The Tennessee Valley Authority continues to integrate solar and wind energy into its electricity grid, but reliability or lack of it during peak demand for power has meant TVA has lowered the price it is paying suppliers.
The TVA board of directors met Friday at Western Kentucky University’s Knicely Conference Center. Several speakers during the public comment period addressed the solar payments issue, asking TVA to continue to pay solar subsidies – which they have lessened since 2011 – and make more solar projects available to small solar energy businesses, particularly between October and the end of the year.
Nineteen people addressed the board on various issues. The board members’ policy is to listen and typically not respond to comments.
“The issue is incentives,” said William “Bill” Johnson, TVA president and chief executive officer.
“We do nothing to dissuade anyone putting solar on their roof,” Johnson said during a news conference after the meeting. “There are volume limits in the solar program.”
TVA spends $1.6 billion annually on solar and $8 billion on all renewables. Renewable energy sources, like the hydroelectric power on which the TVA first built its business, comprises about 13 percent of the system’s available power sources.
Bowling Green TVA board member Peter Mahurin, who chairs the TVA Finance, Rates and Portfolio Committee, and Mark Iverson, general manager of Bowling Green Municipal Utilities, agreed Friday that the solar availability isn’t steady.
“It’s like in the summer,” Mahurin said during a break in the meeting. “You have plenty of fresh tomatoes in August, but none in February.”
Solar power happens “in fits and starts,” said Iverson, who represents local power companies throughout the TVA region on the TVA’s Regional Resource Stewardship Committee.
TVA supplies the power for BGMU, Warren Rural Electric Cooperative Corp. and many other utilities in the region.
“Solar power needs to compete in the marketplace,” Iverson said.
John Thomas III, executive vice president and chief financial officer for TVA, said peak availability for solar is at 3 p.m., but the peak demand for TVA is two hours later in the day. In the winter, TVA’s peak demand is at 6 a.m. daily and solar availability lessens.
Johnson said TVA will continue to work on the integration of solar and wind into its energy array of coal, nuclear, hydropower and natural gas produced electricity. Watts Barr Unit 2, the first nuclear energy plant constructed in years and which recently received an operating license from the U.S. Nuclear Regulatory Commission, should be hooked to the TVA power grid by the end of the first quarter of 2016, Johnson said during the news conference. Construction on the Tennessee plant is 99 percent complete.
“That will mitigate 6 to 8 million tons of CO2 per year,” Johnson said of Watts Barr 2. That CO2 reduction will count against TVA’s target for reaching federal clean power plant standards as it continues to lessen fossil fuel use.
“Solar and wind are intermittent,” Johnson said of the power sources. “How do you integrate those into the electrical system where there is instantaneous demand and little storage capability?” he asked. Johnson said because solar flow is intermittent, backup sources of power are needed “so you don’t see a blip when the sun goes down.”
The reduction of solar subsidies was approved by the TVA board of directors in 2011 under a five-year plan. At the retail rate, Johnson said, TVA is still paying above its generation cost.
Amanda Garcia, staff attorney for the Southern Environmental Law Center, called the board’s decision to decrease solar subsidies “misguided,” and asked the board to put the changes on hold. A coalition of business owners, advocates of renewable energy and TVA ratepayers distributed a news release the day before the meeting launching FreeTheSun.org and charged the TVA with blocking expansion of distributed solar across the southeast.
Billions of dollars are being spent on cleaning up fossil fuel technology, said Steve Johnson, president of LightWave Solar and board member of the Tennessee Solar Energy Industry Association. He Johnson said the association is taking its case to President Barack Obama, who appoints the TVA board members. Obama has touted renewable energy in the nation’s climate change plan and wants fossil fuel generation lessened under his Clean Power Plan.
Mahurin, chairman of Hilliard Lyons Financial Services in Bowling Green, said he was pleased to announce that the TVA 2015 goal to decrease operational costs by $500 million actually was exceeded by $100 million. TVA operates on a fiscal year which ended Sept. 30. He also said the TVA debt position continues to improve.
TVA reported a net income of $1.1 billion in fiscal year 2015, the highest in TVA history, Thomas told the board. “Weather results impacted base revenue,” Thomas said, adding that electricity sales were flat in fiscal year 2015, spurred only by winter weather electricity demand.
— Follow business reporter Charles A. Mason on Twitter at twitter.com/BGDNbusiness or visit bgdailynews.com.
