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

Annual Energy Outlook 2014: 

Electricity Working Group Meeting

September 25, 2013

Electricity Analysis Team

Office of Electricity, Coal, Nuclear, and Renewables Analysis

Office of Energy Analysis

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Key Modeling updates from AEO2013

• Revised Reserve Margin and Capacity Market Methodology

– Explicit Reserve Margin, Explicit Capacity Payment

– Results in 3-5 mill higher electric prices

• Operating/Spinning reserve structure

– New constraints introduced in the capacity planning and dispatch submodules

to enforce required levels of spinning and operating reserves. 

– Costs related to maintaining reserves will be passed through to prices.

– Impact: results in slightly more CC builds and fewer CT, however the remaining 

CT as well as existing steam units generate a little more to meet the new 

operating reserve requirements.

• Fully linked CO2 transport algorithm to EOR opportunities

2 Electricity Analysis Team 

September 25, 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Environmental Rules

3 Electricity Analysis Team 

September 25, 2013

• Only current laws and regulations are included in EIA’s 

reference case.

• Clean Air Interstate Rule is assumed in place through 2040.

• Mercury and Air Toxics Standards take effect in 2016.

– AEO2014 allows ESP upgrades for certain eligible plants.

– DSI and fabric filter costs were updated.

• Regional Greenhouse Gas Initiative is in place for 9 

Northeastern states, the limit was updated in Feb. 2013.

• California cap-and-trade program as specified in AB32 is 

modeled in all affected sectors.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Existing and Proposed Generating Capacity

4 Electricity Analysis Team 

September 25, 2013

• Analyzed company press releases and submissions to EIA 

for consistency with respect to plant retirements and new 

capacity additions

• Compared submissions to EIA against EPA Settlement 

Agreements with regard to plans for:

– Unit retirements

– Environmental equipment retrofits

– Coal to gas conversions

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Reported Coal Retirements By Year 

5 Electricity Analysis Team 

September 25, 2013

0

2

4

6

8

10

12

14

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

AEO 2013 (2011 Form EIA-860 data)

AEO 2014 (Form EIA-860 as reflected in

NEMS 9/20/13)

Early 

Release 

2012 Data 

gigawatts

AEO 2013: 27 GW’s 

AEO 2014: 34 GW’s 

Total Reported Coal Capacity Retirements 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Planned New Plant Capacity Additions

6 Electricity Analysis Team 

September 25, 2013

gigawatts

0

5

10

15

20

25

30

2012 2013 2014 2015 2016 2017 2018 2019

AEO 2013

Coal Natural Gas Nuclear Wind Solar Biomass Hydro-Electric

Planned Capacity Additions gigawatts (2012-2019)

AEO 2014 AEO 2013

Coal 6.06 6.06

Natural Gas 22.94 16.73

Nuclear 5.52 5.52

Wind 14.36 12.91

Solar 5.60 4.73

Biomass 0.60 0.74

Hydro-Electric 0.93 0.83

0

5

10

15

20

25

30

2012 2013 2014 2015 2016 2017 2018

AEO 2014

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 

Early 

Release 

2012 Data 
Nuclear Power Assumptions

• Planned Retirements – 4,795 MW

– 2013 – Kewaunee, San Onofre 2 & 3, Crystal River

– 2014 -- Vermont Yankee

– 2019 -- Oyster Creek

– No further retirements assumed, but model can make economic retirement decisions; 

typically not seen in a reference case 

• Planned Additions – 5,522 MW

– Watts Bar (2015)

– Summer 2 & 3 (2017 & 2018)

– Vogtle 3 & 4 (2016 & 2017) 

• Planned Uprates – 540 MW

– Assumed implemented only if reported on Form EIA-860

7 Electricity Analysis Team 

September 25, 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Changes in results from AEO 2013

• Comparisons relative to AEO2013HR8 which included the 

impacts of the American Taxpayer Relief Act of 2012 passed 

on 1/1/2013.

• Similar overall load growth but sectoral mix changes

– 1.0 % 2012-2040 compound annual growth rate (similar to AEO2013HR8)

• Residential (0.7% CAGR vs. 0.9% for AEO2013HR8)

• Industrial (0.8% CAGR vs. 0.5% for AEO2013HR8)

• By 2040 electricity use is 1.3% higher overall while total 

generating capacity is 2.4% higher.

• Natural gas fuel prices higher for most of the forecast, but 

flatten out post 2035, ending lower than last year’s forecast.

