Can Southwest Virginia remake itself as a laboratory for renewables?
As coal continues to decline, region zeroes in on diversification
Exeter, Va., with the JMAC #2 mine in the distance. (Sarah Vogelsong/Virginia Mercury)
NORTON — In September 2020, the highwall came crashing down.
For decades, the more than 75-foot-high remnant of surface mining had dominated the eastern entry to Norton, looming over the intersection of Routes 23 and 58. Officials had long since forgotten what company had left behind the structure, which predated both the state’s mining agency and federal surface mining laws. To many people, it hardly mattered: more than anything, the highwall was a constant reminder of how coal had shaped the city’s fortunes.
But between the time of its appearance and today, much has changed. Coal has been on the decline in Virginia since its 1990 peak. Production has dropped from 46.6 million tons that year to just 9.9 million in 2020. Employment declines have been even steeper, falling from 10,265 to 1,878 over the same period.
“The economics have been there for a long time,” said Adam Wells, a director of community and economic development for regional nonprofit Appalachian Voices. Virginia’s reserves of metallurgical coal — the high-quality ore used in steelmaking — have offered a bright spot; still, he said, “we did cross this point where it became clear we were never going to have another rebound like the way we’ve had.”
Over the past five years, interest in energy besides fossil fuels has surged in the coalfields region.
Norton and all of the region’s seven counties except Buchanan underwent the SolSmart designation process, a nationally recognized signal that a locality is “open for solar business.” Appalachian Voices and other groups successfully lobbied the General Assembly to loosen restrictions on local governments and schools striking agreements with solar companies in territory controlled by electric utilities Appalachian Power and Old Dominion Power. Through “Project Oasis,” regional partners launched a study of the feasibility of using water in flooded underground mines to cool data centers, an industry officials see as a potentially flush source of local tax revenue.
Other signs of change came out of Richmond, some 360 miles away. The Department of Mines, Minerals and Energy placed solar panels on its office in Big Stone Gap in 2019 and on Oct. 1 will become the “Department of Energy” in recognition of its changing focus. Following a government watchdog report that found Virginia’s generous coal tax credits “no longer appear relevant,” the General Assembly this winter voted to begin phasing them out.
And in Norton, the highwall was demolished to make way for a new 200 acre industrial park. This Wednesday, Gov. Ralph Northam’s office announced that Atlanta-based Internet service provider EarthLink would build a major customer support center on the site.
“The fact that (EarthLink CEO) Glenn Goad, a son of our region, chose to reshore 285 overseas jobs in the city of Norton and Wise County with a $5.4M investment is proof positive that Southwest Virginia’s assets are world-class competitive,” crowed Will Payne, director of regional marketing campaign InvestSWVA, in a triumphant email to stakeholders after the announcement.
“Our area has been the energy capital of Virginia,” said Jonathan Belcher, head of the Coalfields Economic Development Authority, which was created by the state legislature 33 years ago to help the region “achieve some degree of economic stability.” “So why not let it continue to be the energy capital, just with a different kind of energy?”
Will this time be different?
Whether renewables will help usher in a new era for Southwest Virginia or prove yet another unfulfilled hope is a question lingering in the background of many conversations.
Over the years boosters have repeatedly promised that change and progress are just around the corner for Appalachia.
“Just about as optimistic as anyone is Virginia’s Division of Industrial Development, which proclaimed recently that the ‘sleeping giant’ of Virginia’s southwest corner is awakening,” chirped an Associated Press story from September 1967.
Yet today Southwest Virginia remains one of the state’s most economically distressed regions. Although Virginia in 2019 had a median household income of just over $74,000, according to American Community Survey estimates, none of the coalfield localities even hit $50,000. Median household incomes ranged from as low as $29,000 in Norton that year to just over $42,000 in Tazewell. Poverty too was more than double Virginia’s 9.9 percent rate in every coalfield locality except Scott County.
After so many promises, some distrust remains.
“It all extends back to the mining companies,” said Matthew McFadden, a Wise County native who describes himself as a “good old boy from Southwest Virginia” and returned to the area from Charlottesville to try to sell solar in the region for Staunton-based Secure Futures Solar. “There’s always been this history of outside people coming in to take things.”
