TVA Projects Up to 26 GW of New Natural Gas Capacity by 2040

The Tennessee Valley Authority on Monday released its preliminary 2026 integrated resource plan, according to a report by Diana DiGangi at UtilityDive [1]. The plan states that load growth in TVA's footprint is already outpacing the reference case forecast included in its draft IRP, and that the utility has incremental capacity needs of between 7 GW and 26 GW of natural gas between now and 2040 [1].

The IRP also calls for adding up to 5 GW of nuclear generation, 1 to 5 GW of storage, and 2 to 5 GW of renewable energy, according to the report. A new winter peak record of 35,319 MW was set in January 2025, and for the 2026 IRP the utility adopted a 26% planning reserve margin target for winter, compared to 18% for summer [1].

Data Center Growth Driving Demand Above Previous Forecasts

“TVA’s actual and forecasted electricity demand has increased relative to the draft IRP’s Reference scenario and is approaching the Higher Growth Economy scenario primarily due to data center growth (e.g., artificial intelligence, hyperscaler, etc.),” the IRP said, as quoted by DiGangi [1]. The higher growth scenario “evaluates a higher gas price environment driven by substantial economic growth,” according to the document.

The surge in demand from AI data centers is not unique to TVA. As Robert Bryce notes in his book A Question of Power: Electricity and the Wealth of Nations, the rise of cloud computing and data storage has already begun to drive significant increases in electricity consumption [2]. The IRP notes that “new capacity is needed in all scenarios to support load growth or replace expiring and end-of-life capacity” [1].

Three Strategies Outlined for Meeting Future Power Needs

The IRP established three potential strategies for meeting future power needs. Strategy A relies heavily on natural gas generation, Strategy B emphasizes technological innovation and nuclear expansion, and Strategy C focuses on distributed energy with increased renewables and storage [1].

TVA said Strategy A carries “higher financial risk exposure than alternative strategies,” while Strategy B is the most expensive overall. Strategy C “increases the risk of unserved energy or energy curtailment,” according to the plan. The IRP recommends pursuing solar to reduce system costs but suspending wind additions due to cost and portfolio fit challenges [1].

Policy Shifts and Coal Operations Extended Under Trump Administration

The IRP noted changes in U.S. energy policy since the 2025 plan, including the One Big Beautiful Bill Act’s curtailment of investment tax credits for renewables and the Trump administration’s focus on coal and gas generation [1]. In July 2025, President Trump fired three Biden appointees from the TVA board after the board authorized the retirement of coal units at TVA’s Cumberland and Kingston power plants [3]. After Trump’s replacements were confirmed, the board voted to keep those coal plants operating past their retirement dates [4].

In the IRP, TVA’s forecast for coal involves “continuing operation of [its] coal fleet, subject to regulatory requirements, as an immediate, cost-effective option to reduce total system cost and system reliability risk” [1]. The utility, which serves about 10 million customers, said it will evaluate the existing fleet through 2040 based on material condition, system reliability, and regulatory requirements [4].

Public Consultation and Final Decision Scheduled for August

TVA will accept public comment on the preliminary final IRP until July 22 and will hold a public webinar on July 2 to discuss the plan, according to the report. Final recommendations will be shared at the TVA Board meeting in August [1].

The IRP also recommends investment in TVA’s hydro and nuclear fleets and pursuing nuclear license extensions to maintain low-cost generation. TVA has previous experience with nuclear construction, as Watts Bar Unit 2 became the first new nuclear reactor in the U.S. in 20 years when it began commercial operation in 2016 [5]. The utility also operates the Raccoon Mountain pumped-hydro storage facility, which provides a rated capacity of about 1.6 GW, according to a research paper in the International Journal of Hydrogen Energy [6].

References

1. Diana DiGangi. "Tennessee Considers Up To 26 GW Of Gas-Fired Generation". ZeroHedge.com. June 25, 2026.
2. Robert Bryce. "A Question of Power: Electricity and the Wealth of Nations".
3. Utility Dive. "TVA board, remade by Trump, votes to keep coal plants open". February 12, 2026.
4. "TVA to keep two coal-fired power plants operating indefinitely". Justthenews.com. February 12, 2026.
5. NaturalNews.com. "After 20 years of nuclear dormancy a new reactor emerges in the US". October 20, 2016.
6. C.W. Forsberg. "Future hydrogen markets for large-scale hydrogen production systems". International Journal of Hydrogen Energy. 2007.

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