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www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis
Annual Energy Outlook 2019:Preliminary Results for Electricity, Coal, Nuclear, and Renewables
ForJoint Session- AEO2019 Working GroupsSeptember 20, 2018 | Washington, D.C.
ByEIA, Office of Electricity, Coal, Nuclear & Renewables Analysis
Welcome to AEO2019 Preliminary Results Working Group• We will be confirming attendance: please state your name and affiliation at
log-in.
• NOTE: we will be recording the Working Group presentation to enable preparation of meeting notes. The recording will not be made available to anyone outside the Working Group.
• The meeting is being conducted under Chatham House Rules.
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 2
Summary
• Key developments for AEO2019 cycle
• Preliminary AEO2019 outlook results
• Open discussion
3AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Key developments for AEO2019 in electric sector modelingElectricity/Nuclear
– Revised costs for new generating units CC/CT – Additional state programs to support non-emitting generation (NJ, CA)– Shift from risk analysis for individual nuclear plants to common generation-at-risk treatment– Electric generating capacity updates– Revised short-term elasticity approach
Renewables– Improved representation of renewable generation resources– Updated state RPS programs– Updated solar costs to reflect policy and market considerations
Coal– Updated coal supply curve parameters and analysis of coal supply contracts
4AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
AEO2019 Cases• Reference Case • Core side cases
– High/low oil price– High/low economic growth– High/low oil and gas resource and technology
• Additional considerations– Affordable Clean Energy rule– Revised NSPS alternative cases
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 5
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Electricity/Nuclear Updates
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 6
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
EPA proposed replacement of Clean Power Plan and revision of NSPS
• EPA proposed the Affordable Clean Energy (ACE) rule, replacing the original Clean Power Plan (proposed Aug 2018- currently in 60 day comment period)
– Revises EPA’s BSER (“best system of emission reduction”) finding for GHG emissions from existing power plants to include only heat-rate efficiency improvements
– Rather than setting specific technology-based standards, gives states a list of “candidate technologies” that can be used to establish performance standards for use in state plans
– Revises EPA’s New Source Review Permitting program so that only projects that increase a plant’s hourly rate of pollutant emissions would be subject to full NSR analysis
• EPA is expected to issue revised Standards of Performance (NSPS) for greenhouse gas emissions from new electric generating units shortly
– Will cover treatment of new, modified, or reconstructed stationary sources
• As in AEO2018 EIA’s Reference Case will exclude the CPP and retain current NSPS
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
7
Updated treatment of plant aging, generator cost (capital/O&M) and performance for existing units
• S&L did not find data to support EIA’s current approach to plant aging costs– where aging was a factor its impact was consistent over time rather than an increase in spending
at year 30 and it was significant in only a limited number of technology types
• While aging was not as significant a factor in fossil generation cost, S&L found other variables to be significant for capital expenditures, including:
– Capacity for gas/oil steam plants and wind turbines, and
– Operating hours for natural gas combined cycle,
– Number of starts for natural gas combustion turbines.
• S&L recommended additional study to test whether generators incur incremental capital spending to prevent deterioration in operating performance
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 8
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Comparing S&L recommended capital expenditure levels for coal-fired units to current EMM treatment
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 9
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
5 15 25 35 45 55 65 75
2017
$ kW
/yea
r
Midpoint years of plant age range
New Value – No FGD New Value – with FGD Existing EMM Value
Revised costs for new generating units: Gas CC vs. CT
Combined cycle/combustion turbine
• Recent reports1 suggest a continued decline in the cost of new combined cycle gas turbines, converging on simple cycle cost
• PJM’s Cost of New Entry Study estimated that for example in the EMAAC region gas CC overnight capital cost was at $873/kW (vs. $898 for CT)
– Attributed to improved performance, lower unit cost, and lower capital cost
– EIA confirmed declining costs in evaluation of data for new builds
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
1 https://www.pjm.com/-/media/committees-groups/committees/mic/20180425-special/20180425-pjm-2018-cost-of-new-entry-study.ashx
10WORKING GROUP PRESENTATION FOR
DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Additional state programs to support non-emitting generation
New programs– New Jersey S-2313 zero emission certificate program
– California SB 100 renewable portfolio standard program
– Revised RPS policies
Implemented in AEO2018– Illinois: Future Energy Jobs bill
– New York: Clean Energy Standard legislation
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 11
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Shift from risk analysis for individual nuclear plants to common generation-at-risk treatment
