WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

October 21, 2021

MEMORANDUM FOR: Angelina LaRose

Assistant Administrator for Energy Analysis

FROM: Jim Diefenderfer

Director, Office of Long-Term Energy Modeling

SUBJECT: Summary of Annual Energy Outlook 2022 (AEO2022) Working Group for

Electricity, Coal, and Renewables held on September 21, 2021

The working group presentation summarized the preliminary results from the Annual Energy Outlook 

2022 (AEO2022) for electricity, coal, and renewables. The presentation materials included these updates 

and are available as a separate document on EIA.gov.

Overview

AEO2022 will include the eight core side cases (High and Low Economic Growth, High and Low Oil Price, 

High and Low Oil and Gas Supply, High and Low Renewables Cost) along with the Reference case. We 

are considering topics for Issues in Focus articles, which may include running additional cases.

The second working group meeting was an opportunity for stakeholders to comment and provide 

feedback on the model development work we have done since the first working group meeting on May 

27, 2021, and to comment on preliminary AEO2022 results.

Model updates

EIA staff summarized the model updates and enhancements for AEO2022 and shared some general 

preliminary results for AEO2022. We also outlined changes we made in the model to current laws and 

regulations that will be reflected in AEO2022, which include:

• Updated Oregon’s and Delaware’s renewable portfolio standards based on new state legislation

• Extended production tax credit (PTC) and investment tax credit (ITC) based on legislation passed 

in December 2020

• Removed the Affordable Clean Energy (ACE) rule

• Updated the Cross-State Air Pollution Rule (CSAPR)

• Removed Ohio’s zero energy credit (ZEC) program for nuclear power plants
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

We then discussed our model updates and enhancements for AEO2022, which include:

• Improved market sharing algorithm by adjusting build decisions among competitive 

technologies within the Electricity Capacity Planning (ECP) submodule 

• Revised operating modes that are available for baseload technologies to allow them to operate 

with more flexibility within a season and allow them to respond to changes in net load based on 

regional intermittent generation

• Implemented a new declining capacity credit algorithm for standalone storage

• Updated biomass supply curves and improved interaction between the supply curve and oil 

prices

• Updated solar inverter loading ratio (ILR) for standalone solar photovoltaic (PV) from 1.20 to 

1.30 to align with the updated ILR implemented for hybrid PV included in AEO2021

• Enabled a mechanism to allow wind generators to be retired based on economics

• Reconciled U.S. coal exports with our International Coal Market Module (ICMM)

• Revised U.S. coal transportation rates based on our survey data from 2017 to 2019

• Updated Coal Market Module (CMM) base year to 2020 for coal supply

We concluded the presentation with a discussion on preliminary results for AEO2022, which include: 

• Lower electricity demand following updates in the commercial sector as well as increased selfgeneration

• Higher capacity additions compared with AEO2021, at nearly 50 gigawatts (GW) more planned 

additions and nearly 38 GW unplanned additions

• More retirements from coal plants and older, less efficient natural gas plants than in AEO2021

because of lower projected electricity prices, lower electricity demand, and higher capacity 

additions for renewables 

• Solar PV continues to account for the majority of renewables capacity additions, contributing to 

higher capacity additions of standalone energy storage than in AEO2021

• Less wind capacity additions than in AEO2021 , despite the PTC extension, as a result of

competition from solar and natural gas

• Higher natural gas-fired generation in the near term but remaining near the same level over the 

longer term, as in AEO2021, despite lower natural gas prices 

We informed participants that the results are still preliminary and the final AEO2022 is scheduled to be 

released in late January 2022.

In addition, we noted that we are actively tracking several pieces of legislation in the news related to 

electricity and coal, namely the Infrastructure Investment and Jobs Act and the Build Back Better Act 

(the reconciliation bill introduced in Congress in fall 2021). These proposed legislation packages include 

extensions and updates to both the PTC and ITC, as well as a new policy design, the Clean 

Electricity/Energy Payment Plan (CEPP). We are closely following the development of these proposals

and assessing how to model them. The complexity of incorporating them into the model and the timing 

of the legislations’ enactment will influence our approach for AEO2022. 
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

The meeting then opened for questions and comments about updates we are considering for AEO2022

and beyond.

Discussion

The discussion following the presentation was brief; participants asked only a few clarifying questions. 

One participant asked about our efforts to model bi-facial solar PV to account for the increased

efficiency of bi-facial panels compared with traditional silicone panels. We answered that the 

performance profile of bifacial panels (as measured by hourly or seasonal output profiles) doesn’t differ 

enough from other PV technologies in the model to warrant separate representation. However, because 

it has higher overall conversion efficiency, its potential impact on electricity markets is already 

accounted for in the model through cost reductions for the existing PV technology. 

Another participant pointed out that we did not mention the update to the Maryland renewable 

portfolio standard (RPS). We did not provide an answer during the meeting on this topic, but after 

review of the updated legislation, we confirmed that the Maryland RPS update included minor changes 

to the interim year targets and removed black liquor gasification biomass as a compliant technology. We 

do not include black liquor gasification as a potential technology for modeling, and the interim years for 

the Maryland RPS are non-binding for AEO2022. Although the wording of the policy has changed, no 

change would occur from a modeling perspective as a result of the updated legislation. 

Finally, a participant asked if we model 8,760 hours in future years. We responded that the National 

Energy Modeling System (NEMS) does not model 8,760 hours in any year but models representative 

hours based on time of day (morning, midday, night) and season (winter, summer, spring, and fall). A 

few years ago, we also added a module to the EMM to evaluate renewable generation and battery 

storage based on a notional 24-hour by 12-month by 2-day structure.

Attendees

We hosted the working group meeting entirely online, and 55 people attended, including EIA staff and 

external participants.

Guests

Misha Adamantiades U.S. Environmental Protection Agency

Justin Baca Solar Energy Industries Association

Kelsey Bartz American Clean Power Association

Michael Caravaggio Electric Power Research Institute

Brendan Casey American Clean Power Association

Wesley Cole National Renewables Energy Laboratory

Hana Colwell American Clean Power Association

John Hensley American Clean Power Association

Lauren Khair National Rural Electric Cooperative Association

Hannah Kolus Rhodium Group

Trieu Mai National Renewables Energy Laboratory

Cara Marcy U.S. Environmental Protection Agency
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

Jim Moore Spire Energy

Karen Obenshain Edison Electric Institute

Aaron Pfeifer Union Pacific

Paul Pierce U.S. Geological Service

Sharon Showalter OnLocation

Norman Sproehnle ISO New England

Kirsten Verclas National Association of State Energy Officials

Kenneth Walsh Leidos

Frances Wood OnLocation

EIA staff attendees

Greg Adams Mary Lewis

Lori Aniti Vikram Linga

Lindsay Aramayo Nilay Manzagol

Erin Boedecker Laura Martin

Richard Bowers Elizabeth May

Kien Chau Carolyn Moses

Jim Diefenderfer Kevin Nakolan

Kathryn Dyl Chris Namovicz

Mindi Farber-DeAnda Albert Painter

David Fritsch April Patel

Tyler Hodge James Preciado

Thaddeus Huetteman Syne Salem

Kevin Jarzomski Andrew Smiddy

Scott Jell Manussawee Sukunta

Slade Johnson Edward Thomas

Mala Kline Neil Wagner

Augustine Kwon Stephen York