Last year, at COP26 the world was talking about decarbonization. Since Russia’s invasion of Ukraine in February 2022, and the subsequent energy crisis that has emerged, the world is talking about energy security, reliability and affordability. The bottom line is that we need all of this. Energy—both the use of it and the supporting industries that develop it—can be a significant lever for economic growth and opportunity, as well as a critical component of national and geopolitical security. And the U.S. continues to innovate in new energy technologies at a rapid pace. A strong diverse energy mix ensures resilience in times of disruption that could shut down power supplies or sharply increase the price of electricity—which can threaten well-being and cause significant economic damage. And a diverse energy mix enables the strength of one power source to make up for the weaknesses of another.
Many of these critical concepts are woven throughout Virginia’s 2022 Energy Plan. In the transmittal letter for the 35 page Energy Plan, Gov. Youngkin explains: “We need to recognize that a clean energy future does not have to come at the cost of a healthy, resilient, and growing economy. . . We must reject the mindset that it is ‘either/or,’ and embrace the reality that it is ‘both/and.’ In fact, the only way to confidently move towards a reliable, affordable and clean energy future in Virginia is to go all-in on innovation in nuclear, carbon capture, and new technology like hydrogen generation, along with building on our leadership in offshore wind and solar.”
To that end, the Energy Plan calls for a number of initiatives in nuclear power, leveraging U.S. leadership in nuclear power innovation. Notably, the plan calls for the deployment of the state’s first small, modular reactor in Southwest Virginia within the next 10 years, as well as the establishment of a nuclear energy innovation hub, leveraging the capabilities of Virginia’s industries and universities. Nuclear power currently makes up 14% of Virginia’s energy mix, and 95% of its carbon-free power. See Energy Plan at 4, 20.
For decades Southwest Virginia has mined and operated coal plants to provide power to the state and region. As we have written about many times before on this blog, as coal plants shut down, nuclear power provides a strong option for a replacement power source by providing not only immense amounts of carbon-free energy, but by also providing a number of high paying jobs that can ensure a just transition to cleaner power sources. There has also been a string of significant recent federal legislation—including significant tax credits intended to support repowering coal communities with clean energy, including nuclear. Recently, the U.S. Department of Energy commissioned a report concluding that hundreds of United States coal power plant sites could be converted to nuclear power plant sites, adding new jobs, increasing economic benefit, and significantly improving environmental conditions. And by teaming the planned plant with a nuclear innovation hub, the Energy Plan could bring significant opportunities for economic growth to Virginia.
We walk through a brief overview of the plan below.
Energy Plan Recommendations in the Nuclear Area
The Energy Plan focuses on a number of guiding principles and recommendations in the areas of reliability, affordability, innovation, competition, and environmental stewardship. Energy Plan at 10. In the area of innovation, the Energy Plan looks to a number of new technologies, including nuclear; hydrogen; renewable energy; battery technology supply chains; carbon capture, utilization and storage, coal combustion residuals and waste utilization; and research and development.
The recommendations in innovation impact nuclear most directly, recommending that Virginia:
- Work with government, industry, and academic partners to develop a plan to deploy a commercial SMR in Southwest Virginia within 10 years.
- Collaborate with the Virginia Nuclear Energy Consortium and higher education institutions to establish a nuclear hub in Virginia.
- Create a new focus within the Virginia Economic Development Partnership, that targets businesses developing and implementing emerging energy generation technologies.
- Develop a hydrogen roadmap with state, local, and private sector stakeholders to poise Virginia to capitalize on hydrogen generation opportunities.
- Leverage federal and state funds to support energy innovation in multiple areas such as biogas, carbon capture and storage, critical minerals, hydrogen, grid modernization/resilience, biomass; and spent fuel recycling.
- Study the creation of incentives to encourage energy infrastructure development for business-ready sites. See 2022 Energy Report at 22.
Other aspects of the Energy Plan would also impact the deployment of new nuclear as well. For example, the Energy Plan recommends required periodic re-assessments of Virginia’s energy portfolio to remain current with the evolution of energy production and transmission, and includes several recommendations to preserve Virginia’s grid reliability and access to electricity. See Energy Plan at 2, 16.
The 2022 Energy Report is a result of the required update of the state’s energy plan under the Virginia Clean Economy Act (VCEA) passed in 2020 by a Democratic-controlled General Assembly and signed into law by then-Gov. Ralph Northam (D). As envisioned at the time, the update would describe how the state would continue to take steps to shed its reliance on fossil fuels.
For more information, please contact Amy Roma, Partner, or Stephanie Fishman, Associate.