Virginia Clean Economy Act Marks Five Years, Driving Economic Growth and Clean Energy Transition
Key Insights
The Virginia Clean Economy Act (VCEA), passed five years ago, has significantly boosted the state's GDP by 11% while simultaneously reducing pollution, demonstrating a successful economic and environmental strategy.
Contrary to initial predictions of job losses, the VCEA has fostered substantial job creation, with 118,000 positions now in Virginia's advanced energy sector, attracting major manufacturers like Volvo Trucks.
The VCEA's focus on clean energy and efficiency has led to substantial savings for ratepayers, with Dominion Energy's renewable projects projected to save $118.5 billion in fuel costs over their lifespan.
Despite challenges like rising energy demand and recent legislative setbacks, industry leaders emphasize continued progress through policy and technology to ensure grid resilience and cost-effectiveness.
Virginia's landmark Clean Economy Act (VCEA), enacted five years ago, has demonstrably spurred economic growth and advanced the state's clean energy transition, according to an analysis by Advanced Energy United. The legislation, which set a path to 100% clean energy, has coincided with an 11% increase in Virginia's Gross Domestic Product (GDP) and significant job creation within the advanced energy sector.
Opponents initially warned of job losses, but the VCEA has instead fostered robust employment. The advanced energy industry in Virginia now accounts for 118,000 high-paying jobs. This policy framework has signaled to global manufacturers, such as Volvo Trucks, that Virginia offers a favorable business environment. Volvo's New River Valley facility in Dublin, its largest truck factory globally, has been producing the all-electric VNR Electric truck since 2021, integrating it into Volvo's global fleet strategy.
The transition to clean energy and enhanced energy efficiency under the VCEA has also yielded substantial financial benefits for ratepayers. Dominion Energy's latest Renewable Portfolio Standard plan, for instance, is projected to save ratepayers $118.5 billion in fuel costs over the operational lifespan of its renewable energy investments. This demonstrates the long-term economic advantage of renewables, which tend to decrease in cost over time, unlike volatile fossil fuel commodities. Analysis indicates renewables remain competitive even without federal subsidies.
While the VCEA has laid a strong foundation, the state faces new challenges, notably rising energy demand. Industry experts, including Morgan Pinell, Managing Director at Advanced Energy United, emphasize that solutions exist, such as technologies to reduce energy use during peak times and enhance grid flexibility. However, recent legislative actions, including gubernatorial vetoes of bills aimed at expanding rooftop solar and energy storage targets (HB 1833 and HB 2537), have slowed progress. Additionally, antiquated permitting processes continue to delay critical clean energy projects.
Despite these hurdles, the initial five years of the VCEA refute predictions of economic harm, instead highlighting the risks associated with reliance on volatile fossil fuel markets and an aging transmission infrastructure. Industry stakeholders urge continued leadership and data-driven policy decisions to build upon the VCEA's success, accelerate permitting and interconnection, and leverage new technologies to meet Virginia's energy demands reliably and affordably, maintaining its economic edge.