Dominion threatens to abandon 2.6GW offshore windfarm over performance guarantee | Hacker News Reader

Dominion threatens to abandon 2.6GW offshore windfarm over performance guarantee

utilitydive.com

59 pointsboshomi45 comments

And now, for the rest of the story: https://www.baconsrebellion.com/wp/secret-wind-case-document...

It blows my mind how many aggressives and their useful idiots talk crap about greedy corporations, but will defend this textbook case of cronyism... an $8 billion boondoggle with a rate-of-return guaranteed to protect this privileged company's stock price and increase executive salaries.

Dominion lobbied hard to get the regulatory framework they now cite as being violated. Its classic wolf guarding the hen house.

from the above article:

  The SCC judges and their staffs have read all those secret documents. Attorney General Jason Miyares’ team in the Office of Consumer Counsel have read all those secret documents. The lawyers for the various environmental groups, otherwise highly supportive of offshore wind, have read all those secret documents. Having read them, they endorsed a significant performance standard with financial penalties

I hear a lot these days from Virginians about the bad acting Dominion does.

That Richmond’s newest, most luxurious building with the best views (nicer than any bank or the many industry headquarters) is Dominion, when they are supposed to be providing a regulated taxpayer service, is telling.

Photo: https://images.app.goo.gl/cMEsPdtwr5wx8aiJ6

The list of shitty things they do is too long for here, but their new HQ was suppose to be 2 buildings. They decided against the other build during covid and work from home. Now there is just an empty lot downtown which no one can build on until the rights revert back to the city.

Another gem of a company called CoStar is look to build a huge building downtown too.

For utilities, you, the rate-payer, are not the customer. The customers are the politicians and bureaucrats that "regulate" them.

Everything these companies do is about pulling the wool over the ratepayers eyes, so the masses don't complain to the politicians. Did you see the latest ad about how they're working hard to deliver service, and the article about the latest donation they made to some non-profit. The media tells my its all good, so it must be

> donation they made to some non-profit

Which is another way if saying that they took it upon themselves to redirect a chunk of their customer's own charity budget to causes that the company prefers. And to compound the damage, are doing so out of the customer's remaining income as already reduced by taxes.

Amazing that the public keeps falling for this, over and over.

Polititians are more like the stakeholders, and companies generally listen to those more than the customers they serve.

You get the government you deserve. If the people are dumb enough to be fleeced like this, they should be.

“If people are dumb enough to be scammed, they should be scammed.” I’m sure every scammer would agree with this sentiment.

I can understand the rider that allows the utility to recoup the expenditures it took to create the farm, however, a good portion of said farm should belong to customers after they've paid it off. Otherwise, its just another subsidy.

I think this may be first time I've ever heard a dispute between a utility and a regulator where the utility seemed to be in the right... Maybe I'm missing something?

Setting a performance obligation for a wind farm is like prohibiting wildfires, a legal "solution" for a technical/physical problem. I feel like missing the problem here.

Maybe law makers want to obstruct a company or out of ideologically aka. political reasons push back against renewables.

Or this wind park maybe a trick from Dominion, to cash in subsidy and practically abbadon the plant after. Like other mega projects with public partnerships in the past became.

Unfortunately, the article does not illuminate the law makers reasoning.

With this sized variable production unit, I do get the idea with demanding some type of delivery guarantees. Or it could massively disturb the market. I think it is pretty reasonable to start expecting renewables to cover the variability. Either building enough storage or alternative production.

https://www.baconsrebellion.com/wp/secret-wind-case-document...

  The lawyers for the various environmental groups, otherwise highly supportive of offshore wind, have read all those secret documents. Having read them, they endorsed a significant performance standard with financial penalties

Re: "Setting a performance obligation for a wind farm is like prohibiting wildfires..."

This ignores that risks can be insured. If your risk isn't insurable, your pricing, costs, etc. are probably out of whack. In this case, it seems more like Dominion was expecting to cash in on subsidies in a classic "socialize risk, privatize profit" move. When the conditions around that changed, they got pouty.

The disputes where the utility is right often get no media attention, because it’s a boring story. The addition of wind is what makes this one notable.

2.6GW for 9.8billion USD. Regardless of the environment, and out of curiosity, what's the comparative price for coal, gas or nuclear stations say over a 10 year period (including build price).

At 42% capacity factor of 2,600MW, 24 hours and 365 days in a year, that's 9,600,000 MWh in a year. At a 30 year lifespan, the capital expenditure is $330M/year, for an average cost of $34/MWh. This is basically unbelievably cheap for offshore wind, and if you would tel someone 10 years ago this price, they probably wouldn't believe you.

Wind typically has very low operations and maintenance costs compared to the CapEx, but even at 20%, the cost is still less than $45/MWh, which is incredibly cheap. Of course this doesn't factor in the time value of money, but to see raw numbers like this for offshore wind, which historically has been quite a bit more expensive, is a bit shocking to me.

The term of trade is "Levelized cost of electricity", https://en.wikipedia.org/wiki/Levelized_cost_of_electricity

Coal is about 2x, gas about 1,3x and nuclear is about 3.6x the LCOE of wind, in 2020, without differentiating between onshore and offshore wind.

Lazard’s Levelized Cost of Energy V15.0: https://www.lazard.com/media/451905/lazards-levelized-cost-o...

