The US electricity behemoth Tennessee Valley Authority plans to spend $8 billion on clean power in the coming years. That’s going to throw a huge monkey wrench into the incoming Trump Administration’s plans for the fossil fuel industry. After all, President-elect Trump promised to bring coal jobs back to coal country, and his chances of doing that are pretty slim if one of the nation’s largest coal purchasers is purchasing a lot less coal
So, can Trump get the TVA — or any other US power supplier, for that matter — to buy more coal?
TVA And Coal Power
For those of you new to the Tennessee Valley Authority, this agency was formed during the Great Depression to launch the first and still the most far-ranging economic development program in US history. It brought electricity to rural Tennessee while creating thousands of jobs.
Today the TVA supplies power to practically all of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia.
Initially TVA focused on clean power, namely hydropower. It currently has a roster of 19 hydroelectric dams.
TVA was also an early adopter of nuclear energy, which it continues to promote at the expense of coal.
Here’s the money quote from TVA:
Coal-fired plants have formed the backbone of our power system since TVA first started using them in the 1950s. However, in keeping with our commitment to generate safer, cleaner energy, we’re beginning to retire older, less efficient coal-fired plants and replacing them with low- or zero-emission electricity sources…
In other words, the $8 billion clean power buy is baked into TVA’s DNA, going back to its earliest days.
If the incoming Trump Administration feels up to stopping the runaway freight train of clean power development, TVA would be a good place to start.
Go for it.
TVA And Clean Power
Meanwhile, TVA has been busy introducing utility scale renewable energy to deep red states that otherwise might not welcome such investments. In the latest development, TVA entered into a power purchase agreement with NextEra Energy Resources for the biggest solar farm in Alabama.
The new River Bend Solar Energy Center celebrated its commissioning just last week. It clocks in at 75 megawatts with more than 300,000 solar panels.
According to TVA, officials in Lauderdale County, where the solar farm is located, were mighty pleased:
“This project has provided good jobs for Lauderdale County residents, and businesses are enjoying the extra activity, too,” said Lauderdale County Commissioner Joe Hackworth. “We are thrilled to host the state’s largest solar facility and help realize the benefits it can bring to our community.”
The Lauderdale County School District is going to be the big winner. The new solar farm is expected to contribute more than $9 million to the local tax coffers over its useful life, with most of that going to school projects.
Wind energy is also playing a role in the TVA clean power portfolio, with nine contracts adding up to 1,542 megawatts.
Last week TVA’s Van Wardlaw had this to say about future plans, on the occasion of the Alabama solar farm commissioning:
“Over the next 20 years, TVA will invest about $8 billion to support our renewable energy portfolio, and we see a bright renewable energy future for projects like this across the Tennessee Valley.”
Coal On The Outs
During the campaign, President-elect Trump seemed to be appealing mainly to coal miners in the Appalachian region.
That’s no accident. Appalachia has been bleeding coal jobs for generations due to mechanization. The recent shale gas boom inflicted a world of hurt years on Appalachian coal years before renewable energy began inching into the market.
Here’s a rundown from the Appalachian Regional Commission earlier this year:
Focusing on coal production over the last 30 years, we can see fairly divergent trends in major regions of the United States…production in Appalachia peaked around 1990 and has been declining since, with the decline accelerating over the past five years…The result is that over the past 10 years, coal production in Appalachia has decreased by 45 percent , which is more than double the national decrease of 21 percent.
If the domestic market for coal is drying up, there’s always the export market — or not, as the case may be.
The recent boom in mountaintop coal mining in Appalachia was powered in part by overseas demand for coal, but that has since evaporated.
The real problem, though, is that Appalachian coal has been living on borrowed time for decades. Back in 2000, a US Geological Survey report toted up the damage:
A large proportion of Appalachian historical production has come from relatively few counties in southwestern Pennsylvania, northern and southern West Virginia, eastern Kentucky, Virginia and Alabama. Many of these counties are decades past their years of peak production and several are almost depleted of economic deposits of coal.
Ouch! Unless President-elect Trump has some serious plans for magically refreshing those coal deposits, Appalachia will not be adding new coal jobs any time soon.
The alternative would be to provide hefty taxpayer-supported subsidies for enabling the remaining deposits to compete with alternative sources, including cheaper coal from Wyoming and other areas of the US.
Wyoming has been a bright spot for coal jobs in recent years, but the future isn’t looking so rosy. Aside from falling global demand, other factors are at play.
A royalty loophole that supported the western coal has been closed and chances look pretty slim for building new coal export terminals in other parts of the US, so stay tuned.
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Image: via Tennessee Valley Authority.
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