The heated debate over a proposed 1,000-MW natural gas-fired power plant in Virginia shines a spotlight on a conundrum facing the US power sector.

Dominion Energy Inc., the utility proposing the Virginia plant, said the new fossil fuel-powered generation is needed to meet a projected 85% increase in the state's electricity demand over the next 15 years. The company's 2023 integrated resource plan (IRP), submitted to state regulators in May, calls for what could be six or seven new natural gas plants that, if built, would double the company's carbon footprint by 2048 and potentially exceed the state's legally mandated climate goals.

The Virginia utility is not alone. By mid-2023, US power companies were making plans for 122 new natural gas-fired plants or units in more than 33 states, S&P Global Market Intelligence data shows. The nation's 30 largest utilities by market capitalization accounted for 23 of those projects, about half of which are new plants and half expansions of existing facilities.

All but two of those 30 largest energy providers have set goals to reach net-zero emissions by 2050, and 13 said they will get there sooner. But the rush to invest in new natural gas-powered generation, which companies said is needed to complement intermittent renewable sources, is raising questions over how some utilities expect to reach their climate goals.

"It's completely alarming," said Victoria Higgins, Virginia director for Chesapeake Climate Action, one of the groups campaigning against the Dominion Energy plant. "If they're saying that they intend to meet that zero-carbon mandate by 2045 and continue to build new fossil fuel resources, that is completely disingenuous."

Aaron Ruby, a spokesperson for Dominion Energy, noted that 85% of the company's planned investment in new generation over the next 25 years will consist of wind, solar and other carbon-free energy resources. Dominion is building what will become the nation's largest offshore wind farm off the coast of Virginia and already has the nation's second-largest solar fleet, Ruby said in an interview. Ruby also noted that today's forecasts for plant retirements become less certain further out into the future.

"We're still totally committed to achieving net-zero emissions," Ruby said. "But we're going to need to see significant advances with clean energy technology to get there."

Meanwhile, opponents of Dominion's proposed Virginia power plant are organizing local community members to speak out against the project. The facility, referred to as the Chesterfield Electric Generation Project, would be built a few miles south of the state capital of Richmond near Dominion's Chesterfield coal plant, whose last units shut down in May.

About 2,270 natural gas-fired power plants today produce 42% of the electricity that US homes, businesses and industries use, according to S&P Global data.

So far in 2023, 10 new gas-fired plants have come online, according to the US Energy Information Administration, and six more are expected by the end of this year. The agency estimated that 8.6 GW of new gas-fired capacity will be added to the nation's power system this year, a sharp reversal from the consecutive declines in natural gas additions in the three years before 2022 and 2023.

The surge in gas plant projects could have implications for US pledges under the Paris Agreement on climate change unless the new capacity is used as a last resort, said Mike O'Boyle, senior electricity director for Energy Innovation, a climate policy think tank.

Natural gas-fired power plants will have a role to play in coming decades, O'Boyle and other experts said. But they said that role should be as peaker plants, which generally run only a few hundred hours a year during periods of very high power demand.

"To the extent there is new natural gas capacity added, it needs to be operated as little as possible if we're going to have any chance of meeting our emissions goals," O'Boyle said in an interview.

EXPLORE FURTHER: See the top 30 electric and multi-utility companies' net-zero and related emissions reduction goals. Click here for the downloadable file.

10% of US emissions

Production of electricity in the US accounted for 25% of the country's greenhouse gas emissions in 2021, according to the US Environmental Protection Agency's greenhouse gas inventory. Natural gas plants, which emit about half the carbon a coal plant produces on a per-megawatt-hour basis, helped to reduce overall power sector emissions by nearly 36% between 2005 and 2021 by replacing coal-fired generation, according to the EPA.

During the same period, however, carbon releases from natural gas-fired power plants about doubled and today account for nearly 10% of the country's total emissions, the EPA data shows.

Regulated utilities that can recover from ratepayers power plant investments and sudden spikes in natural gas prices will continue to add capacity, but they may also end up with stranded assets in an emissions-constrained world, said Ron Lehr, an energy attorney and former commissioner on the Colorado Public Utilities Commission. Companies could also be held accountable for emissions from their supply chains, Lehr cautioned.

"Emissions include the methane that leaks from the gas system, [which] if it's more than just a little bit, is forcing more climate change than coal," Lehr said.

Concern over climate-warming emissions from natural gas-fired power plants has not deterred utilities that are now exploring nascent technologies including hydrogen and carbon capture they hope will solve the problem.

Despite the potential of the new technologies, a strong case can be made for using natural gas to reduce power sector emissions, said Robert Ichord, a former deputy assistant secretary for energy transformation at the US State Department who now runs an energy analysis consulting firm.

"About 55% of carbon emissions from electricity in the US come from coal — we've got to shut down those plants," Ichord said in an interview. "Where you've got a good gas supply and transmission networks, you need gas to firm up and provide flexibility for the system."

In a rule proposed in May to curtail carbon emissions from power plants, the EPA reinforced the transition strategy by requiring large natural gas-fired power plants to co-fire with 30% clean hydrogen by 2032 and 96% by 2038 or cease operating.

What is doable when it comes to curtailing emissions from such plants is up for debate. The leading industry group for investor-owned utilities, the Edison Electric Institute, said in comments on the proposed EPA rule that the agency offered no evidence that the hydrogen technology would be available "by 2038, much less 2032."

In the meantime, Entergy Corp. is building a 1,215-MW "hydrogen-capable" natural gas-fired power plant in Orange, Texas, an industrial city bordering Louisiana. The average residential ratepayer will see an $11 increase to their monthly bills the first year of operations for the $1.5 billion project, the company said in an email. But Entergy also said it expects the plant, referred to as the Orange County Advanced Power Station, to help bring down greenhouse gas emissions from older plants that can now be retired.

"We believe continued use of gas in the near to medium-term is consistent with a net-zero future because it enables efficient deployment of renewables and the assets that use natural gas today and can be transitioned into decarbonized gases in the future," Entergy said in its 2022 climate report, where it reiterates its plan to reach net-zero emissions by 2050.

Back in Virginia, Dominion Energy says its need for new natural gas generation comes in response to an influx of energy-thirsty data centers that have made northern Virginia the world's largest center for internet traffic. The industry is responsible for nearly all of the 85% projected growth in Virginia's electricity demand over the next 15 years, the company said.

"We are a regulated utility and have an obligation to serve when a customer, large or small, residential, commercial or industrial, any customer, approaches us and requests service," Dominion Energy's Ruby said.

Under the sweeping Virginia Clean Economy Act enacted in 2020, the company can petition state regulators to keep fossil fuel plants open past the statutory limit of 2045 if reliable electricity service is threatened.

A new natural gas plant that begins operating in 2027, the starting date Dominion proposed for the Chesterfield plant, could have a lifespan of 40 years and overshoot climate goals by many years, Higgins, the environmental advocate, said.

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