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www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

Annual Energy Outlook 2015: Electricity, Coal, Nuclear and Renewables Preliminary Results

For Joint Electricity, Coal, Nuclear, and Renewables AEO2015 Working Group September 15, 2014 | Washington, DC By EIA, Office of Electricity, Coal, Nuclear & Renewables Analysis

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE

The AEO2015 will be abridged compared to AEO2014

• The U.S. Energy Information Administration is revising the schedule for production of the International Energy Outlook (IEO) and Annual Energy Outlook (AEO). The IEO and AEO will alternate annually between full and short versions.

• The AEO2015 will be the first short version of the Annual Energy Outlook. • The shorter version will include an abbreviated discussion and results from select cases.

2014 2015 International Energy Outlook

Short Edition to be released summer 2014

Full Edition will be released in spring 2015

Annual Energy Outlook

Full Edition released in spring 2014

Short Edition will be released by early 2015

Office of Electricity, Coal, Nuclear and Renewables Analysis September 15, 2014 2

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

Assumptions

3 Office of Electricity, Coal, Nuclear and Renewables Analysis September 15, 2014


Assumptions - Environmental Rules

4

• Only current laws and regulations are included in EIA’s reference case

• Clean Air Interstate Rule is still assumed (as in AEO2014)

– Not modeled: Cross State Air Pollution Rule (CSAPR) – D.C. Circuit Court still has not ruled on EPA’s motion to lift stay on CSAPR

• Mercury and Air Toxics Standards (MATS)

– Assumed compliance by 2016, consistent with AEO2014

Office of Electricity, Coal, Nuclear and Renewables Analysis September 15, 2014


Assumptions - Environmental Rules (cont.)

5

• Updates to NEMS modeling of California SB1368 to remove firm contractual arrangements for coal plants upon expiration

– Reduce firm imports to represent expiration of contracts with the Four Corners, Navajo, Reid Gardner, San Juan, and Boardman plants

– Adjust carbon emission rate for firm imports with expiration of contracts

– Retire Intermountain plant in 2025

• California cap-and-trade program as specified in AB32 is modeled in all affected sectors, consistent with AEO2014



Assumptions - Planned Coal Retirements By Year

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

gigawatts

AEO 2014: 33 GW

AEO 2015: 35 GW

Total Reported Coal Capacity Retirements (2013-2025)



Nuclear Power Assumptions • New Plants – 5.5 GW

– Watts Bar (2015)

– Summer 2 & 3 (2019 & 2020) – pushed online date back 2 years

– Vogtle 3 & 4 (2016 & 2017)

• Uprates – Only uprates reported to EIA will be incorporated in the Reference case; no

change in assumptions from AEO2014

• Retirements – Announced nuclear retirements – 1.2 GW total from 2014

• same assumptions as AEO2014 (Vermont Yankee, Oyster Creek)

– Generic/unplanned retirements – 0 GW in current runs but still evaluating potential for retirements due to operational uncertainty (5.7 GW in AEO2014)



EIA’s solar PV cost assumptions continue to be consistent with LBNL analyses of utility-scale installed system prices


2013$/kWAC

Sources: EIA AEO2014 and AEO2015, R.W. Beck/SAIC "Updated Capital Cost Estimates for Electricity Generation Plants“ (Nov. 2010 and April 2013); LBNL “Utility-Scale Solar 2012 and 2013 (forthcoming)”; SEIA/GTM “Solar Market Insight Q1-2014”; correspondence with Justin Baca (SEIA).

0

1000

2000

3000

4000

5000

6000

2010 2011 2012 2013 2014 2015

Previous Beck /SAIC EstimatesAEO2014AEO2015LBNLSEIA/GTM


EIA reduced initial wind capital cost assumptions by 10% to reflect recent cost trends reported in LBNL’s 2013 Wind Technologies Report (for plants 50-150 MW)


2013$/kW

Sources: EIA AEO2014 and AEO2015, R.W. Beck/SAIC "Updated Capital Cost Estimates for Electricity Generation Plants“ (Nov. 2010 and April 2013); LBNL “Wind Technologies Report 2013” (using sample of plants 50-150 MW)

0

500

1000

1500

2000

2500

3000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Previous EIA/Beck/SAIC Estimates

