The TVA’s New Coal Strategy: Culture Change Or Simple Economics?
For more than 30 years, Stephen Smith has been a thorn firmly planted into the side of the Tennessee Valley Authority. The Executive Director of the Southern Alliance for Clean Energy has never been shy about holding the giant utility accountable, especially when it comes to the TVA’s dismal record on air quality.
That’s why it’s strange to hear him using words like “historic” and “extraordinary” when describing the TVA’s recent move away from carbon dioxide-emitting coal as its main fuel source for providing electricity. “These changes are phenomenally important,” Smith says, “because TVA is now moving into really what is a leadership position on carbon.”
In April 2011, the TVA announced plans to shut down 18 coal-fired units at three of its plants. And last November, TVA CEO Bill Johnson laid out a vision for future production that includes a precipitous drop in coal reliance and a shift upward in nuclear power, natural gas and renewable sources like wind and solar. By 2020, Johnson says he hopes the TVA can reduce its coal consumption to 20 percent, down from its current level of 43 percent.
“The exciting part,” says Smith, “is that TVA is open to the idea of 20 percent of its portfolio being met by energy efficiency and renewable energy, which is a dramatic jump from where they’ve been historically.”
In 2013, about 12% of the TVA’s fuel came from renewable sources, most of it from the agency’s hydro-electric dams. However, that percentage is a bit higher than previous years because of an abundance of rain in 2013.
Smith suggests the movement away from coal is due in part to a cultural change going on at the TVA. He believes the 2008 coal ash spill at the Kingston Fossil Plant represented a seminal moment in that transition. “If there’s a silver lining in (the coal ash spill), it’s that TVA took a hard look at this particular fuel source and this technology and began to rethink its relationship with coal.”
But Smith says it’s also a matter of economics. The emergence of the fracking process to extract natural gas from the ground has given TVA a cheaper alternative to coal. Wind and solar energy have also become less expensive and more accessible. And new EPA air quality standards being released next week could make the operation of coal plants even more expensive.
Jonathan Levenshus of the Sierra Club’s Beyond Coal Campaign says the cost of burning and managing coal is becoming a financial liability for the TVA. “Senior management at TVA recognizes the energy paradigm in the United States is shifting and instead of playing catch-up, they’re trying to lead that change,” Levenshus says. “TVA was driving around in an 18-wheeler and they realized they needed a pick-up truck.”
The TVA's Vice President of Stakeholder Relations Joe Hoagland says the decision to shift toward alternative forms of energy has to be a financial one, because that's what TVA customers demand. “They’ve been very clear that they want high reliable power and they want cost-effective power,” Hoagland says, “so when we sit down and we look at making a decision for how we are going to continue to produce power effectively and into the future, those are the first two things we look at.”
At the same time, Hoagland says electrical customers are beginning to ask for greener options. However, he hesitates to suggest a culture change is sweeping through the TVA. “I’m not sure you can change culture,” says Hoagland, who has worked at the TVA for 22 years, “but we’re listening more to our customers, we’re listening more to our stakeholders, we’re trying to understand their needs better and be more responsive to those needs.”
Environmentalists like Stephen Smith and Jonathan Levenshus say they’re still not crazy about the TVA investing more in nuclear power and natural gas. But Levenshus says the TVA’s willingness to reduce its carbon emissions and embrace renewable forms of energy is encouraging. “If TVA continues to get to a place of understanding that it has to be a part of this new energy paradigm, that it can scale up energy efficiency, wind and solar power, that it won’t just be a new energy utility, it will be the energy utility of the future.”
For Smith, the fact that the TVA has already reduced its carbon dioxide emissions more than 30 percent since 2005 represents a palpable change. “The fact that I can get up in my home in West Knoxville and see the Smoky Mountains more days in 2014 than I could in 2004 and much more than I could in 1994,” he says, “that makes me happy.”