for example. At the end of October, a little more than 300 days into the year, in terms of hours — about 7,300 hours so far — our customers have been without electricity, on average, for three hours. If you subtract major weather events over which we have no control, we’re

at about an hour and 45 minutes. Now, being without electricity for three hours, or one hour and 45 minutes, or one minute, can be very frustrating, and we intend to drive that number down as much as we can. But we’re proud of our record of reliability. On the affordability front, when we compare ourselves to national averages, we have been below the national average for residential customer rates for the last 18 years. Our residential rates have grown by a little bit, more than 1% a year, and our commercial rates by a little less than 1%, since 2010. The rate of inflation over that period has been about 2.6%. Relative to other things that our customers are paying for, our rates are declining. This summer, we were 21% below the national average. We’re 36% below the East Coast regional average. That’s for residential customers, but the story is the same for our industrial customers. We’re 16.7% lower than the national average and we’re 38.7% lower than the East Coast rate. That’s important when we think about trying to attract businesses to Virginia. We’ve reduced our carbon emissions since 2005 by 46%. That’s 18 years of growth — we’re serving more customers and we’re serving more electric demand — but we’ve reduced carbon emissions by 46%. And we’ve reduced the other emissions that people think of by generating electricity. Whether it’s sulfur oxides or nitrogen oxides or mercury, we’ve slashed those by 90% or more over the course of the last 30 years. The way we do that starts with a diverse mix of sources that we use to provide electricity to our customers — nuclear, natural gas, solar, hydro, biomass, coal, and now offshore wind. If we have those diverse sources and then we invest in the infrastructure needed to get our customers reliable service, and we’re efficient in our operations, that adds up to effectively achieving that critical mission that we have of reliable, affordable, and increasingly clean energy.

We’ve got work to do. Growth in demand is expected in Virginia, and that’s exactly what we want. We need to make sure we’re smart about investing in new generation, we’re smart about investing in new infrastructure, and we’re being innovative in thinking about the way we provide service to our customers. El Koubi: I believe Dominion has a goal of net zero carbon emissions by 2050. That’s going to require careful management of everything that you’ve just described. How do you achieve that net zero carbon emissions goal by 2050 while also keeping up with the demand projections that we’re seeing in Virginia and elsewhere? Blue: When I started working at the company in 2005, we generated about half the electricity that we provided to our customers from coal. Today, that’s closer to 10%. We have added in cleaner natural gas — highly efficient natural gas units that have helped reduce carbon emissions. Now, they’re lower carbon than coal, but they’re not carbon-free. What they give us, however, is the confidence to be able to add in more renewables going forward, largely meaning solar and wind. Why do I say they give us that confidence? Solar and wind are not, in the industry parlance, dispatchable. Solar operates when the sun is shining, wind operates when the wind is blowing. It’s dark at night and it’s cloudy sometimes during the day. The wind doesn’t always blow consistently. If we have these natural gas units that we can operate, they can fill in when the wind isn’t blowing and the sun isn’t shining. As we go forward, we’ll add in more of these carbon-free sources like solar and wind and we’ll operate those gas units differently, or we may have a different mix of those gas units. Some of the gas units we operate today are designed to run all the time. We’re proposing to add, for example, adjacent to our existing Chesterfield Power Station, what’s called a natural gas

peaking plant — one that’s not designed to operate all the time but is designed to operate when demand is high and other generation sources are not there. Renewables will get us a long way toward achieving our goal of net zero by 2050, but they’re not going to get us all the way. They’re going to need help from battery storage. Most of the batteries that are used across the industry today are lithium-ion batteries, which are good for about four hours. That’s great, but we’re looking to get something longer-duration. So, we’ve just announced a pilot with a battery that is closer to 100 hours’ duration. We’re looking to make sure that we’re thinking about all other possible technologies that will help us close the gap to 2050. We operate a very important nuclear fleet that is carbon-free around the clock. Those plants were initially licensed for 60 years — many of them were built in the 1970s. They will meet the end of their current licenses in the 2030s. We’re now in the process of licensing those out to 80 years. In fact, the Surry Power Station is currently the only nuclear power station in America that is licensed from 60 to 80 years. North Anna will be, not too long from now, licensed out to 80 years. Continuing to operate those nuclear plants is going to be critical to our ability to achieve net zero by 2050 because they provide so much carbon-free electricity. We’re looking at supplementing that existing nuclear fleet with what are called small modular reactors. Many of the component pieces of the reactors themselves are manufactured offsite and then installed on the site where we may want to put them. The Navy uses small modular reactors on submarines and aircraft carriers. They have not been deployed commercially yet in this country, but we’re examining that possibility. We’re also looking at the possibility of using hydrogen. When hydrogen is combusted, it does not produce greenhouse gases. It can be created by taking water and, through

A C O N V E R S AT I O N W IT H B O B B LU E

We have an opportunity, because of the way this project is advancing, to become known as a hub for offshore wind along the East Coast. That could provide even more economic benefit to the Hampton Roads region and to Virginia. BOB BLUE Chair, President, and CEO, Dominion Energy, Inc.

electrolysis, separating out the oxygen from the hydrogen. It’s possible that we might be able to blend hydrogen into an existing natural gas plant. It’s possible, someday, that we might be able to operate a power plant with hydrogen. El Koubi: The Coastal Virginia Offshore Wind project is said to be the largest project Dominion has ever undertaken, and it’s going to be one of the largest offshore wind farms in the world once it’s completed. Can you talk a little bit about what it means for Dominion and the renewable energy supply for Virginia and the nation? Blue: We’ve undertaken big projects before. I mentioned those nuclear power plants. When we built those back in the 1970s, those were huge projects for the company. When we built our hybrid energy center in Southwest Virginia that went online in 2012, that was a large project for the company. We have a history of building large infrastructure projects for the benefit of our customers, and that’s what this is. Because the fuel is free, we expect it to save customers about $3 billion in fuel costs. We have to buy fuel for the other ways we generate electricity, whether it’s fuel for our nuclear stations, natural gas for our gas plants, or coal for our coal stations. [The Coastal Virginia Offshore Wind project] is taking advantage of free fuel. It emits nothing. When it’s operating, starting potentially in late 2025, with full completion expected by the end of 2026, it will prevent up to 5 million metric tons of carbon emissions per year that would otherwise be

generated from different sources of electricity generation. But beyond the benefits to our customers from fuel savings and reduced emissions, the economic benefits of this project will also be substantial. There are already 750 Virginia-based workers, nearly 530 of them in the Hampton Roads region, working on this project. When it’s in service, there will be about 1,000 jobs supporting this project. It’ll create millions of dollars in tax revenue, tens of millions of dollars in pay and benefits, and hundreds of millions of dollars in total economic impact. And we have an opportunity, because of the way this project is advancing, to become known as a hub for offshore wind along the East Coast. That could provide even more economic benefit to the Hampton Roads region and to Virginia. El Koubi: Can you talk a little bit more about how nuclear power fits into Dominion’s plans in Virginia and elsewhere? Blue: About 30% of the total electricity we generate today is from nuclear, including 87% of the carbon-free electricity. I’m not sure that the folks building them could have predicted the profound impact that those plants would have in Virginia. People weren’t thinking about climate change and the warming of the planet back then, but for us in Virginia to have the benefit of those plants today is remarkable. We need to keep them operating. We invest in them and have throughout their lifetime. I joke that there’s probably not a lot in a

A C O N V E R S AT I O N W IT H B O B B LU E

nuclear plant today that was there when it was first constructed, and we’ll have to make additional investments to keep those plants operating reliably and safely. We’re in the process of doing that now. A lot of the businesses that are looking to move to Virginia have sustainability goals, and they’re looking for a low-carbon electric grid. We’ve got one here today, as compared to the rest of the country, thanks to those nuclear units, and we’re expanding it rapidly. But going forward, we’re going to see electricity demand grow, a lot of it driven by data centers. We probably serve more of them than any other company like ours in the country. Just operating those existing units isn’t going to be enough, and that’s why we’re looking at those small modular reactors. What we need in order to be able to invest in them is to make sure we understand that the technology will work as advertised by the developers. We need to make sure that we can put them in service in a cost-effective way for our customers. An interesting thing about small modular reactors is that they could be deployed, potentially, in different places than the reactors we operate today. They do not need as large a safety buffer, if you will, as those units do. Where we have retired older units — maybe coal or oil units that we used to operate — and we have the transmission infrastructure still there, there are possibilities to be able to site them and take advantage of that existing infrastructure. So right now, our focus is technology selection and understanding the costs.

El Koubi: Let’s talk about those demands. You mentioned the electrification of the economy, and one of the major drivers of that is electric vehicles. How do electric vehicles fit into Dominion’s efforts to get to net zero carbon emissions? Blue: Once the purchase price point for electric vehicles starts to get closer to parity with non-electric vehicles, I think you’ll see demand move pretty quickly. Our customers want to know that they’re going to have enough electricity to get to and from wherever they’re going. This idea of range anxiety is real. As people drive these vehicles, though, they tend to get comfortable with the way they operate. The important part for us is to make sure that we’re providing the infrastructure for charging. We were participating with other utilities in a coalition to make sure that there are fast-charging stations across the Midwest and South and up and down the Atlantic coast. We try to work with customers who are going to be putting the charging stations in to make sure that we have our infrastructure ready for them, and for customers who may be converting a fleet to electric vehicles. I’m not sure there’s going to be one silver-bullet strategy; it’s going to be a lot of different pieces. But we’ve built this electric grid out over the course of more than a century. We’ve seen periods where demand went up fast, when people converted to electric appliances and heat pumps, and we were able to meet that demand. I expect that we’re going to be

Our company thrives when the communities in which we do business thrive, and the way for those communities to thrive is to grow their economic base. Our objective is to be as good a partner as we possibly can. We’re going to do that by continuing to be reliable, continuing to be affordable, and continuing to make the way that we generate electricity cleaner and cleaner as we go forward. BOB BLUE Chair, President, and CEO, Dominion Energy, Inc.

A C O N V E R S AT I O N W IT H B O B B LU E

The first eight monopile foundations for the Coastal Virginia Offshore Wind commercial project, manufactured by global offshore wind manufacturing leader EEW Special Pipe Constructions GmbH, arrived at Portsmouth Marine Terminal on Oct. 19.

