TVA polishes its crystal ball 

TVA polishes its crystal ball

The future of power generation will use less coal and more nuclear energy

Every ten years or so the Tennessee Valley Authority (TVA) asks whether it has the right mix of energy generation technologies and is on track to meet demand for electricity from its customers. It is a daunting task given that the utility covers a huge area and customer base.

TVA’s power-service area covers 80,000 square miles in the southeastern United States, including almost all of Tennessee and parts of Mississippi, Kentucky, Alabama, Georgia, North Carolina and Virginia. The utility has revenues of $11 billion, employs 12,000 people, and is third in the nation in power sales revenue – billions and billions of kilowatt hours! (View an interactive map of the TVA region that shows the location of dams and power plants.)

On Sept 16 TVA published the latest edition of its "Integrated Resource Plan, (IRP) which is a 20-year look ahead. While no one can predict the future, the use of scenarios can help reduce uncertainty in making contingency plans. This is what TVA did with seven separate mixes of economic growth, fuel prices, and other key factors.

The formal title of the study is "TVA's Environmental and Energy Future." It analyzes potential combinations of economic and regulatory trends in the coming years and provides recommendations for addressing them. The plan's main purpose is to help TVA meet the region's future energy challenges in ways that maintain reliable power supplies, competitive prices, improved environmental performance and continued financial strength.

More than just a roll of the dice

TVA's yearlong analysis included input from numerous stakeholders including state agencies, power distributors, environmental groups, universities and the general public. The study yielded several likely probabilities for TVA, including:

· The expansion of nuclear energy will continue with the completion of the Watts Bar reactor. TVA may decide to complete the Bellefonte reactor as well. Eventually, nuclear energy will overtake coal as the leading electricity source for the utility's customers. This change will take place as the utility adds the equivalent of four more nuclear reactors.

· TVA may close or moth-ball a portion of its coal generation fleet, as coal units become older and less economical under tighter regulations. TVA now gets 60% of its energy from coal. It could idle as much as 4.7 GWe of coal-fired generation capacity by 2015. The utility's managers have found it isn't cost-effective to upgrade older plants to the most current pollution control technology to keep them running.

· Energy efficiency and demand response, as well as renewable generation, will play an increasing role in future resource options. TVA thinks it can cut peak power demand by 6 GWe by using time-of-day pricing, energy audits, and other incentives.

· Natural gas capacity additions will be a viable resource option and a key source of generation flexibility for TVA. The utility thinks it could add as much as 7.5 GWe of natural gas generation capacity by 2030 mostly for peak power applications.

· TVA's releases of carbon dioxide, nitrogen oxide, sulfur dioxide and mercury emissions will continue to decrease over time as coal is phased out.

TVA goes with more nuclear option despite criticism from green groups

The draft Integrated Resource Plan suggests that a diverse portfolio -- including more nuclear, less coal, more energy efficiency and demand response programs and more renewable generation -- rank higher than strategies that do not establish the same level of financial and operational flexibility.

Van Wardlaw, TVA's executive vice president of Enterprise Relations, who is leading the Integrated Resource Plan effort, said:

"TVA's Integrated Resource Plan process is a rigorous one that is supportive of TVA's renewed vision and will guide the corporation as it leads the region and the nation toward a cleaner and more secure energy future, relying more on nuclear power and energy efficiency and less on coal."

Environmental groups praised TVA's plans to moth-ball some of its coal plants, but added they want the coal-fired boilers permanently shut down. Stephen Smith, director of the Southern Alliance for Clean Energy, also said his group opposes TVA's plans to use "high risk" nuclear energy. The Alliance is a vigorous opponent of new nuclear reactors in Tennessee and Georgia.

Smith is a member of TVA's Stakeholder Review Group which has been advising the utility on the development of the plan. No one from the nuclear industry outside of TVA's service area serves on the group.

TVA completed its previous Integrated Resource Plan in 1995. The new plan will update the earlier study, based upon changes in regulations and legislation, the marketplace for electric generating utilities and customer demand.

TVA's Board of Directors will meet in the spring of 2011 to select the planning strategy that best meets TVA's strategic goals. Between now and then TVA will hold a series of public meetings to get input on the draft plan. Check TVA's web site for details on dates, times, and locations of the meetings.

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