SACE in the News: Declining Demand for Energy Impacts Planning for Utilities

Guest Blog | September 29, 2011 | Energy Efficiency, Energy Policy, Nuclear

A recent article in The Tennessean highlights one emerging reality for energy companies: people are consuming less energy. The excellent long-form piece by reporter Anne Paine, “TVA bets on rising demand: Less electricity use could increase costs” goes into detail about the decisions utilities face with energy use on the decline.

Plans for new power plants, based on predictions of growing demand for energy, should be reconsidered in light of this new information. This is especially true when it comes to the cost and risk associated with TVA’s plan to complete Bellefonte. Simply put, investing billions in a new nuclear power plant at a time when energy use is falling is not a wise investment. From Paine’s article:

The Sierra Club and the Southern Alliance for Clean Energy are among groups that say TVA’s projections are based on more power use than needed because of the path that’s about to be taken. TVA’s decision to finish the Bellefonte nuclear reactor in Hollywood, Ala., 110 miles southeast of Nashville, is based on numbers that underestimate the costs and risks and don’t adequately project the savings possible through energy efficiency and conservation, they say.

However, the larger question of why energy use across the country is declining remains. Certainly the economic downturn accounts for some of this trend, but other factors are at play as well. SACE has long promoted energy efficiency as a tool for reducing the need to build new power plants. These programs and Energy Star rated appliances are making a difference as the article details:

Cavanagh says TVA could have chosen a better path since the 1980s. The Pacific Northwest, which has low rates and low energy use, is often pointed to as a model. “Over the past 30 years, the Northwest was able to knock out about half of its consumption increases with energy efficiency,” Cavanagh said. “Over the next two decades they’re looking to knock out 90 percent of growth with energy efficiency.”

Energy Star rated refrigerators use at least 20 percent less energy than other models.
Energy Star rated refrigerators use at least 20 percent less energy than other models.

According to TVA it will cost an additional $4 billion to $5 billion to complete Bellefonte; SACE and independent experts believe that number could be much higher. A safer bet for TVA would be to invest that $5 billion in energy efficiency programs and renewables, projects that don’t carry the risk or long-term waste storage problems that come with nuclear power. TVA literally cannot afford to absorb significant cost overruns at Bellefonte without exceeding their Congressionally-mandated $30 billion dollar debt limit. Given the current political climate, the federal government’s willingness to raise TVA’s debt limit is far from a sure thing.

The article in the Tennessean also takes note of the financial and safety risks associated with attempting to complete Bellefonte:

“‘If you really want to look at all the different scenarios, you not only look at rates, but you look at risks,’ said Stephen Smith, executive director of the Southern Alliance for Clean Energy. ‘If a reactor goes haywire or the Nuclear Regulatory Commission does more regulations because of Fukushima — all those things are risk factors that will likely drive the rates up…’”

Guest Blog
My Profile