A C O N V E R S AT I O N W IT H B O B B LU E

I think we’ve probably had as much experience with data center customers as any similar company in the country. Just since 2019, we’ve connected 75 data centers, and those are large-capacity customers. That requires us to invest in generation and our electric transmission grid, which we’ve been doing to the tune of better than a billion dollars a year in electric transmission here in Virginia. BOB BLUE Chair, President, and CEO, Dominion Energy, Inc.

able to do the same thing here, but it’s going to be a different level of demand than we have experienced over the course of the last 20 or 30 years. Our regional grid operator predicts that, in our part of the grid, demand for electricity is going to start going up by about 5% a year. A lot of that is driven by data centers, but a chunk of it will be driven by electric vehicles. It’s our obligation to make sure we’re ready to meet that demand through the ways that we’ve already talked about, providing a diverse mix of generation and making investments in the grid so that we can continue that reliability. El Koubi: Over the last several years, we’ve seen a wave of very large advanced manufacturing and data center projects that are typically big consumers of power, and one of the critical location factors for these projects is the availability of power — and increasingly, these industrial customers are looking for clean power. How are Dominion and other power companies adjusting to some of these high-demand sectors? Blue: I think we’ve probably had as much experience with data center customers as any similar company in the country. Just since 2019, we’ve connected 75 data centers, and those are large-capacity

customers. That requires us to invest in generation and our electric transmission grid, which we’ve been doing to the tune of better than a billion dollars a year in electric transmission here in Virginia. Take, for example, a company like Plenty Unlimited Inc., an indoor agriculture company and a big user of electricity. We spent a lot of time working with them ahead of time, making sure we understood how quickly they would ramp up their energy needs, and were able to achieve the schedule that they’re looking for. Similarly, with other projects that we’ve worked — with Amazon, with the LEGO Group, with Procter & Gamble — we’re making sure that we’re meeting their needs. Fundamental to all that is our ability to communicate with those customers. Our company thrives when the communities in which we do business thrive, and the way for those communities to thrive is to grow their economic base. Our objective is to be as good a partner as we possibly can. We’re going to do that by continuing to be reliable, continuing to be affordable, and continuing to make the way that we generate electricity cleaner and cleaner as we go forward.

For the full interview, visit www.vedp.org/Podcasts

Sky Meadows State Park in Fauquier County was certified as an International Dark Sky Park in 2021. The park holds a monthly “Astronomy for Everyone” event that features a children’s program, an astronomy presentation, and opportunities for stargazers of all levels of experience to view the night sky.

Virginia’s energy economy is poised for big strides What had been a slow, steady evolution of Virginia’s energy economy to increase the use of cleaner energy sources has now gone up-tempo with concerted efforts across multiple administrations.

S TAT E O F A C C E L E R AT I O N

Framatome Inc. in Lynchburg supplies equipment, services, and fuel for nuclear power plants. Another Lynchburg company, BWX Technologies, Inc., supplies nuclear components and fuel to the U.S. government.

After passage of the Virginia Clean Economy Act (VCEA) three years ago got the ball rolling toward a cleaner, more productive energy future, the Commonwealth of Virginia’s 2022 Energy Plan (see page 24) has the Commonwealth poised to meet significant needs in the future. “Virginia is in a good position to take advantage of clean energy,” said Will Clear, managing partner of Bristol-based Virginia Energy Strategies and former chief deputy director of the Virginia Department of Energy (VDOE). He said the state’s excellent wind and solar resources would “create opportunities that will benefit all of Virginia.” The trick will be to maintain proper balance on the path to a decarbonized energy system, Clear said. Every energy system sits on a three-legged stool: reliability, affordability, and environmental stewardship. Collectively leveraging all three will be the crucial challenge as the Commonwealth seeks to meet the VCEA’s stated goal of 100% renewable energy for electricity generation by 2050. New nuclear power generation may be placed into service after 2030 and continue to operate after 2050 as a carbon-free energy source. Jonathan Miles, a professor at James Madison University (JMU) and executive director of the university’s Center for the Advancement of Sustainable Energy, said the Commonwealth has been on a gradual trajectory of expanding renewable energy for the last two decades. Now, he says, three long-term developments have coalesced to drive Virginia’s clean energy generation forward: ◾ Investment in new energy infrastructure over many years by the state’s main electric utilities, Richmond-based Dominion Energy, Inc. and Appalachian Power, a part of American Electric Power Company Inc. ◾ Development of technology that brought the cost of renewable energy down sharply

◾ Continued development and investment in a tech-savvy workforce with the skills needed to build and maintain cutting-edge energy infrastructure Both Clear and Miles believe the Commonwealth will be faced with policy adjustments on the path to 2050 as technologies evolve. Both agree with April Wade (see page 42), executive director of the Virginia Nuclear Energy Consortium (VNEC), that nuclear power is likely to play an important role in providing Virginians with carbon-free electricity. The VNEC was created by the legislature to advance the nuclear industry by bringing together state energy officials, institutions of higher education, nuclear energy-related

companies, and other organizations to advance the nuclear industry. Nuclear generating stations can provide all-important baseload power that complements intermittent sources such as wind and solar energy. The Federal Energy Regulatory Commission defines baseload as “the minimum continuous load or demand in a power system over a given period of time.” Loads on such systems change throughout the day and from season to season. Daily swings in demand are usually met by peaking plants, which are plants that turn on quickly during times of rising demand — for example, on summer afternoons when air conditioners may be running at full blast to beat the heat.

Not surprisingly, solar energy production varies with daylight and generally peaks during midday, just about the time it is needed to supply those electricity-hungry air conditioners during summer. When night falls, solar generation disappears. And while the wind can howl at night, it can also stand still. This is why baseload power is so important to maintaining the electricity grids’ reliability. Energy storage systems — essentially large batteries for electricity from wind, solar, and other sources — are mandated to grow substantially in Virginia. But the ability to build enough affordable storage to supply electricity when the sun doesn’t shine and the wind

doesn’t blow remains a question mark for the 2050 target date when utilities must complete the shift to renewables, with an allowance for nuclear power.

research and development. This has resulted in a nuclear-trained workforce of 100,000, many of whom work for commercial entities and civilian contractors.

That brings us back to nuclear energy, which provided about 30% of Virginia’s electricity in 2021, according to the latest figures from the U.S. Energy Information Administration (EIA). “We have a well-rounded nuclear industry,” Wade said. Virginia is home to a diverse nuclear energy with commercial electrical generation, advanced manufacturing and service capabilities, defense (including BWX Technologies in Lynchburg, the sole manufacturer of naval nuclear reactors for U.S. submarines and aircraft carriers), and

Dominion Energy owns two commercial nuclear power stations: the North Anna Power Station in Louisa County and the Surry Power Station in Surry County, the U.S. nuclear plant with the longest existing licensure agreement. With demand for electricity in the state set to double in the decades to come, Wade predicted that “we will see small modular reactors or other advanced reactors built here in Virginia at some point.” Of special interest are small

S TAT E O F A C C E L E R AT I O N

V I R G I N I A T OTA L A N N U A L E N E R G Y G E N E R AT I O N BY S O U R C E

100

5 1

19 80

PERCENTAGE (%)

28 60 6 11

39 61 52

47 45 35

26 20 4

2020

2025 (projected)

2035 (projected)

0 2000

2005

2010

2015

YEAR Coal

Natural Gas

Nuclear

Source: Commonwealth of Virginia 2022 Energy Plan; Historical data from U.S. Energy Information Administration

Solar/Wind

Other

XXXXX

Dominion Energy operates two solar facilities in Buckingham County and is working toward opening a third facility. The Buckingham solar facility, shown here, provides power to Amazon Web Services.

modular reactors (SMR). While not yet a commercial reality, these reactors are designed to be mass-produced more cheaply than large site-built reactors, and they can be used to add increments of generation capacity as needed. The U.S. Nuclear Regulatory Commission certified the country’s first SMR design in January 2023. Wade pointed out that Virginia is the only state with a nuclear advocacy organization created by the legislature — the organization she runs, VNEC — and a nuclear strategic plan for the Commonwealth mandated by the legislature. “I think Virginia is a leader in the industry,” she said. As further evidence she cites one of VNEC’s initiatives, the Virginia Innovative Nuclear Hub, a collaboration among several Virginia universities and the nuclear energy industry. For the moment, however, natural gas is the primary fuel for generating electricity, providing about 57% of Virginia’s electric power in 2021, according to the EIA. About 85% of that gas comes from outside the state. Natural gas is low-carbon, has other advantages as compared to coal, and is useful for

both baseload and peaking power, but contribues to climate change nonetheless. Reducing use of natural gas for electricity generation to zero by 2050 while maintaining all three legs of the energy system stool — reliability, affordability, and environmental stewardship — will be challenging, Clear said. Another aspect of Virginia’s energy needs may figure prominently in how it manages its electricity supply. Right now, Virginia imports its transportation fuels, including diesel and gasoline, from other states. As the transportation system moves toward electric vehicles, demand for electricity will rise considerably. This is both a challenge and an opportunity, Clear said. If Virginia can build enough renewable and nuclear energy capacity to meet that demand, then money which Virginians are currently sending out of state for motor fuel would stay in Virginia to nurture economic activity and employment in the Commonwealth. Boosting renewable and nuclear electricity generating capacity sufficiently will be a tall order. In 2021, only about 9% of the state’s electricity was

generated from renewable sources, including hydroelectric power, and only about 30% came from nuclear energy. These sources would have to grow substantially and quickly if they’re going to meet the coming increase in demand and replace natural gas, the current dominant fuel for energy generation. Miles said ongoing efforts are addressing barriers to wind and solar power deployment, some that are being driven by the VDOE with support from JMU and other Virginia universities. These efforts include educating the public about benefits while addressing concerns raised, assisting localities in which projects are being considered, and providing nonpartisan, data-driven resources. “We all want to get clean power,” Clear said. But for that to happen, citizens across Virginia will have to accept wind and solar installations as part of the landscape. Both Clear and Miles believe they will, just as Wade believes Virginians will see the wisdom of nuclear power as part of an energy mix needed to create a carbon-free energy system for the Commonwealth.

