Debunking 4 Myths About TVA’s Plans for Natural Gas
Despite its track record as a valuable technology, natural gas still has its critics. For those uncertain about its use, here are four common myths debunked.
As TVA moves to a cleaner energy portfolio, including the potential retirement of TVA’s remaining coal fleet by 2035, natural gas is a front runner for potential replacement generation because it provides the flexibility and reliability needed to meet power demand.
Despite its track record as a valuable, lower-carbon emitting technology, natural gas still has its critics. For those uncertain about its use in TVA’s strategic path forward, here are four common myths debunked.
Myth #1: Natural gas doesn’t align with TVA’s net-zero carbon future.
False. TVA recently announced our aspiration to achieve net-zero carbon emissions by 2050, and natural gas is a critical enabler for TVA’s plan to have 10,000 megawatts of solar online by 2035.
“To put it very simply, we can’t accomplish our renewable goals without natural gas,” said David Bowling, vice president, Gas & Hydro, Power Operations. “In the short-term, natural gas generation is the technology that will get us from where we are to where we plan to go. It is also one of the technologies that will help us integrate renewables into our mix over the long haul by ensuring reliability while new technologies are still being developed.”
The innate flexibility of gas generation is key for incorporating renewables without sacrificing reliability – for times when the sun isn’t shining or the wind isn’t blowing.
In addition, natural gas has already played an important part of reducing TVA’s carbon footprint by replacing high-carbon output from coal plants with lower-carbon emitting technology that produces 60-70% less CO2 per MWh. As the technology evolves, the carbon output will only get smaller.
Myth #2: Judging from the recent blackout in Texas, natural gas isn’t a reliable option for TVA.
False. With the recent Texas blackout in February 2021, there have been questions surrounding gas as a reliable source during extreme weather events. However, unlike Texas, TVA and its partners operate in an integrated public power model that focuses on service and reliability for its end-use customers. To that end, TVA builds operational margin in generation reserves to provide a high level of reliability assurance even in extreme temperatures. It is also continually investing in assets with its mission of service in mind.
“TVA continued to provide uninterrupted power to Valley residents during the extreme winter weather,” said Larry Sparks, general manager, Gas Operations. “This is attributed not only to the skilled and dedicated workers who operate and maintain our fleet, but also to the significant investments made over the past few years to address highest risk material condition issues, including freeze protection.”
Myth #3: If we replace retired coal megawatts with gas generation, gas prices will certainly skyrocket and it will no longer be economical.
False. Based on gas price forecasting for the coming decade, TVA does not anticipate an extreme rise in gas prices that will impact the economics of operating our gas assets.
“The current gas forward markets only see a small price escalation over the next decade although weather can cause short-term price volatility,” said Jeff Avery, director, Natural Gas, Fuels & Hedging. “TVA utilizes hedging – a contractual protection with suppliers – to provide greater cost certainty for our ratepayers.”
Natural gas prices are affected by weather, supply chain disruptions and potential emerging regulatory changes.
“TVA mitigates our gas price risk through a mix of commercial portfolio products including fixed-price contracts, storage, and other balancing services which reduce the risk of adverse price moves even at the highest levels of system demand,” Avery continued. “The recent weather event in Texas is an example where TVA effectively mitigated rising prices and maintained stable fuel costs.”
In addition to contractual protections, TVA’s portfolio diversity provides a natural hedge to the price volatility of any one specific commodity. TVA conducts long-term fuel forecasting twice a year to ensure it is appropriately evaluating the economic profile of all current and future major asset decisions – including the potential addition of gas generation to replace retired coal megawatts.
Myth #4: Natural gas generation is being called a “bridge” because TVA will cross over and then leave it behind.
False. “When TVA refers to natural gas as a ‘bridging technology’ it means that we see it as critical connection between how we operate today and into the future,” said Sparks. “Gas is a necessary technology to support coal retirements and enable expansion of renewables, yes. But it will continue to hold a valuable place in TVA’s diverse portfolio.”
The benefits of gas are also expected to evolve with future fuel flexibility, says Sparks. TVA is exploring new gas fuel options, such as hydrogen, to continually lower carbon emissions. In addition, TVA is exploring the viability of “carbon capture”
as an emerging technology to extend the life of existing natural gas plants in a carbon-free environment. Carbon capture serves as a backstop for removing carbon that cannot be displaced by other means. This is the fastest and most direct method of
ensuring low-cost, reliable, dispatchable generation to fuel the next phase of carbon reduction in the 2030s.