By - Jim Vess

TVA sees growth in solar and natural gas generation, but no new wind, coal or hydro assets

Energize Weekly, February 27, 2019

The Tennessee Valley Authority (TVA) is projecting greater reliance on solar, natural gas and storage to meet electricity demand—but no new coal, wind or hydro—in its draft Integrated Resource Plan (IRP).

A long-term planning document, the watchword in the IRP is “flexibility” in the face of market and technological changes.

The IRP will “enhance TVA’s ability to create a more flexible power-generation system that can successfully integrate increasing amounts of renewable energy sources and distributed energy resources,” the plan said.

The plan used six uncertainty scenarios, such as facing an economic downturn, an increase in electricity demand due to regional economic expansion, the rapid growth in distributed generation and a scenario where licenses for nuclear plants are not renewed. Nuclear plants provide about 40 percent of TVA’s electricity.

Those scenarios were matched with five potential strategies, such as promoting renewables, efficient load distribution, grid resiliency, promoting distributed generation. There was also a base case, using current assumptions on resource costs.

The result was 30 different resource portfolios accounting for variables from the pace of economic growth to the tempo in the installation of distributed generation.

The planning process identified several elements that applied across all the scenarios:

  • New capacity is needed even in the lower load futures, in part to replace expiring or retiring capacity.
  • Solar expansion plays a substantial role, driven by its attractive energy value beginning around the mid-2020 timeframe.
  • Varying levels of gas, storage and demand response are added depending on strategic focus to ensure reliability and provide flexibility.
  • No wind or hydro resources are added, indicating that solar backed up by gas and/or storage is “the more optimal choice.”
  • No baseload resources are added, except in the case where small modular reactors, an emerging nuclear technology, are promoted for resiliency.
  • Energy efficiency levels are relatively similar across the portfolios and decrease over time as efficiency impacts from codes and standards increase over time.

“Key considerations when evaluating potential coal retirements are uncertainty around future environmental standards for CO2 and the outlook for load and gas prices,” the IRP said. Projected coal plant retirements ranged from 800 megawatts (MW) to 3,000 MW based on the scenario.

The base-case strategy, which leverages utility-scale resources, is the most economical and the strategy designed to create the most efficient load demands had the highest revenue requirement.

TVA’s current generation portfolio is 40 percent nuclear, 26 percent coal, 20 percent natural gas, 10 percent hydro, 3 percent wind and solar, and energy efficiency programs account for 1 percent.

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