Electric vehicles, population growth to boost TVA power demand

Federal utility wants to curb growth with renewed focus on energy efficiency

Staff Photo by Robin Rudd / An electric vehicle charges Thursday at the Tennessee Valley Authority's downtown Chattanooga offices.

The shift from gasoline to electric-powered cars and the electrification of manufacturing in the growing Tennessee Valley is projected to boost the demand for TVA electricity by at least 50% by 2050, but the federal utility hopes to curb part of that growth with a renewed focus on energy efficiency measures.

TVA President Jeff Lyash told the TVA board this week that the utility will need to generate more power as electricity demand in TVA's seven-state region rebounds from a decade of relatively stagnant growth in power consumption. Lyash said population and economic growth in the region, combined with the shift to electric vehicles and more electrification of home heating and industrial machinery, could significantly boost electricity demand during the next three decades.

"By 2050, we expect TVA to need half again as much energy as we supply today to support growth and electrification, and that energy must be clean," Lyash told the TVA board Thursday during its quarterly board meeting in Florence, Alabama. "People's reliance on electricity continues to grow, and that is going to continue in coming decades."

Population and business growth

Over the past five years, TVA has attracted a record $47.8 billion of new business investment, adding an estimated 346,400 jobs, and the population of the Tennessee Valley is growing six times faster than the U.S. average, Lyash said.

Tennessee, Georgia and Kentucky have emerged as leading states in the production of electric vehicles and batteries, which are energy-intensive industries and are likely to spur a rapid shift from gasoline to electric-powered cars and trucks in the region.

"Electrifying the transportation sector, if we can do it effectively and efficiently, is our biggest opportunity for carbon reduction, and our region is one of the leading areas for EV manufacturing," Lyash said.

TVA is already working to promote electric vehicles by promoting more charging stations through its Fast 50 program and is converting its own fleet to all-electric vehicles. To generate more carbon-free power, TVA is also pursuing new small modular nuclear reactors and working on a joint effort to develop a hydrogen hub.

"I think the role that TVA is going to try to play here is similar to what we played early in our life in 1933," Lyash said in an interview with the Chattanooga Times Free Press.

Power demand grows

The shift from gas-powered to electric vehicles will boost electricity demand, which has been relatively stable for TVA over the past decade due to a shift by many to more energy-efficient appliances, heat pumps and buildings.

Lyash said just as utility officials overestimated power growth a generation ago once energy efficiency measures cut demand, he said it is important that utility officials today not ignore the prospect of renewed electricity demand growth due to the shift away from other forms of energy.

Promoting energy efficiency

To help meet the growing use of electricity in transportation, Lyash said he wants to encourage TVA customers to find ways to more efficiently use the power they buy and to help boost its power management tools during peak demand periods.

"We think there is going to be a new wave of technology with things like advanced energy heat pumps, so we are looking hard at significantly expanding our energy efficiency programs," Lyash said in an interview with the Times Free Press. "I have challenged our staff to offset 40% of the load growth that is coming from economic growth and immigration with energy efficiency programs."

TVA was one of the first U.S. utilities to encourage energy efficiency in the 1970s with loans and grants for consumer conservation measures, installation of energy-efficient water heaters and rate discounts for customers using cycle-and-save equipment to limit energy consumption during peak demand periods.

TVA continues to provide free energy audits and advice to help both residential and business customers to identify energy-efficient improvements they can take to lower their power use and electric bills. TVA also provides grants for low-income households and schools to make energy upgrades through its Home Uplift program.

But in 2018, TVA revamped its support for energy efficiency to limit its direct payments for energy improvements except in targeted low-income areas.

The Southern Alliance for Clean Energy, an environmental group that is urging utilities to promote efficiency and cleaner power, said TVA now ranks near the bottom among electric utilities in the Southeast for energy efficiency and provided less than 3% as much aid for energy efficiency as the U.S. average in 2019. Only Alabama Power ranks lower in the region.

Legislation aids efficiency investments

Aided by new federal incentives offered through the Inflation Reduction Act adopted in 2022, TVA wants to do more this year to encourage its customers to limit electricity use. TVA has also set a goal of adding another 1,000 megawatts to its existing demand response program that allows TVA to limit its power delivery to customers with interruptible service contracts during periods of peak demand.

Lyash said TVA is looking at "a significant expansion" of its energy efficiency programs to help in low-income areas through its Home Energy Uplift and similar programs.

"The IRA (Inflation Reduction Act), we think, should have significant money that we can use," he said.

The Internal Revenue Service is still writing some of the tax changes under the Inflation Reduction Act, but the White House said the new law provides rebates for energy efficiency retrofits. The rebates will range from $2,000-$4,000 for individual households and up to $400,000 for multifamily buildings. Up to $2,000 is available for building retrofits reducing energy use by 20% or more, and up to $4,000 is available for improvements or retrofits that save 35% or more.

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