TVA releases draft resource plan outlining increased nuclear, less coal

Source: Tennessee Valley Authority

The Tennessee Valley Authority (NYSE: TVA) has issued a draft of its Integrated Resource Plan, a comprehensive study that will help guide efforts to meet regional electricity needs over the next 20 years.

Titled "TVA's Environmental and Energy Future," the study analyzes potential combinations of economic and regulatory trends in the coming years and provides recommendations for addressing them. The plan's main purpose is to help TVA meet the region's future energy challenges in ways that maintain reliable power supplies, competitive prices, improved environmental performance and continued financial strength. 

TVA's yearlong analysis included input from numerous stakeholders including state agencies, power distributors, environmental groups, universities and the general public. The study yielded several likely probabilities for TVA, including: 

-- Nuclear expansion will continue, with the potential to eventually
overtake coal as the leading electricity source; 

-- TVA may idle a portion of its coal generation fleet, as coal units
become older and less economical under tighter regulations; 

-- Energy efficiency and demand response, as well as renewable
generation, will play an increasing role in future resource options; 

-- Natural gas capacity additions will be a viable resource option and a
key source of generation flexibility for TVA; 

-- The intensity of TVA's carbon dioxide, nitrogen oxide, sulfur dioxide
and mercury emissions will continue to decrease.

Using the study's methodology, TVA examined seven possible long-term scenarios for the next two decades, based on factors such as economic growth, inflation, fuel prices and the regulatory environment. They are: 

-- Dramatic economic recovery
-- Environmental focus becoming a greater national priority
-- Prolonged economic malaise
-- Introduction of game-changing energy-related technology
-- Greater U.S. energy independence
-- Carbon regulation creating an economic downturn
-- Current approach/baseline

The Integrated Resource Plan process also developed various possible strategies that TVA might use to meet the region's future power needs. Each strategy was analyzed to create 20-year power generation portfolios -- or combinations of electricity resources -- for TVA to consider. Each portfolio was rated using factors such as cost, risk and environmental impact. 

The draft Integrated Resource Plan suggests that a diverse portfolio -- including more nuclear, less coal, more energy efficiency and demand response programs and more renewable generation -- rank higher than strategies that do not establish the same level of financial and operational flexibility. 

"TVA's Integrated Resource Plan process is a rigorous one that is supportive of TVA's renewed vision and will guide the corporation as it leads the region and the nation toward a cleaner and more secure energy future, relying more on nuclear power and energy efficiency and less on coal," said Van Wardlaw, TVA's executive vice president of Enterprise Relations, who is leading the Integrated Resource Plan effort. 

The TVA Board of Directors has adopted a renewed vision for the federal corporation to be one of the nation's leading providers of cleaner low-cost energy by 2020, increasing its use of nuclear power and energy efficiency and improving its environmental performance. 

TVA completed its previous Integrated Resource Plan, titled "Energy Vision 2020," in 1995. The new plan will update the earlier study, based upon changes in regulations and legislation, the marketplace for electric generating utilities and customer demand. 

Using the Integrated Resource Plan's findings, the TVA Board of Directors in the spring of 2011 is expected to select the planning strategy that best meets TVA's strategic goals. 

TVA will hold four public meetings to receive comments on the draft plan. Meetings are scheduled in Bowling Green, Ky., on Oct. 5; in Olive Branch, Miss., on Oct. 7; in Knoxville, Tenn., on Oct. 13; and in Huntsville, Ala., on Oct 14. The meetings also will be available by webinar.

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