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

Annual Energy Outlook 2018:

Preliminary Results for Electricity, Coal, 

Nuclear, and Renewables

For

Joint Session- AEO2018 Working Groups

September 19, 2017 | Washington, D.C.

By

EIA, Office of Electricity, Coal, Nuclear & Renewables Analysis
Summary

• Significant developments for AEO2018 cycle

• Present preliminary AEO2018 outlook results

• Open discussion

2 AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group

September 19, 2017

WORKING GROUP PRESENTATION FOR 

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Significant electric sector model development for AEO2018

Electricity/Nuclear

– Addressing review/revision of existing federal air regulations for generators

– Explicit modeling of generation at economic risk

– Electric generating capacity updates

– Initiation/modeling of state programs to support nuclear generation

– Analysis of local market conditions to evaluate economic risk factors at individual nuclear plants

Renewables

– Improved representation of renewable generation resources

– More detailed representation of state RPS programs

– Changed capital cost structure of generating technologies to better account for renewable tax 

credits

Coal

– Addressing revision of existing rules affecting cost of coal mining

3 AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

WORKING GROUP PRESENTATION FOR 

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Status of the Clean Power Plan remains highly uncertain, although the 

nature of the uncertainty has shifted since AEO2017

• EPA review of the Clean Power Plan (CPP)

– No final decision to date, but publicly stated preference for repealing the ruling “as-is”

– Not clear from available information what, if anything, will replace it

– EPA vs. Massachusetts still presumably requires carbon regulation 

– The longer the rule is stayed, the more specific CPP deadlines become untenable

• EPA review of Standards of Performance for Greenhouse Gases (NSPS)

– From New, Modified, or Reconstructed Stationary Sources: Electric Generating Units

• EPA withdrawal of Proposed Rules intended to support implementation of CPP 

– including Model Trading Rule, Clean Energy Incentive Program, etc.

• EIA will continue to publish cases including and excluding the CPP

– Core side cases will be developed under both scenarios

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

WORKING GROUP PRESENTATION FOR 

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4
AEO2018 Cases

• Case with the Clean Power Plan

• Case without the Clean Power Plan

• Core side cases

– High/low oil price

– High/low economic growth

– High/low oil and gas resource and technology

• CPP/No CPP alternative cases for particular side cases

• Additional side cases currently under consideration

– Extended Policies

– Energy Storage 

• Unless otherwise noted, preliminary “AEO2018” results shown in this presentation 

include the CPP to facilitate comparisons with AEO2017

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 5

WORKING GROUP PRESENTATION FOR 

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Electricity/Nuclear Updates

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 6

WORKING GROUP PRESENTATION FOR 

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Modeling the economic risk for nuclear units in AEO2018

• Define nuclear units at economic risk as those with 3+ years of “negative net 

revenues” (projected revenues insufficient to cover projected costs)

• Currently analyzing scenarios to evaluate higher levels of fixed O&M prior to 

developing final inputs

– Minimum= 110% of plant-level O&M

– Maximum= 150% of plant-level O&M

• Still analyzing the price variability experienced by nuclear units (zonal prices 

vs. region-wide pricing)

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 7

WORKING GROUP PRESENTATION FOR 

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Variety of economic risk issues for the nuclear power fleet

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 8

Cost and Revenue Risk Issues

• Local market prices (actual)

• FOM costs ($/MWh)

• Market structure (reg/dereg)

• Demand trend (near flat)

• Technical (aging cost)

• State RPS (renewable wedge)

• State Price Support (life line)

• Grid Congestion (temporary ?)

