The Virginia Department of Energy announced the launch of the Virginia Clean Energy Innovation Bank (VCEIB) within the department’s State Energy Office Thursday. Gov. Glenn Youngkin vetoed Democratic legislation earlier this year that would have established a similar system, which caused skepticism from clean energy advocates about his intentions.
Democrats are questioning his motives and the legality of funding this project, while Youngkin’s administration says it will streamline money into clean energy initiatives.
According to the Youngkin administration, this new project, which will use $10 million in seed money, aims to accelerate the deployment of clean power generation and energy infrastructure across the commonwealth.
“The Virginia Clean Energy Innovation Bank embodies our commitment to a diversified energy portfolio,” said Virginia Energy Director Glenn Davis. “By supporting projects at various stages of commercialization, we’re not just backing established technologies—we’re nurturing the innovations that will shape Virginia’s energy landscape for decades to come. This approach ensures we’re building a resilient energy sector that can adapt to future challenges and opportunities.”
The Virginia Department of Energy says the VCEIB, often called a green bank, will mobilize public and private capital to address critical financing gaps in the clean power generation and infrastructure sectors.
The General Assembly passed legislation earlier this year that would have established a similar system. Youngkin vetoed the bill.
In a statement at the time, Youngkin said the reason for his veto was because legislators failed to adopt his recommended changes.
“While I agree with the underlying purpose behind the legislation, regrettably, the General Assembly did not adopt my recommendations which would have allowed the opportunity for conflicts between the entity created by this legislation and existing programs at the Virginia Department of Energy to be resolved,” he wrote in his veto statement.
Lee Francis, the deputy diretor for the League of Conservation Voters in Virginia, supports moving toward clean energy, but he is wary of the Youngkin administration pushing their own bank forward after the veto earlier this year.
“Virginia can and should be doing everything it can to bring clean energy investment and jobs to our commonwealth. This is why it was so disappointing that Governor Youngkin vetoed legislation this year to establish the same clean energy bank that they’re now touting,” Francis said. “With no guardrails in place, as would have existed under the 2024 legislation that Youngkin killed, we have serious questions over whether this will be a tool used to advance our clean energy future or abused as a piggy bank for Youngkin’s pet energy projects.”
The sponsor of the legislation from earlier this year, Senate Majority Leader Scott Surovell, D-Fairfax, said he is disappointed in the governor for doing this unilaterally instead of working in a bipartisan way.
“It’s disappointing because I think both the governor and the General Assembly would like to create a green bank, but we’ve been unable to agree on the specific parameters of it,” he said. “So instead of working with us in a bipartisan fashion, he’s acting unilaterally, which I guess maybe you can do when you’re a CEO, but government’s not supposed to work that way.”
Surovell said the Youngkin administration told him they would be using the money budgeted for his legislation to help fund this initiative, but he questioned the legality of that.
“I’m concerned as to whether any businesses would be willing to apply to something unless there’s General Assembly approval of the concept and also the use of the money that was actually appropriated,” he said. “We’re analyzing whether his action was even legal.”
Del. Rip Sullivan, D-Fairfax, sponsored the Clean Economy Act in 2020 and said he is glad to see progress, but is also skeptical about the Youngkin administration’s actions.
“I’m glad to see any progress when it comes to clean energy and clean energy jobs in the commonwealth,” he said during an interview. “That was precisely why so many of us supported the green bank bill that passed the General Assembly this year and precisely why so many of us were disappointed that the governor vetoed it.”
Sullivan says the legislation they were pushing would have allowed Virginia to access federal funds to help with the transition to clean energy.
“One of the reasons that having a green bank, from the General Assembly’s perspective, was a state cannot access the very large amount of funds available from Joe Biden’s Inflation Reduction Act, which is doing so much to advance the energy transition,” he said. “A state cannot access those funds unless it has a vehicle like this green bank, which, of course, the governor was aware of when he vetoed it.”
“While I can’t say that the governor himself opposed it,” Sullivan continued. “He certainly has never said anything positive about the Inflation Reduction Act, and it has unfortunately devolved into into a partisan fight. But here we are in a situation in which a Republican governor is accessing federal funds made available by a Democratic president, and he doesn’t even acknowledge that fact, which is frustrating.”
Youngkin’s administration said his green bank project will prevent state agencies from competing for opportunities.
“Governor Youngkin has consistently stated that Virginia is best positioned to secure federal funding when our agencies collaborate rather than compete for the same energy project opportunities,” said Christian Martinez, a spokesperson for Youngkin. “While he supported the bill’s overall objectives, he expressed concerns about its proposal to create a new 12-member quasi-public governance board that would compete directly with Virginia Energy’s applications for federal grants. This recent announcement will channel funds directly into clean energy projects, streamlining the process without adding unnecessary bureaucratic layers.”
Democrats have been trying to move the state toward clean energy for years.
When they had the majority in both chambers of the General Assembly in 2020, they passed the Clean Economy Act, creating a schedule for which Dominion Energy and American Electric Power are required to retire electric generating units located in the commonwealth that emit carbon as a by-product of combusting fuel to generate electricity. It also requires them to construct, acquire or enter into agreements to purchase generating capacity located in the commonwealth using energy derived from sunlight or onshore wind.
Davis, in an interview, said a problem with the Clean Economy Act is that it does not allow for every clean energy option to fit into the Renewable Portfolio Standard (RPS), which is a regulation that requires the increased production of energy from renewable energy sources.
“The new RPS actually calls out energy by name,” Davis said. “It calls out solar. It calls out wind. If you had an energy source that was just as clean as solar that popped up tomorrow, it would not be treated the same as solar, because the Virginia Clean Economy Act does not say all clean energy fits in the numerator. It says these specific ones do.”
Davis said this green bank will give Virginia more freedom to expand clean energy.
“This bank allows us to grow clean energy and bring about clean energy innovation in the commonwealth,” he said. “How it impacts the RPS isn’t taken into account because we feel that any clean energy is good for the commonwealth. It doesn’t just have to be what was named in the numerator of the RPS formula.”
Sullivan disagrees with Davis’ viewpoint on the Clean Economy Act.
“He’s wrong,” Sullivan said. “We recognized on day one that a bill that was setting a course of 30 years down the road, things were going to be invented, market forces were going to change in such a way that the Act has flexibility within it and may well need tweaking over the years. But there’s nothing in the Clean Economy Act keeping from the development of all sorts of imaginative and innovative approaches to clean energy.”