This blog was written by John D. Wilson, former Deputy Director for Regulatory Policy at the Southern Alliance for Clean Energy.

Guest Blog | August 17, 2015 | Energy Efficiency, Energy Policy, Utilities

One of the questions I often get asked is what it would take for the Tennessee Valley Authority (TVA),  or any other large utility, to move to 100% renewable energy and energy efficiency. That question comes up more and more often as people learn about TVA’s  2015 Integrated Resource Plan (IRP). Even though TVA’s IRP is a 20-year plan, I don’t feel that the plan represents a long-term vision for supplying electricity to the Tennessee Valley.

That’s not as much of a critique of the plan as it first might seem. What might be termed “ground rules” for an IRP include constraints on looking forward. For example, except for Small Modular Reactors, TVA restricted its planning process to today’s commercially available technologies and conventional business models. Even known trends in technical performance of energy efficiency and wind technologies, in particular, were excluded from the planning process. Like many other utility IRPs, TVA’s 20-year plan looks at the ground we stand on, sketches some ideas for tomorrow, but does not really scan future horizons.

There’s no doubt that we are confronted with big choices in our energy future. Amory Lovins and the Rocky Mountain Institute published Reinventing Fire just two years ago, and the TVA IRP is a perfect example of how choices about our energy future are being made in real time. Reinventing Fire describes four different futures, three of which reduce carbon emissions significantly:

• Maintain – “Business-as-usual” (coal, gas, nuclear and some renewable energy and energy efficiency)
• Migrate – Adopt lower carbon generation, with a focus on nuclear, coal with carbon capture, and gas
• Renew – Renewables, mostly at utility scale, supply 80% of national energy, in combination with energy efficiency and demand response
• Transform – Aggressive energy efficiency and distributed resources become leading energy resources

TVA’s IRP studied futures that remained well within the “Maintain” and “Migrate” future scenarios for the most part, although TVA’s consideration of solar does represent a more ambitious evaluation than might be expected.

What would it take for TVA to reinvent its fire? Dramatic changes are possible with technology that’s available or on the way. It’s not just RMI, the National Renewable Energy Laboratory suggests that the entire U.S. could get to 80-90% renewable energy by 2050. With today’s technology, that would be pretty challenging! We are keeping our focus on technology that could be deployed over the next five to ten years and have assembled detailed data to study the reliability of wind and solar energy in the Southeast. With these data, we developed a very simple model to understand what it could take for TVA to “Reinvent its Fire” and use renewable energy to meet more than two-thirds of customer needs!

If TVA pursued RMI’s “Renew” future, it could supply at least 68% of customer electricity demand with renewable energy if the wind was blowing and the sun was shining. But of course that isn’t always happening (otherwise this blog would be over now!) so we need some additional resources. For this blog, I’m going to keep it simple and just use natural gas power plants to fill in the gaps. And for renewable energy, I’m relying on the two highest performing resources available to TVA: wind imported from the Great Plains via HVDC transmission and utility-scale solar systems (with single-axis tracking).

Here’s the bottom line: though a 100% renewable energy and energy efficiency solution is difficult to imagine today, TVA could study using renewable energy for two-thirds of its generation, without compromising reliability. This future could be achieved more easily if TVA, its state governments and others partnered to help every energy user become efficient. And it could be made more flexible with adoption of a range of technologies. But, as RMI acknowledges, there are significant obstacles to reinventing TVA’s fire. Read on for the details …

How reliable can solar and wind energy be for TVA?

Keeping it reliable means delivering power every hour of every day for every year. In a previous blog, I discussed the importance of correctly determining just how much wind and solar can be relied upon. For the southeast, a good rule of thumb is that wind is for winter, solar is for summer. TVA and other southeastern utilities can rely on renewables – a portfolio of wind and solar becomes less variable, and has greater output, during those same hours in which customers tend to use the most electricity.

Our simple future scenario maximizes wind and solar while ensuring system reliability, even with variable output from the various renewable resources. The wind and solar resources could be large enough to meet about 85% of TVA’s peak demand (the highest demand hour of the year). A pretty large natural gas power plant fleet would be needed: enough combined cycle plants to meet 50% of peak demand and enough combustion turbine plants to meet 30% of peak demand, plus 15% for reserves. But the gas plants would not run very often: the combined cycle plants would  run only 35% of the time (less than half of the 75% capacity factor assumed by EPA in the final Clean Power Plan rule), and the combustion turbine plants would run at a typical 5% operating rate.