Preparing to Meet Virginia’s Long-Term Energy Needs

Dominion Energy broke ground on the Dulles Solar and Storage project, shown in this rendering, in 2023. Housed at Washington Dulles International Airport, the project will be the largest renewable energy project ever developed at a U.S. airport.

Revamped energy plan aims to build energy capacity through flexibility, technological innovation

he best way to conceptualize Virginia’s energy ambitions is to look to its past of supporting one of the most power-intensive industries in existence. “Data Center Alley” in Loudoun County is the world’s largest concentration of hyperscale data centers — its capacity exceeds that of either China or Europe. Virginia’s primacy in the data center market can be traced back to 1992, when the National Science Foundation tabbed a group of network providers in the Washington, D.C., area as one of the four original Network Access Points through which the nascent internet would be run. Five years later, America Online located its headquarters and initial data centers in Loudoun County. Today, Data Center Alley is home to more than 160 data centers occupying 18 million square feet. The area requires massive energy to power and cool computers, servers, and virtual machines, and Virginia is looking to capture even more of that market. Fueled in part by plans to add more hyperscale data centers, the demand for electricity in Virginia is forecast by Dominion Energy to grow 5% annually, more than double its pace during the decade before the pandemic.

ANTICIPATING FUTURE NEEDS With that projected growth, Virginia can’t afford to leave any energy stone unturned. That’s where the Commonwealth of Virginia’s 2022 Energy Plan comes in, supplementing the standard pillars of the “three-legged stool” model — reliability, affordability, and environmental stewardship — with the additional guiding principles of innovation and competition.

P R E PA R I N G T O M E E T V I R G I N I A’ S LO N G - T E R M E N E R G Y N E E D S

Surry Power Station in Surry County celebrated its 50th anniversary in 2023. The plant has been approved to continue operating for the next 20 years, the longest active agreement in the country.

“We are working on a lot of projects simultaneously,” said Glenn Davis, director of the Virginia Department of Energy. “We don’t want to become California. We don’t want to have rolling blackouts.” Solar. Offshore wind. Small modular advanced nuclear reactors. Natural gas. Hydrogen energy made by heating water with natural gas (blue hydrogen) or renewable energy (green hydrogen). All options are on the table because Virginia’s energy demands are rising, Davis explained. “It’s important that stakeholders in the conversation don’t leave out the demand part of the equation,” said Virginia Deputy Secretary of Commerce and Trade Chelsea Jenkins. “We need to look realistically at all generation solutions, their commercial viability and cost to taxpayers, and understand how they work together to provide 24/7/365 energy to Virginians and businesses.”

In the 15 months since Gov. Glenn Youngkin released the plan, officials have sought partners to increase energy production. While generating more energy is a focus, it’s not the only goal. The Commonwealth is also focused on adding jobs for the future and creating supply chains here to diversify and grow energy generation in Virginia. Since the release of the energy plan, state officials have sought partners and built relationships as far away as Europe to build both hydrogen generation and a domestic supply chain for parts to support that process. “Given the once-in-a-lifetime opportunities that are resulting from changes to the grid and energy sectors transitioning, we are focused on developing a globally competitive supply chain,” Jenkins said. “Advanced nuclear is a great example — the projected U.S. and global demand for new nuclear is staggering. We have already built a great foundation in Virginia to remain highly

competitive as a global supplier of products and services, and we intend to continue competing to win domestic and international investments.” A green hydrogen production facility is in the planning stage at the Tech Center Research Park in Newport News. Its location will allow it to be powered, eventually, by 176 14.7-megawatt wind turbines and three offshore substations at Coastal Virginia Offshore Wind, located 27 miles off the coast of Virginia Beach in a 112,800-acre commercial lease area in the Atlantic Ocean. On track to open later this year, the offshore wind farm could power as many as 660,000 homes by 2026. That construction is just one of the tangible results that should start to roll out in 2024 after more than a year of investigating opportunities. “The year 2024 will be very exciting across a number of sectors,” Davis said.

Dominion Energy’s UVA Puller solar facility in Middlesex County produces nearly 10% of all electricity used at the University of Virginia. Its 58,800 solar panels help eliminate more than 15,000 metric tons of carbon dioxide emissions each year.

‘BOTH/AND’ INSTEAD OF ‘EITHER/OR’ Unlike a previous energy plan that aggressively phased out nonrenewable energy, the 2022 plan keeps all avenues open, including firm baseload generation that’s always available and not intermittent. Unless Virginia increases its baseload, Davis said, renewable energy alone won’t keep pace with energy demands — demands that are growing faster than in any other state, in part due to the Commonwealth’s massive data center industry. That means Virginia will use natural gas to separate hydrogen molecules from water for energy and develop small modular reactors (SMR). “The governor’s energy plan has put Virginia on the path to being a leader in SMRs,” Davis said. The goal of building supply chains in Virginia isn’t limited to hydrogen and advanced nuclear — the Commonwealth

wants partners who pave the way to manufacturing opportunities here for every type of power generation, from wind turbine blades to fuel cells and batteries that store energy to be used when demand peaks. As of late 2023, Southwest Virginia was in the running to build one of 20 federal technology hubs nationwide, allowing the Commonwealth to apply for up to $75 million of funding after it submits more detailed plans to the U.S. Economic Development Administration. Looking ahead to 2024, Davis thinks the Virginia Nuclear Energy Consortium will find partners, too. While most of the expected increase in demand for energy will be driven by data centers, some additional demand will come as drivers switch from vehicles powered by gas to those powered by batteries, he said. That’s even more true if Virginia sticks with previous plans to ban the sale of gas-powered vehicles in

2035. While such a plan might work in a state that already has a lot of charging stations, the infrastructure for it is lacking in Virginia, Davis said. In the meantime, the state is aggressively pursuing solar generation. Virginia is seeking $250 million through an Environmental Protection Agency program called “Solar for All” that will commit $7 billion across the country for residential solar, enabling millions of low-income households to access affordable and clean solar energy. “The more residential solar that’s produced, the less demand there will be on the grid,” Davis said. The priority of both the 2020 and 2022 energy plans remains the same: to anticipate future energy challenges and build the capacity to mitigate them. That means using data about expected demand to create goals, then using flexible means to get there.

CVOW

— or “sea” and “vow,” if you will — is a fitting acronym for a transformational offshore wind farm. CVOW, or the Coastal Virginia Offshore Wind project, has been in the planning stages for years by Dominion Energy, a state-regulated public electric utility company. As the enormous project nears the commencement of construction, its name evokes a longstanding commitment to creating jobs for hundreds of Virginians while developing a new source of reliable, renewable energy capable of powering up to 660,000 homes.

Coastal Virginia Offshore Wind

COASTAL VIRGINIA OFFSHORE WIND PROJECT HITS MAJOR MILESTONES

Dominion recently reached two major milestones in the CVOW timeline. One presents tangible, enormous evidence of the project’s progress and the other, though more behind the scenes, is an important regulatory step. The first batch of eight massive monopiles reached Portsmouth on Oct. 19 after a weeks-long journey from Germany. And CVOW plans received a public final approval, called a Record of Decision, from the Bureau of Ocean Energy Management (BOEM) on Oct. 30. These events move CVOW closer to a working renewable power-supplying reality a decade in the making. The project is on time and on budget, with over 90% of costs fixed, having avoided delays and cost overruns that have plagued other offshore wind projects. Offshore construction will commence in May 2024, and all CVOW turbines are expected to be up and running by late 2026. “It’s extremely exciting and rewarding,” said John Larson, director of public policy and economic development at Dominion. “It’s a great thing for Virginia businesses and Virginia workers.”

ECONOMIC OPPORTUNITY FOR VIRGINIANS The planned site is in federal waters off the coast of Virginia Beach. Much of the activity to build and operate CVOW

will be in the Hampton Roads region, centered on The Port of Virginia’s facilities in the area to capitalize on the port’s unrestricted access to the ocean, navigational flexibility, and deep, wide channels free of overhead obstructions. Following the success of a two-turbine pilot project built in 2020 on the western edge of the lease area, the commercial CVOW will use larger, more efficient 14.7-megawatt turbines. Once completed, it will be one of the first offshore wind farms in the United States, and one of the largest in the world, potentially the single largest depending on other projects in development. Its 176 next-generation turbines will produce a total of 2.6 gigawatts of power, partially on the turbines’ strength. CVOW is oceanic in multiple senses of the word. Larson calls it the largest project Dominion has ever undertaken, and its enormity is complicated by its novelty. When Dominion secured the offshore lease area in 2013, no American offshore wind project had yet gone through regulatory processes, no domestic supply chain existed, and there was no specialized workforce to speak of. The pilot turbines were the first ever installed in U.S. federal waters. The past decade has been spent not only planning an

Virginia Incentivizes Offshore Wind Manufacturers With New Grant offshore wind farm, but helping to build out an entire industry around it. In 2020, consulting firm Mangum Economics estimated that CVOW will directly or indirectly create around 900 jobs during the construction phase, and 1,100 once the turbines are completed (see page 50). Currently, around 1,000 people work on CVOW in total. About three-quarters of those jobs are in Virginia, with half of the total in the Hampton Roads area. “That’s been a huge focus of the company: how to bring the economic benefits of CVOW to Virginians,” said Larson.

FOUNDATIONAL PIECES In the design of CVOW turbines, monopiles are essentially enormous steel tubes that will be driven into the sea floor, forming a base for each turbine. The monopiles are up to 270 feet long, 31 feet across at the widest point, and weigh around 1,500 tons on average. A single oversized shipment will take several days to carefully maneuver and unload. After so many years of planning, their arrival in Virginia is a sign of construction readiness. “The company and the team members were extremely excited to see the first pieces of equipment coming to Portsmouth Marine Terminal,” said Larson.

