Will Payne

Will Payne is managing partner of economic development firm Coalfield Strategies, the director of InvestSWVA, a public-private partnership aimed at attracting companies to the western portion of Virginia, and an adviser to the Energy DELTA Lab research and development facility in Wise County. He is a member of the University of Virginia Darden School Foundation Board of Trustees and previously served as vice rector of William & Mary’s Board of Visitors. He is also co-owner of Squabble State Farms in Washington County. 

Virginia Economic Review (VER): In the past, the Southwest Virginia economy was centered on the region’s abundant coal mines. How has the region shifted its priorities as the energy industry has moved away from coal?

Will Payne: Southwest Virginia has had challenges diversifying its economy over the last 30 years. Census and economic data tell that story clearly. When it comes to economic development, the solution lies in new approaches and accountability with broad local buy-in. Reimagining the economy doesn’t mean wholesale change. In fact, we need to build on our strengths, particularly the region’s committed workforce. As with any regional solution, we must come together. That means making closing deals a priority, regardless of where the jobs end up. After all, a job in one end of the region or the other is good for the whole region. 

A coordinated approach has been underway since 2019, and much credit goes to members of the region’s legislative delegation. Their vision several years ago resulted in InvestSWVA, a homegrown private sector lead generation and project development campaign with investments from Appalachian Power, Dominion Energy, the Virginia Tobacco Commission, and the LENOWISCO Planning District Commission. InvestSWVA is all about pursuing big ideas and taking risks — we can’t afford to think any other way. We’re especially optimistic about building on the private equity partnerships that have resulted in multiple tech company expansions.

The roadmap we’ve laid out builds on the region’s strengths. It includes a vision where Southwest Virginia can be the location of choice for high-tech companies looking to grow in rural downtowns, clean energy developers building at scale on large reclaimed coal mine properties, data centers running energy-efficient and secure operations, manufacturers seeking a hardworking and skilled workforce, and the craft beverage industry being supplied with locally sourced specialty grains. All five priorities have aggressive goals in place and are now meeting milestones to varying degrees. 

VER: Can you talk about how Southwest Virginia is well positioned for the energy industry and what the region can offer energy companies?

Payne: The energy play is a land strategy, pure and simple. Over 100,000 acres of previously mined properties reach every corner of the region’s seven coalfield counties and the city of Norton. However, development of that land hasn’t traditionally been possible due to private and federal ownership. Access to that land is complicated, and knowledge of the subsurface geology and mining history is even more complicated. You also must understand ownership of surface and subsurface rights, including coal, gas, and pore space. Anyone who has worked with a former mine site knows it’s unlike any other property.

That’s where relationships with large landholders become so critical. Our team has spent much of the last four years developing partnerships with resource companies, seeking ways to diversify holdings and maximize revenue generation. At the same time, developers emboldened by federal incentives and responding to market demands are coming out of the woodwork to find suitable locations for projects. That demand is Southwest Virginia’s gain. 

Our pitch to energy companies is straightforward: vast, relatively low-cost tracts of land, robust power assets, and access to abundant clean water define half of the value proposition. The other half is partnering with us. We have a clear mission to deliver new higher-paying jobs and long-term tax revenues for the region. If a project can be done, we know we can do it in Southwest Virginia. The bonus value add is that through developing energy-ready sites from reclaimed mine properties, we can continue to produce metallurgical coal for steelmaking for years to come. It’s this “all-of-the-above” strategy that defines a once-in-a-generation opportunity to transform the region’s economy. It’s both realistic and a natural fit. 

VER: How does energy generation play into economic development? How have companies reacted to clean energy projects in Virginia?

Payne: Providing reliable and affordable clean energy is the new frontier opportunity for Southwest Virginia. Increases in land use restrictions for energy projects outside the region underscore our chief competitive advantage. We have large tracts of relatively inexpensive land with site attributes attractive to energy developers. Southwest Virginia has been flooded with developers over the last two years, all exploring reclaimed mine properties — particularly for solar, wind, energy storage, hydrogen, and energy-efficient data centers. More recently we’ve been working on potential advanced nuclear reactor projects.

Our InvestSWVA and Energy DELTA Lab teams have the luxury of choice. Given the amount of time and investment that goes into a multiyear project, we have to be discerning about who we choose to partner with. That timeline requires trust and a shared commitment to workforce training, job creation, and sustainable local tax revenues. We’re strategically positioned to work with Fortune 500 companies with large balance sheets and proven developers of all sizes. We only want to work with partners who have the region’s long-term best interests in mind. 

VER: Can you give us a high-level overview of the Energy DELTA Lab in Wise County? What is that project best equipped to accomplish and how can it put Southwest Virginia on the map to attract energy projects?