• In both the AEO2018 and AEO2019, a nuclear unit is projected to be retired if the nuclear unit is:
– In dispatch analysis (EFD): projected to have 3+ years of “negative net revenues” (projected energy only revenues insufficient to cover projected costs) and
– In capacity expansion modeling (ECP): not required for least cost optimization to meet regional reserve margin requirements
• AEO2018 also included retirement of individual nuclear plants based on an analysis of local market conditions to evaluate economic risk factors
– Analysis was based on local market prices, fixed costs, deregulated market, load growth, aging costs, state RPS, availability of state support, grid congestion, growth in natural gas use
– AEO2019 no longer includes retirements based on this generation-at-risk analysis
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 12
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Renewables Updates
13
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Renewable Electric Power Sector Updates for AEO2019
• REStore
• RPS updates
• New capacity credit algorithm
• New spinning reserve parameter
• kWh to BTU conversion
• Solar cost evaluation
14
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Generation in California, April 2050megawatthours
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
EIA has improved its enhanced-resolution treatment of renewables and storage with an integrated dispatch approach
15
-10
0
10
20
30
40
50
0 6 12 18 0 6 12 18
weekend weekday
curtailments
solar
wind
storage
hydro
natural gas
other
0
10
20
30
0 6 12 18 0 6 12 18
marginalprice
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Renewable Portfolio Standard Updates• Massachusetts
– 35% renewables by 2030 (up from 25% by 2030)
• New Jersey– AB 3723 (SB 2314) 21% from Class I renewables by January 1, 2020
• 35% by January 1, 2025
• 50% by January 1, 2030
– Phase down of solar carve-out
• California– 60% renewable generation by 2030, 100% carbon-free by 2045 (to include large scale hydro,
CCS, and nuclear)
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 16
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
• RPS projection compliance calculated by:
• Approximately 92% of RPS compliance met with in-state renewables in 2050 (includes large-scale hydro), even without new targets
• Qualifying ‘clean energy’ resources and additional specifications regarding the CA RPS are pending regulatory determination
California 100% carbon-free goal has limited impact on results
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 17
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Renewable Energy Generation/Total Electric Power Projections 20 - Western Electricity Coordinating Council / California All Sectors : Electricity Generation : Total (BkWh)
AEO 2019 w/ CA RPS
AEO 2019 w/o CA RPS
AEO 2018
95%
91%92%
𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝑇𝑇𝐺𝐺𝐺𝐺𝐺𝐺𝑇𝑇 𝑆𝑆𝐺𝐺𝑇𝑇𝐺𝐺𝑆𝑆
,where Total Sales = Total Consumption
− End−use Generation
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Preliminary Results
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 18
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Lower short term natural gas price path in AEO2019, stabilizing at 7-8% lower than AEO2018
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a
19
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2015 2020 2025 2030 2035 2040 2045 2050
Natural Gas: Henry Hub Spot Price2018$ per MMBtu
AEO2018
AEO2019
Electricity sales largely unchanged from AEO2018
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a
20
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
3,000
3,250
3,500
3,750
4,000
4,250
4,500
4,750
5,000
2015 2020 2025 2030 2035 2040 2045 2050
Total Electricity Salesbillion kWh
AEO2018
AEO2019
Generation mix is similar to AEO2018, with slightly less coal and higher mid-term natural gas use due to lower projected natural gas prices
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a
21
AEO2019 _____
AEO2018 _ _ _ _
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
0
500
1,000
1,500
2,000
2,500
3,000
1990 2000 2010 2020 2030 2040 2050
2017
history projections
Reference case
Electricity generation from selected fuelsbillion kilowatthours
natural gas
coal
nuclear
renewables
Petroleum
Similar to AEO2018, primarily solar and natural gas-fired capacity is added after 2025
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.d091617a, ref2017.d120816a
22
0
10
20
30
40
50
60
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Electricity generating capacity additions, AEO2019gigawatt
History Projections
SolarWindOil & natural gasNuclearCoalOther
0
10
20
30
40
50
60
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Electricity generating capacity additions, AEO2018gigawatt
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Utility and end-use PV capacity is lower due to lower natural gas & electricity prices and a re-specification of the end-use PV model
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a
23
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
172153
0
50
100
150
200
250
300
2015 2020 2025 2030 2035 2040 2045 2050
Utility-scale solar PV generating capacitygigawatts
AEO2018AEO2019
251
257
0
50
100
150
200
250
300
2015 2020 2025 2030 2035 2040 2045 2050
End-use solar PV generating capacitygigawatts
AEO2018
AEO2019
Coal Production and Exports
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 24
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a *2017 - 2019 data is estimated per the STEO projections
Total coal production down slightly in short-term, but increases slightly in later years
