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

AEO2019 1st Coal Working Group Meeting

Coal and Uranium Analysis Team

May 17, 2018 | Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.
Roll Call – AEO2019 1st Coal Working Group

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 2

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Last Name First Name Organization Attending In Person WebEx

Adams Greg EIA X X

Benevidas Frank Alliance Energy X X

Benitez Jose' EVA X X

Daniels David EIA X X

Diefenderfer Jim EIA X X

Digiantommaso Jen OCFO X X

Evans Carolyn Norfolk Southern X X

Eyster Jerry GE X X

Fisher Brian EPA X X

Fritsch David EIA X X

Graeter Philip EVA X X

Heller Jamie Hellerworx X X

Herndon Whitney Rhodium X X

Hodge Tyler EIA X X

Huetteman Thaddeus EIA X X

Khair Lauren NRECA X X

Kislear Jordan DOE X X

Kuester Catie Union Pacific X X

Kwon Augustine EIA X X

Leitman Michael NRECA X X

Lundgren Carl MSHA X X

Martin Laura EIA X X

Mead Ian EIA X X

Medine Emily EVA X X

Moxness Greg DOL X X

Namovicz Christopher EIA X X

Ondrich Naomi DOL X X

Rockwell Joshua osmre X X

Schultz Robert LEENA Laboratories X X

Wood Frances On Location X X

Wos Thomas Tri-State X X

Zelek Charles NETL X X
Agenda

• Overview of AEO2019 process

• Review of AEO2018 assumptions and projections

– Legislative and regulatory review

– 3 key assumptions 

– 3 key industry trends

– Summary of results for coal capacity, generation, disposition, regions, labor, and exports

• Model updates and improvements for AEO2019 and beyond

• Q&A

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 3

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Overview of Annual Energy Outlook 2019 (AEO2019)

• AEO2019 will be a limited release

– Flip-book will be published

– Only core side cases will be run

• Reference

• High/Low Oil & Gas Resource Technology

• High/Low Oil Price

• High/Low Economic Growth

– No Issues in Focus articles or related side cases will be published

– Assumptions documentation will be updated

• 2nd working group session will be conducted in late summer

• Publication is scheduled for January 2019 (estimated)

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 4

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
AEO2018 Reference case reflects current laws and regulations

• EPA’s Clean Power Plan (CPP) not included in AEO2018 Reference case 

– Reference and core side cases including the CPP are available in the AEO data browser

– All cases include EPA’s New Source Performance Standards limiting CO2 emissions from new plants

– A 3% adder is applied to the cost of capital for new coal units or upgrades to existing units without maximum 

sequestration options (90% removal) included to account for risk of future tightening of CO2 emissions 

standards and other policies affecting coal

• EPA’s Cross State Air Pollution Rule (CSAPR) and Mercury and Air Toxics Standards are included in 

the Reference case

• Other EPA regulations assume compliance is reflected in survey Form EIA-860 filings as each plant 

takes action to comply

– Regional Haze compliance follows from State Implementation Plans due 7/31/21 with implementation by 2028 

(EPA announced it is revisiting the 2017 revision)

– EPA had projected minimal coal retirements from previously-finalized Coal Combustion Residuals, Cooling 

Water Intakes, and Effluent Limitation Guidelines

– Effluent Limitation Guidelines for Best Available Technology (BAT) are under review by EPA

– The 2015 Coal Combustion Residual regulations are also under review by EPA

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 5

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
State-level programs are also included in the AEO2018 

Reference case

• California

– Recently signed state law under AB 398 Global Warming Solutions Act requires statewide greenhouse gas 

emissions to return to the 1990 level by 2020 and be 40% below the 1990 level by 2030

– Cap-and-trade program under AB 32

– State law under SB-1368 that prohibits CA utilities from entering into long-term financial commitments for 

base load generation, unless in compliance 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 Northeast’s Regional Greenhouse Gas Initiative (RGGI) program

• Renewable Portfolio Standard (RPS) programs

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 6

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Limited pending regulatory changes applicable to coal 

mining in the Reference case 

• Coal excise tax rates for the Black Lung Disability Trust Fund are scheduled to decline 

January 1, 2019 From $1.25 to $0.50 per ton for underground, and from $0.55 to $0.25 for 

surface-mined coal (not applicable to lignite coal and coal intended for export)

• Other pending federal regulatory actions affecting coal mining are under review and were 

not included in the Reference case

– Office of Surface Mining’s Stream Protection Rule was nullified and formal programmatic consultation reinitiated

– Dept. of Interior’s Royalty Policy Committee expressed no recommended changes for coal leasing at its Feb. 

