TVA sees no pressing need for new baseload capacity beyond Watts Bar 2

The Tennessee Valley Authority (TVA) does not foresee any immediate need for building new baseload capacity in the next few years beyond the Watts Bar 2 nuclear plant, which is expected to go online by the end of 2015, TVA Vice President of Stakeholder Relations Joe Hoagland said March 9.

This means TVA foresees no immediate to revive plans for a nuclear unit at the Bellefonte site in Alabama, Hoagland during a conference call on draft of the latest TVA Integrated Resource Plan (IRP).

This Watts Bar 2 reactor will have a 1,150 MW generating capacity. The new reactor is scheduled to become operational by the end of 2015 and is included as a current resource in TVA’s generating portfolio.

During the call, Hoagland said that none of the existing TVA nuclear units are in danger of closing soon. Additional coal unit retirements are possible under certain low demand or “de-carbonization” scenarios, he added.

TVA continues to look at small modular reactors (SMRs) at its Clinch River site in Tennessee chiefly as an R&D project. TVA is no longer looking exclusively at a Babcock & Wilcox affiliate as the only possible vendor for SMR technology, Hoagland said.

When asked about assumptions on natural gas prices, Hoagland replied that TVA considers the most likely scenario being an incremental or “nominal” increase in today’s low gas prices.

Currently, about 52% of TVA’s electricity is produced from coal and natural gas power plants. The nuclear plants produce about 33% of the generation, hydroelectric plants produce about 11%, and most of the remaining generation came from non-hydro renewables and energy efficiency sources.

Although combustion turbines comprise 15% of TVA’s current capacity portfolio, their annual energy contribution is less than 1%, as would be expected of higher cost reliable peaking resources, TVA said.

Unlike past IRPs by TVA, the federal utility decided to treat energy efficiency and a renewable power “as a resource” and that’s a big step forward, Hoagland said.

TVA’s current planning reserve margin is 15% above peak load requirements and is applied during both the summer and winter seasons.

These planning strategies represent decisions that TVA controls (such as asset additions, idling coal plants, integration of more flexible resource options) as opposed to the scenarios described below, which represent aspects of the future that TVA does not control (such as more stringent regulations, fuel prices, construction costs).

TVA started its process before issuance of the Environmental Protection Agency (EPA) Clean Power Plan, which seeks to cut carbon dioxide 30% by 2030.

TVA’s emissions of CO2 were reduced 32% between 2005 and 2013. TVA projects approximately a 40% reduction in CO2 emissions by 2020 from 2005 levels.

Under the current outlook scenario, TVA requires additional capacity and energy of 2,100 MW and more than 16,000 GWh by 2020, growing to 10,300 MW and more than 58,000 GWh by 2033.

TVA board could act upon plan in August

 During the call, Hoagland said that the draft IRP will be subject to public review for the next 45 days and the TVA board of directors is expected to act upon the proposed IRP in August.

There is a series of public meetings scheduled on the proposal, Hoagland said. The meeting dates and locations are:

 •March 19 – Chattanooga, TN

• April 6 – Knoxville, TN

• April 9 – Huntsville, AL

• April 14 – Tupelo, MS

• April 15 – Memphis, TN

• April 21 – Nashville, TN; and

• April 22 – Bowling Green, KY.

The 2015 IRP will revise the 2011 IRP. TVA is updating the 2011 IRP earlier than planned because several of the assumptions used in its development changed. These include reduced demand for electricity and greater availability and lower cost of natural gas.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.