Energy Efficiency can lead TVA to Cost, Energy, and Emission Reductions. Soon!

An exciting new Synapse study shows us that TVA has much better options than continuing to operate and retrofit its dirty, aging fleet of coal-fired power plants. TVA currently operates 39 boilers, which would cost nearly $12 billion to retrofit. These costs do not reflect potential controls for carbon pollution. If TVA does choose to pursue retrofits on these boilers, the study finds that 33 of those 39 boilers will be “deeply non-economic on a forward going basis.” That is, power from these boilers will be more expensive than market based electricity, thus rendering them uneconomical to operate.

The Tennessee Valley Authority (TVA) must soon decide whether it will, in the next few years, spend nearly $12 billion to retrofit its aging fleet of coal-fired power plants in order to meet modern pollution standards, plus billions more to run those plants into the future. The majority of these plants are far in the red: with the projected required pollution controls, they will cost more to run than they bring in in revenue. Rather than passing billions in expenses to ratepayers to keep these plants online, TVA should be exploring ways to retire these non-economic plants as quickly as possible.

And there are some excellent job-creating, energy reducing retirement strategies for TVA to pursue. In fact, the data suggests that TVA could save billions and curb pollution by making common sense, achievable investments in energy efficiency. TVA themselves identify a 1.2% energy reduction as their “high achievable” energy efficiency reduction. Synapse took this number and applied it to potential cost savings vs coal plant retrofits. It turns out that 1.2% energy reduction could meet all projected demand growth until 2030. The study also looks at particular coal plants in the fleet, such as Galatin. The numbers they found are astounding…

By simply capturing 1.2% in energy savings per year, a rate which TVA acknowledges is achievable, the utility could entirely replace the capacity needs met by either Gallatin, Allen, Colbert, or two units at the Shawnee and John Sevier plants by 2015. For example, right now, the Gallatin Plant alone is slated for $1.1 billion of controls and pollution upgrades, and will incur costs of at least $5.7 billion between 2015 and 2032. The average residential ratepayer might expect to see a bill hike of about $2.50 per month for the next twenty years for this upgrade. Replacing these units with efficiency would save TVA, and its ratepayers, at least $2.7 billion over the next twenty years, and we would expect that residential bills would change by anywhere from an increase of only $0.60 to a decline of about $0.35 per month. Continuing to push for deeper efficiency will result in significant savings for consumers, and allow for the retirement of other aging coal units, especially if paired with investments in other forms of cleaner energy.

TVA’s Integrated Resource Plan (IRP) has been given a lot of positive attention for developing a path for TVA to agressively pursue clean energy and energy efficiency. But one thing the IRP does not consider is the potential savings of investing in energy efficiency vs coal plant retrofits.

Among the efficiency successes that TVA will build upon:

– In the two years from 2010 to 2011, TVA’s energy efficiency programs reduced electricity consumption in the Tennessee Valley by 765 gigawatt hours – enough electricity to keep a single 100-watt light bulb burning continuously for over 1,1 00 years.

– And in 2011 alone, TVA achieved a 559 gigawatt hour reduction in a single year – an increase of 270 percent over 2010 that equals enough energy to power 50,000 households for an entire year.

– During the first quarter of TVA’s 2012 fiscal year, TVA and local power distributors achieved a 69 gigawatt-hour reduction in energy use.

Appalachian Voices applauds TVA’s direction. We also believe that it is time that TVA lead the way in choosing job-creating, bill-reducing energy efficiency measures instead of continuing to operate some of the oldest, dirtiest, most non-economic coal plants in the country.