Our dataset allows us to see the impact of weather, but not plant outages or other operational problems. Assuming only weather variability, reserves would be utilized about 115 hours per year on average. About one hour per year there would be a need to draw on outside resources. To avoid relying on outside resources requires the resulting system to export 20% of the renewable energy to other utilities – not ideal. So this very simple scenario needs a few enhancements.

Fortunately, those are easy to imagine. TVA already works with customers to occasionally, temporarily reduce electricity use (demand response). TVA has hydroelectric dams, which can be used to address peak needs. Utilities routinely trade power across a vast region of the United States and Canada. So with just a bit of reality added in, TVA could manage its solar and wind portfolio to ensure reliability not only for its own customers, but for others across the continent.

What about energy efficiency?

So far we’ve dealt with power supplies – and TVA will always need enough electricity to meet 100% of demand – but TVA can help customers reduce demand with energy efficiency programs. Using approaches demonstrated by utility leaders across the country and the world, TVA could reduce customer energy use by 20% or perhaps even more. This doesn’t really affect our analysis – since we’ve only talked in terms of percentages of the total power supply fleet, but maximizing energy efficiency helps customers cut bills and optimize the overall system.

What about rooftop solar? Wind close to home? Energy storage?

Yes, yes, and hopefully. Our simple model can easily accommodate rooftop solar and home-blown wind farms. Rooftop solar has the advantage of generating power right where it is most needed. And home-blown wind farms don’t require multi-state HVDC transmission wires. These resources perform differently than the simple two-technology model we put together for this blog, so they will introduce some additional planning and operational complexity.

What about TVA’s nuclear plants?

TVA’s nuclear plants are a big source of electricity with generally low operating costs. But they’ve proven very expensive to build and impossible to deliver on schedule. In our view, reinventing TVA’s fire means focusing time, talent and resources on solar, wind and efficiency, not revisiting the past pattern of cost and schedule failures. In our scenario, no new reactors are built and the existing plants operate until they are ready for retirement, and then that’s that. Transitions take time.

What are the biggest obstacles?

First and foremost: Cash. If TVA reinvented its fire, its system would be very cheap to operate, but not so cheap to build. It would cost billions of dollars to build the solar farms, wind farms, gas plants and transmission systems that would be needed. It doesn’t cost as much up front to run today’s coal and gas plants, but over time coal and gas fuels could be even more costly to customers. And that doesn’t even count for the billions that TVA has recently decided to sink into propping up aging coal plants so that they comply with tightening environmental regulations.

We haven’t done a cost analysis for this simple discussion. It’s not because cost isn’t important – it is very important. We haven’t done a cost analysis of reinventing TVA because it is not practical for TVA to move so far in one step, and any study of costs for such a large change would be too uncertain to be meaningful. Which brings us to our next obstacle …

Second and just as important: Time. Reinventing TVA’s fire would be a ten to twenty year endeavor. Transmission lines would need to be upgraded, with a number of new lines needed. This takes time as transmission line upgrades have to be coordinated, with key steps occurring when power demand is low so that customers never go without power. Also natural gas pipelines and storage would need to be sufficient to generate peak power when needed – which would be a challenge to site and finance.

During the process of transition, technology and customer needs would evolve. It’s not really about setting a twenty or even thirty year plan, its about taking steps in the right direction and seeing what opportunities unfold.

Third and … in your hands: Public understanding, support and trust. The renewable energy is waiting for TVA to tap, but TVA’s fire can’t be reinvented by engineers alone. It requires a public that understands, supports, and trusts TVA. If the public thinks wind and solar farms are part of some giant conspiracy, or finds reasons to oppose each specific wind farm or transmission line, or can’t trust TVA to invest wisely … well, then TVA will continue forward with something that looks very much like business-as-usual.

That’s why I urge you to reach out to the TVA Board of Directors before it votes to adopt (or amend) its 2015 Integrated Resource Plan. We believe it is time to reinvent TVA’s fire, with plans for more cost-effective wind, solar and energy efficiency. Today’s Board of Directors may not be able to do it all, but when adopting the 2015 IRP it can put in place concrete directives to ensure that TVA begins to work with its customers to build understanding, support and trust for reinventing TVA’s fire.