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www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Annual Energy Outlook 2017:

Preliminary Results for Electricity, Coal,

Nuclear and Renewables

For

AEO2017 Working Group

October 3, 2016 | Washington, D.C.

By

EIA, Office of Electricity, Coal, Nuclear & Renewables Analysis

2

Last Name First Name Organization Last Name First Name Organization Last Name First Name Organization Last Name First Name Organization

Adams Greg EIA Esber Salem paconsulting Marmon Greg woodmac Simpson Cynthia OCFO

Alfaro Jose alphanr Evans Carolyn nscorp Mayes Fred EIA Slater-Thomps Nancy EIA

Anderson Robert DOE Eyster Jerry GE Mazuroski Nick usabiomass Smith Alexander FERC

Arena Jenalyse EIA Feldman David NREL Mcenaney Bobby NRDC Somerday Michele firstenergycorp

Augustine Chad NREL Gigliotti Stephen DOL Mead Ian EIA Spitsen Paul DOE

Baca Justin SEIA Gospodarczyk Marta EIA Moses Carolyn EIA Stanton Tom NRRI

Balash Peter NETL Gresham Lee brattle Namovicz Christopher EIA Staudt James Andover Tech

Battey Hoyt DOE Gulen Gurcan beg.utexas Nandy Samir CONTR Steinberger Kevin NRDC

Biggs Natalie woodmac Hanson Don ANL Neff Shirley EIA Strohfus Mark GE

Blair Nate NREL Harrison Keith southernco Nethercutt Elliott NERC Sutton Jim Alstom

Blumenfeld Andy archcoal Heeter Jenny NREL Nichols Christopher NETL Szabo Aaron omb eop

Boedecker Erin EIA Hensley John AWEA Oster Ron peabodyenergy Theis Joel NETL

Bowles Mark Entergy Herndon Whitney Rhodium Palmer Mason leidos Torrey Beek Oceana

Bowman Michelle EIA Hodge Tyler EIA Park Brian EIA Tsai Chenhao beg.utexas

Bratvold Delma Leidos Holmes Mike undeerc Peters Jamie UP Tucker Russell NRECA

Brewer John NETL Holtberg Paul EIA Peterson David EIA Walsh Ken leidos

Chandra Sanjay ICFI Hunt Hannah AWEA Renes Thomas leidos White Carol EIA

Clausen Scott ACORE Jell Scott EIA Roche Madelyn NRECA White David

Cole Wesley NREL Johnson Elias EIA Romer Craig xcelenergy Williams Alison EEI

Comstock Owen EIA Johnson Slade EIA Salmi Chris dep.nj Wilson Thomas EPRI

Conti John EIA Khair Lauren NRECA Satsangi Ann DOE Wiser Ryan LBL

Craft J.W. Leff Michael Con Edison Sattler Sandra UCS Wolf William jtboyd

Cunliff Colin DOE Lewandowski Dave Schmalz John leidos Wood Frances On Location

Dean John JDENERGY Lindstrom Perry EIA Schmitter John Kep llc Wos Thomas tri-state gt

Diefenderfer Jim EIA Lintner Michael CONTR Schoeberlein David DOE Wright Evelyn SEE

Digiantommaso Jen OCFO Luckow Patrick Synapse Shaffer Brian USGS Wyes Tesfaye OCFO

Dixon Robert DOE Mahan Simon SACE Shenk Brian USACE Yin Hang RFF

Donohoo-Vallett Paul DOE Manzagol Nilay EIA Shields Daniel occ.ohio Zelek Charles NETL

Showalter Sharon On Location Zhao Song leidos

AEO 2017 Electricity, Nuclear, Coal, and Renewables Working Group

October 3, 2016

WORKING GROUP PRESENTATION FOR DISCUSSION

PURPOSES. DO NOT QUOTE OR CITE AS RESULTS

ARE SUBJECT TO CHANGE.

Summary

• Most significant changes in AEO2017 outlook

• Present preliminary AEO2017 outlook results

• Open discussion

3AEO 2017 Electricity, Nuclear, Coal, and Renewables Working Group

October 3, 2016




Most significant changes in electric sector outlook for AEO2017:

nuclear/coal

Nuclear: projected share of units retiring after license expiration at 60 years

Environmental regulation: impact of extensive installation of mercury control

equipment

Generating unit operating performance: detailed representation of heat rates

by operating mode

Coal production: treatment of coal productivity

• Yet to be completed: nuclear uprates, final plant file updates, replacement

for cost index used in projecting new electric equipment additions


October 3, 2016




Most significant changes in electric sector outlook for AEO2017:

renewables

Accounting for regional capital cost differences: solar costs revision to base

on as-observed regional cost information

Solar assumptions data update for consistency between cost and

performance assumptions (using inverter load ratio of 1.2)