• Growth in natural gas use low RISK high

0

5

10

15

20

25

30

Announced

Highest At 

Risk

Large 

group with 

potential 

for closing

Large group

with very low 

potential for 

closing

Large group with low potential for closing

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Potential nuclear generating capacity retirements

gigawatts
Methodology for inclusion of Zero Emission Credit programs

• Require units at economic risk to remain operational over specified period of 

ZECS programs in NY(12 years) /IL (10 years)

• Determine subsidy representing additional revenues required to overcome 

net revenue loss and to continue economical operation

– Adjust subsidy accordingly if specified annual limits are exceeded

• Pass subsidy costs to retail prices as an adder to the distribution component 

to represent the purchase of ZECs by load-serving entities

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 9

WORKING GROUP PRESENTATION FOR 

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New York (Upstate- EMM Region 8) Illinois (EMM Regions 11-13)

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Projected ZECs subsidy paid vs. NY/IL program maximum: 

Alternative Fixed O&M Cost Cases

10

WORKING GROUP PRESENTATION FOR 

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Renewables Updates

11

WORKING GROUP PRESENTATION FOR 

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017
Renewable Electric Power Sector Updates for AEO2018

• Renewable generation: Include improved representation of renewable generation resources. 

• Variable renewable integration: Assess parameters that are impacted by increased generation of 

non-dispatchable (i.e., variable) generation, such as wind and solar.

• Curtailment and energy storage: Integrate energy storage as a capacity expansion option. 

• Potential hydro builds: Reassess data sources of potential hydro builds.

• State-level renewable policy: Enhance representation of Renewable Portfolio Standards (RPS).

• Utility rate structure: Reconsider representation of electric power price with increasing 

deployment of distributed generation to adequately address the ability to recover system costs

• Project Financing : Revaluate cost of capital to finance new generating capacity by owner type.

• Additional data updates: Update standard input assumptions as needed.

12

WORKING GROUP PRESENTATION FOR 

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017
Progress to date: Renewables

• Renewable Generation: Added technology slots for wind turbines with higher hub heights and 

tracking for solar PV; refining parameters

• Variable RE integration: Testing new parameters for maximum regional penetration for wind and 

solar

• Curtailment and energy storage: Refining parameters for a 4 hour storage technology

• Hydro builds: Adding data from ORNL on non-powered dams to replace NPD data currently in 

model

• State RPS policies: More detailed RPS model in-place along with revised RPS parameters

• Utility rate structure: Developing sensitivity case to highlight policy uncertainty

• Project financing: Revised capital structure for wind, solar, and deregulated builds, reverted to 

regulated financing in regulated regions

• Additional data updates: Reviewing regional cost factors for wind and solar; reviewed capacity 

factor assumptions for wind

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

WORKING GROUP PRESENTATION FOR 

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13
• Utility-scale storage assumptions:

– Size: 30 MW / 120 MWh, Efficiency = 85%

– System costs:

• Pack costs = $425/kWh

• BOS costs = $670/kW

• Project contingency cost = 5%

• Variable O&M = $8/MWh

• Fixed O&M = $40/kW-year

• Solar PV capital cost assumptions:

– Capital cost learning for solar PV tracking 

– Tracking cost of $0.15/watt will be used to 

estimate the fixed axis tracking costs

Utility-Scale solar PV-tracking capital cost learning

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

EIA is finalizing cost and performance assumptions for new energy 

storage, solar (tracking), and wind (tall tower) technologies

Source: EIA, based on LBNL Utility-Scale Solar 2016, https://emp.lbl.gov/publications/utility-scale-solar-2016-empirical

14

1

2

4

8

1 10 100 1,000 10,000 100,000

capital costs ($/W)

installed capacity (MW)

Median Price Capacity-Weighted Average Price

capital cost 

learning rate 

12.5%

WORKING GROUP PRESENTATION FOR 

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Source: int40_r18.0807a, int70_r18.0807a, ref2017.1208a

