Which may go some way in explaining why TVA’s board has decided to return to nuclear energy, doubling down on a bet that brought the company close to its $30 billion debt ceiling set in 1979 by Congress. And it may suggest the path America could take to meet future energy demand.
At its May meeting, the board — now comprising nine members who serve five-year terms — devoted the bulk of its discussion to renewable energy, sustainable economic development and environmental stewardship, unanimously accepting a plan to reduce the TVA’s production of fossil fuel energy and decrease its carbon footprint.
"It's going to require our best attention … the things in terms of reducing our footprint are things that we need to do so we've got to get after that," said Tom Kilgore, president and CEO of TVA, at the board meeting.
Under its environmental policy plan, TVA will ramp up production of energy from renewable or low-carbon sources from around 30 percent today to more than 50 percent by 2020, meeting the bulk of this challenge by again investing in nuclear energy.
"I'm encouraged that we all think that nuclear is a way to reduce our footprint,” Kilgrore said, “because with coal being where it is now and the technology being such that you really can't sequester carbon right now, we need a short-term and long-term solution."
Carbon sequestration is an experimental technology that holds the promise of capturing the carbon released when coal is burned, but it has yet to be proven on a large scale.
Still, energy efficiency and conservation remain major components of TVA’s plan.
Terry Johnson, TVA’s nuclear spokesman, explains that without conservation and efficiency efforts TVA would need to build a new nuclear plant every two years just to keep pace with demand. This is effectively impossible as it will take five years alone to complete the second reactor at Watts Bar in Spring City, Tenn, which was already 60 percent complete when work resumed late last year.
So conservation and efficiency are stark realities as much as ideological choices.
But the decision to return to nuclear power still has many worried due to safety issues, the storage of spent fuels rods and the lost opportunity to invest the same amount of money in alternative energies like wind and solar.
"If we had put as much federal money into renewables as we have into nuclear,” Nolt said, “we’d have efficient solar power by now. We would have much better-developed wind power."
And there is again the danger that growth in demand won't be borne out by today’s predictions. Oil prices have already fallen off significantly since their peak at around $140 a barrel earlier this year as consumers altered driving habits and invested in more fuel efficient cars.
Spiking coal and natural gas prices — coal's more than doubled in the past year and natural gas is up about 60 percent — could have a similar effect on investment in insulation and alternative technologies as well as changing consumer habits.
In fact, in response to those higher commodity prices TVA's board just recently approved a 20 percent hike in its rates to utilities, the largest increase in 30 years.
The Political Factor
Add the uncertainty in the market to a contentious political race and it is difficult to know what the future holds for TVA.
While McCain has explicitly stated he would encourage the development of new nuclear plants, Obama has been more cautious, saying he would only support such plans if the safety and storage issues were solved.
The public seems to be warming to the idea. The Nuclear Energy Institute proudly touts studies showing growing public support for building new power plants, with nearly 60 percent of the public in favor and 40 percent opposed. Ten years ago, those numbers were roughly equal.
As America’s current electricity mix largely mirrors TVA’s, the extent to which nuclear energy replaces coal-fired plants as America’s dominant energy source could be determined by the success of TVA in rekindling dormant reactors and chartering new ones.
With the completion and successful restart of Brown’s Ferry earlier this year—making it the first reactor to come online in the 21st century—TVA feels it has earned the credibility it needs to pursue this path.
“We completed it essentially on time and on budget, so that gave us the confidence we could do the same thing with Watts Bar II,” Johnson said.
Freeman, TVA’s former chairman, recently told the Associated Press he’s “appalled” by the board’s decision to reinvest in nuclear reactors and called its member’s “nuclear-aholics.”
"How in the name of heaven could the Tennessee Valley Authority not remember how it got clobbered by this nuclear option financially?" Freeman asked.
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