AEO2014

AEO2015

LBNL


Results



Major summary results changes in electricity, coal, nuclear, and renewables

• Relative to AEO2014, power sector natural gas-fired generation is lower in later years of the projection, due to several factors:

– Higher levels of renewable electricity generation

– Lower electricity sales – Higher levels of end-use natural gas-fired generation – Less natural gas-fired capacity additions in the power sector

– Removal of the fixed 5.7 GW unannounced nuclear retirements assumption

• Coal retirements are similar to AEO2014



Major summary results changes in electricity, coal, nuclear, and renewables (cont’d)

• More renewable capacity additions through 2016 and 2030-2040. Renewable capacity is about 25% higher (50 GW) by 2040 in the AEO2015 than AEO2014, primarily due to solar PV and wind.

– Near-term growth reflects updated planned builds – Longer-term growth primarily from reduced costs

12



Total Electricity Sales

13

billion kilowatthours

Source: AEO2015 NEMS run ref2015d091014a, AEO2014 Ref2014


History Projections

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2010 2015 2020 2025 2030 2035 2040

AEO2014AEO2015


Power Sector Fuel Prices

14

2013$/MMBtu



0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2010 2015 2020 2025 2030 2035 2040

Coal AEO2015 Natural Gas AEO2015

Coal AEO2014 Natural Gas AEO2014


0

2

4

6

8

10

12

14

2010 2015 2020 2025 2030 2035 2040

AEO2014AEO2015

Electricity Price Projections

15

cents /kWh (2013$)



Average (all sectors) electricity prices in 2040 are approximately 5.1% higher in the AEO2015 compared to the AEO2014


Natural gas and coal-fired generation, AEO2014 vs. preliminary AEO2015

16


0

200

400

600

800

1000

1200

1400

1600

1800

2000

2010 2015 2020 2025 2030 2035 2040

Natural GasAEO2015

CoalAEO2015



0

200

400

600

800

1000

1200

1400

1600

1800

2000

2010 2015 2020 2025 2030 2035 2040

Natural GasAEO2014

CoalAEO2014

Billion kilowatthours Billion kilowatthours

17

Average capacity utilization of natural gas combined cycle and coal generating capacity, 2008-2040

percent

0

10

20

30

40

50

60

70

80

90

2008 2013 2018 2023 2028 2033 2038

Natural Gas AEO2015

AEO2014

AEO2015

AEO2014

Coal

2013

Source: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014.



Nuclear Generation

18




0

100

200

300

400

500

600

700

800

900

1000

2010 2015 2020 2025 2030 2035 2040

AEO2014AEO2015


0

200

400

600

800

1000

1200

2010 2015 2020 2025 2030 2035 2040

AEO2014AEO2015

Renewable Generation

19


History Projections




Renewable Generation

20





AEO2015 projected annual generating capacity additions are moderate relative to historical levels


0

10

20

30

40

50

60

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Other renewablesSolarWindNatural gas and oilNuclearHydropower and otherCoal

Additions to electricity generating capacity, 1985-2040 gigawatts

Source: EIA, Annual Energy Outlook 2015

Projections History 2013

21 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

Plant Retirements through 2040

22

gigawatts

0

10

20

30

40

50

60

70

80

90

AEO2014 AEO2015

NuclearCombustion TurbineNatural Gas/Oil SteamCoal




Capacity Additions 2014 through 2040


gigawatts

Source: AEO 2015 NEMS run ref2015d091014a, AEO2014 Ref2014 Note: Other Renewable Energy (RE) includes Hydroelectric, Geothermal, MSW, Wood and Other Biomass

0

50

100

150

200

250

300

Coal Natural Gas Nuclear Wind Solar Other RE

AEO2014

AEO2015


Power Sector CO2 Emissions

24

million metric tons



0

500

1000

1500

2000

2500

2010 2015 2020 2025 2030 2035 2040

AEO2014AEO2015


Coal



Key results for the AEO2015 Reference case

26

• Coal continues to be the leading fuel for U.S. electricity generation through 2040 though it declines from 39% in 2013 to 33% in 2040. This differs from the AEO2014 where natural gas beat out coal by 2035.

• As in AEO2014, coal producers in the Interior region gain share while Appalachia loses share of total U.S. coal production. From 2012 to 2040, the Appalachian region's share of total coal production falls from about 28% to 22%.