2018 meeting and continues to evaluate recommendations for determining fair market value for third party 

transactions and the bonus bid payment schedule

– Waters of the U.S. (WOTUS) delayed 2 years to February 2020; EPA proposing rule to change definition

– U.S. District Court (Montana) ruling that Interior update Resource Management Plans (RMPs) for the Powder 

River Basin to properly account for climate change from leasing of coal and other fossil fuels could have 

implications for federal coal leasing the region

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 7

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal productivities projected to continue 

declining with the exception of Eastern Interior

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213A. 

8

 -

 1.0

 2.0

 3.0

 4.0

 5.0

 6.0

1996 2002 2008 2014 2020 2026 2032 2038 2044 2050

Short Tons per Miner Hour

Eastern Interior

Northern Appalachia

Central Appalachia

 -

 5.0

 10.0

 15.0

 20.0

 25.0

 30.0

 35.0

 40.0

 45.0

 50.0

1996 2002 2008 2014 2020 2026 2032 2038 2044 2050

Short Tons per Miner Hour

Powder River Basin

Gulf Lignite

Rocky Mountain

Dakota Lignite

2015 

History Projections

2015 

History Projections

0.7%

-1.1%

-2.0%

Major Eastern Producing Regions Major Western Producing Regions

-1.3%

-0.7%

-1.0%

-2.3%

[Annual Growth 2015-2050]

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
International seaborne coal trade projected to increase 30% 

(350 million short tons) in IEO2017 (2015-2040)

9

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015 2025 2040

rest of world

India

other nonOECD Asia

China

South Korea

Japan

OECD Europe

2015

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015 2025 2040

rest of world

United States

South

America

Eurasia

Southern 

Africa

Indonesia

Australia

2015

Coal imports 

billion short tons

Coal exports 

billion short tons

Source: U.S. Energy Information Administration, International Energy Outlook 2017

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018
Relatively high levelized cost of electricity for coal prohibits the addition of 

coal in any case evaluated in AEO2018

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Source: “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the AEO2018”, March 2018, Excerpted from Table 1b (2022) and Table B1b (2040)

10

0 2 4 6 8 10 12

Natural Gas CC

Wind

Solar PV

Nuclear AP1000

Coal 90% CCS

Natural Gas CC

Wind

Solar PV

Nuclear AP1000

Coal 90% CCS

2040

New Power Plant Costs

2017 cents per kilowatt-hour

Incremental

transmission

costs

Fixed

costs

Variable costs,

including fuel 2022 Capital costs

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 11

After decades of slowing growth, electricity consumption is 

expected to grow gradually through 2050

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Increasing cost competitiveness of renewables leads to growth in generation 

even with projection for low electricity demand and low natural gas prices

Source: ref2018.1213a, highmacro.1213a, highrt.1213a, lowprice.1213a, ref_cpp.1213a, highprice.1220a, lowmacro.1213a, lowrt.1213a 

12

0

500

1,000

1,500

2,000

2,500

2010 2020 2030 2040 2050

Total renewables generation, including end-use

billion kilowatt-hours

Low resource & technology

High oil price

High economic growth

Clean Power Plan

Reference

Low oil price

Low economic growth

High resource & technology

2017 

History Projections

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Average delivered coal and natural gas prices to the electric power 

sector indicate limited competitive opportunity for coal

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 13

0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Low Oil and Gas Resource

and Technology

Reference

High Oil and Gas Resource

and Technology

Average delivered fuel prices to the electric power sector

2017 dollars per MMBtu

Natural Gas

Coal

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 

2017 

History Projections

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Generating capacity decreases through 2030 in all AEO side cases 

and is sensitive to the projection for natural gas prices

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 14

0

5

10

15

20

25

30

0

50

100

150

200

250

300

350

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Low Oil and Gas Resource

and Technology

Reference

High Oil and Gas Resource

and Technology

Electric Generating Capacity Average delivered natural gas prices to the electric power sector

Gigawatts (GW) 2017 dollars per MMBtu

Natural Gas Prices

Coal-Fired Capacity

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 

2017 

History Projections

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
-300

-200

-100

0

-30

-20

-10

0

10

20

30

40

50

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

2017

history projections

solar

wind

oil and 

gas

nuclear

other

coal

additions

retirements

Annual electricity generating capacity additions and retirements 

(Reference case) 

gigawatts

Economics and policy drive changes to electric generation capacity

Renewables and natural gas comprise most of the capacity additions throughout the projection period in the Reference case.

