The Tennessee Valley Authority is in the early stages of preparing its first new integrated resource plan since 2015.
There have been “significant” changes since TVA’s last IRP, such as declining demand and increasing penetration of distributed energy resources, Bill Johnson, the utility’s president and CEO, said Feb. 2 during a telephone conference call to discuss the company’s financial results for the first quarter of its fiscal year, which runs from Oct. 1 to Sept. 30.
“There are a lot of changes that we need to use to update the plan,” Johnson said. “We tend to be in an adequate capacity position of reserve margins, 15%, 16%, 17%, but we think it’s time for us to start refreshing and updating that IRP.”
TVA reported its quarterly results in the wake of hitting an all-time record for 24 hour energy supply of 706 million kWh delivered on Jan. 17. TVA also set three of its top 12 winter peak demand records this January and had six consecutive days of 600-plus GWh delivered.
Despite the boost from the cold weather, the bigger picture is that demand in TVA’s territory has been essentially flat over the past five years, and that trend is expected to continue as technological advances, consumer demand for generation and energy management technologies, and distributed energy increase, the utility said in its quarterly filing with the Securities and Exchange Commission.
In the SEC filing, TVA said it is beginning work on the IRP sooner than expected. The filing said the IRP would provide direction on how to best meet future power demand by identifying the need for generating capacity, determining the best mix of resources, and evaluating the evolving role of distributed energy resources.
TVA said its 2019 IRP would explore various DER scenarios and aim to improve its understanding of the impact and benefit of system flexibility as a way of adapting to the growth of renewable and distributed resources. TVA said that analysis would be used to inform its portfolio mix for the next 20 years.
There have been considerable changes to TVA’s portfolio over the past 10 years. Ten years ago, coal provided 58% of the electricity TVA delivered and gas-fired generation 10%. In fiscal year 2018, coal’s contribution had shrunk to 26% and gas generation had grown to 20% while wind and solar power grew to 3%. By fiscal year 2027, TVA expects coal to provide 22%, gas 19%, wind and solar power 5%, while nuclear power provides 43% of its electricity, up from 40% in FY 2018 and 26% nuclear power in FY 2007.
TVA in 2015 completed construction of the Watts Bar 2 nuclear plant in Spring City, Tenn. In August, TVA won regulatory approval to uprate or increase the capacity of the three reactors at its Browns Ferry nuclear station by 14%. TVA also says work on its 1,100-MW Allen combined-cycle gas plant near Memphis, Tenn., is almost complete.
In December, TVA closed the last of the 10 units at its Johnsonville coal plant. The coal plant at the Allen project will close when the combined-cycle plant comes online, completing the requirements of a 2011 environmental agreement with the Environmental Protection Agency.
In the conference call, Johnson noted that TVA’s capital spending peaked in fiscal year 2015 at $3.4 billion. TVA’s projections call for $2.1 billion of capital expenditures in fiscal years 2018 and 2019, dropping to $1.9 billion in fiscal year 2020.
