The Tennessee Valley Authority hopes to add around 14 gigawatts of solar energy and 5 gigawatts of energy storage over the next 20 decades, a huge new clean energy addition to its current hydropower, nuclear and coal-dominant production mix.
However, TVA’s integrated resource plan (IRP) filed on Friday also requires 2 to 17 gigawatts of natural-gas-fired generation over that moment, a decision that is attracted the opposition of the Sierra Club and other groups seeking to halt any new carbon-emitting power plants.
TVA introduced its draft IRP in February, and is expected to vote on the final proposal registered last week at its August board meeting in Knoxville, Tenn..
The long-range planning document doesn’t set any particular procurements in motion, and its different situations during the next 20 years don’t all predict the same high level of solar and storage penetration. By way of example, its solar quotes run from 3 gigawatts into 14 gigawatts by 2038, while its storage forecasts vary from 5.3 gigawatts to nothing.
Still, TVA’s new IRP has significant consequences for the 10 million or so customers in Tennessee and six other nations served by the utilities which get their electricity from the New Deal-era federal power agency.
In simple terms, it suggests that TVA, like utilities across the country, is preparing for the shift from fossil fuels and toward carbon-free power as a primary generation resource, while taking steps to control the subsequent grid durability and resiliency challenges, Colin Smith, older solar analyst with Wood Mackenzie Power & Renewables, said in a Tuesday interview.
“Solar will have a lot of impact in terms of dispatchability and reliability on the grid,” he explained.
“They’re not the first to try it, and they’re not unique. Nonetheless, it summarizes a significant trend in what utilities can perform.”
Compared to TVA’s last IRP in 2016,”this really is a considerable increase in solar procurement, and their last one was rather aggressive for its time,” he stated, in the context of where it was coming from.
As of last year, TVA’s production mix consisted of 39 percent atomic, 26 percent natural gas, 21 percent coal-fired, 10 percent hydro, and less than 3 percent wind and solar.
However, the IRP calls for incorporating between 1,500 and 8,000 megawatts of solar by 2028. By 2038 it foresees another 3,800 into 5,500 megawatts under its base-case scenarios, or up to 14,000 megawatts”in case a high level of load growth ”
Growing to meet that high-end guidance would require adding roughly 700 megawatts a year during the next 20 decades, a rate of growth which approximately matches the procurement of Duke Energy at North Carolina,” Smith said.
The uncertainties involved
Whether TVA matches its high-end solar advice will depend on many facets, and using a 20-year interval it is quite possible that a lot of the growth will happen in the next decade, Smith noted.
Still, in the shorter term TVA has been making big solar deals with industrial and commercial offtakers — namely, big data centers — that could function as a conduit for early-stage growth.
TVA is working with Facebook to power a data center in Alabama and with Google for data centers in Alabama and Tennessee, for example — jobs that align with large scale solar and wind procurements from data centre operators across the Southeast.
“We’ve already seen this happen in TVA, which is something which will induce the solar scenario to the greater case,” Smith said. “It’s very likely they’re likely to need to pull huge companies to come in their land by providing these deals”
TVA’s IRP calls for its own solar expansion to emerge in both the utility and spread scale. However, the region’s market for distributed solar has to take off, at least in a manner like the manner that technology giants’ demand for clean data centre electricity is driving the C&I market, Smith added.
In terms of demand, TVA expected to see substantial growth during the next 20 decades, something which’s not necessarily the case in other parts of the nation. At the exact same time, it’s expecting to lose a lot of its coal-fired power over this period, within the nationwide trend of coal plants shutting under economic and environmental pressures.
In February, TVA’s board of directors voted 5-2 to approve the 2020 closure of the Paradise coal plant in western Kentucky.
However, TVA has estimated that retiring the Paradise plant, as well as another coal plant intended for retirement by 2022, the Bull Run Fossil Plant, will save customers $320 million over 10 years.
TVA’s IRP does not envision adding some round-the-clock baseload tools to its source mix to compensate for all those coal plant closures.
This highlights”the need for operational flexibility in the resource portfolio,” because its own executive summary states, including natural gas, storage and demand response to”provide flexibility or reliability .”
Natural gas vs. energy storage as guarantor of grid reliability
The Sierra Club, which has worked with philanthropist and former New York City Mayor Michael Bloomberg on attempts to shut coal plants and halt new natural-gas plant construction, assaulted TVA’s strategy for its reliance on carbon-emitting resources.
“Even as TVA is making positive strides in this new plan, its leaders should begin looking to get an energy future which doesn’t just trade coal to get gas, which not just exposes clients to a volatile marketplace, but also worsens the climate crisis,” Al Armendariz, deputy regional director for the Sierra Club’s Beyond Coal effort, said in a prepared statement.
“As an analyst, I am agnostic from a political standpoint,” Smith said. “But it is worth mentioning again that the upper limit to incorporating renewable resources is how much resiliency and reliability you have in your system.”
Of course, natural-gas combustion and combined-cycle plants are not the only method to provide that reliability,” he said.
Over the next several years, the economics of electricity storage — specifically, lithium ion batteries at multi-megawatt scale — as a replacement for natural-gas peaker capacity will expand from bellwether states like California, Arizona and Texas to a broader range of U.S. markets, based on Ravi Manghani, WoodMac’s mind of energy research.
TVA’s IRP calls for adding around 2,400 megawatts of storage by 2028 and up to 5,300 megawatts by 2038 at both usefulness and distributed scale, although”the trajectory and timing of developments will be highly dependent on the growth of storage technology,” it noted.
But, as Smith pointed out, current prices in California, Arizona, Nevada and other states indicate that the cost points for solar-plus-storage are falling to compete with natural-gas-fired peaker plants at many niches. “We are also seeing solar-plus-storage being something that is always summarized in resource plans,” such as multistate Pacific Northwest usefulness Pacific Power’s most recent IRP.
TVA’s IRP also breaks out how utility-scale and distributed solar and batteries could grow within the next 20 years, based on whether the agency decides to adopt approaches to use these tools to promote power resiliency, more efficient loading shape, or renewable and distributed energy resources expansion.