Virginia manufacturers looking to enter the offshore wind industry have a new incentive to defray costs. The Virginia Offshore Wind Supplier Development Grant (VOWSD), unveiled in July 2023, encourages existing Virginia companies to enter into the production of goods to support the offshore wind industry in Virginia and nationwide. The program, administered by VEDP, targets existing manufacturers or manufacturingadjacent companies that meet the following conditions: ◾ Must make equipment investments of at least $40,000 at the awarded location within 36 months of the effective date of the grant ◾ Fewer than 250 full-time employees at the time of application ◾ Registered as a vendor in the Virginia Offshore Wind Supply Chain Partnership Directory at the time of application ◾ Must maintain appropriate employment levels, as verified by the Virginia Employment Commission, through the life of the grant ◾ Must be in good standing with the Virginia State Corporation Commission and maintain a legal presence within Virginia for at least one year prior to submission of the application Grant awards range from $20,000 to $250,000 per company and are calculated as up to 50% of capital expenditures in equipment related to the production of materials to support the offshore wind industry. Grants are paid as reimbursements for eligible purchases made between July 1, 2023, and June 30, 2026. Job creation is not a requirement of the grant, but the project must not result in any net reduction in employment.

COASTAL VIRGINIA OFFSHORE WIND PROJECT HITS MAJOR MILESTONES

The monopiles are huge, so the finished wind turbines will be as well — about 800 feet above the water at their highest point. But the closest towers will be 27 miles from land, far enough from shore to be difficult to see at sea level from land. “That’s one of the things we like about the Virginia wind energy area — it’s so far out that there’s very little visual impact,” said Larson.

FROM PROCESS TO PROGRESS In September 2023, BOEM released its final Environmental Impact Statement for CVOW, clearing the path for the Record of Decision. “The completion of CVOW’s environmental review is another significant milestone to keep the project on time and on budget,” Bob Blue, chair, president, and CEO of Dominion Energy, said in a statement. For Dominion, the next steps include onshore infrastructure work through the remainder of 2023. Approval of the Construction and Operations Plan is expected 90 days after the Record of Decision at the end of January 2024. This would permit offshore groundbreaking in May 2024, timed to avoid peak North Atlantic right whale migration. Construction crews will prepare foundations, cables, and

other infrastructure over the following year, including installation of the monopiles and transitional tower pieces. Once the turbine foundations are complete, crews will install the towers, nacelles, and blades. Dominion is currently working with regulators to allow sequential commissioning, to generate power from turbines as soon as they’re capable — the first would be online by late 2025 — rather than waiting for every turbine to be completed. If everything goes to plan, all 176 turbines will be finished and generating power by the end of 2026. Full operations will be a grand culmination of more than a decade of work, but even larger plans for U.S. offshore wind are in store, with BOEM expected to hold its Central Atlantic lease auction this year. Virginia is at the center of it all — literally and figuratively. For example, the Virginia Clean Economy Act of 2020 set a target of 5.2 GW of offshore wind power by 2032. CVOW is halfway to that goal. “I believe there’s a robust future for offshore wind on the U.S. East Coast,” Larson said.

Coastal Virginia Offshore Wind

A Hub for

ENERGY RESEARCH in Southwest Virginia

New Energy DELTA Lab will be a proving ground for clean energy advancements

refinement of the Virginia Clean Economy Act of 2020. Since then, leaders at the Energy DELTA Lab secured the one asset without which the project couldn’t move ahead — land that would make possible plans to develop diverse projects that include solar, wind, nuclear, hydrogen, and energy storage.

HIS HAIR AND MUSTACHE grayed,

74-year-old Mike Quillen is no longer flexible enough to regularly walk the mines of Southwest Virginia, where he started a career that saw him build a company that became the sixth-largest coal supplier in the world — although he does plan to be underground for his 75th birthday. But while his joints show their age, Quillen’s mind remains nimble, a quality that made him a natural choice to chair the Energy DELTA Lab, a Wise County partnership between local and state leaders aimed at establishing the region as a testbed for energy innovation. Those aspirations achieved liftoff in October when the lab reached a landmark public-private deal to use 65,000 acres of previously mined coal properties to develop clean and sustainable power. The agreement brings together the Energy DELTA Lab, Wise County, Virginia officials, and landowner Energy Transfer. The land empowers the Energy DELTA Lab to become a green energy matchmaker, pairing the land with developers who can build and store cleaner, more sustainable sources of energy to power the Commonwealth and its economy. Some deals will be made in 2024, said Will Clear, managing partner of Bristolbased Virginia Energy Strategies, former chief deputy director of the Virginia Department of Energy, and an adviser to the lab. “I’m very excited. That’s when we get to see some traction to getting real assets on the ground,” he said.

A PLOT OF LAND AND A VISION That vision, five years in the works, garnered public attention in 2022 as a piece of Virginia’s revamped 2022 Energy Plan (see page 24), itself a

“Everything rides on this land,” said Will Payne, managing partner of economic development firm Coalfield Strategies and an adviser to the Energy DELTA Lab.

The goal is to keep the region going for another 50 years. MIKE QUILLEN Chair, Energy DELTA Lab

The size of the land, nearly the equivalent of 50,000 football fields, provides the space the lab needs to make good on its promise. “This acreage will provide everything we need at DELTA Lab for the pending projects we’ve got in the pipeline right now,” Clear said. Size matters. So, too, does the fact that the land and all the rights bundled with it are owned by Energy Transfer, which has a network of pipelines and energy assets in 41 states. That sole ownership is unusual for a region in which it was often more expedient to sell off property ownership piecemeal — whether that meant the right to sell timber, lay railroad tracks, or mine minerals underneath. “They are unique in that,” Quillen said. Quillen, too, brings an unusual perspective to his role. Growing up in Gate City near the Tennessee border, he first worked in the coal industry for a small company his father co-owned. Along the way, to become a foreman, he had to work two years underground in the mines. Eventually, he became president of Paramont Coal. In 2002, Quillen dove deeper at a time the industry was struggling, helping to found coal producer Alpha Natural Resources. In a sector that saw waves of mergers and acquisitions, Alpha grew quickly. By 2012, when he stepped down as its chairman, Alpha was the second-largest coal producer by revenue in the United States.

The Energy DELTA Lab in Wise County, shown in this rendering, sits on 65,000 acres of previously mined coal properties and aims to attract developers of sustainable energy sources.

In the years since, the rise of natural gas — buoyed by advances in extraction techniques — and the push for a shift to renewable energy sources led to a significant decline in U.S. coal-fired power generation, and thousands of related jobs were eliminated in Southwest Virginia. The leaders behind the Energy DELTA Lab asked Quillen to chair their board and play a role in building a new economy off the infrastructure of the old. It was an offer the former miner couldn’t resist. “I don’t play much golf. I don’t go to Florida,” Quillen said. “I spend most of my time trying to help the region move into that next transition so the next generation can stay here. The goal is to keep the region going for another 50 years.”

The lab has a good partner in Penn Virginia Operating Co., which manages the lands here for landowner Energy Transfer as a wholly owned subsidiary and has a history in the region that dates back more than a century.

A PLACE FOR INNOVATION Quillen’s outlook represents a shift in the Energy DELTA Lab’s goals. The lab’s initial concept was designed by Dr. Michael Karmis, former director of the Virginia Center for Coal and Energy Research. Karmis conceived of the lab as a center for research and an incubator for innovation, which was reflected in his choice of the name DELTA, an acronym for Discovery, Education, Learning, & Technology Accelerator.

While Karmis’ goals remain, the site has features that have also made it a magnet to developers. The former mining area is already served by roads and power transmission lines. There are also fewer regulatory restrictions on how the land can be repurposed. But it’s the underground mines themselves, once thought of as a liability, which may be the site’s biggest attraction. They contain cool water that can be used to operate one of the most promising sectors in the regional economy: data centers. With “Data Center Alley” in Loudoun County, Virginia already has the highest concentration of data centers in the world, but high demand, land prices,

Inside the Energy DELTA Lab’s Future Projects In addition to Data Center Ridge, the Energy DELTA Lab is working on numerous other projects aimed at developing clean energy sources: ◾ WIND: Erect wind turbines that generate 225 megawatts (MW) of power with a goal of eventually doubling output. Required studies on wind speed and other factors could be completed as early as 2025, after which construction would begin. ◾ SOLAR: Create solar farms that produce 300 MW of power with the goal of having them in place as soon as 2028, with the potential of adding more than 400 additional MW. ◾ NUCLEAR: Build small modular reactors to provide a steady source of energy to complement intermittent sources, like wind and solar, and serve as a bridge while technology is developed to store intermittent energy efficiently on a large scale. Though developers have visited the site, potential deals are likely years away as companies test competing designs. ◾ PUMPED-STORAGE HYDRO: Known as Project Energizer at the Energy DELTA Lab, this effort will use underground mine reservoirs as sources of water. When energy supply exceeds demand, the water will be pumped to higher-elevation reservoirs to allow it to be used to generate power during demand surges.

and energy and cooling needs mean that the industry needs to expand into new areas. The Energy DELTA Lab will build Data Center Ridge, where the equipment can be cooled with billions of gallons of water collected from the underground mines, realizing savings of more than $1 million annually and creating a competitive edge in a fast-growing sector. Data Center Ridge could then be powered by a multitude of on-site energy generators, including blue hydrogen, solar, wind, hydro pumping stations, and, eventually, small modular nuclear reactors. “It’s going to transform the region,” Payne said.

◾ ENERGY STORAGE: Test and deploy innovative ways to store power, such as cutting-edge batteries. The Energy DELTA Lab is partnering with technology accelerator Newlab and international energy developer Ørsted on the project. ◾ HYDROGEN: Generate hydrogen energy that can be used to power vehicles, trains, and boats by separating the hydrogen from water. To separate hydrogen, heat must be applied — initially using natural gas, producing what is called “blue hydrogen.” As cleaner power sources go online, generation would shift to sources like wind and solar, creating “green hydrogen.” ◾ EDUCATION: Provide scientific assistance to energy innovators and educational opportunities for area K-12 schools and community colleges looking to train the next generation of talent to work in energy production in Southwest Virginia. ◾ PARTNERSHIPS: Continue the strong relationship with area utilities Dominion Energy and Appalachian Power, which have proven instrumental in growing the scope of the lab beyond research to commercialization and deployment.

