TVA’s Integrated Resource Plan – What it Means

Recently the Tennessee Valley Authority (TVA) Board of Directors approved an updated Integrated Resource Plan (IRP). That sounds great! But what does it really mean?

What is an Integrated Resource Plan (IRP)?

Most simply, an IRP is a common planning tool in the electricity sector. This planning tool helps utilities look into the future to weigh a variety of different possible scenarios and strategies. Utilities do this in order to determine pathways in which they can meet their goal of providing electricity to their customers. Scenarios are things that are outside of the utility’s control like general economic conditions such as a recession. Strategies are inside the utility’s control and provide ways the utility can meet its goals given external scenarios.

Goals will vary from utility to utility but most have a few in common. They are:

  • Providing electricity to its customers at the lowest cost possible
  • Maintaining or improving reliability of the electric system

Some utilities also have environmental goals such as an emissions target.

Why have an IRP?

The world changes, and it changes fast. In TVA’s case, they produced the most recent IRP sooner than they originally anticipated. They did this because the world, or the external scenarios, changed significantly since the last time the IRP was completed.

We’ve all seen what these are in our every day lives. Solar and wind prices are dropping at an extremely fast pace. The advent of fracking is driving down the cost of natural gas. Policy changes at state and federal levels have also changed with the Clean Power Plan and others. The factors significantly change how utilities can meet their goals, many of which they may not have foreseen.

What does TVA’s new Integrated Resource Plan say?

Good question! There isn’t a true single answer for this question. The reason is, by the nature of the document, it says a whole lot of things are possible. For instance, if the United States goes into a recession TVA must make significantly different choices than if we experience sustained economic growth.

However there ARE some generalizations that can be drawn from the document. By looking across all the scenarios and strategies you can see some patterns emerge. These are:

  1. Increased use of natural gas
  2. Decreased use of coal
  3. Use of energy efficiency as a generation resource
    1. Note: There are two ways to meet electricity demand. Traditionally we build power plants to supply whatever people need. However, saving electricity acts just like building a power plant. Studies have shown that energy efficiency is the cheapest source of electricity.
  4. Increased use of solar
  5. Increased use of wind
  6. No additional “base load” power needed
  7. Increased diversity of electricity sources

The scenario and the strategy determines exactly how much of the above you might expect to see. However these generalizations hold true.

Of course the devil is in the details as they say. For instance the use of solar varies widely from scenario to scenario.

The IRP was approved. What happens next?

You ask really good questions! Now that the IRP is approved by the Board of Directors it serves as the official plan of TVA to chart its electricity future to 2033. However the IRP is just a plan. It isn’t a document that says anyone has to do anything. After all the world changes fast. TVA itself has recommended an update to this plan in no later than 5 years from now.

Think of the IRP as merely a guide to help frame electricity decisions as time goes on. Things will change but the collective decisions made by TVA and its board should reflect the overall direction of this document.

Lastly, we must note two things. First, TVA should be commended for an extremely open public engagement process when they were preparing the IRP. They listened to regular folks, businesses, environmental groups, industry groups, local power companies and more. Second, you too can take part in this process to make your voice heard. Next time around, make sure you are engaged throughout the process to help TVA be the TVA you wish to see!

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Clean Power Plan Could Create Boom in Tenn. Valley Tech Industry

TENNESSEE VALLEY (WAFF) – In the past several years, utility companies have started to move away from coal, opting for cheaper natural gas.

On Monday, President Obama’s Clean Power Plan highlighted the government’s commitment to renewable energy, and showed power companies that they will profit from their investments.

Daniel Tait, with Energy Alabama says there’s still a lot of unknowns surrounding President Obama’s plan, like, what will this mean for your electric bill?

“Until we really learn about what the state of Alabama will be able to do at the state level we don’t necessarily know a whole lot just yet for local consumers or local residents.”

However, he sees the plan as an opportunity for growth in the tech industry in the Valley.

“If we’re looking at technological development in these industries, it could be a huge boom for our area to really try and take advantage of that,” said Tait.

WAFF-TV: News, Weather and Sports for Huntsville, AL

To read the full article, please visit WAFF.com

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SB220 Passed! – What it Means

Alabama Senate Bill 220 passed the House and Senate on June 4th, 2015 and became law when Gov. Robert Bentley signed it on June 12th, 2015. Sounds great! Right??? Here’s what it means.

What is SB220?

Quite simply SB220 allows any improvement district (think downtown redevelopment authority) and municipalities (think counties and cities) to create a property assessed clean energy (PACE) program. SB220 primarily focuses on upgrades to existing real property (non-residential) to improve its resilience to storm-related events such as high winds and flooding. Energy efficiency and renewable energy are included in this definition.

What is PACE?

PACE is a simple and effective way to finance energy efficiency and renewable energy upgrades to buildings that are repaid through a small increase in property taxes. PACE can pay for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and many other efficiency and resiliency improvements for almost any property – homes, commercial, industrial, non-profit, and agricultural.

Why is PACE a good thing?

PACE is effective because the money for an improvement project is typically borrowed from a governmental authority and comes with a low interest rate and a long payback period. These two things taken in concert allow many more projects to become good economic deals.

Think about this hypothetical example. You run a small local restaurant and your heating and cooling system dies. Even your cheapest quotes come in at over $6,000 and those units aren’t even energy-efficient! That’s a ton of money and you may not have the cash to pay for it. In a normal world you’d go to your bank to get a loan or put it on your company credit card.

Without PACE – Bank Loan

  • $6,000 loan
  • 5 year repayment period
  • 6% interest
  • = $116.00 monthly payment

Without PACE – Credit Card

  • $6,000 loan
  • 5 year repayment period
  • 17% interest
  • =$149.00 monthly payment

With PACE

  • $7,500 loan
  • 15 year repayment period
  • 3% interest
  • =$51.79 monthly payment

Under this example you’d be able to buy the much more efficient heating and cooling unit for at least half the monthly payment! You might be able to even add air sealing, insulation, solar or other upgrades and still have a cheaper monthly payment. We’d guess that you think PACE is a good idea!

Keep in mind that SB220 only authorizes this type of program for commercial buildings; but, hopefully future legislation will bring this option to residential property owners as well. The more Alabama businesses that complete upgrades through a PACE program, the more money they can reinvest in their business further stimulating the local economy. Also, these business are likely to experience less down-time or disruption should a natural disaster hit.

When will PACE come to Alabama?

Well…. that’s a good question. SB220 is only what is considered ‘enabling legislation’. It doesn’t actually create a PACE program but simply allows local governments and improvement districts to do so. Now we wait for the first municipality in Alabama to jump on it AND a state agency to be given oversight authority. Since the legislation was born out of South Alabama and originally intended for natural disaster resiliency, we’d put our bet on a city like Mobile. Of course we could be wrong! If you would like us to work with your city to implement PACE, let us know!

Google’s 100% Renewable Energy Alabama Campus – What it Means

North Alabama welcomes Google with its 14th data center! Yay Alabama! OK, so what does it actually mean?

There are two key takeaways that matter to you:

  1. It is now clear that clean, sustainable energy is extremely important to companies of the “new economy”.
  2. The Tennessee Valley Authority (TVA) is re-purposing its shuttered coal-fired power plants to create even more jobs and economic activity than these plants previously provided.

Importance of Google’s Alabama Campus in the New Economy

North Alabama has traditionally been extremely competitive in luring new companies to the area. That said, the game is changing and North Alabama is keeping up. Looking around the country you’ll notice that more and more companies are considering renewable energy and highly energy-efficient buildings as prerequisites for opening up shop. Want some examples?

