TVA sees a lot less coal in all variations of its latest integrated resource plan

The Tennessee Valley Authority issued on July 13 a final 2015 Integrated Resource Plan that shows how the federal utility plans to sharply reduce its coal-fired generating capacity over the next few years.

Under development since the fall of 2013, the IRP is a power planning roadmap to 2033. TVA is updating its 2011 IRP due to dramatic changes in the utility industry. Such changes include abundant, lower-cost natural gas, decreased cost of renewable generation, decreased demand, and increased focus on energy efficiency efforts. The IRP will be presented to the TVA board of directors at its August board meeting in Knoxville, Tenn.

TVA operates the nation’s largest public power system, including 41 active coal-fired units, six nuclear units, 109 conventional hydroelectric units, four pumped-storage units, 87 simple-cycle combustion turbine units, 11 combined cycle units, five diesel generator units, one digester gas site and 16 solar energy sites. It also purchases a portion of its power supply from third-party operators under long-term power purchase agreements (PPAs).

TVA operates 10 coal-fired power plants consisting of 41 active generating units with a total capability of almost 11,900 MW. By 2016, the existing coal fleet will decrease to about 35 active units with a total capability of 10,300 MW. In addition to TVA-owned coal-fired units, TVA has access to the output from a coal-fired power plant with a generating capacity of about 440 MW through a long-term power purchase agreement.

Current plans for the coal plants are:

  • Allen, currently operational, retire all three units. Board approved plan to construct a 2×1 combined cycle gas plant at the site.
  • Bull Run, one operational unit, continue to operate;
  • Colbert, Unit 5 operational and Units 1-4 idle, board has approved plan to retire all five units:
  • Cumberland, two operational units, continue to operate;
  • Gallatin, four operational units, continue to operate with Board-approved scrubbers and SCRs;
  • Johnsonville, ten units, Units 1-4 operational and Units 5-10 idled, retire all units;
  • Kingston, nine units operational, continue to operate;
  • Paradise, three units operational. Board approved plans to construct a combined cycle plant on site, retire units 1 and 2, and continue operation of unit 3;
  • Shawnee, ten units, Units 1-9 operational and Unit 10 retired, Board approved plans to control units 1 and 4. The remaining units will continue to operate until a long-term decision is made;
  • Widow’s Creek, eight units, Units 1-6 retired, Unit 8 idled and Unit 7 operational. Board approved plan to retire all units.

Under the various scenarios in the IRP, no new coal plants were selected. In a few cases, additional coal units were retired beyond those currently planned.

TVA didn’t model Clean Power Plan due to uncertainties

As for the U.S. Environmental Protection Agency’s proposed Clean Power Plan, which is due for a final version later this summer, the IRP said: “While the IRP models the amount of carbon contained in the delivered energy to our customers it does not model a potential compliance strategy for TVA with the Proposed Clean Power Plan. However, as a crude comparison, TVA has made a 30 percent reduction in CO2 emissions from a 2005 baseline, the stated objective of the regulation. One might assume that TVA would then have a low compliance hurdle with the CPP. However very much is unknown right now about how the final rule might change when promulgated this summer. For instance, in the proposed rule Tennessee’s emission guideline was made much more stringent than most all other states by considering Watts Bar Nuclear Unit 2 as an existing unit even though it is not yet operational. TVA has objected to this exclusion and we are awaiting the final regulation to see EPA’s final determination. Also, the final rule could change the timing of the regulation compliance period which would have a significant change in the stringency.

“While we think that it is both inappropriate and premature to model the Clean Power Plan in the IRP, each of the five strategies significantly reduces carbon emissions on the TVA system through the planning period by retiring coal units and adding nuclear, renewables and energy efficiency. Considering these reductions and that compliance with the Clean Power Plan is further complicated by calling for state-by-state emission reductions although TVA’s integrated generation and transmission system encompasses parts of several states, it is inappropriate and premature to model the Clean Power Plan in this IRP. Regardless of the final form of the rule and which strategy TVA selects as a general planning direction from the IRP, we will be bringing the nation’s first new nuclear generation of the 21st Century online at Watts Bar 2 by 2016, retiring 13 units at two coal-fired power plants in Tennessee [Allen Fossil Plant and Johnsonville Fossil Plant] and 13 units at two coal-fired power plants in Alabama [Colbert Fossil Plant and Widows Creek Fossil Plant] by 2018, and replacing some of this coal generation with lower-emitting natural gas, energy efficiency and renewables during the planning period. This will put TVA on a trajectory toward complying with the Clean Power Plan or regulatory requirements of another form in a carbon-constrained future.”

