TVA study recommends Allen coal plant shutdown, new natural gas generation

TVA study recommends Allen coal plant shutdown, new natural gas generation

July 3rd, 2014 by Dave Flessner in Business Around the Region

Sierra Club members and volunteers paddle canoes and kayaks past the TVA's Allen power plant on McKellar Lake in this file art.

Sierra Club members and volunteers paddle canoes and...

Photo by The Commercial Appeal /Times Free Press.

TVA logo

TVA logo

What's next

• TVA will conduct a public hearing on shutting down the Allen plant next Tuesday at 7:30 p.m. CDT in Memphis

• TVA board will vote Aug. 21 in Knoxville on a new budget that could replace the Allen plant

For the third time in five years, the Tennessee Valley Authority appears ready to replace one of its aging coal plants with natural gas-fired generation.

TVA on Wednesday released an environmental assessment of its Allen Plant in Memphis that recommends the three coal-fired units at Allen be replaced with a new natural gas plant.

TVA estimates building a new gas plant with comparable power output would cost from $500 million to $1.3 billion, depending upon the type built. But that would avoid the need to spend up to $650 million to install required scrubbers on the Allen coal plant to meet air quality standards by the end of 2018 and would avoid other expensive coal ash disposal requirements to maintain the TVA facility.

The TVA board will still have to vote on any shut down of the Allen Steam Plant and decide on the size and type of the gas generation replacement. Such a decision could come when the TVA board adopts its fiscal 2015 budget at its Aug. 21 meeting in Knoxville.

Replacing the Allen coal plant with a gas-fired facility is similar to what TVA did at its John Sevier Fossil Plant in Rogersville in 2009 and what it is now doing at its Paradise Fossil Plant in Kentucky.

TVA is also considering phasing out coal units at its Widows Creek plant in Alabama and its Shawnee plant in Kentucky. Such plants are part of a sweeping 2009 environmental agreement TVA made with EPA to either shutter or scrub 18 of its coal-fired units.

TVA President Bill Johnson said his long-term goal is for TVA to get about 20 percent of its electricity generation from coal plants that have scrubbers and selective catalytic control devices. A decade ago, TVA got more than 60 percent of its power from coal and most of that power came from plants that did not have advanced pollution controls.

Coal supporters complain that TVA is overlooking an abundant and relatively cheap source of energy by phasing out so many coal-fired plants. Last year, U.S. Senate Majority Leader Mitch McConnell, R-Ky.,criticized TVA's decision to shut down its oldest units at the Paradise plant in Kentucky.

"To allow a historically abundant and proven resource, such as coal, to fall by the wayside would ultimately threaten our energy independence," McConnell said at the time.

But environmental groups on Wednesday hailed TVA's recommended shut down of the Allen plant.

Dr. Stephen Smith, executive director of the Southern Alliance for Clean Energy, applauded TVA for wanting to retire "the old and inefficient Allen coal plant" and urged TVA to consider replacing part of the generation from the 702-megawatt plant with conservation and renewable sources, in addition to natural gas.

"This is a win on economics, a win for the environment and a win on overall efficiency," Smith said.

The Sierra Club, which wants to see coal-fired power generation phased out over time, said the Allen plant "creates smog that threatens all Memphians.

"TVA's action makes clear that coal is an outdated fuel source which no longer belongs in our energy mix," said Scott Banbury, conservation program coordinator for the Tennessee chapter of the Sierra Club.

Shutting down the Allen plant could cost 150 jobs of those employed at the TVA coal plant. A comparable gas-fired plant would have about 30 employees, according to TVA spokesman Scott Brooks.

The Allen Steam Plant, which operates three coal-fired units and 20 combustion turbines, generates enough power to supply about 340,000 homes. It was built in the in the 1950s by Memphis Light, Gas, and Water (MLGW). TVA purchased the plant and the property underlying it in 1984.

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