TVA could help propel one of the biggest transfers of wind energy across America and get the best price to do so if it agrees within the next four months to buy the electricity generated from Oklahoma and Texas wind turbines and shipped to the Tennessee Valley on a new, $2.5 billion transmission line.
Clean Line Energy Partners LLC, a Houston-based company formed to build high-voltage, long-distance transmission lines, is urging TVA to agree by the end of the year to buy at least some of the nearly 4,000 megawatts of wind energy it wants to transmit along a $2.5 billion direct-current line it plans to build through Oklahoma and Arkansas.
If TVA acts before the end of 2016, it could qualify for maximum production tax credits for wind energy that could nearly cut in half the expense of wind-generated power, which is already decreasing as wind turbines become more efficient.
Jimmy Glotfelty, executive vice president for Clean Line Energy Partners, told the TVA board last week that it could deliver wind-generated power from Oklahoma and Texas up to 60 percent of the time at around 3 to 3.5 cents per kilowatt-hour, which is cheaper than some of TVA’s other energy costs. Such wind-generated power could be available in two to three years after new wind turbines are erected in Oklahoma and Texas, where the wind blows more steadily than in the Southeast, and after Clean Line builds its proposed 700-mile line from the panhandle of Texas to Memphis.
The cost will be cheaper this year because the maximum federal production tax credits, worth the equivalent of 2.2 cents per kilowatt-hour, will begin to decrease after Jan. 1.
“We continue to to have strong discussion with utilities in the Southeast and we continue to have productive talks with TVA because we believe this is a very competitive source of clean energy which we think would add value to their portfolio,” Glotfelty said.
TVA put out a request for interest this spring to power suppliers interested in making proposals to TVA for renewable energy and is evaluating proposals submitted in response from wind, solar and geothermal generation. Clean Line is by far the biggest proposal with up to 4,000 megawatts of power carried on the proposed transmission line.
TVA President Bill Johnson said no decision has yet been made about Clean Line or any other proposal. He said TVA could move ahead “if it makes sense under our timetable, not someone else’s timetable.
“We’ve been in long-range discussions with them (Clean Line Energy) under several memoranda of understanding,” Johnson said. “Our objective here is quite simple: to have the least cost, cleanest, most reliable system all at the same time. If it turns out that Clean Line is a part of that, then we will do that. But we are still in the evaluation phase.”
TVA is phasing out 18 of its oldest and dirtiest coal-fired units to comply with stricter air quality standards and to reduce carbon emissions. The utility is building new natural gas plants in Memphis and Paradise, Ky., to replace that lost generation, but wind power could supplement that gas generation.
Environmental groups are urging TVA to do more to limit carbon emissions, which they claim are linked with global warming and the increase in floods, droughts and storms around the world.
“This past July was the hottest July ever recorded since humans began instrument recording,” Stephen Smith, president of Clean Line Energy, told the TVA board last week. “Last year, 2015, was the hottest year ever on record, a historic record. Indeed, 15 of the last 16 years have been the hottest ever recorded, an historic trend. This, my friends, is not normal.”
Smith said TVA should agree to buy the wind-generated power coming from Clean Line Power, which he said is now available at some of the lowest prices ever for renewable, clean energy.
“Wind prices are at historic lows, in many cases lower than natural gas,” Smith said. “The use of High Voltage Direct Current to move low cost wind to load centers without congestion on the transmission lines is an historic opportunity of national significance.”
TVA could also benefit by wheeling some of Clean Line Energy’s wind power on its transmission lines to other utilities in the Southeast, Smith said.
“We believe Clean Line is “in the money or very close,” he said. “It will help our region dramatically increase our use of clean, zero-carbon renewable energy, diversify our energy mix, and allow TVA to play a national leadership role in helping strategically develop our natural abundance of clean renewable energy in a cost effective way, thus decreasing our carbon output and helping others do the same.”
But others are more cautious about moving ahead with a commitment to power purchases on a line that hasn’t yet been built. TVA’s long-range power plan doesn’t foresee the need for much, if any, new generation for the next couple of decades.
U.S. Sen. Lamar Alexander, R-Tenn., an ardent supporter of nuclear power and a critic of what he calls “unsightly windmills,” also has criticized the continued federal subsidies given for wind generation over the past half century. The production tax credits for wind are worth nearly as much as the cost of building the turbines themselves and Alexander has questioned the reliability of depending upon a power source that is available only when the wind blows.
But backers of the Clean Line plan said TVA could supplement the wind generation, as needed, with its expanded gas generation, which can easily be turned on and off as wind conditions change.
Smith argued that the problems caused by global warming, which he said includes the Zika virus in South Florida, the record floods in Louisiana and the droughts elsewhere in the country, require a new approach by power utilities.
“You are not just passive observers to these historic events,” Smith told the TVA board last week. “You have the ability to make historic decisions that will impact the course of history – all of our history.”