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

Annual Energy Outlook 2013

Renewable Electricity Working Group

Chris Namovicz, Renewable Electricity Analysis Team

August 2, 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Agenda

• Review status of AEO 2012

• Discuss new model updates and development efforts for AEO 

2013 and future AEOs

– Capital cost updates

– Performance updates

– Policy updates

– Planned additions updates

– Model updates

• Obtain feedback from stakeholders on any key items that EIA 

should look at

Chris Namovicz, August 2 2 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Status of AEO 2012

Chris Namovicz, August 2

• AEO 2012 (full version) was released in late June, 4 months 

latter than planned

• This delay was the result of several major model 

development exercises that got behind schedule

– Including development of a new Liquid Fuels Market Module 

– Also affected by late inclusion of Mercury Air Toxics Standards issued in 

December 2011 

• As a result, the AEO 2013 development cycle got off to a late 

start

– In order to try to return the AEO publication cycle to “normal”, we are not 

planning on doing major model development efforts for AEO 2013 

– We will be doing routine (and even some non-routine) data updates

– We will also be continuing to do model development for AEO 2014

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: Capital Cost

Chris Namovicz, August 2

• EIA has funded a task with R.W. Beck/SAIC (now SAIC 

Energy, Enviroment & Infrastructure, LLC) to update 

technology costs used in the electric power sector

– R.W. Beck did a similar report for EIA in 2010, which serves as the basis for 

AEO 2011 and AEO 2012 capital costs 

• The contract was recently awarded, and work should be 

substantially completed by mid September

• We will try to prioritize preliminary data to focus on 

technologies that have seen the biggest changes in cost over 

the past 2 years

– This will likely include some renewables, especially solar, and possibly wind 

• Although we will try to obtain feedback on the draft figures, 

stakeholder involvement will likely be more limited because of 

time constraints

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: Hydro Capital Costs

Chris Namovicz, August 2

• The R.W. Beck approach is not detailed enough to fully 

capture the detailed and specific nature of our hydroelectric 

cost estimates

• These costs were developed by INL about 10 years ago

• EIA is developing a task with INL to update the costs in our 

current database of hydro sites

– Task will not be completed for AEO 2013

• EIA will also continue to pursue other data that could 

enhance our database of sites and otherwise improve our 

hydro modeling

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: Performance

Chris Namovicz, August 2

• EIA and LBNL have (independently of each other) been 

analyzing wind performance (capacity factor) trends

• EIA has occasionally updated the parameters used to project 

capacity factors for wind in the AEO

• Newly developed data will provide an opportunity to update 

model parameters for AEO 2013

• EIA may also be able to update the methodology used to 

project wind capacity factors, but this is something that will 

have to wait for a future AEO

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: MSW/LFG

Chris Namovicz, August 2 7 

• EIA re-evaluated the supply of municipal solid waste and 

landfill gas

• EIA will update the “biogenic” split of MSW

– This affects how much generation from MSW plants is accounted for under 

“renewable” generation in the AEO tables 

• While additional study may be warranted, no additional nearterm model updates are anticipated for AEO 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: Federal Policy

Chris Namovicz, August 2

• EIA uses “current laws and policies” in the Reference case

– This includes any expiration dates embedded in current law 

• At the Federal level, the expiration of the PTC for wind in 

2012 and other renewables in 2013 has potential to cause 

problems with the model development schedule

– A late extension (after finalization of the model runs in the fall) could be difficult 

to include in the “Early Release” case, especially if accompanied by significant 

changes to the policy (other than a simple deadline extension).

– In addition, this will make it difficult to gauge planned additions in light of the 

policy uncertainty

• We will also monitor other Federal environmental policies that 

may impact electricity markets to incorporate as necessary 

(and as time permits)

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: State Policy

Chris Namovicz, August 2

• At the state level, we will continue to monitor new and revised 

RPS and environmental policies that could impact electricity 

and renewable energy markets

• Generally, we look for laws that are on-the-books by early 

September

• Depending on the particulars of the law, we may have to wait 

for regulatory specifications to fully understand the 

implications of the law and incorporate it into the model

• Note: we have a regional model structure that cannot account 

for all details of State policies

– We try to capture the key elements of the policy, including key incentives and 

limitations 

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Input Updates: Planned Additions

Chris Namovicz, August 2

• Planned additions are power plants that have reported to EIA 

as being in the process of planning and construction

– Our model cannot pick-up very near-term demand for new plants, but is able to 

make projections for most plants types over the next 2 to 5 years

– The planned additions are intended to account for growth during this “blind 

spot” in model coverage 

• In general, EIA only includes plants that have started 

construction in the AEO projections

– Past experience suggests a high degree of uncertainty over plants that report 

earlier planning milestones

• For some renewables, EIA has previously included plants 

that have received regulatory approvals as well

– This is a result of the short lead-times and pressures of expiring tax credits

– We will need to re-evaluate our inclusion criteria given the potential for tax 

credit expiration, extension, or modification 

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Model Updates: Buildings Sector

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• Annual updates

– Interconnection limitations (DSIRE)

– Historical generation by and capacity of combined heat and power and 

renewable distributed generation systems (EIA- 860, IREC, AWEA)

• Photovoltaic system cost path

– Tracking the Sun IV (LBNL, 2011) 

– Residential, Commercial, and Utility-Scale Photovoltaic (PV) System Prices in 

the United States: Current Drivers and Cost-Reduction Opportunities (NREL, 

2012) 

– SunShot Vision Study (DOE, 2012)

Chris Namovicz, August 2

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Model Updates: Extension to 2040

Chris Namovicz, August 2

• EIA plans on releasing AEO 2013 projections through 2040

• Most model development work was completed as part of the 

AEO 2012 development cycle

• Assumptions and results need to be checked to ensure that 

all “over-the-horizon” issues are properly handled

– Evaluate the potential for new technologies

– Evaluate whether any new resource or operational constraints may be 

introduced for existing technologies

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Model Updates: Biomass Supply Integration

Chris Namovicz, August 2

• EIA has obtained from the University of Tennessee an 

updated POLYSYS model to facilitate integration

– Currently working on coding changes 

• EIA has decided on a new approach that will result in 

significant changes in how biomass price and quantity 

information is communicated among the various modules in 

the model

– The model will now solve for consistent price/quantity pairs for the Electricity 

and Liquid Fuels Market Modules

• Although completion is possible for AEO 2013, the significant 

cross-module changes may result in postponement until AEO 

2014 to avoid delaying the current model development cycle

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Model Updates: Wind Intermittency

Chris Namovicz, August 2

• EIA has funded a task to look at several aspects of wind 

intermittency and impacts of variable operation on the 

efficiency of fossil generators

• The task was initiated in June, and work is not expected to be 

completed in time for inclusion in AEO 2013

• The task will improve representation of these interactions, 

which may become significant at higher levels of 

wind/intermittent penetration

– New model structures may have additional benefits in representing other 

aspects of grid operation

– Could include some representation of storage

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Feedback

Chris Namovicz, August 2

• We will be soliciting feedback specifically on our capital cost 

updates, but any input on this issue would be welcome ahead 

of time

• Are there any cost, performance, technology, or policy trends 

that we need to be aware of?

• Are there any other issues that we need to address?

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
For more information

Chris Namovicz, August 2

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE