Tennessee Valley Authority · NYSE:TVC
Tennessee Valley Authority — Corporate Update (2010)
22 slides from Tennessee Valley Authority's corporate update, 2010
Slide 1: Integrated Resource Plan: TVA's Environmental and Energy Future
Integrated Resource Plan TVA’ S ENVIRONMENTAL AND ENERGY FUTURE Public Briefings ™M
Slide 2: What is an Integrated Resource Plan (IRP)?
What is an Integrated Resource Plan (IRP)? An IRP is a 20-year look ahead that evaluates reliable, cost-effective resource options (supply- and demand-side) for meeting future demand for electricity IRPs are a common planning tool employed throughout the utility industry — TVA’s last IRP was com
Slide 3: Role of the IRP
Role of the IRP TVA Mission Strategic Activities Vision Translation Integrated Resource Plan Tests and Shapes Activities (IRP) Tactical Activities Annual Long-Range Financial Plans Annual Business Plans 2
Slide 4: TVA's IRP Process
TVA’s IRP Process The IRP process can be summarized into six high-level steps Evaluate financial impacts of 5 options, including rate impacts Review Draft IRP of future generation 4 and demand side options Select a preferred 20-year resource plan Use trade-off analysis to find the best 3 6 power sup
Slide 5: Closing the Capacity Shortfall
Closing the Capacity Shortfall 60,000 Projected Firm Requirement 50,000 Capacity 40,000 Shortfall Existing Firm Supply (Gap) MW 30,000 20,000 10,000 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 Objective: Identify the optimum resource combination to close the gap between existing firm supply
Slide 6: Stakeholders are Involved
Stakeholders are Involved Forum for Public Input Comments — Conducted seven public scoping meetings between July 20th and Public Scoping Meetings August 6th, 2009 — Gave participants an opportunity to provide input to IRP scope — Established in July 2009 to obtain input from different stakeholder
Slide 7: Stakeholders are Involved (Cont'd)
Stakeholders are Involved (Cont’d) Stakeholder Review Group (SRG) Represented Organizations – Commonwealth of Kentucky – State of Tennessee – Howard Baker Center for Public Policy – Tennessee Chamber of Commerce and Industry – Joe Wheeler EMC – Tennessee Paper Council – Oak Ridge National Labs – Ten
Slide 8: Scenario Planning is Being Employed
Scenario Planning is Being Employed Scenario planning provides an understanding of how near-term and future decisions would change under different conditions — Similar near-term decisions across different scenarios may imply that these decisions are less ―risky‖ while major differences may imply p
Slide 9: IRP Scenario Summaries
IRP Scenario Summaries Scenario Key Characteristics — Economy recovers stronger than expected and creates high demand for electricity 1 – Economy — Carbon legislation and renewable electricity standard are passed Recovers — Demand for commodity and construction resources increases Dramatically — Ele
Slide 10: Scenarios Provide a Broad Range of Power Requirements
Scenarios Provide a Broad Range of Power Requirements Firm Requirements by Scenario 60,000 55,000 50,000 MW 45,000 40,000 35,000 30,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario
Slide 11: IRP Planning Strategy Summaries
IRP Planning Strategy Summaries Planning Strategy Key Characteristics A – Limited Change in — Retain and maintain existing generating fleet (no additions beyond Watts Bar 2) Current Resource Portfolio — Rely on the market to meet future resource needs — Allows for nuclear expansion after 2018 and ne
Slide 12: Key Findings Emerge in the Draft IRP
Key Findings Emerge in the Draft IRP Nuclear expansion is present in the majority of portfolios Some fossil layups are favorable compared to maintaining the existing fleet Planned Energy Efficiency and Demand Response (EE/DR) play an increasing role in future resource portfolios The addition
Slide 13: Scorecard Approach is Utilized
Scorecard Approach is Utilized The IRP Scorecard will be applied to inform selection of a preferred 20-year resource plan Step 1 Planning strategies are prioritized by their ranking metric scores — Ranking metrics are financial measures of cost and risk Step 2 Strategic metrics are constructed a
Slide 14: Scorecard Approach is Utilized (Cont'd)
Scorecard Approach is Utilized (Cont’d) The IRP scorecard was developed to reflect components of TVA’s mission Ranking Metrics Strategic Metrics Environmental Economic Energy Supply Stewardship Impact Short- Growth in Term Rate Risk / Risk Total Plan Carbon Water Waste Total Personal Scenarios Plan
Slide 15: Ranking Metrics Summary
Ranking Metrics Summary Strategy C – Diversity Focused Strategy E – EE/DR and Renewables Focused Ranking Metrics Ranking Metrics Energy Supply Energy Supply Short-Term Short-Term Risk / Risk Total Plan Risk / Risk Total Plan Plan Cost Rate Plan Cost Rate Benefit Exposure Score Benefit Exposure Score
Slide 16: Completed IRP Scorecards
Completed IRP Scorecards Strategy C – Diversity Focused Ranking Metrics Energy Supply Short-Term Risk / Risk Total Plan Plan Cost Rate Benefit Exposure Score Scenarios Impacts 1 100.00 97.48 100.00 100.00 99.43 2 99.58 100.00 96.20 96.17 98.49 3 100.00 97.13 100.00 100.00 99.35 4 100.00 97.94 100.00
Slide 17: Technology Innovation
Technology Innovation Innovations that enable the utilization of key technologies in the planning strategies have been identified and summarized in the table below Technology Innovation Description A B C D E Advancements in this area are necessary to fully realize Smart Grid Technologies the EE/DR
Slide 18: Other Considerations of Risk
Other Considerations of Risk Other risks should be considered when evaluating the merits of alternative strategies — The financial risk measures included in the ranking metrics may indirectly account for part of these risks, but not all Examples of these broader risk considerations include but a
Slide 19: Implications of Preliminary Results
Implications of Preliminary Results Rank Planning Strategy Key Characteristics — Allows for nuclear expansion after 2018 and new gas-fired capacity as needed C – Diversity Focused Resource — Increases the contribution from EE/DR portfolio and new renewables 1 Portfolio — Adds a pumped storage hydro
Slide 20: The Top Three Planning Strategies are Diverse
The Top Three Planning Strategies are Diverse Range of Capacity Additions (MW)1,2,3 Example Change in Generation Mix Existing 2010 Existing System Type System Minimum Maximum Hydro, Pumped Renewables, 10.0% Hydro, 1.8% Nuclear 7,800 0 4,800 0.4% EE/DR, 0.3% Combustion Turbine4 5,300 0 7,500 Combined
Slide 21: Scorecard Approach is Utilized
Scorecard Approach is Utilized The IRP Scorecard will be applied to inform selection of a preferred 20-year resource plan Step 1 Planning strategies are prioritized by their ranking metric scores — Ranking metrics are financial measures of cost and risk Step 2 Strategic metrics are constructed a
Slide 22: IRP High-Level Schedule and Next Steps
IRP High-Level Schedule and Next Steps Develop Present Identify Analyze and Incorporate Scope Inputs and Initial Preferred Evaluate Input Framework Results Alternative Summer Fall 2009 – Spring Current Fall 2010 – Winter - 2009 Winter 2010 2010 (Fall 2010) Winter 2011 Spring 2011 Next Steps Contin