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

Annual Energy Outlook 2017

1st Coal Working Group

Coal and Uranium Analysis Team

August 31, 2016| Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES.

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS 

AND INPUTS ARE SUBJECT TO CHANGE.
Agenda

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 2

• EIA ongoing activities

• Modeling focus for AEO2017

• Review of AEO2016 results 

• General Modeling Assumptions

– Focus on productivity and other factors affecting price

– Feedback from CWG participants

• Other stakeholder concerns/comments

• Appendix: Regulations having potential to impact coal 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Coal Fleet Aging Meeting 

(Adjunct Meeting to Coal Working Group)

3

• Modeler’s forum held in June 2016 as follow up to the June 2015 EIA post-conference 

session

• Meeting Purpose: guide next steps and priorities for tangible research initiatives or 

focused modeling efforts that:

(1) Address issues associated with operating an aging coal fleet

(2) Can be represented in the Electricity Market Module of EIA’s National Energy Modeling System

• Key findings:

(1) Determination of when aging/cycling costs should be incurred is important.

(2) An attempt to characterize the data (heat rate, O&M, mode of cycling) and establish 

relationships among the data could be an important next step for EIA.

(3) EIA should concentrate its costing effort on the numerous smaller, but still expensive costs that 

are more likely to be incurred by a plant over time.

• Current effort: NETL is leading a contracting effort to explore coal plant operations 

information to improve understanding of the implications of suboptimal operation of the 

aging coal fleet

• See: http://www.eia.gov/forecasts/aeo/workinggroup/coal/ for meeting notes and 

presentation.

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Status of Development Efforts

• Use of recoded Coal Market Module (CMM) in AIMMS successful

• Final EPA Clean Power Plan (CPP) implemented in NEMS

• Approach successfully developed and implemented to automate AEOSTEO benchmarking

• Progress made in re-estimating the underlying coal supply curve 

regressions in the CMM Coal Pricing Submodule to incorporate 2010-2013 

data, but additional modeling required

• EPA’s Coal Ash, Cooling Water Intake, and Effluent Guidelines final 

regulations not explicitly modeled in NEMS

– EPA analysis indicated minimal incremental impact on coal retirements

– Rules are site-specific and limited cost data is available

– Inclusion would require significant structural modeling changes with limited expected impact 

on projections

• Re-estimating international coal export supply curves and equations for 

estimating ocean freight rates (for AEO2018)

• Assessment of transportation rate methodology (for AEO2018)

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 4

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Modeling Focus for AEO2017

• AEO2017 will be a short edition, with a limited number of side cases – tentative 

release date January 2017

• Final CPP in the Reference case (as it was in the AEO2016)

• Extension to 2050 and other modelling and process improvements

– Extending to 2050 enables EIA to conduct longer-term policy assessments

– Closing AIMMS each cycle limits the number of licenses needed to conduct parallel 

runs

• Focus on assessment of productivity

– Limited staff and stringent deadlines prevent comprehensive update of all assumptions

– Last full data update year 2013, limited data updates for 2014, and 2015 will not be 

updated

• EPA’s Coal Ash, Cooling Water Intake, and Effluent Guidelines final rules will not 

be explicitly modeled in AEO2017” (as in AEO2016)

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 5

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
AEO2016 Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 6

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Current trends already having an impact on 

coal consumption even before the CPP

• Nationally

– Slowing growth in electricity demand

– Competition with relatively low-cost natural gas

– Increasing competition with renewable energy

– Compliance with the Mercury Air Toxics Standard (MATS)

– High plant construction costs relative to natural gas and renewables

• Regionally

– Central Appalachia encountering thinning seams and reserve depletion

– Illinois Basin coals competing more effectively as plants add SO2 

controls

– Coal export markets weakening

7

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Source: EIA, Annual Energy Outlook 2016

Electricity use (including direct use) continues to grow, but the rate of 

growth slows as it has almost continuously over the past 60 years 

8

U.S. electricity use and GDP

percent growth (rolling average of 3-year periods)

0

2

4

6

8

10

12

14

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Period Average Growth

Electricity use GDP

1950s 9.8 4.2

1960s 7.3 4.5

1970s 4.7 3.2

1980s 2.9 3.1

1990s 2.4 3.2

2000-2015 0.5 1.8

2015-2040 0.9 2.2

History

Electricity

GDP

2015 Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Delivered prices of natural gas and coal to the electric power sector in the 

Reference case

-3

2

7

12

2005 2010 2015 2020 2025 2030 2035 2040

coal

AEO2016

AEO2016

AEO2015

AEO2015

average delivered fuel prices to electric power 

plants, 2015 dollars per million Btu

9

History 2014 Projections

natural gas

Short Term Energy Outlook

August 2016

Source: AEO2016 (ref2016.d032416a) and AEO2015 Reference case (April 2015).

