Electricity demand flat: Recession, energy-saving technology keeps greater Chattanooga area power usage in check

TVA president Bill Johnson speaks during a TVA board meeting in February.
TVA president Bill Johnson speaks during a TVA board meeting in February.
photo TVA president Bill Johnson speaks during a TVA board meeting in February.

Since the Tennessee Valley Authority helped electrify the South in the 1930s, demand for electricity has typically grown at a faster pace than the growth rate of the overall economy.

But coming out of the Great Recession, there's been a power shift in the Tennessee Valley. Even as households and businesses use more electric-powered computers, televisions, phones and other gadgets than ever before, electricity demand is barely growing.

In homes and industries across the region, electrical appliances, equipment and heaters are becoming more energy efficient while power controls and smart grids are allowing customers and utilities to better manage their electricity usage.

"In our long-range plans coming out of the credit crisis (in 2008 and 2009), we've seen a fundamental shift in the growth of electricity," TVA Chief Financial Officer John Thomas told industry analysts last week. "We're looking at a gross, growth rate of roughly 1 percent, which is far below the 3 to 4 percent we saw before the credit crisis."

TVA projects the amount of electricity it sells won't return to the pre-recession levels of 2007 for perhaps another decade following a drop in power usage in the economic downturn and a sluggish recovery in power consumption since the recession ended.

A new power plan TVA is developing for the next 20 years foresees electricity demand likely growing below 1 percent a year -- less than half the projected economic growth pace for TVA's seven-state region and only about a fourth of the growth rate in the past generation. Power demand may grow even more slowly -- or perhaps not at all in some years -- if new energy efficiency measures by TVA or self-generation by TVA customers act as "virtual power plants" to substitute for having to build new and usually more expensive power generation.

"We don't foresee in the next 20 years a need for any new large-scale power plant," said Joe Hoagland, vice president of stakeholder relations at TVA who is coordinating a new integrated resource plan to guide TVA's power planning through 2035. "The discussions we're having are about how much energy efficiency, renewables and natural gas we'll need, especially combustion turbines that have the flexibility to use more renewable and distributed energy generation."

TVA President Bill Johnson said last week he is confident that the long-delayed Unit 2 reactor at the Watts Bar Nuclear Plant will be finished and begin generating power within the next year. The 1,150-megawatt plant, which is scheduled to go online by December, will be able to meet the electricity needs of about 600,000 homes.

TVA has or will shutter more than two dozen of its oldest coal-fired generation units, but the utility is building new gas-fired power plants to replace those idled units. The emergence of more solar and wind generation by TVA customers also is likely help supply more future power demand.

TVA continues to study the possibility of adding small modular reactors in Oak Ridge under a pilot program with the U.S. Department of Energy and TVA continues to maintain its unfinished Bellefonte Nuclear Plant in Hollywood, Ala., for potential future generation. But Hoagland said the smaller nuclear units being considered at Oak Ridge are more to test the technology than to meet projected power needs in the area.

TVA has no plans in the immediate future to resurrect work at the Bellefonte Nuclear Plant, where TVA has spent more than $6 billion over the past four decades on two pressurized water reactors designed by Babcock & Wilcox. Neither of the units was ever finished and TVA contends there is no demand in the next decade to justify finishing the plant.

Even after studying power demand trends for more than two decades in the industry, Dr. Hoagland said he has been surprised at the change in the efficiency of many industries and how that had slowed the growth in power demand coming out of the 2009-2010 recession.

For most of its history, TVA power demand has grown anywhere from 2 to 8 percent, depending upon the economy, weather and new inventions. Electricity consumption was seen as a barometer of economic growth. As the economy grew and more workers got more money, consumers would buy bigger houses, more appliances would be sold and more stores and commercial buildings were erected -- all powered, at least in part, by electricity.

But new energy efficient devices ranging from compact fluorescent light bulbs to high-efficiency motors are requiring far less energy than the products they replace, breaking the historic link between economic and electricity growth.

The U.S. Energy Information Administration is projecting that electricity use in the U.S. will rise an average of just 0.6 percent a year for industrial users and 0.7 percent for households through 2040.

TVA is likely to have comparable growth rates in power demand, although the economy of the region is likely to grow slightly faster than the U.S. as a whole.

Last week, TVA said that new jobs and investments in the Tennessee Valley so far in fiscal 2015 are at a record high following last year's record performance.

Contact Dave Flessner at dflessner@timesfreepresss.com or 423-757-6340.

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