A supplemental environmental impact statement that accompanied the IRP said: “Under Scenarios 1, 2, 4 and 5, the seven less controlled units at Shawnee continue to operate until 2025 when they are retired. Under Scenario 3, they are controlled and operate through the end of the planning period. Under Scenarios 4 and 5, Kingston Fossil Plant is retired in the early 2020s and all Shawnee units are retired in the mid-2020s. The operating coal capacity at the end of the planning period in 2033 would be 6,610–7,506 MW under Scenarios 1, 2 and 3 and about 5,000 MW under Scenarios 4 and 5.”

Coal plant retirements have been ongoing for several years

Since 2010, TVA has retired the four-unit, 704-MW John Sevier Fossil Plant, six units totaling 666 MW at Widows Creek and a 126-MW unit at Shawnee. An additional eight coal-fired units are mothballed: the 412-MW Widows Creek Unit 8, Johnsonville Units 5–10 with a total capacity of 926 MW, and the 431-MW Colbert Unit 5. The Johnsonville units will be retired by Dec, 31, 2015. Widows Creek Units 7 and 8 will be retired by October 2015.

In April 2011, TVA entered into two agreements to resolve litigation over Clean Air Act (CAA) New Source Review requirements for its maintenance and repair of its coal-fired units. The first agreement is a Federal Facilities Compliance Agreement with the U.S. Environmental Protection Agency (EPA). The second agreement is with Alabama, Kentucky, North Carolina, Tennessee, the Sierra Club, National Parks Conservation Association and Our Children’s Earth Foundation.

Under these agreements, TVA agreed to retire 18 coal-fired units by December 2017. With the exception of Johnsonville Units 1-4, which are scheduled to be retired by December 2017, all of these units have been retired or are mothballed. The agreements also require TVA to take additional actions at several of its coal plants. Those actions affecting the future of currently operating units and mothballed units include:

  • Allen – TVA must install FGD systems or retire the three units by Dec. 31, 2018. The TVA Board has approved the construction of an adjacent combined cycle (CC) plant and committed to retiring the coal units.
  • Colbert – TVA must install FGD and SCR systems on Units 1-4, convert them to burn renewable biomass, or retire them by June 30, 2019. TVA must install an FGD system or retire Unit 5 by Dec. 31, 2018. TVA has placed Unit 5 in inactive reserve and committed to retire all five units by their respective compliance dates.
  • Gallatin – TVA must install FGD and SCR systems, convert to burn renewable biomass, or retire the four units by Dec. 31, 2017. TVA has committed to installing and operating FGD and SCR systems which are currently under construction. Once complete, the summer net dependable capacity of the plant will be reduced to 922 MW.
  • Shawnee – TVA must install FGD and SCR systems on Units 1 and 4, convert them to burn biomass, or retire them by Dec. 31, 2017. TVA has committed to installing and operating FGD and SCR systems on the two units. Construction is expected to begin in 2015 and to be completed in 2017.
  • Paradise – After evaluating how to comply with the federal Mercury and Air Toxics Standards, TVA decided to retire Paradise Units 1 and 2 (with a combined capacity of 1,176 MW) upon completion of adjacent CC plant currently under construction. This is scheduled to occur in 2017 and is not associated with the CAA agreements.

Once all of the announced coal plant/unit retirements occur and FGD/SCR installations are completed, which are anticipated by 2020, the operating coal units will have a total capacity of approximately 7,980 MW.

TVA is a large consumer of coal and consumed a total of 31 million tons of coal in fiscal year (FY) 2014. In recent years, TVA has obtained coal from the Northern Appalachian, Central Appalachian and Illinois Basin regions in the eastern U.S. and from the Powder River Basin and Uinta Basin regions in the western U.S.

For FY 2015, TVA has contracted to purchase approximately 27.4 million tons of coal. The largest sourcing area is the Illinois Basin, which will provide about 51% of the coal, a slight increase over recent years. Fifty-seven percent of the coal will be from surface mines, mostly in the Powder River Basin; this proportion has increased in recent years. None of the coal is projected to be from Appalachian mountaintop removal surface mines, which have been subject to much controversy over environmental impacts of this large-scale mining. In recent years, coal from these mines has comprised less than 2% of TVA’s coal purchases.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.