• Nearly all of the 43 GW of coal-fired capacity retirements (30 GW planned) occur by 2016 largely because of the combination of MATS, relatively low natural gas prices, and relatively low electricity demand.



Key results for the AEO2015 Reference case

27

• Coal production remains near 2013 levels through 2017 as the average utilization rate for existing coal plants increases offsetting generation losses from retirements; between 2017 and 2023, coal production rises as natural gas prices rise and coal exports increase

• 1.4 GW of additions (0.7 GW planned)

• Delivered coal prices increase gradually through 2040 at an average rate of 1.0% per year (on a per ton basis) due to declining coal mine productivity and increasing transportation costs



Coal production by region, 1970-2040

28

million short tons

Appalachia

Interior

Western

AEO2014 Total U.S.

AEO2015 Total U.S.

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040

2013 Projections History

Source: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014



Appalachian coal production, 1970-2040

29

million short tons

0

50

100

150

200

250

300

350

400

450

500

1970 1980 1990 2000 2010 2020 2030 2040

Northern Appalachia

Central Appalachia

Southern Appalachia

AEO2015

AEO2014

Source: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014 Except for Appalachian total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines




Interior coal production, 1970-2040

30

million short tons

AEO2014

AEO2015

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020 2030 2040

Eastern Interior

Gulf Lignite

Western Interior


Source: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014. Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines



Western coal production, 1970-2040

31

million short tons

AEO2014

AEO2015

0

100

200

300

400

500

600

700

1970 1980 1990 2000 2010 2020 2030 2040

Wyoming PRB

Other West


Source: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014. Except for Western total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines



Average minemouth coal prices by region, 1980-2040

32

2013 dollars per short ton

Appalachia

Interior

West

U.S. Average

0

10

20

30

40

50

60

70

80

90

100

110

120

1980 1990 2000 2010 2020 2030 2040

2013

Source: Preliminary AEO2015 (NEMS run ref2015.d091014a)



Source: History: U.S. Energy Information Administration (EIA), Quarterly Coal Report; Projections: Preliminary AEO2015 (NEMS run ref2015.d091014a).

U.S. Coal Exports, 1995-2040

33

million short tons

0

20

40

60

80

100

120

140

160

1995 2000 2005 2010 2013 2015 2020 2025 2030 2035 2040

CokingSteam

History Projections



Coal exports by major supply region, 2010-2040

34

million short tons

0

20

40

60

80

100

120

140

160

180

2010 2015 2020 2025 2030 2035 2040

Western

Appalachia AEO2015 Total

AEO2014 Total

Source: 2010-2012: U.S. Energy Information Administration (EIA), Annual Coal Distribution Report; 2013-2040: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014.

Interior



35

For more information Jim Diefenderfer, Director, Office of Electricity, Coal, Nuclear & Renewables Analysis, [email protected], 202-586-2432 Greg Adams, Team Lead, Coal & Uranium Analysis Team, [email protected], (202) 586-7343 Eric Krall, Team Lead, Electricity Analysis Team, [email protected], (202) 586-3883 Chris Namovicz, Team Lead, Renewable Electricity Analysis Team, [email protected], (202) 586-7120

EIA Information Center [email protected] Our average response time is within three business days.

(202) 586-8800 24-hour automated information line about EIA and frequently asked questions.



mailto:[email protected]







For more information

Office of Electricity, Coal, Nuclear and Renewables Analysis September 15, 2014 36

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/aeo

Short-Term Energy Outlook | www.eia.gov/steo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

State Energy Portal | www.eia.gov/state


http://www.eia.gov/

http://www.eia.gov/aeo

http://www.eia.gov/steo

http://www.eia.gov/ieo

http://www.eia.gov/mer

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http://www.eia.gov/state

Backup Slides



Non-Hydro Renewable Generation more than doubles between 2012 and 2040 in the Reference case


Source: EIA, Annual Energy Outlook 2015 (Reference case run: d091014a)

Non-hydro renewable generation in the AEO2015 Reference case billion kilowatthours

0

100

200

300

400

500

600

700

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Wind

Solar

Geothermal Municipal waste

Industrial CHP Power sector

History Projections

Biomass


Coal production, AEO2015 vs. AEO2014 in 2040 (and 2013) (million short tons)

39

233 5 – 5 (14)

62

30 – 31 (28) 1 – 1 (2) 233 – 228 (136)

146 – 151 (125)

77 – 80 (128)

18 – 17 (18)

65 – 61 (45)

33 - 35 (30) 28 – 26 (40)

404 – 422 (374)*

4 – 5 (2)** 73 – 60 (42)

U.S. Total: 1,119 – 1,121 (984)

Source: 2013 (preliminary): Mine Safety and Health Administration, Form 7000-2, “Quarterly Mine and Employment and Coal Production Report;” 2040: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014.