15

0

100

200

300

400

500

600

700

800

900

Low Oil and 

Gas Resource/

Technology

Cumulative generating capacity 

additions and retirements (2018-50)

gigawatts

Reference High Oil and

Gas Resource/

Technology

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Net summer coal-fired generating capacity in the electric power sector declines 

disproportionately by region in the AEO2018 Reference case

Source: AEO2018 Reference case (ref2018.d121317a); 

16

0 10 20 30 40 50 60 70

ERCOT

FRCC

MRO (MROE/MROW)

Northeast (RFCE,NPCC)

North Central (RFCW,RFCM)

SERC Gateway (SRGW)

SERC SE (SRSE)

SERC Central (SRCE)

SERC VACAR (SRVC)

South (SPNO,SPSO,SRDA)

WECC

(AZNM,CAMX,NWPP,RMPA)

2017 2050 Retirements

U.S. Total 

2017: 256 MW

AEO2018 2050: 191 MW

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Although coal capacity declines, capacity factors for remaining coal 

units recover as natural gas prices allow

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 17

0

100

200

300

400

500

600

700

800

900

1,000

1,100

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Low Oil and Gas Resource

and Technology

Reference

High Oil and Gas Resource

and Technology

Electric Generating Capacity Total Electricity Generation

gigawatts (GW) gigawatt-hours (GWh)

Coal Capacity

Coal Generation 

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 

2017 

History Projections

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2010 2020 2030 2040 2050

Capacity Utilization Rate – Coal-fired Generation

percent 2017 

History Projections

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Electricity generation from natural gas and renewables increases steadily with coal 

and nuclear projected to remain relatively flat in the AEO2018 Reference case 

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018.

18

12%

36%

31%

22%

0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2010 2020 2030 2040 2050

2017

history projections

Nuclear Natural Gas Renewables Coal

0

500

1,000

1,500

2,000

2,500

3,000

1990 2000 2010 2020 2030 2040 2050

2017

history projections 

natural gas

coal

nuclear

renewables

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Electricity generation from selected fuels

billion kilowatthours

Electricity generation from selected fuels

billion kilowatthours
0

500

1000

1500

2000

2500

3000

2010 2020 2030 2040 2050

2017

projections

High Oil and Gas 

Resource/Technology

(low natural gas prices)

0

500

1000

1500

2000

2500

3000

2010 2020 2030 2040 2050

2017

projections

Low Oil and Gas 

Resource/Technology

(high natural gas prices)

0

500

1,000

1,500

2,000

2,500

3,000

1990 2000 2010 2020 2030 2040 2050

2017

history projections 

Electricity generation from selected fuels

billion kilowatthours

natural gas

coal

nuclear

renewables

Reference

The projected mix of electricity generation varies widely across cases

as differences in fuel prices result in significant substitution

19 Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 
Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Electricity sector consumption drives total U.S. coal disposition 

with stable industrial and slowly-increasing export demand

20

0

200

400

600

800

1,000

1,200

2000 2010 2020 2030 2040 2050 2020 2030 2040 2050 2020 2030 2040 2050

electric power sector 

consumption

net exports

other consumption

High Oil and Gas 

Resource and 

Technology 

Low Oil and Gas 

Resource and 

Technology

AEO2018

Reference case

U.S. coal consumption and net exports 

million short tons

2017

history projection

• Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
0

200

400

600

800

1000

1200

2010 2020 2030 2040 2050

2017

projections

High Oil and Gas 

Resource/Technology

(low natural gas prices)

0

200

400

600

800

1000

1200

2010 2020 2030 2040 2050

2017

projections

Low Oil and Gas 

Resource/Technology

(high natural gas prices)

0

200

400

600

800

1,000

1,200

1995 2005 2015 2025 2035 2045

2017

history projections

Coal production by major region

million short tons

Total

West

Interior

Appalachia

Reference

Interior region coal production is projected to increase at the 

expense of the West and Appalachia regions in the Reference case

21 Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Source: U.S. Energy Information Administration, AEO2018 National Energy Modeling System run REF2018.D1213a, highrt.1213a, and lowrt.1213a. 
0

200

400

600

800

1,000

1,200

1,400

2000 2010 2020 2030 2040 2050

2017

history projections

Reference case Reference with Clean Power Plan

Total

West

Interior

Appalachia

U.S. Coal production by region – Reference Case with and without Clean Power Plan

million short tons .

