As of Sept. 30, 2016, the Tennessee Valley Authority had eight coal-fired plants consisting of 35 active units, accounting for 10,285 MW of summer net capability, and 24 retired units, said TVA in its Nov. 15 annual Form 10-K report.
Those retired units are: Colbert Fossil Plant Units 1-5, John Sevier Fossil Plant Units 1-4, Johnsonville Fossil Plant Units 5-10, Shawnee Fossil Plant Unit 10, and Widows Creek Fossil Plant Units 1-8.
Coal-fired plants have been subject to increasingly stringent regulatory requirements over the last few decades, including those under the Clean Air Act (CAA). Increasing regulatory costs have caused TVA to consider whether or not to make the required capital investments to continue operating these coal-fired facilities.
In April 2011, TVA entered into two agreements (collectively called the “Environmental Agreements”) to address a dispute under the CAA. The first deal is a Federal Facilities Compliance Agreement with the U.S. Environmental Protection Agency. The second is with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups. Under these deals, TVA agreed to retire 18 of its 59 coal-fired units by the end of 2017 and was generally absolved from any liability, subject to certain limitations and exceptions, under the New Source Review (NSR) requirements of the CAA for maintenance, repair, and component replacement projects that were commenced at TVA’s coal-fired units prior to the execution of the agreements. TVA also agreed to retire, repower, or install air pollution controls on 16 of the remaining coal-fired units.
Failure to comply with the terms of the Environmental Agreements would subject TVA to penalties stipulated in the agreements. TVA is taking the actions necessary to comply with the Environmental Agreements. TVA said it is confident that it has adequate capacity to meet the needs of its customers after units are retired under the Environmental Agreements.
The plans for coal units include:
- Allens Units 1-3, retire when new gas-fired unit at site is completed, by Sept. 30, 2018;
- Bull Run unit, continue to operate;
- Colbert Units 1-5, retired in April of this year;
- Two units at Cumberland, continue to operate;
- Gallatin, add scrubbers and SCRs on four units by end of 2017;
- John Sevier, retired two units in 2012 and two more in 2014;
- Johnsonville, retired Units 5-10 in December 2015 and will retire Units 1-4 by the end of 2017;
- Kingston, continue to operate all units;
- Paradise, retire Units 1-2 by Sept. 30, 2017, when new gas unit at site is completed, and keep operating Unit 3;
- Shawnee, retired Unit 10 in 2014, adding scrubbers and SCRs on Units 1 and 4 by end of 2017; and
- Widows Creek, retired Units 1-8 in increments in the 2013-2015 period.
After TVA completes the actions described above, it anticipates that it will have 7,891 MW of summer net capability of coal-fired generation, a reduction of 6,682 MW from TVA’s coal-fired capacity as of Sept. 30, 2010. TVA said it is moving towards a more balanced generation plan with greater reliance on lower-cost and cleaner energy generation technologies. TVA’s long-range plans will continue to consider the costs and benefits of significant environmental investments at its remaining coal-fired plants.
In April 2016, in response to a request from TVA, the EPA issued an administrative order under the Clean Air Act to allow operation of Paradise Units 1 and 2 for a year beyond the Mercury and Air Toxics Standards compliance date of April 15, 2016. The additional year will allow these units to continue to operate while the new combined cycle facility being built at the site becomes operational. TVA expects to retire Paradise Units 1 and 2 once this replacement capacity is available.
To reduce SO2 emissions, TVA operates scrubbers on 19 of its coal-fired units with scrubbers currently under construction on two additional units, and has switched to lower-sulfur coal at 20 coal-fired units. To reduce NOx emissions, TVA operates SCRs on 18 coal-fired units with SCRs currently under construction on six additional units, operates selective non-catalytic reduction systems on four units, operates low-NOX burners or low-NOX combustion systems on 19 units, operates over-fire air on six cyclone units, optimized combustion on six units, and operates NOX control equipment year round when units are operating (except during start-up, shutdown, and maintenance periods). TVA has also retired or announced plans to retire 33 of 59 coal-fired units. Except for seven units at Shawnee, the remaining coal-fired units will either have scrubbers and SCRs or be retired.
TVA has two natural gas-fired facilities under construction which will add approximately 2,000 MW in total. The facility at Paradise is expected to be completed in the spring of 2017, and the facility at Allen is expected to be completed in 2018. Work on the Gallatin scrubber and selective catalytic reduction systems (SCRs) continues with the first two SCRs expected to be completed in the spring of 2017 and the second two SCRs expected to be completed in the fall of 2017.
During March 2016, TVA removed from service Units 1-4 at Colbert, with a summer net capability of 712 MW, and subsequently retired all units at Colbert in April 2016. Colbert Unit 5 had previously been removed from service in 2013. As the Paradise and Allen natural gas-fired generation facilities are completed, TVA will be retiring five coal-fired units with a net summer capability of 1,971 MW at those two sites.
Coal consumption at TVA’s generating facilities during fiscal 2016 and fiscal 2015 was approximately 24 million tons and 28 million tons, respectively. At Sept. 30, 2016, and Sept. 30, 2015, TVA had 31 days and 32 days of system-wide coal supply at full burn rate, respectively, with net book values of $252 million and $316 million, respectively.
On April 4, 2016, TVA entered into a letter agreement with Choctaw Generation Limited Partnership LLLP (CGLP) for the reimbursement of certain capital costs and ongoing operating and maintenance costs related to assets recently constructed at the Red Hills lignite-fired power plant. These capital additions were required to comply with new Mercury and Air Toxics Standards. As a result of the new agreement, TVA was required to reassess a related 1997 power purchase and operating agreement (PPOA) with CGLP.