TVA decision to downsize Generation Partners defies logic

TVA's decision to downsize its Generation Partners Program defies logic when you consider the agency's goals to provide affordable electricity while stewarding the environment, supporting economic growth and fostering technological innovation

TVA's decision to downsize its Generation Partners Program defies logic when you consider the agency's goals to provide affordable electricity while stewarding the environment, supporting economic growth and fostering technological innovation.

Imagine you were head of an agency charged with providing affordable energy, stewarding the environment and supporting economic development and technological innovation. Now imagine that the agency operated a program that fostered the development of 100% clean and renewable energy from emerging technologies, created local jobs and attracted private investments in local communities, and cost the agency a fraction of one percent of annual expenses. Would you support the significant downsizing of that program on the basis that it was too successful?

Apparently you would if you’re an executive at the Tennessee Valley Authority.

On Tuesday, the Tennessee Valley Authority (TVA) announced that it would be scaling back its Generation Partners Program, cutting the size of eligible systems by 75% and striking a difficult blow to the renewable energy industries that have been one of few bright spots in the region’s economy over the past several years. Systems above the new 50 kilowatt (kW) cap will now be shuffled to TVA’s Standard Offer Program that is poorly designed to encourage development of the Valley’s renewable energy resources.

TVA’s news release claims that the move was made to counteract “unsustainable” growth of the program. Unsustainable to who? Not to the solar companies that have invested capital and hired workers to meet growing demand. Not to the residents and businesses that are installing solar systems to reduce the cost and environmental impact of their energy usage. Not to the Southeastern states that have actively recruited renewable energy industries and benefited from the investments made by these industries. And certainly not to the nine million residents in the Valley that suffer the effects of TVA’s over-reliance on coal or the risk of living near aging nuclear reactors.

What’s more, when looked at in the context of TVA’s statutory mandates to provide electricity at the lowest rates feasible while protecting the environment, promoting economic development and fostering technological innovation, the decision to downsize Generation Partners defies logic.

The cost to keep TVA coal plants running and build new nuclear reactors is what's driving the Valley's electricity rates, not TVA's Generation Partners Program.

The cost to keep TVA coal plants running and build new nuclear reactors is what drives the Valley's electricity rates, not TVA's Generation Partners Program.

Providing electricity at the lowest rates feasible: Let’s get one thing straight: TVA’s decision to scale back the Generation Partners Program is not about rates. Even at the supposedly “unsustainable” rate of growth that the program has experienced in the past year — about 50 MW of new generation — and even setting aside the fact that the program is subsidized by voluntary contributions through TVA’s Green Power Switch Program, the total cost to run this program for the next five years would be about one-tenth of what TVA spends in one year on either operating expenses (not including fuel) or construction expenditures. The cost of keeping TVA’s coal plants running and building TVA’s nuclear reactors is what drives our rates, not the Generation Partners Program.

Also, TVA should recognize what much of the rest of the world already knows: that renewable energy resource are rapidly improving their efficiency and cost-effectiveness. Investing in these resources now ensures lower rates later as wind, solar and biomass continue their current trajectory to becoming our most cost-effective energy option.

Stewarding the environment: The Generation Partners program is one of the most successful renewable energy programs in the Southeast, and has been one of the key drivers in developing the Valley’s renewable energy resources. Developing these resources directly results in less air pollution, less water pollution, less greenhouse gas emissions, less coal ash and less nuclear waste. In addition, these resources do not require massive mining operations to produce fuel or the constant stream of trains, barges and trucks to transport fuel. Plain and simple: the Generation Partners Program helps TVA reduce its environmental impact.

Promote economic development: Clean energy industries, especially the solar industry, have provided one of the few bright spots in the region’s economy over the past several years. On the manufacturing side, companies like Sharp Solar, Hemlock, Whacker-Chemie, AGC Flat Glass, Aerisyn, Suniva and Stion have located, or committed to locate manufacturing facilities in southeastern states, creating thousands of jobs and bringing billions of dollars to our regional economy. What does it say to these companies and other renewable energy companies considering locations in the Southeast that we are downsizing the market for their products?

Tennessee workers installing Tennessee-made solar panels -- an example of the economic opportunities provided by the Southeast's renewable energy industries.

Tennessee workers installing Tennessee-made solar panels -- economic opportunities provided by the Southeast's renewable energy industries.

On the installation side, each megawatt (1,000 kilowatts) of solar generation installed in the region provides almost 40 jobs in local economies (calculated using modeling tools provided by the National Renewable Energy Laboratory), and means millions of dollars invested locally.

This is why the state of Tennessee has made advanced manufacturing and energy technologies a focal point of its economic growth strategy and why states like Mississippi, North Carolina and others are actively recruiting clean energy industries: they offer an immediate economic driver in uncertain times as well as the promise of rapid growth and continuing contribution to regional economies as these markets expand. TVA’s decision to scale back Generation Partners will negatively and directly impact the growth of the region’s renewable energy industries, leading to lost jobs and investment opportunities for Valley residents and businesses.