Coal production remains flat through 2050 in the Reference case and 

declines slightly if the Clean Power Plan is assumed

Coal production decreases through 2022 because of retirements of coal-fired electric generating capacity.

22 Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal mine employment trends reflect impact of declining 

labor productivity against backdrop of declining production

23 Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

0

10

20

30

40

50

60

70

80

90

100

2000 2010 2015 2020 2030 2040 2050

Thousands

Coal Mine Employment

Number of Miners

2015

history projections total

Appalachia

West

Interior

Reference case

0

10

20

30

40

50

60

70

80

90

100

2000 2010 2015 2020 2030 2040 2050

Thousands

Coal Mine Employment

Number of Miners

2015

history projections

total

Underground

Mines

Surface

Mines

Reference case

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Source: AEO2017 Reference case (ref2018.d121317a)
Average minemouth coal prices increase gradually as productivity 

decreases over time

2017 dollars per short ton

Appalachia

Interior

West

0

10

20

30

40

50

60

70

80

90

1980 1990 2000 2010 2020 2030 2040 2050

AEO2018

U.S. Average

2016

History Projections

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 24

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Source: AEO2017 Reference case (ref2018.d121317a)
U.S. coal exports are expected to recover only gradually through 2050

million short tons

0

10

20

30

40

50

60

70

80

90

100

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Coking

Steam

History Projections

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 25

Source: AEO2017 Reference case (ref2018.d121317a)

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Coal Market Module (CMM) Updates and Improvements 

Planned for AEO2019 and beyond

• Implementing 2016/2017 base year updates

• Updating Coal Production Submodule (CPS) econometric parameters 

• Allowing for AIMMS code to be opened and closed between cycles to reduce the 

number of licenses needed when running NEMS

• Enhancing reporting capability by implementing standardized, analytical coal reports 

directly in the AIMMS software, e.g., supply curve reporting

• International coal supply curves and domestic transportation model improvement 

efforts planned for AEO2020; International Coal Market Module (ICMM) planned for 

after IEO2019

• Looking into option of a short-term coal projection working group 

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 26

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Legislative and regulatory changes affecting the AEO2019 

from changes in Federal tax code

• Tax Cuts and Jobs Act of 2017

– Broad, macro feedbacks on electricity demand

– Changes to investment economics from the change in marginal tax rates and the temporary 

provisions for immediate expensing

• Section 45Q tax credit for Carbon Capture and Storage

– Reviewing possible impact on cost treatment in EMM

– revised (from $20) to $50 per metric ton for secure geologic storage

– revised (from $10) to $35 per metric ton for EOR, EGR, or utilization

– NETL is working on an analysis of 45Q; NEMS code they developed may be transferable

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 27

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
• Are there predictable patterns of spending 

associated with aging/ plant life extension?

• What other variables are critical determinants 

of spending patterns?

• Is regulatory status a significant factor in 

spending?

• Is there sufficient historical data on non-hydro 

renewable generation to determine impacts of 

aging?

Variables Affecting Annual Changes in Real Spending per kW Key Issues Addressed in Study

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Updating methods for projecting changes in generation 

costs (Sargent & Lundy study- forthcoming)

28

Generating Capacity Capital

Expenditures O&M Spending

Coal Steam Age (for units with 

FGD)

-

Gas/Oil Steam Capacity -

Gas/Oil Combined-Cycle Operating Hours -

Gas/Oil Combustion Turbines Starts -

Conventional Hydropower - Age

Pumped Storage – Hydraulic 

Turbine Reversible - -

Solar Thermal – Central 

Tower - -

Solar Photovoltaic – SingleAxis Tracking - -

Geothermal - -

Wind Capacity Age

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
• How does varying current NEMS-EMM 

treatment (3+ unprofitable periods) influence 

projected retirements?

• How does use of energy only vs. inclusion of 

capacity payments influence retirements?

• Is there a generally-accepted industry 

definition of generation-at-risk?

