Stephen Smith | March 24, 2015
Energy Efficiency, Energy Policy, Utilities
If you’re like me, you are nostalgic for the days when the Tennessee Valley Authority (TVA) brought innovation, increased economic development and low-cost energy to the Tennessee Valley. TVA’s recently released draft 2015 Integrated Resource Plan (IRP) outlines five alternate energy scenarios under which TVA could implement various resource planning strategies to meet both short- and long-term energy demands. Unfortunately, TVA’s draft IRP does not renew its legacy and instead undervalues critical cost-effective options that would help families and businesses cut energy bills.
We applaud TVA’s efforts to retire coal units during the 2015 IRP planning process, but we continue to feel that TVA did not balance its need for capacity with thoughtful analysis on how much replacement capacity was actually necessary. This resulted in TVA’s decisions to make significant investments in large natural gas plants (at
Paradise, Allen) and in retrofitting old coal units (at Shawnee).
TVA continues to view clean energy resources through a blurred lens. TVA underestimated performance and over-estimated costs of energy efficiency, resulting in a draft 2015 IRP that contains less energy efficiency than the 2011 IRP. By including artificial constraints and unnecessary growth caps, TVA improperly devalued the merits of energy efficiency. To TVA’s credit, there was a significant amount of effort with stakeholders to bring forth wind data that would accurately reflect the dynamic nature of wind energy based on the latest technologies and current market trends. Unfortunately, TVA ultimately chose outdated wind data, resulting in a draft IRP that includes very little low-cost wind energy.
As part of various IRP and resource planning groups, SACE has been engaged in each step of the planning process. I and my staff very much appreciate and applaud TVA’s focus on engaging stakeholders, even though we feel that TVA fell short by failing to embrace dialogue at critical points in their development of energy efficiency and wind input assumptions. But in many other ways, TVA effectively engaged stakeholders which resulted in several effective outcomes.
TVA staff commonly use a highway analogy to explain the movement of the different planning strategies within the various ” IRP roadways” on the “energy highway.” In theory, TVA’s plan would indicate a range of options that the utility could move freely among, finding the best path forward along its “energy highway.” However, TVA’s excessive cost and debilitating performance assumptions for wind and energy efficiency act as penalties – effectively functioning like toll lanes that restrict the utility’s interest in choosing these low-cost energy choices.
TVA characterizes the energy efficiency results in the draft IRP as an unprecedented commitment to energy efficiency. Not only is this description misguided, it also disregards TVA’s unfulfilled commitment to energy efficiency in the
2011 IRP – when TVA promised to become a “regional leader in energy efficiency.” TVA recently cut its energy efficiency budget and scaled back its energy efficiency programs from those endorsed in 2011. The draft 2015 IRP firmly caps the growth of energy efficiency programs — they cannot catch up with the 2011 IRP goals until at least 2025. This leaves TVA behind regional energy efficiency leaders and well behind national best practices.
Clean Line Plains and Eastern Transmission Project
TVA is equally short-sighted in the way it treats wind energy in the draft IRP. In particular, I am disappointed with TVA’s failure to align its plan with the market as demonstrated by the
Clean Line Plains & Eastern HVDC ( high voltage direct current) wind power transmission project. Although TVA acknowledged that wind generated in western Oklahoma and north Texas is highly productive (operating at a very high “capacity factor”), TVA selected a highly prejudicial method for valuing wind power’s contribution to its peak capacity needs. Industry experts recommended a capacity credit of at least 40% (and suggested an even more realistic credit of 50%), TVA assumed a mere 14% capacity.
TVA’s decision to cherry-pick the only calculation method that applies a lower wind capacity value demonstrates a level of disengagement from market and performance data. It feels as if TVA’s “mind” was made up on wind before the IRP planning processes even started. Even with promising projects being suggested for Tennessee and Alabama using cutting-edge technology, TVA’s evaluation for In-Valley wind relied heavily on out-dated wind technologies that were deployed over four years ago. TVA had access to, but ultimately excluded, more current data provided by industry experts regarding
available technologies best suited for our large regional wind resource.
Along with the draft IRP, TVA has also released a
Draft Environmental Impact Statement (EIS), which analyzes how each of the alternative energy scenarios and strategies will affect the environment. Now that the draft IRP and accompanying EIS have been released, TVA will take comments on both documents until the end of the public comment period on April 27th.
During this public comment period, TVA will host public listening sessions across its service territory.
During these listening sessions, TVA will present the major takeaways of the draft IRP and take Q & A from the public as well as supply materials for people to submit comments in-person.
SACE will host a
webinar at 1pm ET on March 24 where SACE staff and other IRP working group members will explain these takeaways in more detail. Make your voice heard as we work together to increase low-cost, clean energy resources in the Valley!