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00:00Time now for commodity and cheap or we talked to one executive in the commodity world today. It's Robert Blue Dominion Energy chairman and CEO. Greening utilities is hard regulated. Companies are just that. They're subject to government rules and the government sets the rates the companies allowed to charge customers and that's enough to cover its costs plus a small profit. And that makes greening pretty hard. Utilities must put up a lot of cash to build out wind and solar farms while not overcharging a customer. So enter Dominion Energy. It's a utility in Virginia South Carolina Ohio and North Carolina. And it's spending 72 billion dollars over the next 15 years to transform to go green. Here's what that looks like. So eleven years ago got about 50 percent of its power from coal. Now that number is 10 percent. And in 2035 it'll be just 1 percent. At the same time renewables explosive growth brings its mix to about 35 percent. And one big way is able to get there is through the largest offshore wind farm off the coast of Virginia. It's trying to get that project done by 2020 six which will generate two point six gigawatts of power. That's enough for six hundred and sixty thousand homes. That price tag nearly 10 billion dollars. Now Dominion also proposed about 15 solar and energy storage products. And that's going to provide six point two gigawatts of electricity powering one and a half million customers. That price tag six billion dollars plus. So here are some of the hurdles. Analysts say the Dominion shut down so much of its coal so fast that what left is some low cost coal which will be much harder to retire from here. It recently also increased what it would cost to build that wind farm in Virginia an environmental organization. The Sierra Club criticized the company for its gas plants that are going to be running through 2045 especially the gas that comes from fracking. So I recently sat down with the CEO of Dominion Energy Bob Blue and I asked him the role that natural gas will be playing in the middle of this energy transition. It is natural gas that is allowing us to add the renewables that we are. The fact is the wind doesn't always blow and the sun doesn't always shine. And sometimes we go for extended periods of time where the wind doesn't blow and the sun doesn't shine. And natural gas is what allows us to continue to operate the electric grid in those environments. It seems like Dominion is considering a large new natural gas plant that would have a lifespan that exceeds your 2050 net zero goal. How would what would you say to someone who says well that doesn't mesh with your plans. Yes. So you may be thinking about our South Carolina business in Virginia. We've we've recently built within the last decade that we finish these several years ago some very highly efficient combined cycle natural gas plants. And that's what I said gives me that comfort that we can add as many renewables as we want in South Carolina. There may be the possibility for some additional natural gas there but that's because we have an aging coal fleet in South Carolina and it makes sense to shift to something that will allow us again to keep the lights on. This transition as we think about it to a greener energy needs to be done in an orderly way that doesn't sacrifice reliability our customers their lights on and their gas flowing 100 percent of the time. That is job one for us has been for the entirety of our existence and will continue to be job one for us. And we can actually go faster with renewables if we're using some natural gas. Now over time we're going to use it differently. No question about it. But we can't simply say we're done with it today because we don't have the technology at the moment to operate the grid without it. The idea of how much consumers will pay up to be greener over the course of the next 15 years we're talking about 2 percent a year average increase in electric bills which we think is pretty manageable. When you think about the benefits of moving toward fewer emissions less carbon. Let's get to then the green stuff where the money is really staking a huge claim is wind and a humungous offshore wind project should be about 10 billion ISE. Right. Can you tell me about the project how it came about how you're thinking about it. We've seen inflationary pressure like everyone has seen and projects that were building commodity prices little bit higher than we might have seen a couple of years ago. But interestingly at the same time the project that we've had operating off the coast so far it's been generating more electricity than we expected. And the data that we've got. As we've further studied this project indicates we're going to generate more electricity from the turbines a larger percentage of the time than we had originally expected. So commodity pressure up. But the amount of electricity generated also up which keeps the cost per unit of electricity about the same as what we've been talking about for a while. So we think we can manage the costs. What are you most excited about. To me what's most exciting is that we're on track on the permitting schedule process. And I would say that the technology of these turbines has really improved. So the two turbines that we have operating today are six megawatts each. And the ones that we expect to build will be more than 14 megawatts of twice as much electricity generated from these newer generation turbines than the ones that we installed just a year ago. So really incredible progress on the technology. I think maybe the best way to think about these issues is there may not be one single silver bullet. It might not be just hydrogen. It might also be renewable natural gas like we're developing taking methane from hog and dairy farms and capturing that instead of allowing it to go up into the atmosphere and using it as pipeline quality gas. There could be potentially a carbon capture and storage additional nuclear through small modular reactors which I think may have some promise some time off in the future.

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Nat Gas Allows the Grid to Keep Running: Dominion Energy CEO

"Bloomberg Commodities Edge" talks to the smartest voices in the commodity world about the companies, the physical assets and the trading behind the hottest commodities. This week Bloomberg's Alix Steel talks with Robert Blue, chair and CEO of Dominion Energy, about investments in renewables and why natural gas remains a key part in the electric mix. (Source: Bloomberg)

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