Increasing max intermittent share allows some regions to 

extend growth beyond 2017 levels

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 15

0%

10%

20%

30%

40%

50%

60%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Share of wind and solar generation for Region 17 (Southwest Power Pool – North)

percent

VRE 40 VRE 70 Reference 2017

WORKING GROUP PRESENTATION FOR 

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

The revised cost of capital assumptions result in more renewables & 

CCGT; less coal & CT 

Source: ref2018.0916a, wg2.0918b

16

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-20

-10

0

10

20

30

40

2015 2020 2025 2030 2035 2040 2045 2050

Difference in net summer capacity, revised vs. previous assumptions, by fuel type

gigawatts change

Coal

Oil & gas ST

CCGT

CT/diesel

Storage

Renewables

Distributed generation
Preliminary Results

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 17

WORKING GROUP PRESENTATION FOR 

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Lower short term natural gas price path in AEO2018, 

stabilizing at 20-25% lower than AEO2017

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2017.1208a, ref2018.0916a

18

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2015 2020 2025 2030 2035 2040 2045 2050

Natural Gas: Henry Hub Spot Price

2016$ per MMBtu

AEO2017

AEO2018

WORKING GROUP PRESENTATION FOR 

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Electricity sales largely unchanged from AEO2017

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2017.1208a, ref2018.0916a

19

3,000

3,250

3,500

3,750

4,000

4,250

4,500

4,750

5,000

2015 2020 2025 2030 2035 2040 2045 2050

Total Electricity Sales

billion kWh

AEO2017

AEO2018

WORKING GROUP PRESENTATION FOR 

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Generation mix is similar to AEO2017, with slightly less coal and higher 

mid-term natural gas use due to lower projected natural gas prices

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2018.d091617a, ref2017.d120816a

20

0

500

1,000

1,500

2,000

2,500

1990 2000 2010 2020 2030 2040 2050

Net U.S. electricity generation

billion kilowatthour

History Projection

Coal

Natural gas

Nuclear

Petroleum

Renewables

AEO2018 _____

AEO2017 _ _ _ _

WORKING GROUP PRESENTATION FOR 

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Similar to AEO2017, primarily solar and natural gas-fired 

capacity is added after 2025, with slightly more near-term wind

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2018.d091617a, ref2017.d120816a

21

0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Electricity generating capacity additions, AEO2018

gigawatt

History Projections

Solar

Wind

Oil & natural gas

Nuclear

Coal

Other

0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Electricity generating capacity additions, AEO2017

gigawatt

WORKING GROUP PRESENTATION FOR 

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Utility and end-use PV capacity is lower due to lower natural gas 

& electricity prices and a re-specification of the end-use PV model

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2017.1208a, ref2018.0916a

22

0

50

100

150

200

250

2015 2020 2025 2030 2035 2040 2045 2050

Utility-scale solar PV generating capacity

gigawatts

AEO2017

AEO2018

148

127

0

50

100

150

200

250

2015 2020 2025 2030 2035 2040 2045 2050

End-use solar PV generating capacity

gigawatt

AEO2017

AEO2018

226

200

WORKING GROUP PRESENTATION FOR 

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2018.0916a, ref_no_cpp.0916a

CO2 emissions are higher in the No CPP case as renewables and 

nuclear generating capacity are lower than in the case with the CPP

23

-40

-30

-20

-10

0

10

20

30

40

50

60

2015 2020 2025 2030 2035 2040 2045 2050

Generating capacity by fuel type under No CPP case

gigawatt change from CPP case

Nuclear

Fossil fuel

Renewables

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2015 2020 2025 2030 2035 2040 2045 2050

CO2 emissions by electric power sector

million metric tons

With CPP

No CPP 

WORKING GROUP PRESENTATION FOR 

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Coal Production and Exports

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 24

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2017.1208a, ref2018.0916a *2014 - 2016 data is estimated per the STEO projections 

Total coal production down slightly in short-term, but increases 

slightly in later year

25

400

500

600

700

800

900

1,000

1,100

1,200

1970 1980 1990 2000 2010 2020 2030 2040 2050

Total coal production (1970-2050)

million short tons

AEO2018

AEO2017

History Projection

2016

WORKING GROUP PRESENTATION FOR 

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Appalachia

Interior

Western

Total U.S.