A C O N V E R S AT I O N W IT H L A V I D A C O O P E R

Betting on Energy Innovation

a Conversation with Will Payne

Will Payne is managing partner of economic development firm Coalfield Strategies, the director of InvestSWVA, a public-private partnership aimed at attracting companies to the western portion of Virginia, and an adviser to the Energy DELTA Lab research and development facility in Wise County (see page 34). He is a member of the University of Virginia Darden School Foundation Board of Trustees and previously served as vice rector of William & Mary’s Board of Visitors. He is also co-owner of Squabble State Farms in Washington County.

Virginia Economic Review (VER): In the past, the Southwest Virginia economy was centered on the region’s abundant coal mines. How has the region shifted its priorities as the energy industry has moved away from coal? Will Payne: Southwest Virginia has had challenges diversifying its economy over the last 30 years. Census and economic data tell that story clearly. When it comes to economic development, the solution lies in new approaches and accountability with broad local buy-in. Reimagining the economy doesn’t mean wholesale change. In fact, we need to build on our strengths, particularly the region’s committed workforce. As with any regional solution, we must come together. That means making closing deals a priority, regardless of where the jobs end up. After all, a job in one end of the region or the other is good for the whole region. A coordinated approach has been underway since 2019, and much credit goes to members of the region’s legislative delegation. Their vision several years ago resulted in InvestSWVA, a homegrown private sector lead generation and project development campaign with investments from Appalachian Power, Dominion Energy, the Virginia Tobacco Commission, and the LENOWISCO Planning District Commission. InvestSWVA is all about pursuing big ideas and taking risks — we can’t afford to think any other way. We’re especially optimistic about building on the private equity partnerships that have resulted in multiple tech company expansions. The roadmap we’ve laid out builds on the region’s strengths. It includes a vision where Southwest Virginia can be the location of choice for high-tech companies looking to grow in rural downtowns, clean energy developers building at scale on large reclaimed coal mine properties, data centers running energy-efficient and secure operations, manufacturers seeking a hardworking and skilled workforce, and the craft beverage industry being supplied with locally

sourced specialty grains. All five priorities have aggressive goals in place and are now meeting milestones to varying degrees. VER: Can you talk about how Southwest Virginia is well positioned for the energy industry and what the region can offer energy companies? Payne: The energy play is a land strategy, pure and simple. Over 100,000 acres of previously mined properties reach every corner of the region’s seven coalfield counties and the city of Norton. However, development of that land hasn’t traditionally been possible due to private and federal ownership. Access to that land is complicated, and knowledge of the subsurface geology and mining history is even more complicated. You also must understand ownership of surface and subsurface rights, including coal, gas, and pore space. Anyone who has worked with a former mine site knows it’s unlike any other property. That’s where relationships with large landholders become so critical. Our team has spent much of the last four years developing partnerships with resource companies, seeking ways to diversify holdings and maximize revenue generation. At the same time, developers emboldened by federal incentives and responding to market demands are coming out of the woodwork to find suitable locations for projects. That demand is Southwest Virginia’s gain. Our pitch to energy companies is straightforward: vast, relatively low-cost tracts of land, robust power assets, and access to abundant clean water define half of the value proposition. The other half is partnering with us. We have a clear mission to deliver new higher-paying jobs and long-term tax revenues for the region. If a project can be done, we know we can do it in Southwest Virginia. The bonus value add is that through developing energy-ready sites from reclaimed mine properties, we can continue to produce metallurgical coal for steelmaking for years to come. It’s this “all-of-the-above”

strategy that defines a once-in-ageneration opportunity to transform the region’s economy. It’s both realistic and a natural fit.

companies with large balance sheets and proven developers of all sizes. We only want to work with partners who have the region’s long-term best interests in mind.

VER: How does energy generation play into economic development? How have companies reacted to clean energy projects in Virginia?

VER: Can you give us a high-level overview of the Energy DELTA Lab in Wise County? What is that project best equipped to accomplish and how can it put Southwest Virginia on the map to attract energy projects?

Payne: Providing reliable and affordable clean energy is the new frontier opportunity for Southwest Virginia. Increases in land use restrictions for energy projects outside the region underscore our chief competitive advantage. We have large tracts of relatively inexpensive land with site attributes attractive to energy developers. Southwest Virginia has been flooded with developers over the last two years, all exploring reclaimed mine properties — particularly for solar, wind, energy storage, hydrogen, and energy-efficient data centers. More recently we’ve been working on potential advanced nuclear reactor projects. Our InvestSWVA and Energy DELTA Lab teams have the luxury of choice. Given the amount of time and investment that goes into a multiyear project, we have to be discerning about who we choose to partner with. That timeline requires trust and a shared commitment to workforce training, job creation, and sustainable local tax revenues. We’re strategically positioned to work with Fortune 500

Payne: We launched the Energy DELTA (Discovery, Education, Learning, & Technology Accelerator) Lab in conjunction with the 2022 Virginia Energy Plan after four years of incubation at InvestSWVA to fill a void in the market. Southwest Virginia’s large landowners are seeking ways to enhance their resource revenue base through new land development. At the same time, energy companies and utilities are searching for land meeting specific attributes. We’re capitalizing on the opportunity to close deals by serving as a matchmaker while providing technical expertise on the land above and below the surface. The DELTA Lab is currently developing several energy-ready industrial sites in Wise County on land owned by Fortune 100 company Energy Transfer and managed by Penn Virginia Operating Company. This strategy complements the Virginia Business Ready Sites Program, with campuses totaling nearly 7,000 acres to support agricultural,

conservation, industrial, and clean energy projects. These sites were selected because of industry demand for vast tracts of land, robust grid access, on-site generated power potential, and abundant underground mine-based water. We recently secured an agreement with our development partner Energy Transfer for access to its 65,000-acre property. While most of the land deal’s properties are in Wise County, neighboring Lee, Scott, and Dickenson counties and the city of Norton are on the table for development and have projects undergoing due diligence today. The DELTA Lab’s project portfolio represents the full spectrum of energy technologies — solar, wind, hydrogen, energy storage, pumped-storage hydro, energy-efficient data centers, and emerging technologies like advanced nuclear reactors. More than a dozen projects under consideration today represent in excess of $8 billion in potential private capital investment, 1,650 new high-paying jobs, and nearly a gigawatt of new power generation and demand. In addition, the DELTA Lab led federal grant applications in 2023 for nearly $600 million that would support our project portfolio. Our model site under development, Data Center Ridge, builds on four years of work to convert a 400-acre previously mined property to a 1-gigawatt multi-tenant

A C O N V E R S AT I O N W I T H W I L L PAY N E

data center campus leveraging the DELTA Lab’s planned nearby clean energy projects and patent-pending Oasis mine-based water cooling technology. The site serves not only as a solution to unprecedented demand for cloud storage, but also provides location diversity and security, considering real estate constraints in Northern Virginia. VER: What role does metallurgical coal still play in the energy industry? Payne: From a steelmaking standpoint, metallurgical or “met” coal will be necessary for a long time to come, just as thermal coal and natural gas will be needed for power plants for the foreseeable future as a backstop to rolling blackouts and power disruptions. Some of the world’s highest-quality met coal is produced in Southwest Virginia. It’s a more rare and higher-value product that’s used to produce coke, an essential ingredient in steel production. The met coal export business is also big for the Commonwealth as a whole. As of June 2023, over 56% of the country’s met coal flowed through The Port of Virginia’s three coal terminals. When it comes to clean energy, steel is the common denominator in all projects. We need it for wind turbines, solar racks, battery components, and advanced nuclear reactors. Our team worked closely with many state and local partners to ensure global met coal producer

Coronado Global Resources expanded its Buchanan Mine Complex. That resulted in the deepest underground ribboncutting in U.S. history at 1,819 feet below the surface — a four-minute descent by elevator. Even Coronado argues that it’s not an energy company. It’s more aptly defined by its role in the manufacturing, infrastructure, and construction sectors. Without companies like Coronado and other met coal producers throughout the region, we wouldn’t have clean energy power generation assets to deploy. VER: How is Southwest Virginia developing talent to meet the needs of energy producers that might consider locating in the region? Payne: Workforce development begins and ends with the strength of partnerships our four community colleges — Mountain Empire, Southwest Virginia, Virginia Highlands, and Wytheville — have developed with the region’s K-12 public school systems. I’ve had the good fortune to work with all four of the region’s community college presidents and many of their faculty and workforce solutions professionals. They can all clearly and concisely articulate their complementary role in driving economic development. The challenge with energy projects is timing. Training programs that try to prepare our workforce before a demand exists create inefficiencies in the system. They also put the region’s talent pool at

risk of moving away, further contributing to so-called “brain drain.” Southwest Virginia is not alone in training a cohort for jobs that didn’t materialize for one reason or another. There must be communication and commitment from both sides. Our community colleges have already made a commitment. It’s central to their mission. As we move forward, our team will work to match developers and technologies with community colleges that can both recruit talent and deliver customized training programs. A great example is how Mountain Empire Community College delivered value in 2021 for a medical IT company, eHealth Technologies. Following an early December expansion announcement, the team identified an applicant pool and worked through the holidays to prepare for a multiweek training program that kicked off right after New Year’s Day. Energy projects have a longer runway, and we’ll use it to our advantage. It could take anywhere from 18 months to several years for a generation project to be online following an announcement. We’re engaging now with educational partners for awareness and planning but will shift gears to execution at the right time. We need to leverage the fact that our K-12 schools and community colleges are ready to work together to produce graduates who can be trained in a quick, strategic, and surgical manner.

NUCLEAR’S ROLE IN THE FUTURE OF CLEAN ENERGY A Conversation With April Wade

April Wade is executive director of the Virginia Nuclear Energy Consortium (VNEC), which represents stakeholders invested in research and development, workforce development, innovation, and advocacy for the nuclear energy industry. VEDP President and CEO Jason El Koubi spoke with Wade about VNEC’s mission and activities, Virginia’s surprising history in nuclear energy, and the role nuclear energy can play in a robust power generation industry working toward ambitious clean energy goals.