* Includes production from all mines in Wyoming’s Powder River Basin.

** Includes production from mines in both Alaska and Washington.



Average annual growth in coal mining labor productivity for selected supply regions (percent)

40

Coal Supply Region 1980-1990 1990-2000 2000-2013 2011-2012 2012-2013 AEO2015 2012-2040

AEO2014 2012-2040

Northern Appalachia 5.4 5.5 -2.2 -4.9 4.3 -1.1 -1.3

Central Appalachia 7.3 4.4 -5.2 -3.8 3.3 -2.9 -3.4

Eastern Interior 4.8 3.7 -0.2 6.1 7.0 0.3 0.1

Gulf Lignite 2.6 2.4 -2.7 -4.2 -1.8 -1.0 -1.0

Dakota Lignite 6.0 1.0 -3.1 -4.8 0.7 -0.9 -1.0

Western Montana 4.6 2.0 -2.4 -11.7 15.4 -0.5 -1.7

WY, Northern Powder River Basin 7.5 3.2 -3.2 -5.7 -2.6 -1.6 -1.7

WY, Southern Powder River Basin 7.2 4.9 -2.4 -6.4 4.9 -1.4 -1.7

Rocky Mountain 7.8 5.5 -2.5 3.5 -0.2 -2.2 -2.5

U.S. Average 7.1 6.2 -1.8 -0.2 6.9 -0.9 -1.2

Note: Data for 2013 are preliminary. Source: History: U.S. Energy Information Administration (EIA), Annual Coal Report; and Mine Safety and Health Administration, Form 7000-2, “Quarterly Mine and Employment and Coal Production Report;” Projections: Preliminary AEO2015 (NEMS run ref2015.d091014a); and AEO2014 Reference case.



41

Coal demand regions

Source: U.S. Energy Information Administration, Office of Energy Analysis



42

Net summer coal-fired generating capacity in the electric power sector by coal demand region, 2013 and 2040

gigawatts 0 10 20 30 40 50 60

01NE (CT,MA,ME,NH,RI,VT)02YP (NY,PA,NJ)

03S1 (WV,MD,DC,DE)04S2 (VA,NC,SC)

05GF (GA,FL)06OH (OH)

07EN (IN,IL,MI,WI)08KT (KY,TN)09AM (AL,MS)

10C1 (MN,ND,SD)11C2 (IA,NE,MO,KS)

12WS (TX,LA,OK,AR)13MT (MT,WY,ID)14CU (CO,UT,NV)

15ZN (AZ,NM)16PC (AK,HI,WA,OR,CA)

2013AEO2014AEO2015

U.S. Total 2013: 301 AEO2014: 258 AEO2015: 259




43

Cumulative net summer coal-fired capacity retirements by coal demand region, 2014-2040

gigawatts 0 2 4 6 8 10 12

01NE (CT,MA,ME,NH,RI,VT)02YP (NY,PA,NJ)

03S1 (WV,MD,DC,DE)04S2 (VA,NC,SC)

05GF (GA,FL)06OH (OH)

07EN (IN,IL,MI,WI)08KT (KY,TN)09AM (AL,MS)

10C1 (MN,ND,SD)11C2 (IA,NE,MO,KS)

12WS (TX,LA,OK,AR)13MT (MT,WY,ID)14CU (CO,UT,NV)

15ZN (AZ,NM)16PC (AK,HI,WA,OR,CA)

AEO2014AEO2015


U.S. Total AEO2014: 45 AEO2015: 43



44

Cumulative SO2 scrubber and Dry Sorbent Injection (DSI) retrofits, 2014-2040

gigawatts

0

5

10

15

20

25

30

35

40

45

50

2010 2015 2020 2025 2030 2035 2040

AEO2015

AEO2015

AEO2014

AEO2014

DSI

SO2 Scrubbers

2016




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