0

200

400

600

800

1000

1200

1400

1970 1980 1990 2000 2010 2020 2030 2040 2050

Regional coal production, 1970-2050

Million short tons

16 Total U.S.

15 Total U.S.

AEO2018

AEO2017

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

Source: ref2017.1208a, ref2018.0916a *2014 - 2016 data is estimated per the STEO projections 

Coal production by region, 1970-2050

26

2016*

History Projections

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AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

U.S. coal exports are expected to recover only gradually through 2050

27

0

20

40

60

80

100

120

140

1995 2000 2005 2010 2012 2015 2020 2025 2030 2035 2040 2045 2050

Coking

Steam

History Projections

Source History: U.S. Energy Information Administration, Quarterly Coal Report

Projections: IEO2017 Reference case (Released 9/14/2017)

U.S. coal exports, 1995-2050

Million short tons

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For more information

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

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

Annual Energy Outlook | www.eia.gov/aeo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

28 AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017

WORKING GROUP PRESENTATION FOR 

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Contact information – Office of Electricity, Coal, Nuclear, and 

Renewables Analysis

• Jim Diefenderfer, Director, Jim.Diefenderfer@eia.gov

• Thad Huetteman, Team Leader – Electricity Analysis, Thaddeus.Huetteman@eia.gov

• Greg Adams, Team Leader – Coal & Uranium Analysis, Greg.Adams@eia.gov

• Chris Namovicz, Team Leader – Renewable Electricity Analysis, Chris.Namovicz@eia.gov

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 29

WORKING GROUP PRESENTATION FOR 

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Contact information – Electricity Analysis Team

• Thad Huetteman, Team Leader, Thaddeus.Huetteman@eia.gov, (202) 586-7238

• Lori Aniti, Lori.Aniti@eia.gov, (202) 586-2867

• Tyler Hodge, Tyler.Hodge@eia.gov, (202) 586-0442

• Scott Jell, Scott.Jell@eia.gov, (202) 586-5196

• Jeff Jones, Jeffrey.Jones@eia.gov, (202) 586-2038

• Augustine Kwon, Augustine.Kwon@eia.gov, (202) 586-3645

• Nilay Manzagol, Nilay.Manzagol@eia.gov, (202) 586-3704

• Laura Martin, Laura.Martin@eia.gov, (202) 586-1494

• Kenny Dubin; Kenneth.Dubin@eia.gov, (202) 586-0477

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 30

WORKING GROUP PRESENTATION FOR 

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Contact information – Coal & Uranium Analysis Team

• Greg Adams, Team Leader, Greg.Adams@eia.gov, (202) 586-7343

• David Fritsch, David.Fritsch@eia.gov, (202) 287-6538

• Marta Gospodarczyk, Marta.Gospodarczyk@eia.gov, (202) 586-0527

• Elias Johnson, Elias.Johnson@eia.gov, (202) 586-7277

• Slade Johnson, Slade.Johnson@eia.gov, (202) 586-3945

• Michael Scott, Michael.Scott@eia.gov, (202) 586-0253

• Bonnie West, Bonnie.West@eia.gov, (202) 586-2415

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 31

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Contact information – Renewable Electricity Analysis Team

• Chris Namovicz, Team Leader, Chris.Namovicz@eia.gov, (202) 586-7120

• Richard Bowers, Richard.Bowers@eia.gov, (202) 586-8586

• Michelle Bowman, Michelle.Bowman@eia.gov, (202) 586-0526

• Cara Marcy, Cara.Marcy@eia.gov, (202) 586-9224

• Fred Mayes, Fred.Mayes@eia.gov, (202) 586-1508

• Manussawee Sukunta, Manussawee.Sukunta@eia.gov, (202) 586-0279

AEO 2018 Electricity, Coal, Nuclear, and Renewables Working Group 

September 19, 2017 32

WORKING GROUP PRESENTATION FOR 

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