Maggie Shober | January 21, 2023
| Fossil Gasoline, Tennessee
On Friday, January 20, 2023, the Tennessee Valley Authority’s CEO, Jeff Lyash revealed a Report of Resolution within the Federal Register: it plans to interchange the retiring Cumberland coal plant with a brand new gasoline energy plant and pipeline in Center Tennessee.
Whereas this feels very remaining, let me be clear, this isn’t the ultimate determination on the proposed new gasoline plant at Cumberland.
Table of Contents
This isn’t over
In 2021, TVA introduced a call to retire the Cumberland and Kingston coal vegetation within the 2026-2033 timeframe. The explanations for retirement had been primarily excessive prices to proceed to function the vegetation and the degraded reliability of the vegetation themselves. As a result of TVA is a federal entity, it should undergo an environmental evaluation of main selections, as laid out by the Nationwide Environmental Coverage Act (NEPA). Which means a scoping interval, a draft environmental influence assertion (EIS), and a remaining EIS should all be revealed earlier than a call might be made.
So for Cumberland, this Report of Resolution brings us to the tip of TVA’s NEPA course of on the ability plant. Nonetheless, that energy plant can solely function if a gasoline pipeline is constructed to carry gasoline to the Cumberland web site. That pipeline, referred to as the Cumberland Challenge – proposed by Kinder Morgan – should get approval from the Federal Power Regulatory Fee (FERC). That approval course of is at the moment ongoing underneath FERC docket CP22-493. FERC will conduct its personal environmental evaluation and a call on the gasoline plant will not be anticipated till at the very least September 2023. We at SACE in addition to different environmental and clear power organizations have intervened within the course of to cease the pipeline and Cumberland gasoline plant.
Moreover, the present TVA Board of Administrators has not weighed in on this determination. At its November 2021 assembly, the TVA Board voted to delegate the ultimate determination on methods to substitute each Cumberland and Kingston to TVA’s unelected CEO, Jeff Lyash. However solely three of the 9 present members of the Board had been on the Board at the moment. Many, many issues have modified within the electrical energy sector since November 2021 and people adjustments warrant this determination is price one other look. In reality, the Southern Environmental Regulation Middle is looking on the TVA Board to place a pause on the venture whereas the group takes a have a look at all of the components concerned.
Inflation Discount Act
One main change within the electrical energy sector because the TVA Board delegated the Cumberland determination authority to the CEO is the passage of the Inflation Discount Act (IRA). The IRA is especially impactful to TVA and its prospects as a result of it permits tax-exempt entities, like TVA, to make the most of monetary incentives that decrease the price of clear power assets like photo voltaic, storage, wind, and power effectivity.
Whereas the laws handed in August of 2022 and TVA launched its remaining EIS in late November, that’s nonetheless not sufficient time for TVA to actually consider the impacts of all that’s within the IRA on this determination. In reality, we’re nonetheless ready on steerage from federal businesses just like the IRS and the Division of Power on sections of the IRA that would considerably decrease the price of changing Cumberland with a mix of fresh power assets. As only one instance, the IRS is predicted to launch steerage quickly on how greater monetary incentives may very well be achieved if initiatives are positioned in or close to an power neighborhood, outlined as elements of the nation that fueled progress via coal mines or coal energy vegetation.
TVA has a plethora of coal communities that would serve to profit from the financial growth a clear power venture would carry. It’s definitely price taking a bit additional time to do due diligence earlier than deciding on a technology venture that can have a a lot smaller financial growth footprint than clear power and can proceed to pollute a neighborhood that has already been burdened with air pollution from the Cumberland coal plant.
Moreover, since value is the principle motive TVA claims it’s going with gasoline over clear power resembling photo voltaic, storage, and power effectivity, and the IRA adjustments the prices of fresh so wholly, it is just logical that the Board rethink its pre-approval of no matter Jeff Lyash determined earlier than this impactful laws was handed.
December 2022 Blackouts
The IRA by itself is sufficient of a motive for reconsideration, however we got one other obvious motive in late December when excessive climate led TVA to impose rolling blackouts on its prospects for on two consecutive days. From the little we find out about the reason for the blackouts, it’s clear a principal driver of them had been failures at a number of fossil energy vegetation, together with TVA’s John Sevier gasoline mixed cycle. This plant is smaller than the one TVA has proposed at Cumberland, however in any other case very comparable, and solely ten years previous. In reality, only a yr in the past TVA had the John Sevier plant on the longest outage up to now to “be certain that it gives dependable energy this winter and for years to come back,” as a part of a “chilly climate reliability dedication.” If another excuse TVA is selecting gasoline over clear assets is reliability, and but an identical plant TVA already has in service can’t be relied upon when it’s wanted, that argument falls aside in a short time.
If TVA had sturdy power effectivity and demand response applications – notably serving to weatherize houses and putting in environment friendly HVAC programs – in addition to extra photo voltaic and storage on its grid, it could have been in a position to hold the lights on via Christmas Eve 2022.
We proceed to attempt for clear power within the Tennessee Valley
TVA’s completion of its inner NEPA course of for the Cumberland alternative determination is a blow to the hopes of many {that a} low-cost clear power alternative for Cumberland would come swiftly and continues to be out of step with the acknowledged decarbonization priorities of the Biden Administration. Nonetheless, leverage over whether or not this gasoline plant finally will get constructed nonetheless stays, and we’re in a lot earlier phases within the strategy of how TVA will substitute the Kingston coal plant. As I’ve acknowledged beforehand, the perfect route for deciding these and different main technology retirement and addition selections is thru an Built-in Useful resource Plan (IRP). TVA is required to get Board approval of its subsequent IRP by late 2024, so it should begin that course of quickly. It’s crucial that the IRP consider options to the 2 gasoline vegetation at Cumberland and Kingston.