• Yet to be completed: more accurate modeling of distributed generation: use

of PV load shapes revision to account for impacts of DPV on demand

• Yet to be completed: Still working on incorporating solar curtailments

algorithm

• Postponed until AEO2018: energy storage


October 3, 2016




Summary preliminary results AEO2017 electric generation sector

• Long term replacement of generation from retired nuclear units, principally

by renewables and natural gas

– Nuclear capacity declines by about 22 GW by 2050

– Renewables generation is up 370% and gas generation increases 43% by 2050.

• Non-hydro renewable capacity additions are net 32 gigawatts higher by 2040

in the AEO2017 than AEO2016, primarily from solar PV

– Solar PV in AEO2017 is 92 GW higher than AEO2016, while wind additions are 62 GW lower

– Expansion of solar PV continues through the end of the outlook period, with another 170GW

added from 2040-50 in AEO2017.


October 3, 20166




AEO2017 Reference case and alternative cases• Reference case includes the Clean Power Plan

– A mass-based approach by states, covering both new and existing sources

– Credit trading at the EMM regional level

– Allowances allocation to load serving entities

• Potential side cases:

– No CPP

– High oil price

– Low oil price

– High economic growth

– Low economic growth

– High oil and gas resource and technology

– Low oil and gas resource and technology


October 3, 20167




AEO2017 Reference case key nuclear assumptions


October 3, 20168




Case AssumptionsTotal Capacity

Additions

Total Capacity

Retirements

Announced New Builds 4.4 GW

Potential Uprates About 5 GW

Additional New Builds Allowed by Model

Announced Retirements 6.9 GW

Generic Derates (near-term) 3 GW

Generic Derates (long-term) About 22 GW

Long-term retirements related to subsequent license renewal

uncertainty are assumed in AEO2017

• Not all reactors will operate for 80 years.

• Uncertainty related to the likelihood of achieving a subsequent license renewal was

examined qualitatively, and AEO2017 includes about 22 GW of long-term retirements

(generic derates) to address this uncertainty.

• AEO2018 will address long-term operations beyond 60 years in more detail, and the

project to do so is underway.


October 3, 20169




Preliminary Results


October 3, 2016 10




Similar natural gas price path through 2040, but rising

significantly after


October 3, 2016

ref2017.0928a

11




0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2010 2015 2020 2025 2030 2035 2040 2045 2050

Natural gas: Henry Hub Spot Price2016$/MMBtu

AEO2017

AEO2016

Electricity sales are slightly down from AEO2016


October 3, 2016

ref2017.0928a

12




2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

2010 2015 2020 2025 2030 2035 2040 2045 2050

Total electricity salesbillion kilowatthour

AEO2017

AEO2016

History Projection

Renewables and natural gas replace lost nuclear generation in

long-term and are primary resource to meet new demand


October 3, 2016

ref2017.0928a

13




0

500

1,000

1,500

2,000

2,500

1990 2000 2010 2020 2030 2040 2050

Net U.S. power sector electricity generationbillion kilowatthour

History Projection

Coal

Natural gas

Nuclear

Petroleum

Renewables

Overnight capital costs for new solar PV plants declines much

faster after 2025, partly due to declining metals cost index


October 3, 2016

ref2017.0928a

14




$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2015 2020 2025 2030 2035 2040 2045 2050

Overnight capital costs for new solar PV plants2016$/kilowatt

AEO2017

AEO2016

Renewable generation is 15% higher in 2040 than

AEO2016, primarily from solar


October 3, 2016

ref2017.0928a

15




0 200 400 600 800 1,000 1,200

Hydro

Geothermal

Biomass

Solar

Wind

Total

Renewable generation between 2016 and 2040billion kilowatthour

AEO2017

AEO2016

Long-term nuclear retirements create substantial additional

opportunity for new capacity additions for wind and solar


October 3, 2016

ref2017.0928a

16




0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Electricity generating capacity additions, AEO2017gigawatt

History Projections

0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040

Electricity generating capacity additions, AEO2016gigawatt

Solar

Wind

Oil & natural gas

Nuclear

Coal

Other


October 3, 2016

Coal capacity is higher than AEO2016 due to extensive

installation of MATS controls

ref2017.0928a

17




(4.5)

(13.4)(11.3)

(4.6)

(11.4)(14.2)

(11.0)(12.5)

(4.1)

(0.7)(3.5) (3.2)

(4.5)

(0.3)

(4.6)