25
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
AEO2019 AEO2018
History Projection
2016
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
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
19 Total U.S.
18 Total U.S.AEO2019
AEO2018
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: ref2018.1213a, ref2019.0914a *2017 - 2019 data is estimated per the STEO projections
Coal production by region, 1970-2050
26
2016*
ProjectionsHistory
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
U.S. coal exports are expected to recover only gradually through 2050
27
0
20
40
60
80
100
120
140
1995 2000 2005 2010 2012 2015 2017 2020 2025 2030 2035 2040 2045 2050
CokingSteam
History Projection
Source History: U.S. Energy Information Administration, Quarterly Coal ReportProjections: AEO2019 Reference case (Preliminary Ref2019.d0914a)
U.S. coal exports, 1995-2050Million short tons
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
For more information
U.S. Energy Information Administration home page | www.eia.gov
Short-Term Energy Outlook | www.eia.gov/steo
Annual Energy Outlook | www.eia.gov/aeo
International Energy Outlook | www.eia.gov/ieo
Monthly Energy Review | www.eia.gov/mer
Today in Energy | www.eia.gov/todayinenergy
28AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Contact information – Office of Electricity, Coal, Nuclear, and Renewables Analysis
• Jim Diefenderfer, Director, Jim.Diefenderfer@eia.gov
• Thad Huetteman, Team Leader – Electricity Analysis, Thaddeus.Huetteman@eia.gov
• Greg Adams, Team Leader – Coal & Uranium Analysis, Greg.Adams@eia.gov
• Chris Namovicz, Team Leader – Renewable Electricity Analysis, Chris.Namovicz@eia.gov
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 29
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Contact information – Electricity Analysis Team• Thad Huetteman, Team Leader, Thaddeus.Huetteman@eia.gov, (202) 586-7238
• Lori Aniti, Lori.Aniti@eia.gov, (202) 586-2867
• Tyler Hodge, Tyler.Hodge@eia.gov, (202) 586-0442
• Scott Jell, Scott.Jell@eia.gov, (202) 586-5196
• Jeff Jones, Jeffrey.Jones@eia.gov, (202) 586-2038
• Augustine Kwon, Augustine.Kwon@eia.gov, (202) 586-3645
• Nilay Manzagol, Nilay.Manzagol@eia.gov, (202) 586-3704
• Laura Martin, Laura.Martin@eia.gov, (202) 586-1494
• Kenny Dubin; Kenneth.Dubin@eia.gov, (202) 586-0477
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 30
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Contact information – Coal & Uranium Analysis Team• Greg Adams, Team Leader, Greg.Adams@eia.gov, (202) 586-7343
• David Fritsch, David.Fritsch@eia.gov, (202) 287-6538
• Elias Johnson, Elias.Johnson@eia.gov, (202) 586-7277
• Slade Johnson, Slade.Johnson@eia.gov, (202) 586-3945
• Michael Scott, Michael.Scott@eia.gov, (202) 586-0253
• Bonnie West, Bonnie.West@eia.gov, (202) 586-2415
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 31
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Contact information – Renewable Electricity Analysis Team• Chris Namovicz, Team Leader, Chris.Namovicz@eia.gov, (202) 586-7120
• Richard Bowers, Richard.Bowers@eia.gov, (202) 586-8586
• Michelle Bowman, Michelle.Bowman@eia.gov, (202) 586-0526
• Cara Marcy, Cara.Marcy@eia.gov, (202) 586-9224
• Fred Mayes, Fred.Mayes@eia.gov, (202) 586-1508
• Manussawee Sukunta, Manussawee.Sukunta@eia.gov, (202) 586-0279
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 32
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Supplemental Slide
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018 33
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
• The effect of the solar PV tariff is expected to be offset by excess solar panel supply resulting from reset of Chinese policy
• Recent IRS safe-harbor guidance is expected to have a significant effect on solar PV build decisions, as it effectively allows up to a 4-year construction period
AEO 2019 Electricity, Coal, Nuclear, and Renewables Working Group: Preliminary Results September 20, 2018
Source: U.S. Energy Information Administration, Form EIA-860 Annual Electric Generators Report, Lawrence Berkley National Laboratory, Utility-Scale Solar 2018, and National Renewable Energy Laboratory, U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017
Solar PV cost assumption is reasonably in-line with cost trends across various sources
34
0
1
2
3
4
5
6
7
2010 2012 2014 2016 2018 2020
Solar photovoltaic with tracking installed costs comparison2017 dollars per watt-ac
EIA generator dataLBNL (capacity-weighted)NREL
AEO2019
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
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