Natural gas, energy efficiency to fuel TVA in the future

Natural gas, energy efficiency to fuel TVA in the future

March 10th, 2015 by Dave Flessner in Business Around the Region

TVA's downtown Chattanooga facility.

TVA's downtown Chattanooga facility.

Photo by Dan Henry /Times Free Press.

The Tennessee Valley Authority, which has long relied upon coal and nuclear power to generate most of its electricity, expects energy efficiency and natural gas to meet most of its power needs in the next generation.

For the first time in its 82-year history, America's biggest government-owned electric utility doesn't expect to start building any major new power plants for at least the next two decades. After finishing the Unit 2 reactor at its Watts Bar Nuclear Plant by December, TVA won't need any more baseload capacity, according to a draft Integrated Resource Plan unveiled by the agency on Monday.

TVA expects to continue to shut down coal-fired generators, which once supplied nearly two-thirds of the agency's power, and replace that power with more natural gas-fired generation, either built or bought by TVA.

Additionally, TVA expects energy efficiency to continue to offset the need for additional power, although environmental groups Monday urged the utility to do even more to encourage conservation and efficiency.

"We really don't see an immediate need for any new large baseload capacity beyond what we already have underway," TVA Vice President Joe Hoagland told reporters Monday.

The power plan is only a road map for the future and could be altered prior to the TVA board adopting the 20-year blueprint in August. But the findings of the two-year study outlined in a 172-page report released Monday suggest that TVA may never finish its Bellefonte Nuclear Power Plant.

"TVA insists this isn't a GPS guide and is more like a six-lane highway of options, but Bellefonte is still in the ditch and isn't likely to get out of it," said Stephen Smith, executive director for the Southern Alliance for Clean Energy and a member of one of the stakeholders' groups reviewing the plan.

Powering the Valley

TVA will increase:
* Natural gas generation, which now includes 87 combustion turbines at nine plants capable of generating 3,900 megawatts of electricity
* Energy efficiency, which saved 451 megawatts of peak demand and 1,843 gigawatt hours of energy from 2012 to 2014
* Renewable generation, which now includes 1,500 megawatts of wind capacity and 72 megawatts of solar generation
* Nuclear power, which now has a capacity of 6,700 megawatts from six operating reactors. The agency will add 1,150 megawatts from a second reactor at Watts Bar by December. But TVA no longer sees a need for power from the unfinished Bellefonte Nuclear Plant in Alabama.

TVA will reduce:
* Coal, which generated most of TVA's power over the past generation. TVA has retired 11 coal-fired units and idled seven more. By 2016, only 32 of the 59 original coal units will still operate.

Find out more

Read the draft Integrated Resource Plan at timesfreepress.com.

Document: TVA Integrated Resource Plan

TVA's draft power plan report for 2015.

How to voice your opinion

TVA will conduct public hearings on its 20-year power plan:
* March 19 - Chattanooga
* April 6 - Knoxville
* April 9 - Huntsville, Ala.
* April 14 - Tupelo, Miss.
* April 15 - Memphis
* April 21 - Nashville
* April 22 - Bowling Green, Ky.
* Aug. 21 - The TVA board will vote on the Integrated Resource Plan at Knoxville meeting
Source: Tennessee Valley Authority

TVA has invested more than $6 billion in its twin-reactor Bellefonte plant -- the largest unfinished construction project in Alabama history. But TVA planners determined it would be too expensive to finish, and it isn't needed in the foreseeable future.

TVA is spending $4.2 billion to finish and license the Unit 2 reactor at its Watts Bar Nuclear Plant near Spring City, Tenn., this year. That reactor will be the first new nuclear reactor to come online in the 21st century in America. It should start power production by the end of the year -- nearly 20 years after the first Watts Bar unit started power generation and more than 40 years after construction began at Watts Bar.

TVA will continue to pursue a small modular reactor design to test in Oak Ridge. But Hoagland said that project is part of TVA's mission of being "a living laboratory" for energy research and is not designed to meet baseload capacity needs.

"We have always looked at the [small modular reactor] project as [research and development] activity," Hoagland said. "We included it in our plan, but we don't foresee a need for any additional baseload generation."

The power plan also suggests that TVA has no immediate need for the 3,500-megawatt high-voltage direct-current line proposed by Clean Line Energy LLC, which wants to import Texas and Oklahoma wind power into the Tennessee Valley. The Clean Line project could be needed by 2025 or so, according to one scenario. But other power scenarios for the future suggest that TVA won't need the wind generation.

Proponents insist that the wind project can deliver cost-effective power to TVA and help the utility meet new carbon control requirements. Clean Line has gained approval from the Tennessee Regulatory Commission but is still awaiting federal approval to proceed with its 700-mile, $2 billion project.

TVA's power demand, which grew by more than 3 percent a year through most of TVA's history, is now growing only about 1 percent a year, and that growth could be cut even more if consumers take steps to make their homes and businesses more energy efficient. Additional solar panels and wind turbines installed by customers in the Valley should also reduce the need for TVA to generate more of its own power.

"There is an enormous potential for energy efficiency in the Tennessee Valley and we really believe [that] with an effective program to encourage insulation and efficiency, TVA won't need to build any new capacity," said Zachary Fabish, staff attorney for the Sierra Club in Washington, D.C.

Environmental groups complained Monday that TVA, which pledged four years ago to be a leader in energy efficiency and renewable power in the Southeast, isn't keeping pace with some of its neighboring utilities.

Amanda Garcia, staff attorney for the Southern Environmental Law Center in Nashville, said TVA's previous Integrated Resource Plan adopted in 2011 called for up to 5,100 megawatts of energy efficiency by 2020, or more than four times the 1,100 megawatts of energy efficiency gains TVA estimates occurred from 2008 to 2013. The new plan calls for between 2,500 and 4,600 megawatts of additional energy conservation by 2033.

"The draft plan underestimates TVA's capacity to ramp up energy efficiency programs quickly and overestimates their costs over the long term," she said. "We are hopeful that additional analysis by TVA, together with input from stakeholders and the public, will result in a final plan that captures the full potential of energy efficiency as a cost-saving, emission-free alternative resource."

Over the next 45 days, TVA will gather input about its power plan at a series of seven public meetings before going back to a review panel to help draft the final plan. The TVA board is expected to vote on the final version of the long-range power plan at its August meeting in Knoxville.

"The goal is to develop scenarios that allow TVA to dynamically respond to market conditions and perform well regardless of how the future unfolds," Hoagland said.

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


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