Jason El Koubi: You’ve been a terrific partner in many, many efforts related to cultivating the nuclear energy industry in Virginia. Can you give us a high-level overview of the Virginia Nuclear Energy Consortium’s mission and what you’re doing? April Wade: We were established in 2013 by legislation that created two organizations, one of which was the Virginia Nuclear Energy Consortium Authority, or VNECA. That is actually run through the Virginia Department of Energy, and its board members are appointed by the governor. The legislation also directed VNECA to establish a nonprofit entity, basically the working arm. That’s my organization, the Virginia Nuclear Energy Consortium, or VNEC. We are a partnership between industry and academics. Our goal is to sustain the Commonwealth’s global leadership in nuclear energy through business development, research, workforce development and training, and advocacy for the nuclear industry. El Koubi: How does nuclear fit into the overall power generation industry? How can nuclear help Virginia and the wider country meet our ambitious clean energy goals? Wade: Nuclear reactors generate about 90% of the Commonwealth’s carbon-free energy and about 30% of all its electricity. Nuclear power is the best option for generating large amounts

of electricity that is safe, clean, reliable, and cost-effective. Currently, nuclear power provides 19% of U.S.-generated power. The Commonwealth has a growing economy with significant energy needs going forward. As we continue to decarbonize the electric grid — which requires energy to be supplied around the clock — new nuclear must be a part of the solution. Internationally, to meet the clean energy goals that have been set by 2050, we need more nuclear power in the mix across the globe. El Koubi: As we look to expand the use of nuclear power — a carbon-free source of electricity generation — some perception issues out there definitely need to be overcome. How can the nuclear industry change public perceptions of nuclear power? Wade: We actually have more support for nuclear power than we’ve ever had in this country. Gallup did a survey last spring that indicated 55% of Americans support nuclear power. We also are seeing a surge of support by the younger generation, and we’re also seeing it in legislation — for example, VNEC and VNECA; that legislation which supported us had bipartisan support. You’re seeing it at the national level, too. The Infrastructure Law was a bipartisan bill, the Inflation Reduction Act was a bipartisan bill, and all had positive impact on the nuclear industry. For example, the Inflation Reduction Act, for the first time, provides that new nuclear receives the same federal tax incentives that other carbon-free energy resources have received for years. This puts nuclear on a level playing field with other clean energy resources. But can we do more? We need to talk about the need for more nuclear and new technologies. The industry, like many industries, is going through a technology revolution. Small modular reactors, micro-reactors, and other advanced reactor technologies have the potential to dramatically alter the way nuclear is

A C O N V E R S AT I O N W IT H A P R I L WA D E

deployed and operates, making nuclear even more attractive as part of the clean energy mix. We need a lot of power. We’re using more power than we ever have. There’s a demand on the grid we need to meet. And with nuclear power in that mix, we can meet those goals. El Koubi: One of the things I hear from people looking at the growth in power consumption in our country and looking for ways we can meet that growth while also decarbonizing is that nuclear has to be a core part of that solution for a wide variety of reasons. As you mentioned, some perception issues are still out there, and it sounds like public opinion is certainly improving on a lot of fronts. One of the things you hear most frequently as an objection is nuclear waste. What are nuclear power companies doing to solve that problem of nuclear waste? Wade: Used nuclear fuel is actually stored safely on-site at every nuclear facility. It’s heavily regulated by the U.S. Nuclear Regulatory Commission, the Department of Energy, and the Environmental Protection Agency. For over half a century, we have safely handled and stored used nuclear fuel. But it can also be reprocessed and provide more energy. That is not something we currently do in the United States, but countries like France do. It’s certainly an area that could be explored here. Some advanced technologies under development may even consume spent fuel to create energy. Like I said, there is a lot of change and advancement happening. What is the plan long-term? That’s really in the federal government’s hands, and they’re looking into options for spent fuel. One of those options is interim storage. A couple of companies have license applications in for interim storage, but those are not up and running yet. Storage at Yucca Mountain in Nevada was talked about at one time. That project wasn’t able to go through. But again, it’s been stored safely on-site at commercial nuclear reactor sites.

We have such a foundation in the industry with our defense, commercial, and our world-class universities. We have great nuclear programs here in Virginia with the community colleges and our university system. Not only can we supply the power that’s needed, but we can supply the workforce that’s needed as well. APRIL WADE Executive Director, Virginia Nuclear Energy Consortium

El Koubi: Let’s turn the focus to Virginia. Virginia has a strong value proposition for this industry. There’s a really robust and diverse nuclear industry already here. What are Virginia’s main selling points for companies in the nuclear sector? Wade: Not many people know this: We have the nation’s first nuclear generator to be connected to an electric grid, which began producing power at Fort Belvoir in April of 1957. So, we have a long history. We’re a national and global leader because of what we have regarding our defense industry, commercial generation, our academic institutions, research, and fuel cycle companies. We build small reactors every day for the Navy. We have commercial reactors

and businesses like BWX Technologies and Framatome that support the industry. Virginia companies are even leading in providing nuclear technology for space travel. One of the selling points about Virginia, especially if we look at small modular reactors or advanced reactors, is that those will need to be fabricated and manufactured, and with our ports and our manufacturing ability, Virginia is a leader. Another selling point is the support we have here in Virginia. Virginia is the only state that has a strategic plan for the nuclear industry. This was put in place by legislation in 2020. We will also be launching the Virginia Innovative Nuclear Hub, or VIN Hub, in the next couple of months. The VIN Hub is in coordination with industry and academia, and it will focus on workforce development, research, education, electrical generation, supply chain, and advanced manufacturing. El Koubi: We’ve heard a lot of discussion now about small, or modular, nuclear reactors. With traditional nuclear reactors and plants, these were all unique designs. With small modular reactors, we’re at the dawn of a new technology that can be deployed in mass production. Designs can be replicated and deployed in multiple instances in a way that puts the best technology into the grid, that reduces the time and capital investment required to make that happen. Is that part of the value proposition as well? Wade: Small modular reactors and advanced reactors are an opportunity for us to get the power to meet the clean energy goals we need to achieve. They can be built in a mass manufacturing way, which will cut down on time, and they’ll add needed power to the grid. SMRs and other advanced reactors are an opportunity to develop a carbon-free resource and will ensure grid reliability. Also, siting an SMR is more flexible than the reactors we have in our current

A C O N V E R S AT I O N W IT H A P R I L WA D E

SM-1, short for Stationary Medium Power Plant No. 1, was the first nuclear reactor to supply power to the U.S. electrical grid. Housed at Fort Belvoir in Fairfax County, the plant achieved its first self-sustaining nuclear reaction on April 8, 1957.

fleet. For example, they can be built on a former coal site, retired fossil fuel power station, at existing nuclear facilities, or other brownfield or industrial sites. El Koubi: We’ve got in Virginia two operating nuclear plants today that have an interesting history for different reasons. The North Anna Power Station was subject to an unexpected earthquake and came back online relatively quickly. The Surry Power Station is licensed to continue operating for another 20 years in the longest current agreement in the country. What does that say about Virginia’s nuclear infrastructure and the leadership of Virginia in this area, as well as the reliability of nuclear power?

Wade: I think those two examples speak for themselves. It shows strong leadership, it shows a strong infrastructure, and it shows reliability. There’s more power needed on the grid every day, and nuclear power can provide that in the mix of other clean energy technologies. It is 24/7. It’ll keep your lights on all the time, and we need more to meet the demands we currently have. Further, it speaks to the safety record of the industry in the United States. Our standards are significantly higher than other countries. The United States is constantly learning and constantly adapting our safety standards to meet challenges before they happen — things like adding additional fail-safes, redundant backup power, and really working to always

find ways to be proactive on safety, security, and being good corporate citizens. El Koubi: As you look ahead, what do you see for Virginia in this industry? Wade: Virginia is going to continue to grow. We have such a foundation in the industry with our defense, commercial, and our world-class universities. We have great nuclear programs here in Virginia with the community colleges and our university system. Not only can we supply the power that’s needed, but we can supply the workforce that’s needed as well.

For the full interview, visit www.vedp.org/Podcasts

VIRGINIA DIODES WORKS TO FILL THE TERAHERTZ GAP

Delta Star, Inc., Lynchburg

Record-high demand drives production expansions 46

Hitachi Energy, Halifax County

ransformers are an essential component for maintaining the national electric grid and ensuring continuous power in regions affected by aging components and sensitivity to storms and natural disasters. Beyond that obvious function, transformers also play an essential part in supporting growth across a range of emerging industries. From the increase in data center construction to the factories producing and charging stations powering electric vehicles, and from the robust renewables market to the increased installation of high-voltage DC networks, U.S. demand for transformers is at a record high. “The U.S. is back to making stuff… and we have helped enable that,” said Kevin Lowery, director of communications for Roanoke-based Virginia Transformer Corp. “In order to have any kind of manufacturing, you need transformers.” The challenge, however, is that this combination of aging infrastructure and the unprecedented transformation of multiple energy-intensive industries has come fast and put transformer

manufacturers in a ramp-up position. Several factors have driven the current and expected growth for the market: ◾ Aging U.S. electric infrastructure that necessitates equipment upgrades ◾ Changes to the regulatory environment, including federal legislation that funds infrastructure upgrades and incentivizes increased efficiency and reduced carbon emissions ◾ An increased emphasis on resiliency and durability in the wake of high-profile grid failures in Texas and the Carolinas ◾ Continued growth in the use of renewable energy sources ◾ Increased demand from high-growth industries that rely on transformers, including data centers and electric vehicle charging networks ◾ Reshoring initiatives focused on bringing domestic manufacturing back to the United States “Three years ago, none of us were talking about what we’re experiencing

today,” said Steve McKinney, senior vice president of transformers, North America, at Hitachi Energy. The Swiss company operates transformer manufacturing facilities in Bland County and Halifax County. “We were making investments, but I don’t think anybody saw all the pieces of the puzzle coming together in the way that has dramatically increased demand.” The supply side of the equation also puts a strain on transformer manufacturing. High barriers to entry and capital needs have limited the number of domestic manufacturers, while major portions of production costs are tied to commodities, leading to significant price fluctuations. As a result, energy projects around the world are being scheduled around transformer availability. “I’ve been amazed at the lead times on these things,” said Will Clear, managing partner of Bristol-based Virginia Energy Strategies and former chief deputy director of the Virginia Department of Energy. “I’ve heard 24-month, 36-month lead times for some of the big transmission projects. This really does hamstring us from a development standpoint.”

