The Tennessee Valley Authority is now on notice that its Draft Integrated Resource Plan misses the mark in what it proposes for developing the Valley’s renewable energy and energy efficiency resources.
Before heading off for the Thanksgiving holiday, several public interest groups, including the Southern Alliance for Clean Energy, submitted comments in response to TVA’s release of its Draft Integrated Resource Plan (IRP) for public review and comment. All agree that while TVA’s IRP process is a significant step in the right direction, the Draft Plan does not give fair consideration to the Valley’s energy efficiency and renewable energy resources. This may mean more cost and more risk for Valley ratepayers.
TVA’s Draft IRP considers various levels of both renewable energy and energy efficiency as part of its proposed strategies for meeting future energy demand. However, even the Draft IRP’s most aggressive levels of these resources fall far short of what could be developed over the next 19 years.
IRP Strategies vs. Estimated Renewable Energy and Energy Efficiency Potential
The above figure compares TVA’s proposed strategies, labeled TVA “A”, “B”, etc. with independent estimates of the potential for these resources in the Valley. As SACE was clear to point out in our comments to TVA, the Draft IRP’s most aggressive strategies for renewables and efficiency, strategies E and D respectively, represent only a fraction of what could be achieved if TVA were to make a serious commitment to these resources.
TVA’s Draft Resource Plan undervalues the Valley’s renewable energy resources.
As SACE discusses extensively in our comments, TVA’s Draft Resource Plan is flawed in its assessment of both the potential and cost of renewable energy resources in the Valley. The Draft Plan also does not account for future price trends of renewable resources, including the steeply declining cost trends for solar energy that are projected to occur. These shortcomings lead the Draft Plan to undervalue the potential for in-Valley renewables to play a significant role in meeting the Valley’s electricity demand over the next 19 years.
Comments by other Southeastern public interest groups mirror our concerns over the Draft Plan’s treatment of in-Valley renewable energy resources. Conservation Alabama, in its comments to TVA, expresses concern that “TVA did not give. . . renewables adequate consideration in evaluating the energy sources’ potential for customers in the Tennessee Valley,” and the Southern Environmental Law Center concludes that “TVA did not properly assess the Tennessee Valley’s potential for energy efficiency and renewable energy resources.” As a result, TVA’s failure “has significant environmental impacts.”
Tennessee Business Leaders for a Clean Energy Economy also notes the Draft IRP’s shortcoming when it comes to the Valley’s solar energy and bioenergy potential, and the organization specifically calls on TVA to “seriously consider including more in-state solar production capacity” and to “articulate a process by which biomass could play a larger role in power production.”
In short, the message to TVA is clear: the Valley’s renewable energy resources can and should be a larger part of TVA’s plan to meet the Valley’s future energy demand.
TVA’s Draft IRP also falls short in its assessment of energy efficiency as a resource.
Unfortunately, TVA’s Draft Resource Plan does not fare much better when it comes to energy efficiency. While TVA has recently teken some significant steps towards improving its performance on energy efficiency, the Draft IRP does not give nearly enough credit for this resource’s ability to contribute to meeting the Valley’s future electricity demand.
TVA’s Draft IRP calls for, at a maximum, a 7% reduction in the baseline projected energy demand in 2029. By comparison, other utilities across the nation are forecasting that energy demand can be reduced by 25% or more over this same time period with aggressive energy efficiency programs. As the cheapest, cleanest and most readily available resource we have, TVA can and should be looking to achieve far more than 7%.
The Draft Resource Plan’s failure to properly value the energy efficiency resource stems from two critical miscalculations that SACE points out in our comments to TVA. First, the Draft Plan relies on an energy efficiency potential study that fails to account for several significant efficiency opportunities available in the Valley. And second, the Draft IRP does not allow for incremental gains in efficiency beyond about 2020 even though it is well proven that the efficiency resource can continue providing energy saving opportunities year after year.
These two miscalculations result in significant levels of cost-effective energy efficiency left undeveloped over the course of the planning period.
Again, SACE is not alone in our critique of TVA’s Draft IRP. Comments submitted by the National Association of Energy Service Companies (NAESCO), which has delivered more than $40 billion of energy efficiency, renewable energy, demand response and distributed generation projects over the last 25 years, states:
“The recommendations contained within the Draft IRP grossly underestimate the achievable energy efficiency in the TVA region,” and that “the projection of 7% aggregate achievable potential for energy efficiency in the TVA territory over the next twenty years, and the concomitant projection that the region will achieve almost no energy savings between 2020 and 2030, lacks credibility.”
NRDC also takes note of TVA’s inadequate consideration of energy efficiency. In its comments, NRDC recognizes that TVA “can and must do even better than current projections to fully capture the economic, reliability and environmental benefits of energy efficiency for itself, its customers and its region.'”
In the end, less efficiency and renewables will mean higher bills for Valley ratepayers, less money invested in local economies and more environmental degradation as a result of TVA’s electric generation. That’s why so many organizations are in agreement that TVA must do more to develop the Valley’s efficiency and renewable energy resources.
TVA plans to release its proposed Final Integrated Resource Plan for review and approval by TVA’s Board of Directors in Spring of 2011. Hopefully, it will make better use of the clean, renewable resource available here in the Valley.