Due to the perfect storm of stricter environmental regulations, the current state of malaise in the U.S. economy and the drastic reduction in the price of natural gas, we are beginning to see a historic reduction of reliance on coal power by Southeastern utilities. Across our region, utilities are announcing idling or retirement of their older, uncontrolled coal units and embracing futures with less coal and more renewables in their long term generation planning. Today’s blog is the first in a three part series covering our major Southeast utilities’ movement away from coal-fired power.
The Tennessee Valley Authority, Southern Company and Duke have all announced significant coal unit retirements and idling and some, like Georgia Power, are showing a commitment to clean energy by investing in new renewable generation sources. Previous SACE blogs have highlighted some of these coal retirement or idling announcements: TVA Announces Plans to Idle Colbert Coal Plant Units, Duke to Close Buck and Riverbend Plants Ahead of Schedule, Georgia Power Takes Major Step Away From Dirty Coal.
In this Southeast Coal Roundup blog series, we are happy to report that the transition away from coal in the Southeast continues – cleaning up our air, water and atmosphere and leaving room for development of more renewable energy generation resources and more robust implementation of energy efficiency measures. Retiring and removing these old, dirty coal units from service will help to improve Southerners’ way of life, by improving the overall public health and saving ratepayers from bearing the burden of expensive coal plant retrofit investments. So gather round the virtual campfire and listen to the this first tale of TVA’s progression away from coal.
TENNESSEE VALLEY AUTHORITY
The Tennessee Valley Authority provides electricity to approximately 9 million customers in parts of 7 Southeastern states and is the country’s largest public power provider. In 2006, TVA was relying on coal for 64% of its electricity generation (as reported in its 2006 10-K). In it’s June 2013 10-Q filing, TVA reported only a 36% reliance on coal-fired power – a 44% drop!
After undertaking analysis in its most recent Integrated Resource Plan, a process SACE was actively engaged in as part of the IRP Stakeholder Group, TVA agreed to retire all units at its oldest coal plant, the Johnsonville plant (TN), 6 units at its Widows Creek plant (AL), and 2 units at its John Sevier plant (TN), representing 2,728 MW of coal fired power and more than 4.7 million tons of annual carbon dioxide emissions. TVA cemented the promise to retire these plants in a 2011 Consent Decree with the Environmental Protection Agency. This same Consent Decree required TVA to retire, retrofit, or repower with biomass, other coal-fired units in Tennessee, including all 3 units of the Allen plant (990 MW) in Memphis and all 4 units of the Gallatin plant (1255 MW) in Gallatin. Although TVA already approved a $1 billion scrubber upgrade at Gallatin, environmental groups are currently challenging that decision, claiming violations of the National Environmental Policy Act (NEPA).
TVA announced that it will idle 4 units at its Colbert plant (800 MW) in northwestern Alabama starting in June 2016 and 1 unit starting in October 2013. The Colbert plant has historical issues of coal ash contamination, leeching toxic metals into the surrounding environment – so the sooner the plant stops burning coal and producing tons of toxic coal ash, the better. Although TVA has installed controls for NOx on Colbert Unit 5, they would still need to install a scrubber for SO2 controls, remove from service or repower Unit 5 with biomass by Dec. 31, 2015 under the terms of the 2011 Consent Decree. Instead, TVA has decided to idle Colbert Unit 5 on October 1, 2013 and remove that unit from service by December 31, 2013 (as laid out in its latest SEC filing). In the end, TVA’s move away from coal in Alabama gives Alabamians a reason to breathe a little easier and will avoid more than 9.6 million tons of CO2 emissions annually.
Most recently, TVA released an Environmental Assessment, required under the National Environmental Policy Act, for its Paradise plant (KY) analyzing possible environmental impacts of either a retrofit for Units 1 and 2 (1408 MW) OR for the retirement of those units by replacing generation with a new natural gas plant. TVA installed scrubbers at all 3 units at Paradise and even upgraded the performance of the scrubbers on Units 1 and 2 in 2012. The fact that TVA invested heavily in Paradise and is still considering retiring Units 1 and 2 is a prime example of just how uneconomical coal plants are becoming. SACE will work with partner groups to advocate for the retirement of Units 1 and 2 at Paradise.
The future of TVA’s Shawnee plant, also located in Kentucky, remains uncertain. The USEC gaseous diffusion plant, TVA’s largest customer and the consumer of almost all of Shawnee’s output, ended its longterm contract with TVA at the end of May 2013. Unit 10 at the plant has been idled since 2010 and TVA is currently considering whether to convert this unit to burn biomass, most likely in the form of wood waste. Units 1 and 4 at Shawnee are covered under the 2011 Consent Decree and must either retire, retrofit or repower to biomass by Dec. 31, 2013. We remain hopeful that TVA will announce full retirement of all 10 units (1750 MW) at Shawnee in its next IRP.
Additionally, TVA’s Bull Run plant (950 MW) has been ramping down generation, despite being one of TVA’s more modern, upgraded plants. TVA operated Bull Run only about 30% of the year in 2012, likely due to the increase in Central Appalachian coal prices.
In part due to SACE efforts, TVA accelerated the timeline for its next IRP, with scoping to begin in the fall of 2013. In the last IRP process, SACE pushed TVA to model up to a 50% reduction in its future coal fleet. We are hopeful that our involvement in the next IRP process will result in an even greater reduction in the amount of power TVA generates from burning dirty coal and will move the customers of TVA into a clean energy future.