“Appalachia has had wealth and social capital extracted from it for over 100 years,” said Wells. “If we’re going to undo that injustice, we need a long-term approach and deliberate and sustained intervention.”
What might be different this time? Officials and residents cite a range of factors. The 2020 Virginia Clean Economy Act, which requires electric utilities to source all of their electricity from renewable sources by 2050, is one. Also there is more widespread regional acceptance that thermal coal — coal used for producing electricity — is on its way out. “It became okay to talk about a post-coal economy out in the open,” said Wells.
McFadden too, who has numerous family members in the coal industry and initially planned to go into the mines himself before being talked out of it by his father-in-law, said that while there may have been some public resentment of renewables “in the beginning,” that’s changed.
“That might exist in a very small percentage of the population here, but not in 95 percent of people,” he said.
Metallurgical coal may have eased the way. With high prices for the commodity and few replacements available to the steelmaking industry, “met” coal has allowed the industry to keep a toehold in the region that shows no signs of slipping. That has let the area reframe its aspirations: Coal is not being replaced, officials can argue; instead, other sources of energy are joining it at the table.
“At the end of the day, Southwest Virginia is coal country,” said Duane Miller, head of the far Southwest region’s planning district commission and the regional industrial facilities authority. “I always push away from the fact that we’re going to get rid of coal and everything’s going to go renewable. They should be able to coexist and be a benefit for everybody.”
New uses for mined lands
For officials, “diversification” has become the watchword and the guiding principle for a new Appalachian economy that for a century has relied overwhelmingly on coal.
“We’re in a region that has been impacted by coal in a negative way, and we’re at that point in the region where people are seeing we need to diversify our economy and attract new businesses,” said Kris Westover, president of Big Stone Gap-based Mountain Empire Community College.
Solar plans have been the most ambitious. Unlike other regions of the state, Southwest Virginia is home to no utility-scale solar, and rooftop and other distributed generation have been thin due to restrictions Appalachian Power previously placed on customers’ ability to sell solar back into the grid. But in the wake of the Virginia Clean Economy Act, activity has picked up. One developer plans to build a large array on a formerly mined site in Buchanan County, while Appalachian Power has gotten regulators’ approval to develop 210 megawatts of solar over the next five years and plans to add 3.4 gigawatts by 2050.
Dominion Energy, the state’s largest electric utility, is also making inroads into the area, most of which lies in Appalachian Power and Old Dominion Power’s service territory. Last Monday, Dominion and the Nature Conservancy announced the utility would develop its first large-scale solar facility on formerly mined lands that lie partly in lands within the Conservancy’s giant Cumberland Forest Project. SunTribe Solar and Sol Systems have also negotiated agreements to develop projects on the same site.
Both Dominion and the Nature Conservancy say the project could provide a model for other coalfields solar. “This is like Generation 1 for this solar-on-mined-lands concept,” said Brad Kreps, director of the conservancy’s Clinch Valley Project, while Dominion Vice President of Renewable Business Development Emil Avram called the idea “a smart way to develop solar in Southwest Virginia,”
Energy storage, one of the most rapidly evolving and critical components of the global renewables transition, has also sparked particular interest. Dominion has for several years floated plans to build a massive new pumped storage facility in Tazewell, while Virginia DMME is examining a small-scale pumped storage concept known as “Project Energizer” that is being developed in conjunction with InvestSWVA and two Liberty University scientists.
“Energy is transient,” said Del. Terry Kilgore, R-Scott. (Kilgore, the only member of his party in the House to vote for the Clean Economy Act, likes to say that he’s “a Republican, but my main party is Southwest Virginia.”) “It doesn’t really matter where it’s developed or where it’s located as long as you have the infrastructure, the big power lines to transfer that.”
Southwest Virginia does. Along with its low taxes, land values and built-out broadband network, the regional transmission network was built to supply a vast network of coal mines that now are being eyed as potential sources for solar. Dominion looks to site such projects within three miles of a transmission line, said Avram; in Southwest Virginia, that’s often not hard to find.