In the meantime, the prices for natural gas and coal have doubled: https://tradingeconomics.com/commodity/coal

That metric disregards _when_ the electricity is actually produced - which is actual blocker. If the raw amount of generated electricity was the real problem, then just build solar. The problems are when wind is still and sun is shining for average an hour a day, like in Poland in December.

Just as in most other parts of central Europe winds seems to be perfectly anticyclical to solar, e.g. higher when solar is lower: https://weatherspark.com/y/87583/Average-Weather-in-Warsaw-P...

It's far from covering the needs in December.

That’s why you want a network of interconnected grids to smooth out the distribution.

The metric also disregards the true cost of nuclear: the government gives them as an industry a ~$13 billion liability cap, when there are are plausible trillion dollar+ disaster events (one time the great lakes were almost ruined and that is comparatively minor).

Liability caps sounds fun. I wonder how much liability the government spends on hydroelectric power in the case of disaster, like say flooding of whole cities downstream.

It would make for a fun thought experiment to take a large one, say Grand Coulee Dam, and calculate the total cost if all that water would suddenly flood downstream.

Why not both? We had nuclear plants in the US downstream of dams that had to be refitted after Fukushima because they realized they could lose backup power from flooding in a dam failure and potentially lead to meltdown.

If we're going to talk about liability, that makes nuclear look better compared to fossil fuels not worse, as nuclear disasters are so rare and deaths from something like coal are extremely common.

Why is nuclear, middle-of-the-pack in terms of safety, worth singling out? The only thing I can think of is the human preference for people to die gradually in subtle hard to attribute ways than for a far smaller amount of people to die in dramatic nuclear meltdowns.

If what you say is in fact realistic, nuclear plants would be insurable without capped liability. Insurers are not driven by public opinion.

It’s much harder to buy a contract that pays $1B on a 1:1m event, than $1M on a 1:1k event, even though the EV is the same from both contracts.

Very infrequent events are hard to quantify and so the error bars are wider, making insurance more expensive and just riskier for insurers.

Here is the canonical source I site for power death rates: https://ourworldindata.org/grapher/death-rates-from-energy-p...

How is $13B at all a reasonable liability number for the whole industry?

That's on the order of only the reactor cost itself. The reactor owner may even get compensated instead of the population since some have done leaseback schemes with the operator.

You got it wrong. It’s $13B that the whole industry will pay for a single reactor accident. Every nuclear power plant operator will have to pay $131M per reactor if there is one accident. Each reactor also has a mandatory insurance of $450M. This is to cover liability only.

Separate from that is a mandatory insurance imposed by the NRC of $1.06B per site to cover cleanup costs

[1] https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/n...

GW = 1000000 kW

This article I found randomly (so I would only roughly consider this ballpark right) stated natural gas construction cost $812 per kW

https://proest.com/construction/cost-estimates/power-plants/

So 814 million per GW, but that is just construction, you have a massive cost in extracting the fuel and of course burning it that the above number doesn't take into account.

I mean in the end it doesnt matter,the cost of coal and natural gas is destroying our planet.

There's the cost per MWh generated and the cost to build the plant. Once you build wind, the marginal cost of each kWh is very cheap.

In the UK Gas is about 10 times the price per kWh than offshore wind, and that's before the latest price hikes. Wind being £48 per megawatt hour ($56).

https://www.carbonbrief.org/analysis-record-low-price-for-uk...

2.6GW and a load of 44% would be 10,000 GWh per year. Over 20 years that's 200 billion kWh for 10 billion dollars, or 5 cents per kWh (plus maintenence/operational costs).

For the cost to build for a 2.6GW plant -- in the UK the Beatrice extension in 2019 cost £2.6b for 588MWh, so £11.4b or $13.5b for 2.6GW, so the price doesn't seem out there.

Based on these comments defending wind energy projects, then why would Dominion care if there's a little risk?

Risk is subjective to the requirements being stipulated.

In this case Dominion claimed they could get 42%, what the rider requires, which is above the usual ~35% most wind plants produce. So they probably know they lied and realize that being held accountable for their lie will not be good financially.

42% is not unexpected for large offshore turbines, and it's one of the big advantages of going offshore, despite the expense.

>2.6GW for 9.8billion USD

42% of a 2.6GW.

Taishan NPP was build for 7.5 bln $ - 3.2 GW capacity. And that's "cursed" EPR design.

https://en.wikipedia.org/wiki/Taishan_Nuclear_Power_Plant

China also built a 100MW offshore wind farm for $100 mio. Comparing building costs between US and China always makes the US project look bad. China is just insanely good at building big projects cheaply (and the US is pretty bad at it, even among its peers).

https://en.wikipedia.org/wiki/Wind_power_in_China#:~:text=Co....

But Chinese construction cuts corners so badly a square comes out nearly round.

That's China, not exactly a good comparison with costs

And it being a nuclear plant it likely has a capacity factor of 85-90%, as opposed to the 30-35%ish for a well placed wind farm.

We are all going to die over money.

How would off shore wind even increase in cost for the consumer. Can someone who knows more than me explain?

If they abandon the wind farm, then can the government or some other entity pick it up for free?

Let's add a giant dependency on a wind farm that's sited in an area prone to hurricanes. What could go wrong?

Reply on news.ycombinator.com