TVA Integrated Resource Plan Shows Clean Energy Is Cost Competitive With Gas and Coal

Knoxville, TN—Today the Tennessee Valley Authority (TVA) released its final 2015 Integrated Resource Plan (IRP), a long-range plan that will guide TVA in identifying resources to meet the energy needs of the Tennessee Valley region over the next 20 years. TVA’s IRP confirms that energy efficiency, solar, and wind power are least-cost options on par with traditional energy sources. The IRP shows no significant cost difference between focused investment in clean energy resources in the first 10 years of the IRP planning period and investment in traditional fossil resources. Ultimately, this difference in cost is slight enough that it could easily be eliminated by unanticipated spikes in fossil fuel costs.

Despite clean energy’s cost competitiveness and the health, economic and environmental benefits that clean energy resources offer, the federal utility isn’t planning to emphasize investments in these clean energy resources in the short term.  Instead, TVA’s IRP shows a primary focus on more risky natural gas to meet the modest projected increases in demand.

TVA has stated, however, that it will continue to evaluate energy efficiency, solar, and wind power and acknowledges that timing for acquiring renewables and energy efficiency may change. That change may have already happened: TVA’s recent renewable energy deals highlight both the cost-competitiveness of renewables and their economic development potential in the Valley.  

Earlier this year, TVA entered into an agreement to purchase electricity at 6 cents per KWh from an 80 MW solar farm in Lauderdale County, Alabama.  The solar farm is projected to employ 437 people over the life of the project and provide the county with a $20 million revenue increase.  And just three weeks ago, TVA announced a deal with Google to develop a 100% renewable-powered data center in Jackson County, Alabama, on the site of the soon-to-be retired Widow’s Creek coal plant.  That project, valued at $600 million, will bring 75-100 jobs to Jackson County. 

Likewise, increased investments in energy efficiency would provide citizens of the Valley with the choice to use energy smarter, lowering electric bills and fostering local economic development opportunities. Other utilities consistently choose energy efficiency as a lower-cost alternative to adding new generation capacity. Yet last year, TVA cut its energy efficiency budget by 25%, leading to net energy savings in 2014 that were well below energy savings achievements of regional leaders in Arkansas, Kentucky and the Carolinas.

“The IRP affirms that energy efficiency makes economic sense for TVA. With strong direction from the Board to focus on quickly developing and ramping up programs, we are optimistic that TVA can meet and exceed its energy efficiency targets in the next five years, helping families save money as well as reducing its own costs, and benefiting all the ratepayers in the Valley,” said Amanda Garcia, Staff Attorney at Southern Environmental Law Center. 

“TVA has made important progress in recognizing the true economic benefits of clean energy resources,” said Dr. Stephen Smith, Executive Director of the Southern Alliance for Clean Energy. “Although we are disappointed that the 2015 IRP does not recommend more investments in low-cost, renewable energy and energy efficiency in the short-term, we are thankful that TVA will continue to update its cost and performance assumptions for clean energy throughout the IRP planning period.”

“Our future does not lie in old, dirty coal or more gas plants, but in making our homes more efficient, lowering electricity bills, and creating a wave of innovation in clean energy industries,” said Jonathan Levenshus, Senior Campaign Representative for Sierra Club's Beyond Coal Campaign. “TVA is simply missing an opportunity to offer its customers better efficiency and renewable options, which are cheaper, more sustainable and can create jobs right here in the Tennessee Valley. I’m hopeful the board will find ways to power our regional economy with affordable, reliable clean energy options in the future, especially over the next few years.”

The TVA Board of Directors will vote on whether or not to approve the staff’s IRP recommendation at the Aug. 21 board meeting in Knoxville.