OK, I admit it; in our watchdog/clean energy advocate role, we at SACE are often critical of our regional utilities. Yet, we have and will continue to call out positive developments and give credit where credit is due for movement in the right direction. Here is a big shout out for the biggest public power entity in the United States, the Tennessee Valley Authority (TVA).
I was recently selected to serve on a newly formed citizens’ advisory committee that provides advice to the TVA Board of Directors. The group, called the Regional Energy Resource Council, held its second meeting last week in Knoxville. At this meeting, TVA shared a few very interesting slides showing the good news that I wanted to call attention to.
The first slide shows a downward trend in TVA’s CO2 emissions since 1995, when TVA poured over 110 million tons of CO2 per year into the atmosphere. I was in Copenhagen in 2009 when President Obama first set a target of 17% CO2 reductions by 2020, which is now part of the Administration’s Climate Action Plan (CAP). I remember thinking that while it was not enough to solve the climate crisis, it would be tough to meet this goal in our region with our utilities so dependent on coal power generation.
The good news is that according to this slide, TVA is reporting that the agency has already exceeded the 17% target and is currently at 23% below 2005 levels (28% below 1995 levels).
The best news is that TVA is on target to hit 40% below 2005 levels by 2020. This is very significant. According to TVA, the U.S. Energy Information Administration’s base case projection has the utility sector as a whole as closer to only an 11% reduction from 2005 levels.
This has been brought about by a perfect storm of lower natural gas prices, decreased energy use caused by slower economic activity, weather, and increased energy efficiency which has allowed the retirement of a significant number of coal units on the TVA system. In the second slide you can see the current status of TVA’s fleet. TVA has announced plans to retire 5,580 MW of coal. This includes the units retired under the consent decree agreement with EPA, and the additional 3,308 MW of retirements announced at November’s Board of Directors Meeting. In addition, SACE believes there is a very strong likelihood that TVA will retire an additional 2,420 MW as part of the current iteration of TVA’s Integrated Resource Plan. This would bring the total to 8,000 MW of coal retirements at TVA alone!
In comparison, the numbers from other regional utilities are moving in the same direction, but not as steeply. Southern Company has committed to retire 16 coal units at 5 plants by 2016, representing 2981 MW. Southern Company has also announced retirements and/or natural gas conversions of 14 units at 6 plants, representing 3033 MW. Duke Energy has retired or committed to retire 18 units at 5 plants by 2018, representing 1667 MW. Progress Energy (before the merger with Duke) under Bill Johnson’s leadership committed to over 1600 MW of coal retirements. Duke has also announced, but not formally committed, to retire 2 units at its Crystal River plant, representing another 873 MW of former Progress Florida facilities.
In slide three, TVA shares its recent history and projected future CO2 emissions rate, which has fallen from above 1,600 lbs/MWh to 1,089 lbs/MWh in 2012. This appears to put TVA’s system-wide emission rate in line with the 1,000 lbs/MWh New Source Performance Standards for new gas turbines. SACE is looking at other regional utility rates to be able to compare “apples to apples.” Clearly, TVA is seeking the “most improved” award. TVA staff are confident that these downward trends will continue.
This is also good news for states in the TVA region as these reductions make it easier for TVA states to plan for the new EPA carbon rules due out this summer.
Interestingly, these new numbers allow TVA to offer a potential service to current and future customers that would allow them to line up their corporate CO2 reduction goals with work that TVA is doing to reduce its CO2 emissions. The one pager on slide four discusses how TVA might be able to collaborate with a company in achieving their goals based on future reductions. This will help in industrial recruiting as more companies set carbon targets.
It’s important to remember TVA’s generation mix in this conversation, and while TVA has nuclear power in their system, the reductions since 2005 came with no new nuclear facilities coming on line. Yes, TVA did “recover/restart” the Brown Ferry unit 1 reactor in May 2007 and still struggles with getting Watts Bar 2 nuclear unit online, a plant which is significantly behind schedule and over budget and will potentially add a new “low carbon” base load plant to the TVA system. TVA CEO Bill Johnson spoke at the November TVA Board meeting in Oxford, Mississippi of a goal of 40% nuclear, 20% gas, 20% coal and 20% renewables (including hydro) and energy efficiency, calling this his vision of a “balanced portfolio.” While I welcome this vision, I believe it does not provide enough leadership for the renewable and energy efficiency target goals. In many years, TVA already gets more than 10% of its energy from hydro power alone. A goal in the near term of pushing the renewable and energy efficiency targets up to 30% would show real leadership in these areas and continue TVA along the low carbon path without the high risk of additional nuclear projects.
Bottom-line, as a father and grandfather and a citizen of planet Earth, the numbers TVA shared were impressive. They gave me hope and showed real solid movement in addressing the challenge of our generation, and I thank all those at TVA past and present that have moved the agency in this direction. Of course, myself and my staff will continue to call it like we see it, and we look forward to calling out more good news in the future.