Carbon reduction is at the center of TVA’s sustainability strategy. Through CY 2019, TVA has achieved a 55% reduction in its carbon emissions compared to 2005 baseline standards. We are working to increase that number to 70% by 2030 and planning additional reductions beyond 2030. We are striving to build the clean energy system of tomorrow today and we are working on innovative technologies that we believe will deliver meaningful, impactful progress.
This year, we issued our first Sustainability Report to highlight TVA’s plans and progress as a business and community partner to build a stronger, more sustainable future together. The report uses the Global Reporting Initiative (GRI) as the standard for TVA environmental, social and governance (ESG) disclosures and reporting to increase transparency to our stakeholders and align our strategy with the United Nations’ Sustainable Development Goals (SDGs).
TVA’s sustainability report is a roadmap of our progress to date across the entire Tennessee Valley. We believe our commitment to carbon-free energy is essential for the environment and our ability to attract and retain major businesses and customers seeking to meet their own ambitious sustainability goals. We believe it improves our delivery of reliable, low-cost and increasingly renewable energy; deepens our care of the Tennessee River system and public lands and strengthens our ability to attract investment in the Valley by major businesses that create jobs and support economic growth.
This fiscal year, nearly 60% of TVA’s power generation mix is carbon-free. Through calendar year 2019, we have reduced carbon emissions from our plants by 55% compared to 2005 levels – and we plan to go even further. We are currently on path to reduce carbon emission rates 70% from 2005 levels by 2030. TVA is a lead sponsor of the Low-Carbon Resources Initiative launched by the Electric Power Research Institute (EPRI) and the Gas Technology Institute (GTI) to advance decarbonization technologies that could help us achieve a carbon net neutral position.
The price of renewable resources, particularly solar, continues to decline; and consumer demand for renewable and distributed energy resources is growing. At TVA, we are actively adjusting and expanding our business model to incorporate these resources and we are collaborating with LPCs on several renewable projects. We have contracted for additional solar that increased total operating and contracted capacity approximately 70% in FY 2020 – and we are currently evaluating multiple major utility-scale projects up to 200 megawatts each that resulted from an RFP issued in March 2020. Projects are expected to be announced in late 2020 and expected to be brought online by the end of 2023.
In 2019, TVA partnered with East Mississippi Electric Power Association, the Department of the Navy and solar power company Silicon Ranch on a 6 megawatt solar facility at the Naval Air Station in Meridian, Mississippi. The facility includes more than 15,000 solar photovoltaic panels that produce enough solar energy to power more than 750 homes. This solar power site provides clean, renewable power to the electric grid at a cost-competitive rate, and it reflects TVA’s ongoing commitment to provide local renewable energy generation as a fully integrated part of the larger power system.
Knoxville Utilities Board (KUB) and TVA's Chris Hansen were honored as 2020 Solar Champions by the Tennessee Solar Energy Industries Association (TenneSEIA). Hansen led the development of TVA’s portfolio of renewable options, including the Green Invest program. KUB is the first local power company to participate, securing 212 megawatts of new-to-the-grid solar power for its customers. We expect KUB’s investment in solar to generate an amount equal to approximately 8% of KUB’s annual electric load, the equivalent of powering 35,000 average homes.
While investing over $15 billion in the power system and reducing debt by over $6 billion.
Based on the latest data from 2019
Along the 652-mile Tennessee River system, providing flood control, river navigation and water supply
In one of the most bio-diverse areas of North America.
In economic benefits through outdoor recreation activities for the Tennessee Valley along the waterways
Already a leader in hydroelectric power generation, TVA is exploring grid-scale, battery energy-storage systems. In September 2020, we announced our first TVA-owned battery-energy storage system will be installed near the East Tennessee town of Vonore, about 35 miles southwest of Knoxville. When operational in 2022, we expect the battery energy system will be able to store 40 megawatt-hours of energy to supplement the high-quality power that TVA provides to its customers. That is enough electricity to power more than 11,000 homes for three hours. This project also will be a testbed for the positive effects batteries can have on TVA’s transmission system. The goal is to be ready to add more battery-energy storage systems in a relatively short time as costs for this technology continue to decrease.
In an effort to encourage energy efficiency, TVA established annual carbon reduction awards for the top performing and most-improved companies across the Valley. TVA currently offers two awards for both directly served customers and LPC-served businesses to commemorate their accomplishments on environmental excellence in the Valley: 1) Leadership Circle – for those achieving the lowest emission rates in a year and 2) Most Improved – for those with the most year-over-year carbon emission improvement.
In FY 2020 – the wettest fiscal year on record – we estimate TVA’s river management activities helped prevent an estimated $1 billion in flood damage. As part of TVA’s role as keeper of the Tennessee River, we work to assess – and mitigate – the possible impacts of climate change on the Tennessee River system, utilizing national climate data. For example, outputs from the sixth Coupled Model Intercomparison Project (CMIP6) will be sampled to adjust TVA’s long-term temperature and precipitation records to appropriately reflect the potential future climate. These adjusted forecasts will then be run through a long continuous simulation and series of short flood simulations. The river system inflows, river flows and reservoir operations will be modeled to create a realistic picture of the future river, including flood risk reduction, river navigation, hydroelectric power production and water quality. We take our role as manager of the vibrant and beautiful Tennessee River very seriously, and we know many people across the Valley depend on our addressing potential impacts on the river.
TVA tracks renewable energy commitments and claims, in part, through the management of renewable energy certificates (RECs). This mechanism allows businesses and individuals to purchase RECs through TVA to meet their renewable energy and sustainability goals. TVA offers Green Programs in partnership with LPCs, which makes it easy for end-use consumers to purchase RECs for their personal sustainability goals.
This Annual Report is intended to provide highlighted information of interest about TVA's business and operations during its fiscal year ended September 30, 2020. This Annual Report should be read in conjunction with TVA’s Form 10-K Annual Report for the year ended September 30, 2020. The Form 10-K provides additional financial, operational and descriptive information, including TVA’s financial statements. The Form 10-K also provides important information about various risks to which TVA is exposed in the course of its operations, which are important to consider before investing in any TVA securities. The 2020 TVA Annual Report and 2020 Form 10-K do not contain all information about TVA securities that is important for making investment decisions. Please refer to the appropriate Offering Circular, and any relevant supplements, for detailed information about TVA securities. TVA’s Form 10-K can be found at www.tva.com/investors.
We have included in this letter and 2020 Annual Report “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “will,” “plan,” “believe” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to, the factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the sections entitled “Risk Factors.” Our forward-looking statements speak only as of the date of this letter and 2020 Annual Report or as of the date they are made, and we undertake no obligation to update them.