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
0

200

400

600

800

1,000

1,200

1,400

2000 2005 2010 2015 2020 2025 2030 2035 2040 2015 2020 2025 2030 2035 2040

renewable electricity generation by fuel type

billion kilowatthours

Annual Energy Outlook 2016, 

Changing tax and cost assumptions contribute to stronger solar 

growth, with the CPP providing a boost to renewables

10

Solar Geothermal

Biomass

Municipal waste/

landfill gas

Wind

History 2015

Conventional 

hydroelectric power

AEO2016 Reference No CPP 2015

Source: AEO2016 (ref2016.d032416a) and AEO2015 Reference case (April 2015).

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Coal, solar, and wind capital costs differ 

significantly from AEO2015 assumptions

11

* Technology specification on some items may have changed from report to report. Pulverized coal has changed from super-critical to 

ultra-supercritical with 30% CCS.

0

1,000

2,000

3,000

4,000

5,000

6,000

Pulverized Coal * Coal/Biomass Co-Fire

(15%Biomass)

Adv Gas/Oil Comb.

Cycle

Conv Gas/Oil Comb

Cycle

Conventional Comb.

Turbine

Advanced Comb.

Turbine

PV (fixed tilt) PV (tracker) Wind Farm - Onshore

Total Overnight Capital Costs (2014$/KW)

2014$/KW Leidos 2015 (latest) AEO 2015 SAIC 2013 R.W. Beck 2010

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.
U.S. electricity net generation

trillion kilowatthours

Source: AEO2016 (NEMS run ref2016.d032416a)

12

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

13%

Renewables and natural gas together account for 65% of 

generation in 2040 while coal’s share falls to 18%

27%

19%

38%

13%

1%

Nuclear

Oil and other liquids

Natural gas

Coal

Renewables

History 2014 Projections

16%

27%

18%

38%

1%

1993

11%

13%

19%

53%

4%

32%

18%

27%

23%

1%

2025 2040

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Electricity Generation by Fuel, 1980-2040

13

billion kilowatthours

Renewables

0

500

1000

1500

2000

2500

1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2015

Note: Includes generation from plants in both the electric power and end-use sectors.

Source: History: U.S. Energy Information Administration (EIA), Annual Energy Review; 

Projections: Preliminary AEO2016 (NEMS run ref2016.d032416a), AEO2015 Reference Case (April 2015).

History 2014 Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Natural 

Gas

Coal
Total coal production, 1970-2040

14

million short tons

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2016 No CPP

AEO2015

History 2014* Projections

Source: AEO2016 (ref2016.d032416a), AEO2015 Reference Case (April 2015), No Clean Power Plan 

(ref_no_cpp.d032316a; *2014 data is estimated.

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Coal production by region, 1970-2040

15

million short tons

Appalachia

Interior

Western

Total U.S.

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040

16 Total U.S.

15 Total U.S.

AEO2016

AEO2015

History 2014* Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Source: AEO2016 (ref2016.d032416a), AEO2015 Reference Case (April 2015), No Clean Power Plan 

(ref_no_cpp.d032316a; *2014 data is estimated.
Coal production by region, 1970-2040

16

million short tons

Appalachia

Interior

Western

Total U.S.

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040

16 Total U.S.

15 Total U.S.

AEO2016

AEO2016 No CPP

History 2014* Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Source: AEO2016 (ref2016.d032416a), No Clean Power Plan Case (ref_no_cpp.d032316a;

*2014 data is estimated.
Average minemouth coal prices by region, 1980-2040

17

2015 dollars per short ton

Appalachia

Interior

West

0

10

20

30

40

50

60

70

80

90

1980 1990 2000 2010 2020 2030 2040

AEO2015 

U.S. Average

AEO2016

U.S. Average

2014*

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

Source: Preliminary AEO2016 (ref2016.d032416a), AEO2015 Reference Case (April 2015), *2014 is estimated.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
U.S. Coal Exports, 1995-2040

18

million short tons

0

20

40

60

80

100

120

140

1995 2000 2005 2010 2012 2015 2020 2025 2030 2035 2040

Coking

Steam

Source: History: U.S. Energy Information Administration (EIA), Quarterly Coal Report; 

Projections: AEO2016 (NEMS run ref2016.d032416a).

History Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
 -

 2

 4

 6

 8

 10

 12

 14

 16

 18

2015 2016 2017 2018 2019 2020 2021 2022 2025 2028

AEO2016

AEO2017

Initial assessment shows that reported coal retirements 

are slightly higher for AEO2017 than AEO2016 

19 Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

Gigawatts

AEO 2016: 35 GW’s 

AEO 2017 preliminary: 39 GW’s 

Total Reported Coal Capacity Retirements 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Discussion Slides

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 20

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Average annual growth in coal mining labor productivity for selected supply 

regions (percent)

21

1980 - 2013 Recent year-over-year

changes

AEO2016

projections

Coal Supply Region 1980-

1990

1990-

2000

2000-

2013

2011-

2012

2012-

2013

2013-

2014 2014-2040

Northern Appalachia 5.4 5.5 -2.2 -4.9 3.7 11.2 -1.2

Central Appalachia 7.3 4.4 -5.2 -3.8 3.1 5.5 -2.7

Eastern Interior 4.8 3.7 -0.2 6.1 7.1 0.9 0.7

Gulf Lignite 2.6 2.4 -2.8 -4.2 -1.2 0.9 -1.0

Dakota Lignite 6.0 1.0 -3.3 -4.8 -1.7 0.7 -0.7

Western Montana 4.6 2.0 -2.4 -11.7 15.4 -0.9 -1.0

WY, Northern 

Powder River Basin 7.5 3.2 -3.2 -5.7 -2.6 3.2 -1.1

WY, Southern 

Powder River Basin 7.2 4.9 -2.4 -6.4 4.9 1.3 -1.1

Rocky Mountain 7.8 5.5 -2.4 3.5 1.3 9.3 -1.6

U.S. Average 7.1 6.2 -1.8 -0.2 6.7 7.6 -0.9

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: AEO2016 Reference Case (ref2016.d032416a).

Coal and Uranium Analysis Team

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Historical productivity and production by region

22

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

short tons per 

miner hour

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Recoverable Reserves at Existing Mines vs. Cumulative 

Regional Production Totals

23

million short tons

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000 Cumulative production AEO2016

Reference case (2015-2040)

Recoverable reserves at producing

mines (2014)

Projections: AEO2016 (NEMS run ref2016.d032416a), U.S. Energy Information Administration (EIA), EIA-7A

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Productivity discussion topics

24

• How might an outlook of declining coal demand impact productivity?

– How has maintenance of existing equipment and capital investments been affected by 

lower demand for coal? Are companies investing more in maintenance activities rather 

than buying new equipment?

– Will productivity appear to be improving because mining assets and production are focused 

on the best performing mines? If so, when can we expect this to bottom out?

– How is productivity affected by a loss of economies of scale? 

• What are companies doing to improve productivity? What sort of cost cutting efforts have been 

taking place at mines, and what might the impacts (direct or indirect) be on productivity?

• What sort of evolutionary changes might be expected in the future to enhance productivity? (Is 

there anything revolutionary on the horizon?)

• Is there a potential to achieve the higher productivity levels seen in 2006-2008 (for various supply 

regions)?

• How might expectations of labor costs and employee demographics impact productivity and 

price?

• What about other mine production costs? Tires, explosives, steel, general machinery costs?

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
25

For more information

greg.adams@eia.gov, (202) 586-7343

diane.kearney@eia.gov, (202) 586-2415 (AEO)

ayaka.jones@eia.gov, (202) 586-0998 (International/China)

elias.johnson@eia.gov, (202) 586-7277 (STEO)

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

Annual Energy Outlook | www.eia.gov/aeo

International Energy Outlook | www.eia.gov/ieo

EIA Information Center

InfoCtr@eia.gov

Our average response time is within three 

business days.

(202) 586-8800

24-hour automated information line about EIA 

and frequently asked questions.

