DATE: September 30, 2013

MEMORANDUM FOR: John Conti

Assistant Administrator for Energy Analysis

Office of Energy Analysis

Alan Beamon

Office Director

Office of Electricity, Coal, Nuclear, and Renewables Analysis

FROM: Renewable Electricity Analysis Team

SUBJECT: AEO 2014 Renewable Electricity Working Group Meeting Summary

ATTENDEES: 

In person

John Conti

Alan Beamon

Bob Eynon

Chris Namovicz

Danielle Lowenthal-Savy

Erin Boedecker

Gwen Bredehoeft

Jim Diefenderfer

Marie Rinkoski Spangler

Michael Leff

Michele Simmons

Michelle Bowman

Owen Comstock

Perry Lindstrom

Peter Drown* (DOE Water Power Program)

Rich Tusing* (DOE EERE)

Shirley Neff

Tyler Hodge

Phone

Becky Campbell * (SEPA)

Elyse Steiner* (EPA)

Frances Wood* (On Location)

Justin Baca*(SEIA)

Liz Salerno* (AWEA)

*Non-EIA Attendees
Date: September 26, 2013

Presenters: Chris Namovicz (methodology), Gwen Bredehoeft (results)

Topics included the environmental regulatory assumptions that will be used in the AEO2014, 

enhancements that were made to the model, updates to the data, and preliminary model results. Data 

updates included revisions to existing and planned capacity based on new data from the Form EIA-860, 

PTC effective expiration dates, and inter-regional transmission transfer capability limits. Capital cost 

assumptions were reviewed and remain unchanged for AEO2014. The model enhancements discussion 

included the integration of Polysys with NEMS to create model-interactive supply curves for biomass, the 

spinning reserve requirement that accounts for operational impacts of maintaining operating reliability 

reserve, and RPS updates (small adjustments, no repeals). The presentation concluded with an 

announcement of changes in the AEO and IEO production cycles where full and reduced content reports 

will be produced in alternate years.

Questions from participants:

• An external participant inquired whether EIA’s low-cost renewables case incorporates only 

adjusted capital costs, or if capacity factors are also increased. EIA explained that low-cost 

renewables cases in recent years have not adjusted the capacity factors and only changed the 

capital costs. The same participant questioned if shifting the PTC expiration date from 2014 to 

2015 was correct, stating that they are expecting the bulk of new installations to occur in 2014 if 

the lead time is 12 months. EIA clarified that the shift was from 2016 to 2015, and that the lead 

time assumed in NEMS three years. As a result, the bulk of the installations come online in 2015 

in the preliminary AEO2014 runs. 

• An external participant asked if EIA intends to stop grouping all renewables into one category in 

tables and charts, stating that some individual renewable energy sources actually exceed 

conventional sources. EIA responded that there is no current plan to change the representation 

of renewables in EIA publications across-the-board, but that the issue has come-up before and 

EIA is generally moving toward representing individual renewable resources when it makes 

sense in the context of a particular figure or table, and that the electric power data publications 

have near-term plans to show renewables individually. Until recently in many figures, individual 

renewable energy generation technologies would not show up without the grouping. But 

increasingly, individual renewable technologies make more sense to show as disaggregated 

from each other. However, grouping the renewables into one category can help to put things 

into context and to see the bigger picture of electricity generation.

• An external participant asked if regional differences in capital costs are accounted for in the cost 

of solar PV systems. EIA replied that the NEMS model uses standard regional adjustment factors

based on factors such as regional labor costs, but that they are not PV-specific. One current 

limitation to a more regional approach is the relatively small number of data points for utilityscale PV at that level. EIA also noted that the capital cost assumptions for PV in the commercial 

and residential sectors also use national PV system cost estimates but regional electricity prices.

• A DOE participant asked how EIA projections model storage, specifically pumped hydro. EIA

explained that the NEMS model includes existing energy storage capacity, but does not model 

new energy storage additions. However, the model includes representation of most of the key 

aspects of intermittency, including the recent addition of spinning reserves impact. Results 

suggest that the impacts at levels seen in the high wind-penetration cases are generally not 

severe enough to support significant new storage.

• Chris Namovicz informed everybody of his rotation at the Department of Transportation for six 

months, starting September 30.
• EIA noted that in the preliminary AEO2014 Reference case the most important thing to keep in 

mind is that gas prices in 2040 are around $1/MMBtu lower than in the AEO2013 Reference 

case, decreasing the competitiveness of other sources including renewables, pushing their 

competitiveness out in time. 

• An external participant asked how natural gas prices in the reference case differ from the prices 

in the side cases. EIA responded there is a fairly large spread in natural gas prices between the 

various NEMS cases, but that the exact side case assumptions have not yet been developed for 

AEO2014.