Nor is land, despite the mountainous terrain. While the region has little prospect of seeing many of the more massive solar developments proposed in flatter parts of the state like Halifax or Spotsylvania, it has an abundance of sites that could serve arrays of up to roughly 20 megawatts, say DMME officials. Over the past century, an estimated 100,000 acres in the coalfields region have been impacted by coal mining and left in various stages of restoration. Many residents and local governments — with what Payne called “a more enlightened approach to land use” than elsewhere in the state — are eager to see them put to a new use.
“It’s an energy-producing region. People are used to seeing the footprint of energy production around. It’s part of the identity,” said Wells.
That could contribute to a smoother permitting process for solar developers than in other parts of the state like prosperous Northern Virginia, where local opposition has proved one of the biggest stumbling blocks.
“Instead of looking at traditional agricultural land, greenfield development, in other parts of the state, you’re working on mined land that’s already been disturbed. So you’re repurposing and reusing the land,” said Daniel Kestner, director of DMME’s recently launched Innovative Mine Reclamation program. “I think there’s an appeal to that.”
A laboratory for renewables
Energy generation, however, is only one facet of the renewables transition that state officials and economic development groups want for Southwest Virginia. Manufacturing, they say, could hold equal or greater promise.
Virginia’s renewables commitments will require massive buildouts of new infrastructure. With Dominion intending to erect between 2.6 and 5.2 gigawatts of wind turbines off the coast of Virginia Beach, work is underway to transform Hampton Roads into a hub for the nascent offshore wind industry. The state’s ambitious utility targets of developing almost 17 gigawatts of solar and 5 gigawatts of storage by 2035 will also demand a plethora of solar panels, steel, batteries and other technologies.
For regional boosters, there’s no reason those products shouldn’t come from Southwest Virginia, where manufacturers have long been supplying the coal industry with equipment and technicians have been operating and maintaining it.
“These components, it’s opening up a whole new sector for recruitment,” said Miller.
Companies are already testing out the proposition. Through an Appalachian Voices-led pilot known as the Energy Storage and Electrification Manufacturing Jobs Project, four companies with historical ties to the coal mining industry are exploring ways to pivot toward supplying the growing renewables industry. In April, Northam announced almost $500,000 in state grant funds would go to support the effort.
“There’s a lot of batteries that can be used in coal mining. The thought process was that we already have companies that are manufacturing things in this sphere,” said Belcher of the Coalfields EDA, which is also involved in the project.
Many have already seen the writing on the wall, he noted: “Any manufacturing company in our region that had been making things for the mining industry, if they haven’t diversified some, then they’re probably out of business by now.”
The transition to a renewables-based energy economy is, of course, playing out across Virginia and the nation. But many regional power players, including InvestSWVA head Payne and DMME Director of Finance and Project Administration Will Clear, think Southwest Virginia offers a unique value proposition for clean energy industries and could serve as a vast laboratory for their development.
“We have 100,000 acres of disturbed land,” said Payne. “The goal is to leverage these properties used in the coal industry for research and development, deployment, (and) ultimately commercialization and manufacturing of renewable energy projects.”
In their vision, multiple sites across Southwest Virginia will become “The Lab”: a place where renewables developers can come to test how emerging technologies work in the real world, beyond the theoretical confines of a classroom or a workbench.
“Say you had a new tracking technology, solar tracking for solar panels,” said Clear. “You’re not going to do that in a (indoor) lab, right? You’re going to do it outside. And we’ve got the land.”
“We’re not talking about something crazy here like fusion or anything like that,” he added. “We’re talking about things you can see in five years. This is a new technology wind turbine, for example, a new technology fan blade. … These are things that people can come here and test and then ultimately we’ll figure out how to implement it and create jobs.”
A waiting workforce
In a region with high rates of unemployment and the boom-and-bust economy that has always characterized coal-dependent communities, jobs are top of mind.
Recent announcements like the Highlands Solar project “are a really good example of high-profile projects that infuse money, a lot of money, into the region,” said Wells. “But we still haven’t been able to go to friends or neighbors and shake hands with someone who got a job because of them yet. And ultimately that’s the goal.”
