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

AEO2018 Industrial Working Group meeting 2: 

Preliminary results

Industrial Working Group 

Industrial Team: Kelly Perl, Team Leader; Chris Dickerson, Farah Naz, Paul Otis, & 

Matt Skelton; 

September 28, 2017| Washington, DC

Preliminary Results. Do not Cite or Disseminate.
Overview

• AEO2018 – Reference case and potential side cases

• Scorecard – what’s been done, what remains

• Preliminary Industrial Demand Module results – excludes refining EXCEPT 

for CHP

– Total energy consumption and energy intensity AEO2018 vs. AEO2017 

– Energy by energy source and industry

– CHP

• Discussion

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 PRELIMINARY. Do not cite or disseminate. 2
AEO2018 is a full year with major model updates and variety of side 

cases

• AEO Reference case projections assume laws / regulations currently on 

books (including those that take effect in future); some examples

– California carbon policies and 2030 reduction goal in effect – planning Issues in Focus for 

AEO2018

– Clean Power plan in AEO2018 Reference case 

• Side cases

– Usual: Hi/Low Price, Hi/Low Macro, Hi/Low Resource and Technology

– General categories of cases – new thinking this year

• Renewable and electricity policy 

• Efficiency – may be role for IDM Energy Efficiency side case from AEO2016

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 PRELIMINARY. Do not cite or disseminate. 3
AEO2018 Scorecard

• Done

– CHP: new archetypes, new data, & regional cooperation coefficients

– SEDS (State Energy Data System) benchmarking

• Almost done

– MECS2014 upgrade – today’s results reflect this 

– Renewables/waste in cement - figured out energy use, need to implement in model

• Still to be done

– Chemical history and near term projections

– New physicals – working on steel

– Individual industry benchmarking: found the reason for the 50 trill problem

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 PRELIMINARY. Do not cite or disseminate. 4
Preliminary findings

• Energy consumption shares similar to AEO2017: natural gas share about 

40% in both AEO2018 and AEO2017 renewables share slightly higher in 

AEO2018

• Energy consumption grows at 1.2%/yr, Shipments 1.7%

– Energy intensity declines but projected energy intensity higher than AEO2017

– Some explanations

• Greater shares of energy intensive manufacturing shipments for AEO2018

• More bulk chemicals CHP than last year

• CHP higher than last year, especially for bulk chemicals

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 PRELIMINARY. Do not cite or disseminate. 5
• Energy consumption grows 

steadily through the projection 

period – no lull in the 2020s

• Energy intensive manufacturing 

shipments share greater in 

AEO2018, including bulk 

chemicals

Industrial energy consumption, quadrillion Btu

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017

AEO2018 industrial energy consumption considerably higher than 

AEO2017 consumption

EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

Preliminary results. Do not disseminate. 6

16

18

20

22

24

26

28

30

32

2015 2020 2030 2040 2050

AEO2018 run idmb2k1.0926n

AEO2017 Reference case
Energy intensity, thousand Btu/2009$ shipments Energy intensive manufacturing share of shipments

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017

AEO2018 energy intensity greater than AEO2017 and generally 

declining; higher share of energy intensive shipments

EXCLUDES REFINING. Source: NEMS runs AEO2017.idmb2k1.0926n and AEO2017 Reference case

Preliminary results. Do not disseminate. 7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2015 2020 2030 2040 2050

AEO2018 run idmb2k1.0926n

AEO2017 Reference case

0.00

0.05

0.10

0.15

0.20

0.25

2015 2020 2030 2040 2050

AEO2018 run idmb2k1.0926n

AEO2017 Reference case
Energy consumption by source, quadrillion Btu Energy consumption by industry, quadrillion Btu

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017

Natural gas share is at or slightly above 40% throughout the projection; 

bulk chemicals becomes a 10 quad industry by 2030

EXCLUDES REFINING. Source: NEMS runs AEO2017.idmb2k1.0926n and AEO2017 Reference case

Preliminary results. Do not disseminate. 8

0

4

8

12

16

20

24

28

32

2015 2020 2030 2040 2050

Purchased 

Electricity

Renewables

Coal

Natural 

Gas

Petroleum

0

4

8

12

16

20

24

28

32

2015 2020 2030 2040 2050

Nonmfg

NEI - other

MBD

Bulk Chemicals 

Feedstocks

Bulk Chemicals 

H&P

EI - other

Iron & Steel

Paper
Industrial CHP generation

billion kWh 

Industrial CHP generation by industry

billion kWh

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017

CHP generation considerably higher in AEO2018 vs. AEO2017 

INCLUDES REFINING. Source: NEMS runs AEO2017.idmb2k1.0926n and AEO2017 Reference case

Preliminary results. Do not disseminate. 9

0

50

100

150

200

250

300

350

2015 2020 2030 2040 2050

AEO2018 run idmb2k1.0926n

AEO2017 Reference case

0

50

100

150

200

250

300

350

2015 2020 2030 2040 2050

Other

Bulk 

Chemicals

Paper

Food

Refining

Iron & Steel
Industrial team contacts

Industrial Team email: EIA-OECEAIndustrialTeam@eia.gov

Kelly Perl (202) 586-1743

Chris Dickerson (202) 586-6476

Farah Naz* (202) 287-6329

Paul Otis (202) 586-2306

Matthew Skelton (202) 287-5660

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017

*Joined within last year

10
Bonus slide

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 11
MECS changes

• Manufacturing

– All manufacturing industries will be benchmarked to MECS

– New Unit Energy Consumption (UEC) and Technology Possibility Curves (TPC)s for the end use 

industries change

– Starting values for manufacturing for the process flow industries

• Nonmanufacturing changes too 

– Base year (2014) nonmanufacturing energy is total energy less manufacturing – with some 

adjustments

• Formula: Non-manufacturing energy = (2014 SEDS – 2014 MECS)

• We adjust if the result is implausible using series such as EIA’s Fuel Oil and Kerosene Sales 

(FOKS), Economic Census, and USDA products

– Bring back the agriculture TPCs by activity – irrigation, vehicles and buildings

• Base year reset to 2014 from 2010 – year model results start

Industrial Working Group Meeting #2 

Washington, DC | September 28, 2017 PRELIMINARY. Do not cite or disseminate. 12