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Extra Slides

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 26

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Appalachian coal production, 1970-2040

27

million short tons

0

50

100

150

200

250

300

350

400

450

500

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 Reference

AEO2015 Reference

Northern Appalachia

Central Appalachia

Southern Appalachia

Total Appalachia

AEO2016

AEO2015

Source: Preliminary AEO2016 (ref2016.d032416a), AEO2015 Reference Case (April 2015) 

Except for Appalachian total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

History 2014 Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Appalachian coal production, 1970-2040

28

million short tons

0

50

100

150

200

250

300

350

400

450

500

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 Reference

AEO2016 No CPP

Northern Appalachia

Central Appalachia

Southern Appalachia

Total Appalachia

AEO2016

AEO2016 No CPP

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2016 No Clean Power Plan Case (ref_no_cpp.d032316a) 

Except for Appalachian total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

History 2014 Projections

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Interior coal production, 1970-2040

29

million short tons

Total Interior

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2015

Eastern Interior

Gulf Lignite

History 2014 Projections

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), 

Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Interior coal production, 1970-2040

30

million short tons

Total Interior

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2016 No CPP

Eastern Interior

Gulf Lignite

History 2014 Projections

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2016 No Clean Power Plan Case (ref_no_cpp.d032316a), 

Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Western coal production, 1970-2040

31

million short tons

0

100

200

300

400

500

600

700

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2015

Other West

History 2014 Projections

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), 

Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Total 

West

WY 

PRB
Western coal production, 1970-2040

32

million short tons

0

100

200

300

400

500

600

700

1970 1980 1990 2000 2010 2020 2030 2040

AEO2016

AEO2016 No CPP

Other West

History 2014 Projections

Source: Preliminary AEO2016 (ref2016.d032416a), AEO2016 No Clean Power Plan Case (ref_no_cpp.d032316a), 

Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 

Total 

West

WY 

PRB
Legislation and Regulations

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 33

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
EPA and the courts have been busy issuing or confirming 

regulations affecting the power sector

Regulation AEO2016 

Assumption

AEO2017 Assumption Comment

Cross State Air Pollution

Rule- CSAPR (SO2/NOx)

Will model CSAPR Will model CSAPR

Mercury and Air Toxics 

Program (Hg/SO3)

Update retirements 

to match 

announced plans

Update retirements to 

match announced plans 

and review/verify retrofit 

status for some plants

New Source Performance 

Standards limiting CO2 

emissions from new plants 

(Clean Air Act S. 111b)

Will be included in

Reference case

Will be included in

Reference case

Part of CPP package; requires 

coal units to install USC with 

partial CCS to achieve max. rate 

of 1,400 lb CO2/MWh 

Regional Haze (Best Available 

Retrofit Technology)

Assumes 

compliance is 

reflected in EIA860 filings on 

plants

Assumes compliance is 

reflected in EIA-860 filings 

on plants

Not expecting significant impact

Coal Combustion Residuals 

(Coal ash)

Not modeled Not modeled Not expecting significant impact 

(approx. 0.8 GW)

Cooling Water Intakes (Clean 

Water Act S. 316b)

Not modeled Not modeled Not expecting significant impact 

(approx. 1 GW)

Effluent Limitation Guidelines Not modeled Not modeled Not expecting significant impact 

(approx. 1 GW)

34 Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Coal Combustion Residual (Coal Ash) 

Final Rule

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 35

• Final guidelines released April 2015

– Rule sets national minimum criteria for the new and existing landfills and impoundments used for the disposal of coal ash.

• All CCR units must monitor groundwater.

• Impoundments and landfills that fail to meet location requirements or impoundments that fail to meet structural integrity 

requirements (i.e. those that pose the greatest risk) must close.

• Some existing disposal sites may be required to retrofit or decide to close (avoiding all compliance costs) .

• Unlined impoundments can continue to operate, but if unacceptable groundwater contamination occurs, they must retrofit 

or close. Similarly, unlined landfills can continue to operate but corrective action must occur to address any releases.

– Coal ash will continue to be regulated as a non-hazardous waste under Subtitle D of the Resource Conservation Recovery Act.

– Rule allows CCR products to remain unregulated if the CCR is encapsulated in a product having a beneficial use. This includes

gypsum wallboard and concrete but specifically excludes the use of coal ash as ground fill. 

– Rule is unenforceable by EPA, but facilities that do not comply may be subject to litigation from other interested parties. 

• Implementation timeline

– Specific timelines vary depending on type of characteristics of CCR unit and compliance option chosen.

• EPA’s estimate of electric power capacity retirements: ~ 0.8 gigawatts

• EPA’s incremental cost estimate:

– $509-$735 million annually (depending on discount rate)

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Cooling Water Intakes (316(b)) Final Rule 

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 36

• Final rule effective as of October 2014

– Sets impingement controls for new and existing electric generating and manufacturing facilities with design intake flow of 

at least 2 million gallons per day (MGD) and use at least 25% of the water withdrawals for cooling.

