“I don't see why we need any wind (generation). If nuclear is zero (carbon and air) emissions and wind is more expensive, and you don't need wind most of the time, why would you buy it?"”
KNOXVILLE -- With more generation from nuclear power and natural gas in TVA's future, the state's U.S. senators urged the Tennessee Valley Authority on Monday not to be blown away by the "energy fad of the day" and cautioned the federal utility not to pursue more expensive and less reliable power from wind mills and other renewable energy sources.
"I don't see why we need any wind (generation)," said U.S. Sen. Lamar Alexander, R-Tenn., chairman of the Senate Energy and Water Development subcommittee. "If nuclear is zero (carbon and air) emissions and wind is more expensive, and you don't need wind most of the time, why would you buy it?"
U.S. Sen. Bob Corker, R-Tenn., chairman of the Senate Foreign Relations Committee, said Germany's decision to turn to wind and solar to replace nuclear power "is a truly idiotic energy plan" that has driven electricity rates in Germany to more than triple what TVA charges.
TVA's future power outlook
The preferred power plan for TVA would replace coal generation with more nuclear and natural gas generation with more emphasis on energy efficiency and renewables. The plan, which TVA directors will consider in August, would boost non-carbon-emitting sources of power from 32 percent of TVA 's portfolio in 2007 to 59 percent by 2025.
* Gas generation will double from 2007 to 2022.
* Coal generation will drop from 60 percent of TVA's portfolio a decade ago to only 18 percent by 2033.
* Nuclear power will be boosted with completion of the Watts Bar Unit 2 later this year and future upgrades of the three Browns Ferry reactors.
* Energy efficiency should increase by 9 percent by 2033.
* Renewable energy will increase from less than 1 percent to 8 percent of TVA's portfolio, primarily due to high voltage direct current wind transmission from states with more abundant winds.
Source: TVA Integrated Resource Plan, reference plan
"Because of what is happening here in the Tennessee Valley and with natural gas prices what they are today, many German companies are looking to build plants in our area to make products to sell back to Europe simply because of energy prices," Corker said during a hearing on TVA's long-range power plans.
"Nothing is more important to me than Tennesseans' standard of living and our state's ability to attract high-quality jobs, and TVA's ability to carry out its mission of providing low-cost, reliable power directly impacts that."
TVA's long-range energy plan being developed this year calls for the utility to turn to more wind generation, but not for at least another decade or more. By 2033, TVA envisions boosting renewable energy to at least 8 percent of its portfolio, primarily from using high-voltage, direct-current transmission lines to import wind-generated power from where it is more abundant than wind is in the Tennessee Valley.
TVA President Bill Johnson said the growth in power demand has slowed from a projected 3 percent a year, four years ago when the last long-term power plan was developed, to less than 1 percent annual growth today. After finishing a second reactor at the Watts Bar Nuclear Plant in late 2015, TVA doesn't expect to need any additional nuclear, coal or other base load generation until after 2025, at the earliest.
But to reduce smog emissions, cut carbon releases and diversify its power generation, TVA is retiring 33 of the 59 coal units it once operated. To replace the lost fossil generation will require more natural gas plants to be built and TVA projects that some energy efficiency and renewable energy programs also will be needed and make financial sense.
In March, TVA agreed to buy the power from an 80-megawatt solar farm to be built in Alabama, which Johnson said was offered "at a very attractive deal."
The developers of one of America's biggest wind power projects also are trying to come into the Tennessee Valley with what they claim will be cost competitive power generated from windmills.
"TVA is looking for the best and lowest cost option and we understand that and believe we can ultimately be competitive," said Jimmy Glotfelty, executive vice president of Clean Line Energy Partners, which is proposing to bring wind power to Southeast Tennessee.
Clean Line is planning to build a $3 billion, 700-mile transmission line to carry 3,500 megawatts of wind energy produced by windmills in Oklahoma and Texas and delivered to TVA and other Southern utilities, pending regulatory approval and customer contracts.
Glotfelty said that based upon initial cost estimates and proposals -- and the renewal of the 2.3 cents-per-kilowatthour federal subsidy for wind generation -- Clean Line could deliver power to TVA at 4 to 4.5 cents per kwh. That would be below the average 6.6 cents price TVA charges its wholesalers for power and should be below some other new generation in the region, including new nuclear plants being built in Georgia and South Carolina.
"Right now, renewable energy is higher cost, but those costs are coming down and I think renewable energy will be very cost-effective in the long run," said Susan Richardson Williams, a former TVA board member and former chairman of the Tennessee Republican Party who now advocates for renewable energy production. "Look how the costs of computers and cellphones have come down as these technologies have developed and become more popular."
Both Alexander and Corker criticized the federal tax subsidies for wind generation, which they said is a type of wealth transfer from low-wind states such as Tennessee to windier states that can generate such power. Without such subsidies, Alexander said wind is not cost-effective. And Alexander said most people's romantic notion of clean, wind energy doesn't recognize that "the blades on these windmills are as big as Neyland stadium."
The push for renewable generation and energy efficiency also is being strengthened by the Clean Power Plan proposed by the U.S. Environmental Protection Agency, which could require Tennessee to cut its carbon emissions by nearly 40 percent from the levels prior to 2010. As proposed, EPA would not give TVA credit for the new Watts Bar Unit 2 reactor since its was started in 1973, long before the new law was drafted.
Alexander blasted the EPA rules, which he said "are like punishing the student who behaved properly in the past" and doesn't get as much credit for improvement.
"Not counting Watts Bar will create an enormous hole for Tennessee that I don't know how we will dig out of," Alexander said. "I think this rule is subject to being challenged as utterly arbitrary because there is no reasonable basis for treating nuclear and hydro one way and wind and solar another way."
Alexander said TVA's reliance upon nuclear and hydro generation -- and more recently more natural gas and controls on older coal plants -- have helped make the air in the Tennessee Valley as clean as it has been in decades. Emissions of smog and particulates have dropped by more than 70 percent from the peak levels reached three decades ago.
Despite his concerns about more renewable power purchases that might be more expensive, Alexander praised TVA's leadership for controlling costs and limiting pollution.
Data from the Energy Information Administration shows TVA rates are below the U.S. average for both residential and industrial customers. Among the 100 largest U.S. utilities, TVA ranks 14th lowest in industrial rates -- and second lowest in the Southeast -- at an average delivered cost of 5.78 cents per kilowatthour. Residential customers pay an end-use price of about 9.11 cent per kilowatthour, which ranks 38th lowest among the top 100 U.S. utilities.
"It's clearly moving in the right direction and, in my view, our rates are competitive," Johnson said.
The proof of such relative appeal is coming from record new investment in the Tennessee Valley, which rose to $8.5 billion last year and is on pace for even more investment in fiscal 2015.
"It's clearly moving in the right direction so why would you want to change at this point," Alexander said. "The most expensive path you could take is to maximize energy efficiency and to maximize renewable power. The goal is not more windmills. The TVA act requires you to pursue low-cost power."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.