Fostering technological innovation: If there is one area where TVA should be focusing its technological innovation goals, it’s in the renewable energy industries. Regional leaders in energy-related research and development such as the Electric Power Research Institute (EPRI), Oak Ridge National Laboratory (ORNL) and the Tennessee Solar Institute, not to mention the region’s university systems, are all working to develop ways to make renewable energy more efficient, more reliable and more cost effective. And they’re attracting millions of dollars in investments in the process.

TVA has a critical role to play as the nation’s largest public power provider in supporting these initiatives. The Generation Partners Program provides support for the markets that will deploy emerging technologies and helps attract investments in continued research, development and deployment of new technologies in the future. Scaling back the program means it’s more likely that while the research and development will be done here in the Southeast, the deployment — and therefore the economic and environmental benefits of deployment, will occur elsewhere.

question-markTVA’s decision to scale down the Generation Partners program goes against each of TVA’s statutory mandates. TVA has yet to put forth any coherent strategy or committed investment that will provide for the sustained and orderly development of the Southeast’s renewable energy resources. Citizens, businesses and institutions across the region are working to develop these markets, but it can’t be done without TVA. Given the potential for these resources to provide economic and environmental benefits to Valley communities while providing clean and affordable electricity to TVA’s system, the decision to roll back Generation Partners despite, or even because of, its success defies logic.

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10 Comments

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Considering the high cost and low reliability of “renewable” energy production systems, TVA’s decision makes perfect sense.


Comment by Vic Dura on September 17, 2011 9:14 am


Solar energy is a reliable way to offset peak demand in the region: during peak solar incidence hours. Costs for the technology are on the way down, as the number of systems goes up.


Comment by ERW on September 17, 2011 12:54 pm


If solar is reliable and cheap, then it should not need the TVA to ensure it’s success. A good product will sell and sustain itself. Can we all agree on that?


Comment by ed on September 18, 2011 6:07 am


“The cost to keep TVA coal plants running and build new nuclear reactors is what drives the Valley’s electricity rates, not TVA’s Generation Partners Program.”

When TVA has to buy solar at 21.5 cents per kWh when they could make it themselves at 0.3 cents per kWh nuclear, yes it will effect our rates.

If TVA charged 21.5 cents per kWh for the electricity it sold, it could build a multitude of nuclear reactors and coal plants and wipe out the 25 billion in debt. They would literally be drowning in cash flow and the rate payer would be literally drowning in debt.


Comment by ed on September 18, 2011 6:12 am


You’ve got to be kidding regarding the picture of the cooling and scrubber towers belching white smoke with the dark ominous clouds in the background. Talk about misleading imagery, this is the worst I’ve seen in a long time. What you actually have in this pic are cooling towers belching water vapor. The two scrubber stacks are also belching water vapor and are part of a system that actually cleans the flue gas of SO2 and mercury.

If you can’t make your point without skewing reality, maybe you don’t have a point afterall.


Comment by ed on September 18, 2011 6:21 am


@ed

How exactly does a picture of a coal plant “skew reality”? This blog is not really discussing coal emissions, so while your commentary is likely correct (I’m not familiar with this plant’s specific pollution control systems), your comments are actually off-topic. It is great that you have such a passion for your employer, though.

But it is a bit “misleading” as you put it to suggest that you can build and operate a nuclear power plant for 0.3 cents per kWh. At least I assume you are comparing that to the a purported “21.5 cents per kWh” build and operate cost for solar. Maybe since you are so convinced that we are “misleading” (by posting a picture), you consider it fair game to offer up inaccurate comparisons.


Comment by John D. Wilson on September 19, 2011 12:19 pm


Wow, TVA employees must have a lot of time on their hands for blog comments. Shifting systems larger than 50 kW to the Standard Offer Program is a joke. The Standard Offer Program offers “avoided cost” – type rates (about 5.5 cents / kWh). These are rates that new conventional power plants built by TVA could never meet, so why not provide renewable energy developers a level playing field?


Comment by kevin on September 19, 2011 9:56 pm


@kevin
We’re happy to have TVA employees making comments, although it would be appropriate to ID themselves as such when talking about their employer.

But thanks for the well-informed comments as usual. The “avoided cost” rates only make sense if TVA is planning to never build another power plant. As if.


Comment by John D. Wilson on September 21, 2011 9:42 pm


@ ed

yes, a good product will sell it self. But successful innovations have always needed investment of time and money before they go mainstream.

You seem to have missed the point that the $.21 premium paid for solar is off set by people VOLUNTARILY participating in Green Power Switch. When you look at it that way, TVA is not really investing much in renewables… just pretending to.


Comment by paying attention? on October 12, 2011 7:50 pm


TVA is actually stated that they are comitted to ecnomic development in the Tennesse Valley. However their position on the sloar generation goes against this. Limiting small systems to histirical kw usage on that site will eventually kill TVA’s solar program and jobs in the Tennesse Valley.


Comment by Jeff eastman on September 24, 2012 8:41 pm


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