AEO2018 Reference Case- Coal Generators Key issues under consideration

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Evaluating alternative measures of generation at-risk: 

share of cost recovery

29

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Alternative generation at-risk criteria

• PJM Coal (2011)

– Physical Screen1: Older than 40 years old; less than 400 MW are “most at risk”

– Economic Screen: “At risk” level measured by costs relative to replacement capacity costs Net Cost of New Entry (Net 

CONE 

• PJM Nuclear and Coal (2017)

– More stringent criteria2: units that have not recovered 100% avoidable costs from total market (energy, ancillary and 

capacity market) revenues

– Relaxed criteria

• Coal: units that have recovered <90% of total market revenues

• Nuclear: units that have not recovered 100% of avoidable costs based on forward price

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 30

1Coal Capacity at Risk for Retirement in PJM: Potential Impacts of the Finalized EPA Cross State Air Pollution Rule and Proposed National Emissions 

Standards for Hazardous Air Pollutants 

22017 State of the Market Report for PJM: Volume 2: Detailed Analysis

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
• What other attributes ought to be considered? 

Which could be eliminated, or represented 

differently? 

• How do these reliability attributes contribute to 

grid resilience?

• Should these attributes be weighted equally, or 

are some more critical than others?

• What is the best way to represent these factors 

in the model?

PJM rating of generation types by reliability attributes Key issues under consideration

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018

Evaluating alternative means of representing impact of 

generation diversity

Source:

http://www.pjm.com/~/media/library/reports-notices/special-reports/20170330-pjms-evolving-resource-mix-and-system-reliability.ashx pg. 16

31

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
EIA evaluates technology costs for select emerging and 

existing technologies on a periodic basis

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 32

Source: U.S. Energy Information Administration, Cost and Performance Characteristics of New Generating Technologies, Annual Energy Outlook 2018, Table 8.2., p. 2.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Q&A on AEO2018 Projections

• Recent article by IEEFA highlights standard questions 

regarding EIA’s modeling of coal markets...

– Can coal plants recover capacity utilization up to 70% on average if 

gas prices are favorable?

– Should EIA consider some form of ‘planned obsolescence’ for coal in 

response to electric utility and corporate purchasing pressures, i.e., 

shift away from modeling retirement decisions as economic decisions?

• Any issues with coal mining labor productivity trends? Can 

Eastern Interior keep improving? 

• Will the U.S. remain a swing coal exporter?

• Any insights on how to value resilience and generation 

diversity?

• Should additional technologies be evaluated by EIA?

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 33

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
For more information

Greg Adams, Team Lead, Coal and Uranium Analysis | Greg.Adams@eia.gov | (202) 586-7343

David Fritsch, AEO Coal Models and Projections | David.Fritsch@eia.gov | (202) 587-6538

Elias Johnson, STEO Coal Models and Projections | Elias.Johnson@eia.gov | (202) 586-7277

Bonnie West, IEO Coal Models and Projections | Bonnie.West@eia.gov | (202) 586-2415 (returning in August)

_______________________________________________________________________________________________

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/aeo

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

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

State Energy Profiles | www.eia.gov/state

Drilling Productivity Report | www.eia.gov/petroleum/drilling/

International Energy Portal | www.eia.gov/beta/international/?src=home-b1

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 34

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
0

50

100

150

200

250

300

350

400

450

500

1970 1980 1990 2000 2010 2020 2030 2040 2050

Northern Appalachia

Central Appalachia

Southern Appalachia

Total Appalachia

Appalachian coal production declines gradually as productivity 

declines, but is buffered by relatively steady met coal demand 

million short tons

• Source: AEO2017 Reference case (ref2017.d120816a), 

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

2016

History Projections

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 35

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Interior coal production remains declines only slightly from 2016 levels under the 

CPP due to increasing productivity and competitiveness with low-sulfur coals

million short tons

Total Interior

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020 2030 2040 2050

Eastern Interior

Gulf Lignite

2016

History Projections

Source: AEO2017 Reference case (ref2017.d120816a)

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 36

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 
Western coal production sees the greatest rate of decline under the CPP

million short tons

0

100

200

300

400

500

600

700

1970 1980 1990 2000 2010 2020 2030 2040 2050

Other West

2016

History Projections

Wyoming PRB

Total West

Coal and Uranium Analysis Team, 

Washington, D.C., May 17, 2018 37

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE 

OR CITE AS MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. 

Source: AEO2017 Reference case (ref2017.d120816a)