On November 10 of the previous year, an event took place in Paradise, western Kentucky that marked a significant shift for the Tennessee Valley Authority (TVA), a federally owned utility created as part of President Franklin D. Roosevelt’s New Deal. The cooling towers of a large coal-fired power plant were demolished, symbolizing TVA’s departure from coal.
While some individuals in the region may disagree with this move, it is considered a victory for both the local environment and the global climate. As the urgency to combat climate change has intensified, there has been a growing consensus on the best approach: transition the electrical grid to green energy and transform various sectors of the economy, such as transportation, buildings, and factories, to rely on zero-carbon electricity. President Joe Biden’s Inflation Reduction Act, signed in August 2021, supports this plan with $370 billion in subsidies. In addition, Biden’s executive order issued in 2021 directs the federal government to lead by example, aiming for a carbon pollution-free electricity sector by 2035 and a net-zero economy by 2050.
In this context, electric utilities play a crucial role, particularly TVA, the largest public power provider in the United States. TVA serves nearly all of Tennessee, significant portions of Alabama, Mississippi, and Kentucky, as well as small areas of three other states. It is unique in the sense that it is a federal agency with no shareholders or profits to prioritize.
Stephen Smith, the executive director of the Southern Alliance for Clean Energy, describes TVA as a “crazy unicorn” because of its distinct structure. While TVA has the potential to serve as a national model for promoting and building a clean-energy future, critics argue that the utility is not living up to its potential. They believe TVA is replacing coal plants with gas-burning plants that will contribute to climate pollution for many years to come. Additionally, TVA is heavily investing in small nuclear reactors that have not yet been developed. Critics also accuse TVA of failing to embrace established clean-energy technologies like solar power, wind power, and energy-efficiency measures.
TVA has achieved a carbon emissions reduction of over 50% since 2005, surpassing the nationwide average for the electricity sector, all while maintaining lower-than-average rates. This accomplishment was accomplished through the replacement of coal with gas, as well as the addition of a large new nuclear reactor. However, like many other American utilities, TVA does not have a plan to achieve Biden’s net-zero grid goal by 2035. Instead, TVA is aiming for an 80% carbon reduction by that date. Although TVA’s president and CEO, Jeff Lyash, expresses a desire to achieve net-zero by 2050, he believes it is currently not feasible with existing technology.
The Tennessee Valley presents an illuminating microcosm of the national debate surrounding the path to net-zero. It highlights the challenge of balancing the need to combat climate change while ensuring a reliable electricity supply and meeting the growing demands of a decarbonizing economy. Lyash acknowledges that TVA has the potential to lead in delivering a clean-energy future, but there is a significant divide among stakeholders in terms of when and how this future will be realized.
TVA’s history is intertwined with moments of crisis. Its establishment in 1933 came at a time of great economic turmoil during the Great Depression. The Tennessee Valley, one of the poorest regions in the country with minimal access to electricity, was transformed by TVA. Through the construction of dams and hydroelectric plants, TVA controlled flooding, electrified the entire Valley, and provided cheap and accessible electricity. Private utilities opposed TVA, considering it unfair competition. However, TVA survived legal challenges and became quasi-independent from the federal government. It generates revenue by selling electricity to municipally or cooperatively owned local power companies, which then distribute power to consumers.
Initially, TVA relied on hydroelectric power, but as demand exceeded supply, it turned to coal in the 1950s, constructing 12 large power plants. Over the past decade, TVA has closed six coal plants, but the issue of toxic coal ash disposal remains. The agency faced opposition from environmentalists in the 1970s when it resisted complying with air pollution regulations. TVA argued that it didn’t make sense to invest in scrubbers for coal stacks as it planned to replace most of them with nuclear reactors. However, due to slower electricity demand growth than anticipated, only seven out of 17 planned reactors were completed. TVA was left with significant debt and unfinished reactor projects.
Despite these challenges, TVA takes pride in its nuclear fleet. It is the only U.S. utility to have successfully brought a new reactor online in the past three decades. The construction of the reactors at the Watts Bar plant spanned several decades, with completion in 1996 and 2016. TVA’s nuclear reactors contributed to generating nearly 60% of its kilowatt-hours carbon-free in the first half of 2023, higher than the national average. However, critics argue that TVA stumbled into this position and failed to embrace the transformative change needed to address the climate crisis.
Overall, TVA finds itself at the center of a complex debate surrounding the delivery of clean energy and the challenges of decarbonizing the electrical grid. While progress has been made in reducing carbon emissions, critics believe TVA should go further in adopting proven clean-energy technologies and abandoning investments in fossil fuels and unproven nuclear technologies. The future of TVA and its role in achieving a sustainable, net-zero future remain uncertain.
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