Despite opposition from environmental groups and concerns voiced by the Environmental Protection Agency, the nation's largest government utility plans to build more natural gas generation to replace the power lost from shutting down its biggest coal-fired plant.
The Tennessee Valley Authority announced Tuesday it will begin building a natural gas plant to replace one of the two coal-fired generators at the Cumberland Fossil Plant in Middle Tennessee by 2026. TVA plans to shut down the other unit at Cumberland by 2028 but has not yet decided how it will replace that power.
TVA President Jeff Lyash said the proposed 1,450-megawatt gas plant should reduce carbon emissions at the Cumberland facility by about 60% compared with the existing coal unit while providing a more flexible and reliable source of power to mesh with growing intermittent solar and wind generation.
The natural gas plant is both the least costly and the best overall option for the future, Lyash said in a telephone interview Tuesday.
"Our (electricity) load continues to grow in the Tennessee Valley," he said, "and we're eager to develop a diverse portfolio of generation from renewables, nuclear, gas and other generation to assure we have clean, reliable and low-cost power."
But environmental critics question why the federal utility is continuing to invest in fossil fuels at one of its biggest power plants when President Joe Biden has set a goal of achieving a carbon-free electricity grid by 2035.
"Swapping that plant for another fossil fuel asset misses the opportunities to diversify TVA's portfolio by investing in clean, renewable power, to take full advantage of programs and incentives that make those assets cheaper than fossil fuel alternatives and to shield ratepayers from the price volatility that accompanies gas," a coalition of seven leading environmental groups said in a 30-page letter objecting to TVA's decision.
A generation ago, TVA generated most of its power from its 59 coal-fired generators, but most of TVA's coal units have been shut down. The share of electricity produced from coal shrank last year to 19% of TVA's power portfolio.
Natural gas now generates about a fourth of all TVA power, and Lyash said gas generation could grow to about a third of TVA's power capacity in the near future to act as a "bridge fuel" until renewables, storage, nuclear, hydrogen and other carbon-free sources can meet all of TVA's growing power demands by 2050 when TVA hopes to be carbon free.
The Cumberland Fossil Plant began generating power in 1968.
Last month, high winds damaged plant equipment, and the plant couldn't operate during the arctic blast that pushed up power demand to an all-time December peak.
The shutdown of the Cumberland coal plant and other power delivery problems from older gas plants during the cold snap forced TVA to impose rolling blackouts across its seven-state region for the first time in its history over two days before Christmas.
"We saw TVA's over-reliance on fossil fuels fail spectacularly in the face of what are becoming increasingly common severe weather events," Amanda Garcia, managing attorney of the Tennessee office of the Southern Environmental Law Center, said in a telephone interview Tuesday. "Unfortunately, I think TVA's ratepayers are the ones that are going to be paying the price both in terms of their electricity bills and their lifestyle and comfort."
TVA has been studying options for the two-unit Cumberland Fossil Plant since 2019 as the 55-year-old coal plant has required additional capital investments to keep operating and to meet stricter air quality regulations. During the past three years, TVA considered an array of options, from keeping the coal plant to replacing the power with other sources such as solar, wind, battery storage and natural gas.
But in a letter last month to TVA, the U.S. Environmental Protection Agency said TVA "did not accept many of EPA's recommendations related to climate change" and said the federal utility should have done "a more robust evaluation of renewable power sources."
Natural gas and the methane it releases into the atmosphere are greenhouse gases linked with global warming, according to the EPA.
Garcia said TVA should have revisited the options of energy efficiency and renewables after the Inflation Reduction Act was adopted last year, providing more incentives for solar, wind and energy efficiency measures.
"The world has changed since 2019 ... and TVA has a new board that should reconsider these options," Garcia said.
Lyash said with growing power demand and an aging fleet of coal plants, TVA needs to move ahead with plans for the future. The federal utility is planning to add 10,000 megawatts of solar power generation by 2035. Even before then, TVA also has requested proposals from other power producers for another 5,000 megawatts of purchased renewables and nuclear power in the largest such bid for carbon-free power in the nation so far.
TVA is still evaluating the carbon-free generation proposals, but Lyash said TVA has determined building the natural gas plant offers a lifetime cost advantage of $1.8 billion over any other alternative now available. Lyash also said gas plants are among the best sources for being turned on and off to help meet varying power loads.
"Replacing retired generation with a natural gas plant is the best overall solution because it's the only mature technology available today that can provide firm, dispatchable power by 2026 when the first Cumberland unit retires – dispatchable meaning TVA can turn it off and on as the system requires the power," Lyash said. "In addition, natural gas supports continued reduction of carbon emissions by enabling the integration of renewables, such as solar and battery storage, all while maintaining system reliability."
Lyash said TVA will begin in the next few months to prepare the Cumberland site for a gas plant and begin making plans to solicit proposals for the new combined-cycle gas plant.
Before the new plant may be installed at Cumberland, however, regulators must still approve a 32-mile natural gas pipeline to the site proposed by the pipeline company Kinder Morgan. The Federal Energy Regulatory Commission is still considering the pipeline plan, which local environmental groups have objected to over fears of gas or methane leaks from the underground pipeline.
The shutdown of the Cumberland coal units is part of TVA's ongoing strategy adopted by TVA directors to phase out all of its coal generation by 2035.
TVA has already built new natural gas plants at the former Paradise coal plant in Kentucky and the shuttered Colbert coal plant in Alabama. The Kingston Fossil Plant, west of Knoxville, is undergoing an environmental review to determine the potential impacts of retiring the coal plant and replacing at least some of its generation from natural gas. A draft environmental report is projected by this summer for Kingston.
TVA also is planning to place 10 aeroderivative combustion turbine gas units at its former Johnsonville Fossil Plant. Construction is underway, and the new gas units are scheduled to be operational by the end of 2024, providing approximately 500 megawatts of power. Aero CTs operate like jet engines that burn natural gas to produce electricity.
"One of the deciding factors in installing these units is flexibility -- being able to start and stop multiple times per day, which supports our efforts to integrate solar generation," TVA spokesman Scott Brooks said in an email.
TVA's decision to build the gas plants at Johnsonville is being challenged by the Southern Environmental Law Center, on behalf of the Sierra Club.
"Building a new gas-fired power plant like the Aero CTs project carries serious risks for the environment and for consumers," Southern Environmental Law Center attorney Gregory Buppert said in a 31-page lawsuit filed against TVA in federal court in Nashville. "Even as the harmful impacts of the global climate crisis grow more apparent, the Aero CTs project would emit over 1 million tons of planet-warming climate pollution each year over its several decades of operation unless forced to retire early or install expensive technology to capture and store its greenhouse gas emissions."
Buppert said TVA is "on the precipice of a significant and long-term commitment to fossil fuels" with the potential development of 5,000 megawatts of new gas in the next few years compared to its 2020 generation.
The Sierra Club argues TVA lacks the regulatory oversight provided to most U.S. electric utilities and argues TVA's environmental assessment for the Johnsonville site was inadequate to comply with the National Environmental Policy Act.
TVA has yet to file a response to the lawsuit, which was filed Dec. 22.