An anniversary is a time to look back and celebrate where you’ve been, but with Kentucky Living’s 75th anniversary, it’s also time to look forward. When our magazine celebrates its centennial in 2048, what will the energy industry look like and what will it take to get there?
We talked with energy leaders, and they say the future is complicated.
As cooperatives and utilities across the country transition their portfolios to incorporate larger amounts of renewable energy—like solar and wind—leaders of these utilities are concentrating on how they will ensure the reliability that their consumers expect.
“I think all of us are trying to rub our crystal ball and have it tell us what’s going to happen, because the current industry is starving for predictability,” says Tony Campbell, CEO of East Kentucky Power Cooperative, a generation and transmission co-op that provides power to 16 member electric cooperatives in Kentucky.
And without predictability, the grid may get grim before it gets better.
“In the short term, which I call 10 years, I have some significant concerns about the reliability of the grid,” says Bob Berry, CEO of generation and transmission cooperative Big Rivers Electric, which powers three member co-ops in Kentucky. “We’re retiring fossil fuel plants, both coal and gas, mostly coal, much faster than we’re putting on new resources.”
Campbell agrees: “I predict the next 10 years, maybe even 12 or more, are going to be very, very challenging.”
The latest proposed rule from the U.S. Environmental Protection Agency would require fossil fuel plants to reduce carbon emissions by 90% by 2040. Campbell says that path toward decarbonization will require a phenomenal transition.
“It took us 100 years to develop the most complex, efficient and reliable electric system in the world, and now they’re trying to create and transition to a whole new set of generating resources, and in a short period of time—10 years or 15 years or so,” he says.
“It can’t physically be done,” Berry says. “The EPA is trying to reduce carbon with technologies that are not developed. We’re all for reducing carbon, but you have to have a plan. You can’t just wish it and it’s done.”
Make way for nuclear?
Unlike solar and wind energy, nuclear energy is dispatchable, meaning it can be generated on demand. It’s also a carbon-free energy source.
“If we’re going to be at zero carbon emissions, nuclear is the answer, and I think we’ll get there,” says Chris Perry, president and CEO of Kentucky Electric Cooperatives, the statewide association that publishes Kentucky Living and supports the 26 electric cooperatives across the state.
The Tennessee Valley Authority, or TVA, which provides electricity in seven states, including to five of Kentucky’s distribution cooperatives, is already generating nuclear energy.
“TVA today has one of the nation’s most diverse and one of the cleanest generation portfolios,” says Don Moul, TVA’s chief operating officer. “So, as we start to transition toward carbon neutral by 2050, innovation is going to be one of the key drivers that tells us what that diverse mix is going to be made up of.”
Right now, Moul says, nuclear is a significant portion of that mix, accounting for about 40% of TVA’s total generation portfolio, and TVA plans to add more nuclear capacity in the form of small, modular reactors over the next 10 years.
Currently, TVA operates one nuclear plant in Alabama and two in Tennessee. TVA also has the first early site permit in the country for an advanced reactor at its Clinch River Site near Oak Ridge, Tennessee, and is identifying other sites to locate smaller units.
But building and bringing a nuclear plant online takes time and a lot of money.
“Significant nuclear, like a small nuclear reactor, they’re 10 years away from being really developed where a co-op can do it,” Berry says. “When you build nuclear, you’re betting the company on it, because the overruns and cost and the schedule can put a small co-op like Big Rivers under. … But it’s the only dispatchable resource that is available that is non-carbon producing.”
Renewable energy and backups
Renewable sources of energy like solar and wind do not produce carbon emissions, but they are not dispatchable—they are available only while the sun and wind cooperate. Berry describes these renewable resources as intermittent generation. They play an important role, but managing their contributions to the grid can be complex.
Big Rivers has 160 megawatts in renewables that will be put into service during the third quarter of 2024 and is developing an additional 100 MW, Berry says. EKPC plans to add approximately 1,000 MW of solar to its portfolio over the next decade.
The 2022 federal Inflation Reduction Act provides co-ops with new tools to assist in this transition. In particular, the U.S. Department of Agriculture Clean Energy Financing Program includes $9.7 billion in financial assistance—grants, loans, loan guarantees or loan modifications—for cooperatives to buy or build clean energy systems.
Big Rivers and EKPC are both members of regional transmission organizations that administer the transmission grid. These regional organizations allow Big Rivers and EKPC to sell generated power and to purchase power generated elsewhere—including power generated through hydro, solar and wind. Today, when renewable energy is added to the mix, it doesn’t replace thermal generation, like coal and natural gas. Those plants must be maintained for when they are needed, Campbell explains.
“When you really need it, or if the renewable generation doesn’t show up—the wind’s not blowing or the sun’s not shining—you have to have thermal generation ready to come online and pick the system up,” he says.
TVA uses 101 generators at 17 sites, including two in Kentucky, that are powered by natural gas or fuel oil. Moul says the natural gas assets will be a “good insurance policy.”
“Our natural gas assets will still be there,” he says. “They’ll still be available if needed. We really expect them to run less, but be there, more like a capacity resource when conditions demand it.”
Hydroelectric power is dispatchable, and though not emission-free, it’s cleaner than fossil fuel plants. But it does require a water source.
“We’re blessed with the Tennessee River system,” says Moul. “When you think about conventional hydro, we operate 29 dams, including the Kentucky Dam near Paducah. Hydro makes up about 10% of our generation, and we’re looking at adding more pumped storage.”
Without scalable battery technology to store it, renewable energy—especially wind and solar—can go only so far.
“Will renewables be the way it is (in 25 years)? We’ll see,” Perry says. “That depends on battery technology, and I do think we’ll have some breakthroughs in that.”
“We’re already investigating battery storage projects, but we want to make sure it makes sense for our customers,” says Moul. “So, it’s got to be cost effective. It balances out that security— the affordable, reliable and resilient. We can’t go all to zero carbon resources and then abandon those other three. We have to balance all four of those aspects out.”
Campbell, who sits on the board of the Electric Power Research Institute, says battery technology is in its infancy. The institute is putting a lot of resources toward developing batteries that don’t require so many rare minerals, he says.
“In 25 years, that could really change,” Campbell says. “I don’t know if you’re going to get to where you could replace a baseload unit with batteries, but it will develop and help renewables to escalate even more in our portfolios.”
Berry cautions that, while batteries will be helpful, they are not the answer.
“Batteries do not generate electricity,” Berry says. “They only store electricity. … We’re still going to need some kind of dispatchable resource.”
“Maybe in 20 years, 25 years, technologies will start to mature and new technologies that are just being developed will begin to come to fruition,” Campbell says. “And I think things will start to level out, but we’re in for a real rough ride for the next 15 years or so.”