Hitachi Energy, Halifax County

Unless you are part of this industry and you can put all these pieces together, you really don’t understand the imbalance that’s now happening. The demand is far exceeding the supply. We are all in ramp-up mode. STEVE MCKINNEY Senior Vice President of Transformers, North America, Hitachi Energy

It wasn’t until Clear toured a transformer plant that he recognized the incredible complexity manufacturers face in increasing supply. “I was amazed at the difficulty behind the manufacturing. These things are made by hand,” he said. “It appears to me that it is an industry where capacity is expensive to increase and could quickly lead to an oversupply situation if demand slows.” Not anymore. The industry is preparing in a big way to match the demand they’re seeing today and, more importantly, the demand expected to continue. “We see this being a 7- to 10-year cycle, and possibly even longer,” McKinney said. As a result, manufacturers across Virginia are working to increase supply of these essential components onshore to serve their customer base more effectively. Hitachi Energy is working to match demand by expanding its facilities. Its Bland plant added capacity back in 2021, and now the company is adding 26,000 square

feet to its South Boston facility. This will accommodate a new production line for manufacturing large transformers geared toward the utility and renewable energy markets. The addition comes with support from several state grants and is expected to create 165 new jobs. Meanwhile, Delta Star, Inc., is expanding its 300,000-sq.-ft. East Coast manufacturing facility in Lynchburg by another 80,000 square feet. It’s the largest capital investment in the company’s more than 60 years of operations in Virginia. Asa Keimig, media & PR manager for Delta Star, explained that the expansion will help the manufacturer maintain its reputation for industry-leading power solutions. The facility provides a diverse range of transformer sizes, as well as mobile transformers, to accommodate a span of market needs. “Investing in our human resources is another primary focus,” Keimig said. “We’re adding positions in manufacturing,

V I R G I N I A’ S T R A N S F O R M E R M A N U FA C T U R E R S P O W E R U P

engineering, and supply chain procurement, to name a few, in an effort to capitalize on market conditions.” Virginia Transformer has likewise prioritized hiring in order to fulfill the inquiries coming in at a record pace. “Just here in Roanoke, we’ve added about 200 jobs over the last year, and we’re looking by the end of this year to add probably another 100,” Lowery said. However, ramping up production isn’t as easy as hiring more people. It takes time to learn these skills. “Transformer winding is a skill that follows a very standard manufacturing process, but it’s a skill that you can’t walk in and develop within a week,” McKinney said. “We have great training programs to accelerate the learning curve of our employees, but it can take six months to really learn this skill and be proficient at it. In some factories, it can take upwards

of a year to be able to be left alone to do transformer winding.” As Virginia’s transformer manufacturers build up capacity, they’re also working to bring their suppliers along with them. For Virginia Transformer, inventory management has proven essential to maintaining its position as an industry forerunner in lead times. “As a privately held corporation, if there are certain materials that we might think could potentially pose a supply chain challenge, we go get an inventory of them,” Lowery said. He notes that suppliers have been supportive in providing this visibility. As he pointed out, “Suppliers love nothing more than to work with a company that’s growing. We’re in that enviable position.” Hitachi’s international presence has provided access to materials that have kept its Virginia production steady. “Being

a large consumer of critical materials, we have clear visibility in terms of the global supply chain,” McKinney said. “Some of the major materials that a lot of people were talking about, like grain-oriented steel, we have been able to secure because of our global footprint.” McKinney added that communication has proven critical to ensuring reliable access to essential materials. Hitachi has hosted Supplier Days to provide its upstream partners visibility into Hitachi’s production plans. “We brought everybody in and shared what is going on because, unless you are part of this industry and you can put all these pieces together, you really don’t understand the imbalance that’s now happening. The demand is far exceeding the supply. We are all in ramp-up mode. As a result, it’s important to communicate with suppliers — and customers — to make them aware that this isn’t just a one- or two-year cycle.”

Virginia Transformer Corporation, Roanoke

Centura College’s Norfolk campus hosts the training facilities for its Global Wind Organisation-certified Wind Turbine Technician program.

New Industry, New Workforce Inside the efforts to train talent for Virginia’s offshore wind needs

ACCORDING TO THE U.S. Department

vice president of corporate solutions at Tidewater Community College (TCC), which has several campuses in the Hampton Roads region.

of Energy, the combined offshore wind energy plants currently in some stage of planning in the United States will be able to produce over 50 gigawatts of power, which is nearly as much as the current global total, and enough to meet the electricity needs of more than 10 million homes. All of those turbines will need workers to manufacture, assemble, transport, install, operate, and maintain them. These jobs require a combination of technical skills and specialized knowledge. A wind turbine technician, for example, needs to know electrical, mechanical, and hydraulic systems. Because offshore turbines are typically much larger than land-based ones and are located miles from shore, their technicians also need to be able to safely work at height and on the water. A large part in offshore wind industry workforce development will be played by career-focused educational institutions — trade schools, higher education centers, and community and private colleges across Virginia. A handful of schools are ahead of the curve and currently offer a wide range of programs related to offshore wind, from short certifications that can be completed in a week to round out a résumé to twoyear programs that teach technical abilities, background knowledge, and soft skills for first-time workers. “We have the opportunity to prepare our region’s untapped talent for exciting careers in the offshore wind industry and develop their skills from entry-level to advanced,” said Laura Hanson, interim

If you have relevant skills, there’s a chance for you to have a career [in offshore wind] no matter where you live throughout the state of Virginia. JOE SUMNER Executive Director, New College Institute

Offshore wind is a relatively new industry, and its specific needs will change over time. Educators can prepare infrastructure and instructors, relying on experience and established relationships. But many also stress the value of nimbleness in career training to be able to adjust to changing standards, industry shifts, or simple skill preferences. Together, industry leaders and educators hope to ensure that as offshore wind farms arrive off the coast of Virginia and the rest of the country, a qualified workforce is ready for them.

REMOTE WORK Many aspects of U.S. offshore wind have been modeled after the established European industry. For example, Global Wind Organisation (GWO)-certified training has become the standard for safety and rescue. And because turbine projects will be built past the horizon, hours from land by boat, operators are also likely to keep crews at sea, alternating them two weeks on and two weeks off. Ship crews and maritime skills will be key to properly operating offshore turbines. The Maritime Institute, the largest maritime training provider in the country, offers a range of U.S. Coast Guardcertified training, GWO training, and more. “It’s one-stop shopping from that standpoint,” said John Stauffer, president of the Maritime Institute, which operates a campus in Norfolk.

N E W I N D U S T R Y, N E W W O R K F O R C E

Those maritime skills will be complemented by many different specializations, whether they’re on the water or not. At TCC, Hanson sees educational opportunities for the full range of careers to support the industry, including skills related to welding and construction, administration and logistics, and even culinary arts for cooks on the support vessels.

Maritime Institute for GWO and Coast Guard training. Early classes have had enrollment capped at 10, but that should expand with demand as new offshore wind farms open in the region. In the meantime, graduates have made good use of their general electrical training, or applied wind turbine knowledge onshore, said Joel English, executive vice president at Centura.

The weeks-long shifts mean that commute times and geography could be less of a barrier to job seekers living inland. The New College Institute (NCI) in Martinsville is a few hours’ drive from the coast. But the school offers a full complement of GWO training, even conducting aquatic lessons at a tower on a flooded quarry. Recent trainees have used their skills in the wind industry on land and out of state.

TCC offers a two-year associate’s degree in electrical technology with a specialization in renewable energy. A student entering the program now would graduate as the Coastal Virginia Offshore Wind project finishes construction and comes online. TCC also offers short-term training programs to meet immediate industry needs for technical skills, said Hanson, with plans to offer GWO training in the near future. TCC currently offers apprenticeship programs and customized training.

Getting the message out that this training is flexible has been a challenge, said Joe Sumner, NCI’s executive director. “If you have relevant skills, there’s a chance for you to have a career [in offshore wind] no matter where you live throughout the state of Virginia,” he said.

ANY WAY THE WIND BLOWS The labor needs of offshore wind will evolve with the industry. While major projects are being built, skills related to construction or manufacturing could be in higher demand. Upon completion, the need for technicians will surge. Virginia schools collaborate with businesses to make sure the wave of graduating students is ready for cutting-edge workforce needs, and not jobs or skills even just a year out of date. For example, at Centura College in Norfolk, a committee reviews the offshore wind program every six months, as with every other program at the school. Since 2020, Centura has offered a one-year, 10-course diploma program for offshore wind turbine technicians that includes nine different certifications. Half of the program is taken alongside electrical students. For the other half, offshore wind students attend the

NCI, Centura, and the Maritime Institute are all part of the Mid-Atlantic Wind Training Alliance, a partnership launched in 2020. In practice, a general spirit of collaboration has reigned, not necessarily related to any official announcement. NCI has aimed to cover gaps in the skills that employers are looking for, while avoiding redundancy in some cases, Sumner said. In Virginia, communication among schools, businesses, and other stakeholders is fundamental to getting skilled workers into attractive jobs. “I think Virginia is going to be the big winner because of the collaboration we’ve had,” said English.

TOP: Centura College’s offshore wind facility in Norfolk offers hands-on training on the college’s training tower and classroom sessions on wind turbine systems. BOTTOM: The New College Institute in Martinsville offers two training tracks to help workers become GWO-certified. The GWO Basic Safety Training program, shown at right, includes modules on working at heights, first aid, manual handling, fire awareness, and sea survival.

NOVA Power Solutions, Inc., Loudoun County

MAKING UP FOR

LOST TIME Once limited from selling internationally, NOVA Power Solutions jump-starts its export program

hen a naval ship is at sea, dozens

“The beautiful thing for us is we can accept

product is a piece of electronics that can

of critical electronic systems

anything as input,” Ziff said. “It can be solar,

support weapons systems but, on its own,

onboard need to operate perfectly,

it can be wind, it can be nuclear, it can be

it is not a weapon,” and should thus

or missions and lives could be in jeopardy.

diesel — it can be anything, because we’re

fall under normal U.S. Commerce

Those systems require consistent power to

going to take that and apply our technology

Department regulation.

operate, but the power provided by the ship’s

to make sure it gets to be whatever that end

generators is often unreliable.

system needs.”

