TVA to Shutter 16% of Coal-Fired Capacity by 2017

The Tennessee Valley Authority (TVA) on Thursday said it would retire 18 older coal-fired units at three power plants starting next year as part of plans to idle or retire 2,700 MW of its 17,000 MW of coal-fired capacity by the end of 2017. The federally owned utility plans to replace the capacity with nuclear—proceeding with plans for Watts Bar Unit 2 and Bellefonte—as well as renewables, natural gas, and energy efficiency.

In documents released on Thursday, TVA said that three “realities” had caused the utility to evaluate the future of its older coal-fired units. First, its coal-fired fleet was aging and many units would require “extensive maintenance” to achieve reliable performance. Second, increasingly stringent regulations on air quality—which TVA expected would be enforced within four to five years—had forced it to “carefully consider where it is most practical to invest in expensive scrubbers and other emission controls.” And third, the utility would bring newer—and “cleaner”— generating facilities online over the next two years, including the Watts Bar Nuclear Plant Unit 2 and the combined-cycle plant at John Sevier.

The announced retirements include about 1,000 MW of coal-fired capacity that had previously been slated for idling. TVA currently operates 59 coal-fired units of which 21 have advanced controls to reduce nitrogen oxides and 17 also have scrubbers to reduce sulfur dioxide

The retirements are expected to help TVA further reduce emissions of sulfur dioxide by 97% from 1977 levels and help reduce emissions of nitrogen oxides by 95% from 1995 levels. Previous TVA pollution-control programs already have reduced sulfur dioxide emissions by more than 90% and nitrogen oxide emissions by 86%, the utility said.

TVA said the plans aligned with recommendations in the utility’s Integrated Resource Plan and a vision for cleaner air. The Integrated Resource Plan, which was formally presented to the board of directors at a meeting in Chattanooga, Tenn., on Thursday, was developed over two years, with extensive business, technical and economic analysis and public input.” In a news release, it said it wants to be “one of the nation’s leading providers of low-cost and cleaner energy by 2020.”

 “Diversity proved to be the most prudent course in meeting future energy needs in all the various future scenarios we studied,” President and CEO Tom Kilgore told the board. “A variety of electricity sources, rather than heavy reliance on any single source, reduces long-term risks and helps keep costs steady and predictable.”

Because coal constitutes more than half of TVA’s current generation mix, Kilgore said replacing older and less-efficient coal units with cleaner sources of power follows the Integrated Resource Plan’s advice to further diversify the utility’s future power portfolio. “In the longer term, these actions reinforce our vision to keep bills low, keep our service reliability high and further improve air quality as we modernize the TVA power system,” he said.

The coal-unit retirements announced Thursday include two at John Sevier Fossil Plant in East Tennessee, six at Widows Creek Fossil Plant in northern Alabama and all 10 units at Johnsonville Fossil Plant in Middle Tennessee. TVA announced in 2010 that it would idle units at John Sevier and Widows Creek, as well as one of 10 units at Shawnee Fossil Plant near Paducah, Ky.

“These units are among the first built by TVA and have served us well over the years. But as times change, TVA must adapt to meet future challenges,” Kilgore said, adding that installing the expensive emission-control equipment that new regulations would require at the smaller, older plants would not be economical. He explained that other coal-fired units without advanced emission controls also are under consideration for idling and possible retirement or for additional emission-control equipment.

TVA to Strike Deals with EPA, States to Settle Clean Air Act Issues

The board on Thursday also allowed Kilgore to settle Clean Air Act–related legal and regulatory challenges with the U.S. Environmental Protection Agency (EPA), the states of Alabama, Kentucky, Tennessee, and North Carolina, and three environmental advocacy groups.

The agreements that settle the alleged New Source Review violations with the EPA call for TVA to pay a $10 million civil penalty as well as provide $350 million to fund a number of environmental improvement projects over the next five years. Improvements include efficiency upgrades to the electric grid; support for energy efficiency enhancements in homes and businesses; assistance to the National Park Service and U.S. Forest Service in restoring and improving lands, watersheds and forests; and aiding reduction of greenhouse gas emissions through efforts such as waste-heat recovery, solar and landfill-gas energy installations.

“The agreements absolve TVA from liability under New Source Review requirements for past work at its plants and provide assurance that TVA can operate its plants in the future,” the utility said. TVA also said settling the case would “end costly legal proceedings and reduce the risks of much higher costs in the future related to past and potential disputes over regulatory compliance.”

The utility has invested more than $5.3 billion since 1977 to reduce coal-fired power plant emissions. With the EPA agreements and its own long-range plans, TVA estimates that it will invest an additional $3 billion to $5 billion in the next 10 years on new emission-control equipment and upgrades of existing equipment at its coal plants.

TVA: Watts Bar, Bellefonte Proceeding; Nuclear Safety a “Top Priority”

On Thursday, TVA Chief Operating Officer Bill McCollum told the board in a briefing on the utility’s nuclear operations and on the potential implications of the Japanese nuclear crisis that designing and operating existing and future plants and its nuclear program would incorporate lessons from Japan.

TVA said the previously approved construction at $2.5 billion Watts Bar Nuclear Plant Unit 2 in East Tennessee and engineering work at the Bellefonte site in northern Alabama are “proceeding on schedule.” Watts Bar 2 is expected to come online by 2013.

McCollum also said that TVA staff will ask the board to make a decision on whether to move ahead with construction of a nuclear unit at the Bellefonte site “after TVA has a clear understanding of the Japanese nuclear situation and any potential impact on the project.”

TVA said that all six of its nuclear reactors were in areas not prone to extremely large earthquakes. It was, however, looking beyond the design basis by evaluating potential vulnerabilities from a chain of events, “such as damage from a tornado or earthquake combined with flooding from a dam failure, and emergencies involving more than one reactor at a site.”

Short-term and longer-term recommendations being considered included moving additional nuclear fuel into dry cask storage; hardening cooling-water supply pipes to spent fuel pools; adding a fifth diesel generator for backup power at Sequoyah and Watts Bar; and hardening electrical switchyards to better withstand seismic impacts.

Sources: POWERnews, TVA