McFadden, the Wise County native, also emphasized the need for employment. “Frankly, we’re having so many young people leaving. I left. A lot of my friends left,” he said. Years later, his decision to move back from Charlottesville to sell solar for Secure Futures stemmed from “wanting to create jobs,” he said.
A robust workforce is available, say economic development groups, one that with some additional training could easily move from the pool of jobs that have historically revolved around coal mining to one based around renewables.
“A lot of our former mine workforce, they’re very talented electricians, welders. We’ve got the workforce built in here, so we think with the right investments … there’s a lot of opportunities to develop that manufacturing,” said Kilgore.
Still, workforce training and business recruitment remain a “chicken and egg” dilemma, said Westover of Mountain Empire Community College, which is working closely with many of the region’s economic development efforts to develop training programs for emerging industries.
“If there’s an interest for the student but there’s no job at the end, oftentimes they hedge their bets and go a different route,” she said. While Mountain Empire worked solar into its energy programs several years ago, jobs within the region remained virtually nonexistent until state law eased Appalachian Power’s solar restrictions in 2020. “We got a little ahead of ourselves with solar,” she said. But “ever since (those) changes have happened, I think that has opened up the way.”
On Friday, the first major consequences of the 2020 policy played out when the Wise County School Board signed a contract with Secure Futures to supply two megawatts of solar to four schools. The district will become the first in the region to source power from solar. McFadden says that over 35 years, the division will save an estimate $7.5 million.
Others may soon follow. Just one day prior, the Appalachian Regional Commission awarded $1.5 million to a solar financing fund that will award grants for solar projects on nonprofit and public buildings in the region.
In Big Stone Gap, Iron Works Cycling & Outdoor Adventure is one of the few commercial structures in Southwest Virginia to have sprung for solar panels, which it put up in November 2020. Since then, said co-owner Bobby Bloomer, “our electricity bill is negative.” With the panels generating excess energy, Iron Works began “mining” the cryptocurrency Ethereum as an additional revenue stream.
“There’s a lot of pent-up demand. It’ll just take a while to translate that into panels on the roof,” said Wells.
Money on the table?
Despite the progress that’s been made, many of the region’s leaders say that without state and federal investment, efforts will hit a ceiling.
In Southwest Virginia, “we’ve just decided a long time ago that if we want to do something, we’ve got to do it ourselves,” said Kilgore. But he too is looking for help from Richmond and Washington. One 2021 bill he patroned establishes a state grant fund for developing renewables on brownfields and formerly mined land but specifies that no monies will be allocated to it unless federal funds are available.
Other less immediately apparent investments are needed to help the region’s economy diversify, said officials. Child care shortfalls limit workforce participation. Developers looking at the area complain most often about the lack of low- to middle-income housing, said Clear. And opioid addiction rates remain among the highest in the state.
Transportation also remains what Belcher called “an impediment to attracting industry,” with many direct routes between coalfield towns still narrow, winding and lacking guardrails and the long-delayed Coalfield Expressway that would link the northern sections of the region to larger centers like Abingdon and Big Stone Gap still unbuilt. So unimpressive are certain routes that he said he avoids driving economic development prospects who visit the region along them “because you lose them.”
The pandemic may unexpectedly prove a game changer. Prior to the emergence of COVID-19, the state was pushing funding to the region through programs like GO Virginia, the Abandoned Mine Land Economic Revitalization program and Tobacco Commission grants and loans. But federal relief funds have unlocked new flows of money nationwide, and a massive federal infrastructure bill being debated in Washington could promise tens of millions of dollars to coalfield areas, including more than $11 billion for mined land cleanup.
“There’s money on the table, and nobody wants to be seen as the person who ignored that,” said Wells.
If Southwest Virginia is to ensure it gets a share of new opportunities, though, officials say it will have to be aggressive — firm in staking its claim as the state energy capital, assertive in courting business and bold in envisioning a new future for its communities.
“I think the region is used to doing a lot with very little and being very modest about what it has going on,” said Payne. “And the region cannot afford to be modest.”
This story has been updated to correct a transcription error that referred to nuclear fission instead of fusion.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.