The Tennessee Valley Authority is the largest public power provider in the nation.

Tennessee stretches almost 500 miles from east of the Cumberland Gap westward to the Mississippi River and the city of Memphis, one of the world’s busiest hubs for barge, air, truck, and rail cargo traffic. The wide bends in the Tennessee River divide the state into three regions: the largely mountainous east, the central basin rimmed by highlands, and the broad coastal plains of western Tennessee. Both the Tennessee River and the Cumberland River, which flows in an arc from Kentucky across north-central Tennessee, have been prone to destructive floods. In the 20th century, a series of dams built by the Tennessee Valley Authority (TVA) to control those rivers brought hydroelectricity to the region. The federal TVA is the largest public power company in the nation and serves almost all of Tennessee and parts of six other states. Although Tennessee produces limited amounts of crude oil, natural gas, and coal, the state has an important role as an electricity provider because of the TVA power generation facilities located there.

Tennessee’s electric power sector consumes the largest share of energy used in the state. However, distances traveled across Tennessee are significant, and the transportation sector accounts for about one-fifth of state energy consumption. The industrial and residential sectors use slightly less, and the commercial sector accounts for one-seventh of the energy used in Tennessee. Manufacturing leads the state’s economy and includes the manufacture of motor vehicles and automotive parts; food, beverages, and tobacco products; and chemical products.

Tennessee’s climate is relatively mild, but it is greatly influenced by the state’s topography. Much of the state experiences hot summers and mild winters, except in the mountains, which are cooler at higher elevations. The residential sector, where both heating and air conditioning are prevalent, accounts for almost one-fifth of the state’s total energy consumption. Overall, Tennessee’s economy uses a larger amount of energy per dollar of state gross domestic product than more than half the states. Because the cost of electricity in Tennessee is below the national average, Tennessee, even with higher energy consumption, is near the national median in energy expenditures per person.

Renewable Energy

Quick Facts

  • The newly licensed Watts Bar 2 will become the nation’s newest nuclear reactor when it begins commercial operations in 2016.
  • Almost half of the Tennessee Valley Authority’s (TVA) territory is in Tennessee. The TVA operates 19 hydroelectric dams, 2 large nuclear power plants, and several other power generation facilities in the state.
  • At almost 9.8 million megawatthours in 2015, Tennessee’s net electricity generation from hydroelectric power was the third-highest among states east of the Mississippi River, and sixth-highest in the nation as a whole.
  • The Southeast’s first major wind farm, located  on Tennessee’s Buffalo Mountain near Oliver Springs, began operating as a 2 megawatt facility in 2000. The wind farm’s generating capacity has been expanded to 29 megawatts.
  • Two utility-scale solar photovoltaic facilities in McNairy County, Tennessee, are the largest in the state and have a combined capacity of 40 megawatts.

The Southeast’s first major wind power farm began operating in Tennessee in 2000.

Tennessee does not have a renewable portfolio, but the state was an early leader among southeastern states in developing its renewable energy resources. The southeastern region’s first major wind farm, located on Buffalo Mountain near Oliver Springs, Tennessee, began operating as a 2-megawatt facility in 2000. Its generating capacity has since been expanded to 29 megawatts. Two utility-scale solar photovoltaic facilities in McNairy County, Tennessee, are the largest in the state and have a combined capacity of 40 megawatts. The TVA operates eight solar power facilities in Tennessee. The largest is a 97-kilowatt facility at Finley Stadium in Chattanooga, Tennessee. The TVA also uses methane gas from the Memphis wastewater treatment plant to boost generating capacity at one coal-fired power plant, increasing the plant’s capacity by 8 megawatts. With many hydroelectric power plants located on the Tennessee and Cumberland River systems, Tennessee is one of the top three hydroelectric power producers east of the Rocky Mountains. Hydroelectric power, although variable, has been contributing about one-eighth of the state’s net generation in recent years. Biomass, primarily from wood and wood waste, also contributes a small amount to the state’s net generation.

Tennessee is the largest ethanol-producing state in the Southeast. The state, with its two ethanol plants, is the 14th-largest ethanol producer in the nation. A third facility, a small cellulosic ethanol demonstration project, ceased operations at the end of 2015. Tennessee also has two biodiesel plants that use a variety of feedstocks.


Tennessee’s 10 largest power plants are all operated by the TVA. The largest, the coal-fired Cumberland Fossil Plant, generates 16 million megawatthours of electricity each year. Overall, coal-fired power plants generate two-fifths of the electricity produced in Tennessee, nuclear plants account for one-third, and hydroelectric power and natural gas each provide about one-eighth of the state’s net generation. Renewable technologies contribute a small amount. Tennessee helped usher in the nuclear age with the nation’s first nuclear fuel enrichment plant, built at the Oak Ridge National Laboratory as part of the World War II Manhattan Project. Today, Tennessee has two TVA-owned nuclear facilities, the Sequoyah Nuclear Power Plant and the Watts Bar Nuclear Power Plant, both located in southeastern Tennessee. The Watts Bar power plant has the nation’s newest nuclear power reactors. Watts Bar Unit 1 began operating in 1996. Watts Bar Unit 2 is the next U.S. reactor scheduled to come online. It has received its operating license and is expected to begin commercial operation in mid-2016. Unit 2 will be the nation’s first new nuclear reactor in the 21st century. The TVA is also pursuing a site permit for a possible new nuclear plant using a small modular reactor at a site near Oak Ridge. In addition to the 2 operating nuclear plants, TVA facilities in Tennessee include 19 hydroelectric dams and a pumped-storage plant, 6 coal-fired power plants, and 7 natural gas combustion turbine sites. In total, the TVA facilities have a combined generating capacity of about 20,000 megawatts. The federal TVA owns more than 90% of the state’s electricity generation capacity and provides service to local power providers in almost all of the state’s 95 counties.

Tennessee is among the top five states in residential electricity consumption per capita. Average residential electricity prices place the state among the 10 states with the lowest prices in the nation, and about three out of five Tennessee households use electricity as their primary source of energy for home heating.

Natural Gas

Tennessee produces little natural gas, but more recent exploration has focused on the Chattanooga Shale in the eastern part of the state.

Tennessee produces less than 0.2% of the nation’s natural gas and has no significant proved natural gas reserves. Most of the state’s producing wells are clustered in northeastern Tennessee, but more recent exploration for additional natural gas resources has focused on the Chattanooga Shale in the eastern part of the state. Tennessee’s natural gas needs are met by almost a dozen interstate pipelines that supply Tennessee as they pass through the state on their way to markets in the Northeast and the Midwest.

Industry consumes the largest share of natural gas delivered to end users in Tennessee and accounts for more than one-third of state demand. Typically, about one-fifth of the natural gas delivered to consumers goes to the commercial sector and about one-fourth goes to the residential sector. Prior to 2010, the electric power sector accounted for less than 5% of the natural gas consumed in Tennessee, but natural gas use for electricity generation has increased since then. In 2015, the electric power sector consumed more than one-fifth of the natural gas delivered to customers in the state. About one-third of Tennessee households use natural gas as their primary fuel for home-heating.

Source: U.S. Energy Information Administration (May 2016)

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