TVA Ponders Closure of Iconic Coal Units

The Tennessee Valley Authority (TVA) wants public input as it considers closing two of the utility’s historic coal-fired power plants: its Bull Run plant in Tennessee, and the last coal-fired unit at its Paradise plant in Kentucky.

The Bull Run Fossil Plant, near Oak Ridge, has been the only single-generator coal plant in the TVA system. The 881-MW plant opened in 1967. TVA said Bull Run’s heat rate, which is a measure of a plant’s operational efficiency, has ranked as the best of any U.S. power plant 13 times, and it has consistently ranked among the top five U.S. plants in heat rate.

The Paradise Fossil Plant near Drakesboro, Kentucky, opened with two, 704-MW coal-fired units in 1963. Those two units were retired in 2017 (Unit 2 at the plant set a record in 2013 for its continuous operation) when TVA began operating a new natural gas-fired plant at the site along the Green River, a facility honored as a POWER Top Plant in 2017.

Unit 3, with generation capacity of 1,150 MW, came online in 1970. It added a scrubber in 2006 to help reduce emissions of sulfur dioxide. The scrubber at that time was the largest single scrubber module in the U.S. The unit also has a selective catalytic reduction system to reduce emissions of nitrogen oxide.

TVA in a news release on November 19 said it “announced a review of generating assets, focusing on Bull Run and Paradise, in August, based on the future cost of maintenance and environmental compliance, and other factors. TVA must continually evaluate its fleet to ensure flexibility and financial responsibility.”

TVA said it has prepared separate environmental assessments (EAs), required under the National Environmental Policy Act, for Bull Run and Paradise as it studies the socioeconomic and environmental impacts of retiring each site. The utility said the assessments will be part of the information presented to the utility’s board early next year prior to decisions about the future of the units.

The draft environmental assessments are available for public review through December 19.

Gathering Information

Scott Brooks, a TVA spokesperson, in an email to POWER on November 20 wrote, “The draft EAs are part of a group of studies intended to provide the TVA Board of Directors information they will consider when determining the future status of the plants. The individual EAs for each plant focus on potential environmental and socioeconomic impacts of the proposed actions and evaluate the potential retirement of BRF [Bull Run] and PAF [Paradise] considering load outlook, performance and overall economic benefits and costs. The EAs reference several factors including TVA’s current portfolio needs, deterioration in material condition, reliability challenges and resulting need for large investments.”

Brooks said TVA President and CEO Bill Johnson asked the utility’s board at its August meeting “for concurrence on a plan to take a closer look at some of the plants in TVA’s fleet.” Johnson at the August meeting told the board: “We are projecting a slight decline in our power load next year and I believe this is a permanent trend. With the decline in that demand, and the change in the shape of our demand [with bigger peaks but less constant demand for power], we find ourselves a little bit long in our generation and we have a mismatch between generating assets and power load shape.”

Johnson on November 13 said will retire from his position early next year; he turns 65 in January. Johnson has led TVA the past six years. He said he will step down once the utility’s board finds a successor. Board chairman Richard Howorth last week said the board expects to name a successor “in three to four months.”

Analyzing Assets

Brooks said the EAs alone would not drive the decision on the future of the coal units.

Brooks said the Bull Run plant, and Unit 3 at Paradise, “are among the first assets being analyzed through a group of studies that include transmission resiliency, fuel security, financial considerations and the National Environmental Policy Act Environmental Assessment.” He said that “Coal is still an important part of the TVA portfolio, and these reviews are not intended to change that direction.”

TVA a decade ago generated more than half its electricity from coal, but has significantly increased its use of gas-fired and renewable generation over the past several years. Johnson last week said TVA has reduced its carbon emissions by 50% since 2005 and has plans to spend about $8 billion over the next 20 years on renewable power. As Johnson announced his plans to retire, he said: “It turns out that reducing carbon emissions makes good economic and environmental sense.”

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).