(13.4)

(51.5)

(5.3)(3.8)

(7.5)

(1.5)

(6.2)

(2.0)(0.3)

(5.9)(4.5)

(3.0)(1.0)

(60.0)

(50.0)

(40.0)

(30.0)

(20.0)

(10.0)

0.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040

Gig

aw

atts

AEO2017 Coal Cap Change AEO2016 Coal Cap Change


October 3, 2016

ref2017.0928a

CO2 emissions post-2020 decline to meet CPP mass-based targets

which are assumed to remain constant after 2030

18




1,200

1,400

1,600

1,800

2,000

2,200

2,400

2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 emissions by electric powermillion metric ton

AEO2017

AEO2016


October 3, 2016

ref2017.0928a, *2014 and 2015 data is estimated

Total coal production down slightly in short-term, but increases

slightly in later year

19




400

500

600

700

800

900

1,000

1,100

1,200

1970 1980 1990 2000 2010 2020 2030 2040 2050

Total coal production (1970-2050)million short tons

AEO2017

AEO2016

History Projection

2005*


October 3, 2016


Coal production by region, 1970-2050

20




Appalachia

Interior

Western

Total U.S.

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040 2050

Regional coal production, 1970-2050Million short tons

16 Total U.S.

15 Total U.S.

AEO2017

AEO2016

2015*

ProjectionsHistory


October 3, 2016


U.S. coal exports

21




2014*

ProjectionsHistory

0

20

40

60

80

100

120

140

1995 2012 2030 2050

US coal exports, 1995-2050million short tons

Coking

Steam


October 3, 2016

preliminary AEO2017 assumptions; ref2016.d032416a

Reassessment of Wyoming Powder River Basin (PRB) Coal

Mining Productivity Assumptions

22




Short tons per miner hour

0

10

20

30

40

50

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

history

AEO2016

AEO2017

0

10

20

30

40

50

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Southern Wyoming PRB

AEO2017

AEO2016

Northern Wyoming PRB • Compared to AEO2016:

• Higher in Northern WY PRB

• Lower in Southern WY PRB

• Net effect: lower productivity

assumptions for the region push

prices higher and production lower

early in the projection; but similar to

AEO2016 in out years

• Methodology includes a mine by

mine assessment relating stripping

ratios and approximate, expected

production tons to derive overburden

tons. Greater overburden tons lead

to an increase in labor hours and

lower productivity.

history

0 10 20 30 40 50

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)

2016

AEO2016 2040

AEO2017 2040


October 3, 2016

ref2017.d092816a and ref2016.d032416a; excludes Two Elk and Texas Clean Energy Project

Net summer coal-fired generating capacity in the electric power

sector by coal demand region, AEO2017 vs AEO2016

23




gigawatts

U.S. Total

2016: 233

AEO2017 2040: 177

AEO2016 2040: 172

Coal-Fired Capacity Omitted from AEO2017


October 3, 2016

Source: U.S. Energy Information Administration, Form EIA-860 “Annual Electric Generator Report”

• While the Two Elk is reported as ‘under construction’ on the Form EIA-860, other references

suggest that the project is, minimally, delayed as the developer has recently cancelled an appeal

hearing. The hearing would have appealed the denial of its request for a permit extension.

• DOE has suspended funding for the Texas Clean Energy Project. This project in not reported on

the Form EIA-860.

http://wyomingpublicmedia.org/post/two-elk-power-plant-hearing-cancelled

https://insideclimatenews.org/news/12052016/department-energy-moniz-carbon-capture-ccs-climate-change-texas-

clean-energy-project

FACILITY CODE PLANT NAME

GENERATOR

ID STATE

PLANT

TYPE

ENERGY

SOURCE

REPORTED

START

YEAR

SUMMER

CAPABILITY

55360Two Elk Generating Station GEN1 WY PC waste coal 2020 275 MW

Texas Clean Energy Project TX IGCC WY PRB 2017 400 MW

Total Capacity 675 MW




http://wyomingpublicmedia.org/post/two-elk-power-plant-hearing-cancelled

https://insideclimatenews.org/news/12052016/department-energy-moniz-carbon-capture-ccs-climate-change-texas-clean-energy-project

Contact information – Office of Electricity, Coal, Nuclear, and

Renewables Analysis

• Jim Diefenderfer, Director, [email protected]

• Thad Huetteman, Team Leader – Electricity Analysis, [email protected]

• Greg Adams, Team Leader – Coal & Uranium Analysis, [email protected]

• Chris Namovicz, Team Leader – Renewable Electricity Analysis, [email protected]


October 3, 201625




mailto:[email protected]




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