– Requires facilities having >125 MGD design intake flow to conduct studies to help permitting authorities determine what, 

if any, entrainment controls are needed.

– Establishes a best technology available (BTA) standard for both impingement mortality and entrainment at new and 

existing facilities.

• Existing BTA technologies for impingement include a closed cycle system, reduction of intake flows to 0.5 feet per 

second, minimum 800-foot distance offshore intakes with use of bar screens, or use of modified travelling 

screens.

• BTA for entrainment will be determined on a site-specific basis.

• Requires that new units must have the equivalent of closed loop cooling.

• Implementation time frame

– Based on expiration of National Pollutant Discharge Elimination System (NPDES) permits but no later than 2023; a plan 

must be submitted by July 14, 2018. 

– Early choice of evaporative thermal cooling can allow implementation delay to 2023.

• EPA’s estimated electric power capacity retirements: ~1 gigawatt 

• EPA’s estimated incremental costs: 

– $275-297 million per year (excludes entrainment costs)

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Effluent Limitation Guidelines

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C. 37

• Final guidelines released September 2015

– Addresses liquid waste steams from plants (primarily coal plants) discharged directly and indirectly to 

water bodies (e.g. lakes, rivers)

• In response to the transfer of pollutants from air to water as a result of the Clean Air Act

– Regulates wastewaters associated with flue gas desulfurization, fly ash, bottom ash, flue gas mercury 

control, and gasification of fuels such as coal and petroleum coke

• Addresses discharge of mercury, arsenic, selenium, nitrites/nitrate wastes from flue gas 

desulfurization equipment 

• Includes zero discharge pollution limits for ash transport water and flue gas mercury control water

• Implementation timeline

– Effective as of January 2016

– Compliance deadlines vary according to the expiration of the plant’s National Pollutant Discharge 

Elimination System (NPDES) permit but will occur between 2018 and 2023.

• EPA’s estimate of electric power capacity retirements: ~ 1 gigawatt

• EPA’s incremental cost estimate: 

– $471-$480 million annually (depending on the discount rate)

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Other laws and regulations affecting coal

38

• EPA’s regional haze program is aimed at protecting national parks through implementation of 

Best Available Retrofit Technology (BART) 

– Requires states to lower NOx and SO2 emissions over time through state implementation plans (SIPs) or 

federal implementation plans (FIPs)

– Implementation to occur between 2014 and 2018

– Retrofits or retirements associated with finalized plans captured in reporting data

• California’s cap-and-trade program (AB 32) and the Northeast’s Regional Greenhouse Gas 

Initiative (RGGI) program

• California SB1368 that prohibits CA utilities from entering into long-term financial commitments 

for base load generation, unless it complies with the CO2 emissions performance standard of 

1,100 lbs/MWh

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

Juan, and Boardman plants and retire Intermountain in 2025

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

• The 3% adder on the cost of capital for upgrades to coal units without maximum sequestration 

options included to account for risk of future tightening of CO2 emissions standards and other 

policies affecting coal

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE. 
Monitoring proposed regulatory actions

39

• California post-2020 Greenhouse Gas (GHG) emissions target

– EO-S-3-05 (2005) requires California to reduce its emissions to 20% of 2020 levels by 2050.

– Guidelines for meeting post-2020 targets are expected in 2017.

• OSM’s Stream Protection Rule (Proposed in July 2015)

– Affects surface mines and underground mines that impact the surface. 

– Requires pre-mining collection of data to establish baseline environmental conditions.

– Specifies that mining area must be returned to a condition appropriate for its pre-mining use. 

– Requires permits to specify maximum acceptable material damage levels from the mine operation.

– Earliest implementation date: January 2017

• EPA’s “Waters of the United States” (Final as of June 2015, but subject to court stay in 

October 2015)

– Expands scope of “waters of the United States” (WOTUS) that are protected under the Clean Water Act.

• Key changes relate to tributaries, adjacent wetlands, and “other waters.”

– Coal industry concerns include permitting delays.

• Potential changes to the federal coal leasing program

– DOI held recent listening sessions.

• Outcome of coal export terminal permitting processes

Coal and Uranium Analysis Team 

August 31, 2016 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS AEO2017 MODELING ASSUMPTIONS AND 

INPUTS ARE SUBJECT TO CHANGE.