TVA to replace its biggest coal plant with natural gas generation

Jan. 10—Despite opposition from environmental groups and concerns voiced by the Environmental Protection Agency, the nation's biggest government utility plans to build more natural gas generation to replace the power lost from shutting down its biggest coal-fired plant.

The Tennessee Valley Authority announced Tuesday that it will begin work on building a combined-cycle natural gas plant to replace one of the two coal-fired generators at the Cumberland Fossil Plant in Middle Tennessee by 2026. TVA plans to shut down the other unit at Cumberland by 2028 but has not yet decided how it will replace that power.

TVA President Jeff Lyash said the proposed 1,450-megawatt gas plant should reduce carbon emissions at the Cumberland plant by about 60% compared with the existing coal unit while providing a more flexible and reliable source of power to mesh with growing intermittent solar and wind generation.

The combined-cycle natural gas plant is both the least costly and the best overall option for the future, Lyash said in a telephone interview Tuesday.

"Our (electricity) load continues to grow in the Tennessee Valley," he said, "and we're eager to develop a diverse portfolio of generation from renewables, nuclear, gas and other generation to assure we have clean, reliable and low-cost power."

But environmental critics question why the federal utility is continuing to invest in fossil fuels at one of its biggest power plants when President Joe Biden has set a goal of achieving a carbon-free electricity grid by 2035.

"Swapping that plant for another fossil fuel asset misses the opportunities to diversify TVA's portfolio by investing in clean, renewable power, to take full advantage of programs and incentives that make those assets cheaper than fossil fuel alternatives, and to shield ratepayers from the price volatility that accompanies gas," a coalition of seven leading environmental groups said in a 30-page letter objecting to TVA's decision.

A generation ago, TVA generated most of its power from its 59 coal-fired generators, but the share of electricity produced from coal shrank last year to only 19% of TVA's power portfolio. Natural gas now generates about a fourth of all TVA power, and Lyash said gas generation could grow to about a third of TVA's power capacity in the near future to act as a "bridge fuel" until renewables, storage, nuclear hydrogen and other carbon-free sources can meet all of TVA's growing power demands by 2050 when TVA hopes to be carbon free.

The Cumberland Fossil Plant, which first began generating power in 1968, is TVA's biggest coal plant. But last month, high winds damaged plant equipment at Cumberand, and the plant couldn't operate during the arctic blast that pushed up power demand to an all-time December peak. The shutdown of the Cumberland coal plant and other power delivery problems from older gas plants during the cold snap forced TVA to impose rolling blackouts across its seven-state region for the first time in its history over two days before Christmas.

"We saw TVA's over reliance on fossil fuels fail spectacularly in the face of what are becoming increasingly common severe weather events," Amanda Garcia, managing attorney of the Tennessee office of the Southern Environmental Law Center, said in a telephone interview Tuesday. "Unfortunately, I think TVA's ratepayers are the ones that are going to be paying the price both in terms of their electricity bills and their lifestyle and comfort."

TVA has been studying options for the two-unit Cumberland Fossil Plant since 2019 as the 55-year-old coal plant has required additional capital investments to keep operating and to meet stricter air quality regulations. Over the past three years, TVA considered an array of options, from keeping the coal plant to replacing the power with other sources such as solar, wind, battery storage and natural gas.

But in a letter last month to TVA, the U.S. Environmental Protection Agency said TVA "did not accept many of EPA's recommendations related to climate change" and said the federal utility should have done "a more robust evaluation of renewable power sources."

Natural gas and the methane it releases into the atmosphere from pipelines and gas generation are major sources of greenhouse gases linked with global warming, Garcia said,

Garcia said TVA should have revisited the options of energy efficiency and renewables after the Inflation Reduction Act was adopted last year, providing more incentives for solar, wind and energy efficiency measures.

"The world has changed since 2019 ... and TVA has a new board that should reconsider these options," Garcia said.

But Lyash said with growing power demand and an aging fleet of coal plants, TVA needs to move ahead with plans for the future. The federal utility is planning to add 10,000 megawatts of new solar power generation and has also requested proposals from other power producers for another 5,000 of purchased renewables and nuclear power.

TVA is still evaluating those proposals, but Lyash said TVA studies and data indicate that building the combined-cycle natural gas plant offers a lifetime cost advantage of $1.8 billion over any other alternative and gas plants are among the best sources for being turned on and off to meet varying power loads.

"Replacing retired generation with a natural gas plant is the best overall solution because it's the only mature technology available today that can provide firm, dispatchable power by 2026 when the first Cumberland unit retires — dispatchable meaning TVA can turn it off and on as the system requires the power," Lyash said. "In addition, natural gas supports continued reduction of carbon emissions by enabling the integration of renewables, such as solar and battery storage, all while maintaining system reliability."

Lyash said TVA will begin in the next few months to prepare the Cumberland site for a gas plant and begin making plans to solicit proposals for the new combined cycle gas plant.

Before the new plant may be installed at Cumberland, however, regulators must still approve a 32-mile natural gas pipeline to the site proposed by Kinder Morgan. The Federal Energy Regulatory Commission is still considering the pipeline plan, which local environmental groups have objected to over fears of gas or methane leaks.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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