That’s where NOVA Power Solutions, Inc.

NOVA Power was started 35 years ago

differentiated from the weapons systems they

comes in. The Loudoun County company

by a veteran who saw the need for military

helped power. That didn’t mean they weren’t in

manufactures power conditioning systems and

operations to maintain a stable power

use in international markets. But they were being

backup batteries for ships, oil rigs, satellite

supply even when off-grid. For nearly the

slipped in through the back door, anonymously.

ground stations, specialty vehicles, and other

first three decades of its existence, the

clients that require a clean, predictable power

company faced extreme challenges selling

For instance, a U.S. defense contractor might

supply in locations far from the electrical grid.

its products directly to international markets

sell a radar system to an ally in Europe. “We

because of U.S. State Department export

would work with the contractor to understand

control definitions for weapons systems.

the technical needs and would build and

Nevertheless, under government regulations of the time, NOVA Power’s systems were not

Unlike the steady wave of electricity that comes into the homes and offices of American cities,

supply them our systems, but we would have

the power supply in remote destinations is

“We were making arguments for many years

no insight into who the ultimate end user

“far from ideal,” said NOVA Power Solutions

that our product is not a weapon and should

would be,” Ziff said. Often, the system would

President and CEO Steve Ziff.

not be regulated as such,” Ziff said. “Our

end up with a foreign military.

Later, NOVA Power might discover that

“The resources it’s provided have been

its products had landed in that country by

invaluable,” Ziff said. NOVA Power

receiving calls from that country looking

executives often join VEDP trade missions

for technical support or to purchase

to foreign countries, where VEDP staff will

additional products.

arrange meetings with relevant people in their industry. The company has participated

“Did we sell it to them originally? No, our

in the Global Defense Program, which

products made their way there,” Ziff said.

offers eligible companies assistance with

“We couldn’t proactively go after any foreign

strategy, export compliance, matchmaking,

markets because of the controls in place.”

and translation, as well as targeted market research services. And NOVA Power is

Then, a decade ago, the State Department

also a participant in VEDP’s Trade Show

changed its policies. NOVA Power’s products

Program, which provides companies with

were no longer classified as weapons. Suddenly,

up to $10,000 per year to participate in

the company could expand its business abroad.

international trade show exhibitions.

There’s no question that what VEDP provides to help drive international business for Virginia companies is the gold standard. STEVE ZIFF

But what was the best way to go about it? But the help doesn’t end there, Ziff said. For One of the company’s salesmen had an idea:

instance, NOVA Power wanted to participate

Turkey. It had a fast-growing economy, a large

in an Australian defense trade show this fall.

naval presence, plans to build lots of ships

Setting up its own booth could have cost as

and, as Ziff put it, “no competition in the

much as $20,000. Instead, NOVA Power

country for what we do.” Best of all, Turkey

will have a section of the VEDP booth for a

wanted to export its military technology to

fraction of the cost, he said.

President and CEO, NOVA Power Solutions, Inc.

other countries, so if NOVA Power could become a trusted contractor, “they would be

Plus, had NOVA Power hosted a solo booth,

doing all the work to export their products

potential customers might have passed by

and we could go along for the ride,” Ziff said.

because they didn’t know anything about the company, Ziff said. In contrast, “Everyone

NOVA Power turned to VEDP for assistance

knows the state of Virginia. They do a lot

with engagement in the country. The company

of the marketing for us.”

also entered VEDP’s two-year Virginia Leaders in Export Trade (VALET) program, which

NOVA Power does business in other states,

assists Virginia exporters with established

but Ziff observed he’s never seen anything

domestic operations that are committed to

else that compares to what VEDP offers.

international exporting as a growth strategy.

“There’s no question that what VEDP provides to help drive international business

Soon, the company brought on a retired

for Virginia companies is the gold standard.”

Turkish Naval officer who was not only well versed on the technology, but highly

In addition to Australia, the company is

connected in his home country. That,

in various stages of entering the market or

combined with a detailed plan for tactics

preparing to do so in Canada, Japan, Poland,

and expectations, yielded impressive results.

Romania, and several others, Ziff said.

Ten years later, Turkey is NOVA Power’s

“We’ve gotten through the door, and now

largest international market, and still growing.

we’re trying to really pitch our tent and

“It’s a great success story,” Ziff said. “I wish I

establish ourselves in a bigger way, because

could repeat it over and over again.”

they all still need what we have.”

Today, as NOVA Power continues to explore new international markets, nearly a quarter of the company’s annual revenue comes from international sales, and that number continues to increase, Ziff said. Throughout it all, VEDP has played a critical role.

MIDDLE PENINSULA

A WATER LOVER'S

PARADISE

Several rural Gloucester County communities are known collectively as Guinea Neck. Some longtime residents speak in a unique dialect with similarities to Cockney English.

The Middle Peninsula is predominantly rural, with

THE MIDDLE PENINSULA OFFERS

an economy historically based on natural resources. Today, the region’s economy is bolstered by tourism, professional services, advanced manufacturing, and aquaculture. Major employers include paper packaging giant WestRock, leading pet nutrition company Nestlé Purina Pet Care, and international horticulture and water treatment company Premier Tech. Surrounded

Competitive infrastructure with four-lane highways that allow for quick access to major population centers and The Port of Virginia’s Hampton Roads facilities The Virginia Institute of Marine Sciences, the graduate school in marine science for the College of William & Mary that conducts vital research into coastal ocean and estuarine science

by two large rivers and the Chesapeake Bay, the Middle Peninsula boasts 506 miles of shoreline that make up the Gloucester Blueways, a system of water

Food, housing, and transportation costs lower than the national average

trails spanning tidal rivers, navigable creeks, and the man-made Beaverdam Lake in Gloucester County. Those waterways also contribute to a thriving seafood industry that supports the annual Urbanna Oyster Festival, which draws more than 50,000 visitors to the Middlesex County town each year.

This Gloucester County mural celebrates the county’s rich history with daffodils, first introduced to the United States by English settlers in the 17th century. The county hosts the Gloucester Daffodil Festival each April.

The community of Deltaville sits at the eastern tip of Mathews County where the Rappahannock and Piankatank rivers empty into the Chesapeake Bay. The area is a popular destination for sailing enthusiasts.

Freight rail service on the Middle Peninsula is provided by Norfolk Southern and connects the region’s localities, including the town of West Point in King William County, to The Port of Virginia’s Hampton Roads facilities 60 miles away.

The Middle Peninsula’s abundant waterways provide a wealth of recreational opportunities, including sailing on the Rappahannock River.

The Gloucester County community of Gloucester Point is connected to Yorktown and the Hampton Roads region by the George P. Coleman Bridge.

Despite its now-misleading name, the New Point Comfort Lighthouse was commissioned by President Thomas Jefferson in 1801 and is one of the oldest lighthouses still standing in the United States.

The Virginia Institute of Marine Science in Gloucester County operates the world’s longest-running shark survey, in progress since 1973.

The Middle Peninsula’s geography makes it a prime location for seafood producers, many of whom have been harvesting crabs, clams, and oysters from its waterways for generations.

FDP Brakes has operated its facility in the Essex County town of Tappahannock for more than 50 years. The company’s big break came in 1970 when it was chosen as the brake supplier for the Ford Thunderbird.

The Middle Peninsula is home to a wide variety of marinas on its many waterways, including the Regent Point Marina in Middlesex County, above, and the Urbanna Yachting Center.

Economic Development Partners in Virginia VEDP works in close partnership with local and regional economic development organizations. For a full list of local and regional partners, visit www.vedp.org/Regions In addition, VEDP regularly works with a wide network of statewide partners, including: State Leadership Partners

Project Delivery Partners

Governor

Colleges and universities across the Commonwealth (e.g., UVA, Virginia Tech, William & Mary)

General Assembly

Policy and Programmatic Partners Virginia Department of Rail and Public Transit

GO Virginia

Virginia Department of Small Business and Supplier Diversity

State Council of Higher Education for Virginia

Virginia Chamber of Commerce, as well as many local and regional chambers of commerce

Virginia Agribusiness Council

Virginia Economic Developers Association

Virginia Association of Counties

Virginia Farm Bureau

Major Employment and Investment (MEI) Commission

CSX, Norfolk Southern, and short-line railroads

Secretary of Commerce and Trade

Dominion, AEP, and other electric utilities

Secretary of Finance

The Port of Virginia

Virginia Department of Transportation

Virginia Community College System

Virginia Innovation Partnership Corporation

Virginia Business Higher Education Council

Virginia Department of Agriculture and Consumer Services

Virginia Tobacco Region Revitalization Commission

Virginia Department of Environmental Quality

Virginia Tourism Corporation

Virginia Cable Telecommunications Association, Virginia Manufacturers Association, Virginia Maritime Association, Virginia Realtors Association, and many other trade associations

Virginia Department of Taxation

Virginia Business Council

Virginia Department of Housing and Community Development

Virginia Municipal League Virginia Association of Planning District Commissions Virginia Rural Center

220

Virginia’s Technology Councils

220

Roanoke Region New River Valley

460

Southwest Virginia

220

221

I81-I77 Crossroads 77 58

460

Northern Shenandoah Valley

Washington, D.C.

66 81

Northern Virginia

211 33

Shenandoah Valley

250

Greater Fredericksburg

Central Virginia

301

95 81

Northern Neck

360

Eastern Shore

Middle Peninsula 13

Greater Richmond Lynchburg Region

60 288

360

295

460

Virginia’s Gateway Region

460

501

South Central 360 Virginia

Southern Virginia

460

Hampton Roads

168

501

Wind of Change

Dominion Energy’s Coastal Virginia Offshore Wind project is breaking new ground in the energy industry. The 8.8-million-megawatt project is the first offshore wind farm installed in federal waters, the first developed and owned by a utility company, and the largest offshore wind project under development in the United States — and a major pillar of Virginia’s efforts to meet increasing power demands while moving toward a reliable, affordable, and clean energy future.