  1. Volkswagen’s Chattanooga, TN plant is home to the first Leadership in Energy and Environmental Design (LEED) certified auto plant in the world. This plant is also home to a solar array that produces more than 13 gigawatt hours of energy or enough to take 1,200 area homes off the grid. You may remember that this plant came down to a decision between Chattanooga, TN and Huntsville, AL.
  2. Apple’s Claremont, NC data center is powered by 100% sustainable energy. Their acquisition went so well, they kept going with another 100-acre, 17.5 MW plant. Apple recently made a commitment to power 100 percent of their Apple Retail Stores with 100 percent renewable energy.

This means that as you see Alabama continues to compete for the jobs of the 21st century, expect more announcements like Google’s. Companies care about sustainable energy because their customers care about sustainable energy.

Oh and don’t forget, it saves them money too! Google’s newest technology allows them to get 3.5 times the computing power out of the same amount of energy, compared to just five years ago.

Re-purposing of Coal-Fired Power Plants

After the announcement that the Colbert Fossil Plant was closing, there was much speculation about what would become of the old sites. Additionally, while some employees were able to find work elsewhere in the TVA, many people were literally worrying about what they would do after their jobs were eliminated. Just a short time later, TVA announced that the site of the Colbert Fossil Plant would become home to Alabama’s largest solar power plant.

A recent study by the University of Alabama shows that the new solar-power plant will generate $52 million in additional local taxes and will create over 400 jobs with cumulative earning of over $24 million. Talk about a boom to the local economy! In fact it was so good Lauderdale County Commissioner Fay Parker said, “I have reviewed the study several times, just to make sure I was seeing what I was seeing.”

By itself, this conversion of the Colbert Fossil Plant was simply great news. But with the Google announcement, are we witnessing a clear strategy by TVA?

If so, we applaud them. As the numbers prove, these new sustainable-energy projects will generate more jobs, income, and tax revenues for their local areas than their predecessors did. In Stevenson, AL the announcement called for at least 100 “high paying jobs” which should be considered in contrast to the 90 jobs lost that probably paid less than Google. This doesn’t even consider the increase in tax revenue to the local school systems and Google’s well-known generosity.

Why old coal-fired power plants?

A couple of reasons. First, there is a significant amount of electrical transmission infrastructure already in place that is attractive to an energy-intensive project like a data center. Think about the money Google will save by building there or the money Alabama saved by not having to build out additional infrastructure as a recruiting incentive. Hint: your tax money was spent wisely! Second, coal-fired power plants typically use a lot of water, and data centers like Google’s can tap into that infrastructure, as well, for its own massive water needs.

Governments also care about sustainable energy because it is now a proven way to create more jobs and increase local tax revenues. Additionally, they can use their recruiting incentives in a more targeted way by properly utilizing existing infrastructure.

So what does it matter for you? Wouldn’t you want to work for Google? Take a peek inside of a Google data center and let us know in the comments.

Let’s Push TVA for a Sustainable Energy Plan for the Future: guest opinion

Let’s Push TVA for a Sustainable Energy Plan for the Future: guest opinion

Our CEO, Daniel Tate, shared a guest opinion on AL.com, encouraging the TVA to follow through on their Integrated Resource Plan.

A few days ago, the Tennessee Valley Authority (TVA) released its draft Integrated Resource Plan (IRP). This plan takes a long-term look at ways that TVA can and should meet future demand for electricity in new and innovative ways. Think of it as TVA’s roadmap into the future. It details everything from external factors beyond its control, such as the state of the economy, to factors within its control, such as how it procures electricity. In other words, this is your energy future, and TVA needs your input ─ now.

The future of energy is already here and we must take this opportunity to press for continued, indeed accelerated growth in clean, sustainable energy. In fact, there are more than 150 businesses in the Huntsville area working in energy and creating well-paying, local jobs. Huntsville’s rich high-tech history lends itself well to take full advantage of the revolution in the energy market and to help diversify our economy.

To continue reading the full article, please visit AL.com

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