TVA Cuts Emissions and Costs by Shutting Coal, Adding NatGas Plants

Reuters, June 2, 2017

U.S.-owned power generator Tennessee Valley Authority said on Thursday it expects to continue cutting carbon emissions and reducing energy costs by producing more power with natural gas and nuclear while shutting old coal plants.

"Ten years ago 60 percent of TVA's energy came from coal. Ten years from now coal will be just 15 percent," TVA Chief Executive Bill Johnson said, noting the company has retired more than half its coal plants over the past decade.

That swing from coal to other fuels allowed TVA to cut carbon dioxide emissions by 50 percent below 2005 levels this year. Johnson said the company expects to cut CO2 emission by 60 percent below 2005 levels by 2020 and 70 percent by 2030. Despite efforts by President Donald Trump to sweep away former President Barack Obama's climate change regulations, like the Clean Power Plan, and his decision on Thursday to withdraw from the Paris climate agreement, Johnson said TVA would continue with previously announced plans to shut old coal plants for economic reasons.

"We started down this path before anyone ever heard of the Clean Power Plan or the Paris climate agreement by looking for the cheapest way to serve customers," Johnson said.

"We had a coal fleet with an average age of 60 years. So we had the option to spend $1 billion to renovate an old coal plant or spend that same $1 billion to build a new gas plant," Johnson said, noting the gas plant is more efficient and requires a smaller work force.

TVA's work will be mostly done by the end of 2018 when it completes construction of a near 1,100-megawatt gas plant for about $1 billion at the Allen station in Tennessee, Johnson said. Other than an upgrade to nuclear reactors at Browns Ferry in Alabama, which will add about 450 MW, Johnson said TVA will probably not build another new plant for a decade. He does not expect any U.S. utility to build new reactors after delays and cost overruns at Southern Co's Vogtle in Georgia and Scana Corp's Summer in South Carolina forced nuclear construction firm Westinghouse into bankruptcy.

"You would really have to be brave to try it. We just finished one and I'm not anxious to try it again," Johnson said, referring to the 1,150-MW Unit 2 at TVA's Watts Bar nuclear plant in Tennessee, which entered service in late 2016 at a cost of $4.7 billion.

(Reporting by Scott DiSavino; Editing by Leslie Adler)

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