Payne: We launched the Energy DELTA (Discovery, Education, Learning, & Technology Accelerator) Lab in conjunction with the 2022 Virginia Energy Plan after four years of incubation at InvestSWVA to fill a void in the market. Southwest Virginia’s large landowners are seeking ways to enhance their resource revenue base through new land development. At the same time, energy companies and utilities are searching for land meeting specific attributes. We’re capitalizing on the opportunity to close deals by serving as a matchmaker while providing technical expertise on the land above and below the surface. 

The DELTA Lab is currently developing several energy-ready industrial sites in Wise County on land owned by Fortune 100 company Energy Transfer and managed by Penn Virginia Operating Company. This strategy complements the Virginia Business Ready Sites Program, with campuses totaling nearly 7,000 acres to support agricultural, conservation, industrial, and clean energy projects. These sites were selected because of industry demand for vast tracts of land, robust grid access, on-site generated power potential, and abundant underground mine-based water.

We recently secured an agreement with our development partner Energy Transfer for access to its 65,000-acre property. While most of the land deal’s properties are in Wise County, neighboring Lee, Scott, and Dickenson counties and the city of Norton are on the table for development and have projects undergoing due diligence today. 

The DELTA Lab’s project portfolio represents the full spectrum of energy technologies — solar, wind, hydrogen, energy storage, pumped-storage hydro, energy-efficient data centers, and emerging technologies like advanced nuclear reactors. More than a dozen projects under consideration today represent in excess of $8 billion in potential private capital investment, 1,650 new high-paying jobs, and nearly a gigawatt of new power generation and demand. In addition, the DELTA Lab led federal grant applications in 2023 for nearly $600 million that would support our project portfolio.

Our model site under development, Data Center Ridge, builds on four years of work to convert a 400-acre previously mined property to a 1-gigawatt multi-tenant data center campus leveraging the DELTA Lab’s planned nearby clean energy projects and patent-pending Oasis mine-based water cooling technology. The site serves not only as a solution to unprecedented demand for cloud storage, but also provides location diversity and security, considering real estate constraints in Northern Virginia.

VER: What role does metallurgical coal still play in the energy industry?

Payne: From a steelmaking standpoint, metallurgical or “met” coal will be necessary for a long time to come, just as thermal coal and natural gas will be needed for power plants for the foreseeable future as a backstop to rolling blackouts and power disruptions. Some of the world’s highest-quality met coal is produced in Southwest Virginia. It’s a more rare and higher-value product that’s used to produce coke, an essential ingredient in steel production. The met coal export business is also big for the Commonwealth as a whole. As of June 2023, over 56% of the country’s met coal flowed through The Port of Virginia’s three coal terminals. 

When it comes to clean energy, steel is the common denominator in all projects. We need it for wind turbines, solar racks, battery components, and advanced nuclear reactors. Our team worked closely with many state and local partners to ensure global met coal producer Coronado Global Resources expanded its Buchanan Mine Complex. That resulted in the deepest underground ribbon-cutting in U.S. history at 1,819 feet below the surface — a four-minute descent by elevator. Even Coronado argues that it’s not an energy company. It’s more aptly defined by its role in the manufacturing, infrastructure, and construction sectors. Without companies like Coronado and other met coal producers throughout the region, we wouldn’t have clean energy power generation assets to deploy. 

VER: How is Southwest Virginia developing talent to meet the needs of energy producers that might consider locating in the region?

Payne: Workforce development begins and ends with the strength of partnerships our four community colleges — Mountain Empire, Southwest Virginia, Virginia Highlands, and Wytheville — have developed with the region’s K-12 public school systems. I’ve had the good fortune to work with all four of the region’s community college presidents and many of their faculty and workforce solutions professionals. They can all clearly and concisely articulate their complementary role in driving economic development.

The challenge with energy projects is timing. Training programs that try to prepare our workforce before a demand exists create inefficiencies in the system. They also put the region’s talent pool at risk of moving away, further contributing to so-called “brain drain.” Southwest Virginia is not alone in training a cohort for jobs that didn’t materialize for one reason or another.

There must be communication and commitment from both sides. Our community colleges have already made a commitment. It’s central to their mission. As we move forward, our team will work to match developers and technologies with community colleges that can both recruit talent and deliver customized training programs. A great example is how Mountain Empire Community College delivered value in 2021 for a medical IT company, eHealth Technologies. Following an early December expansion announcement, the team identified an applicant pool and worked through the holidays to prepare for a multiweek training program that kicked off right after New Year’s Day. 

Energy projects have a longer runway, and we’ll use it to our advantage. It could take anywhere from 18 months to several years for a generation project to be online following an announcement. We’re engaging now with educational partners for awareness and planning but will shift gears to execution at the right time. We need to leverage the fact that our K-12 schools and community colleges are ready to work together to produce graduates who can be trained in a quick, strategic, and surgical manner.

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