8 Electricity Analysis Team 

September 25, 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Total Electricity Sales

9 Electricity Analysis Team 

September 25, 2013

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Residential Electricity Sales

10 Electricity Analysis Team 

September 25, 2013

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d083113a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Commercial Electricity Sales

11 Electricity Analysis Team 

September 25, 2013

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Industrial Electricity Sales

12 Electricity Analysis Team 

September 25, 2013

0

200

400

600

800

1,000

1,200

1,400

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Power Sector Fuel Prices

13 Electricity Analysis Team 

September 25, 2013

0

2

4

6

8

10

12

2008 2013 2018 2023 2028 2033 2038

Coal AEO 2014 Coal AEO 2013HR8

Natural Gas AEO 2014 Natural Gas AEO 2013HR8

 History Projection

$/MMBtu

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Electricity Prices

14 Electricity Analysis Team 

September 25, 2013

 8.5

 9.0

 9.5

 10.0

 10.5

 11.0

 11.5

2008 2013 2018 2023 2028 2033 2038

AEO 2014 AEO 2013HR8

 History Projection

Cents /kWh (2012$)

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Coal Generation

15 Electricity Analysis Team 

September 25, 2013

0

500

1,000

1,500

2,000

2,500

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

 History Projection

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Natural Gas Generation

16 Electricity Analysis Team 

September 25, 2013

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

 History Projection

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Nuclear Generation

17 Electricity Analysis Team 

September 25, 2013

0

200

400

600

800

1,000

1,200

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

 History Projection

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Renewable Generation

18 Electricity Analysis Team 

September 25, 2013

0

100

200

300

400

500

600

700

800

900

1,000

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

AEO2013

Billion kilowatthours

Source: AEO 2014: NEMS run ref2014/d092013a, AEO 2013: Full Release Reference Case, AEO2013 HR8

Projection History

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Plant Retirements through 2040

19 Electricity Analysis Team 

September 25, 2013

45 42

25 39

8

7 5

7

0

10

20

30

40

50

60

70

80

90

100

AEO 2014 AEO 2013HR8

Nuclear

Combustion Turbine

Oil/Gas Steam

Coal

Gigawatts

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Capacity Additions through 2040

20 Electricity Analysis Team 

September 25, 2013

0

50

100

150

200

250

300

Coal Natural Gas Nuclear Renewables

AEO2014

AEO2013HR8

Gigawatts

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
CO2 Emissions

21 Electricity Analysis Team 

September 25, 2013

0

500

1,000

1,500

2,000

2,500

2008 2013 2018 2023 2028 2033 2038

AEO2014

AEO2013HR8

Million metric tons

Source: AEO 2014: NEMS run ref2014/d092013a, AEO2013 HR8

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Changes in release cycles for EIA’s AEO and IEO

22 Electricity Analysis Team 

September 25, 2013

• To focus more resources on rapidly 

changing energy markets and how 

they might evolve over the next few 

years, the U.S. Energy Information 

Administration is revising the 

schedule and approach for 

production of the International 

Energy Outlook (IEO) and the 

Annual Energy Outlook (AEO).

• Starting with IEO2013, which was 

released in July, 2013, EIA adopted 

a two-year production cycle for 

both the IEO and AEO.

• Under this approach, a full edition 

of the IEO and AEO will be 

produced in alternating years and 

an interim, shorter edition of each 

will be completed in the “off” years.

2014 2015

International 

Energy 

Outlook

Interim Edition will be 

released in mid 2014, focusing 

on the liquids projection, which 

is used as part of the AEO2014. 

Summary tables and a short 

analysis will be included. 

Full Edition will be released 

in the spring 2015

Annual 

Energy 

Outlook

Full Edition will be released 

in spring 2014, including 

analysis of energy issues and 

many alternative scenarios. 

Interim Edition will be 

released in late 2014 or early 

2015 and will only include the 

Reference, Low and High 

Economic Growth, and Low 

and High Oil Price cases. The 

shorter version will include 

tables for these cases and 

short discussions. 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

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

• J. Alan Beamon, Director, Office of Electricity, Coal, Nuclear, 

and Renewables Analysis; (202) 586-2025; 

joseph.beamon@eia.gov

• Jim Diefenderfer, Team Leader, Electricity Analysis Team, 

Office of Electricity, Coal, Nuclear, and Renewables Analysis; 

(202) 586-2432; jim.diefenderfer@eia.gov

• Team Members:

– Jeff Jones (202) 586-2038

– Laura Martin (202) 586-1494

– Lori Aniti (202) 586-2867

– Mike Leff (202) 586-1297

– Marie Rinkoski Spangler (202) 586-2446

– Carrie Milton (202) 586-1130

23 Electricity Analysis Team 

September 25, 2013

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE