WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

June 16, 2021

MEMORANDUM FOR: Angelina LaRose

Assistant Administrator for Energy Analysis

FROM: Jim Diefenderfer

Director, Office of Long-Term Energy Modeling

SUBJECT: Summary of AEO2022 Joint Electricity-Renewable Electricity Working 

Group Meeting held on May 27, 2021

This memorandum summarizes the presentation we gave during the Annual Energy Outlook (AEO) 2022 

Electricity and Renewable Electricity Working Group meeting and the discussions that followed. The 

meeting recapped the AEO2021 results and highlighted the major modeling and data updates planned 

for AEO2022. The presentation for this meeting is available in a separate document on our website.

Overview

AEO2022 will include the eight core side cases (High/Low Macro, High/Low Oil Price, High/Low Oil and 

Gas Resource and Technology, and High/Low Renewables Cost), along with the Reference case. We are

considering topics for Issues in Focus articles, which may include running additional cases.

The first working group meeting provides an opportunity to identify issues or topics that might be better 

addressed through smaller, targeted working group discussions and to solicit stakeholder feedback to 

consider in future modeling efforts.

AEO2022 model and policy updates

We began the meeting by presenting an overview of the results from AEO2021. We then shared our 

proposed modeling enhancements for AEO2022, including: 

• Revising the dispatch operating modes to account for net load

• Implementing renewable capacity credit foresight

• Developing a methodology for retiring or repowering wind and solar plants

• Analyzing solar diurnal capacity factors to improve the representation of capacity credits for 

solar

• Reexamining the solar inverter loading ratio

• Reevaluating the market-sharing algorithm for technologies with substantially non-overlapping 

duty cycles
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• Evaluating learning-based cost reductions for offshore wind with offshore oil drilling activity

• Implementing an algorithm to account for the declining capacity credit for storage as a result of 

increased market penetration

We next outlined changes to current laws and regulations for AEO2022, which include:

• Extension of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) that Congress 

passed as part of the omnibus spending package in December 2020

• Updates to the Cross-State Air Pollution Rule (CSAPR), which includes updates to seasonal 

nitrogen oxides budgets for 12 states for 2021–2024

• Removal of the Affordable Clean Energy (ACE) rule from the model, as of January 2021

Longer-Term Model Enhancements

We ended the presentation portion of the meeting by discussing some long-term model enhancements 

that we may implement in the future but will not be a part of AEO2022, including: 

• Improving deep decarbonization scenario analysis by incorporating a hydrogen module to 

provide an option for seasonal storage and a carbon-free reliability fuel

• Allowing for a net negative carbon sink, which would make meeting net-zero targets easier

while maintaining gross positive fossil fuel-fired generation for reliability and seasonal use

• Allowing for spinning reserves from non-fossil fuel generating units

• Using a more granular production cost model based on 8,760 hours to inform long-term model 

inputs, structures, and results

We told participants that the details surrounding these possible model enhancements have yet to be 

determined, and we are currently welcoming outside input for consideration. 

We then opened the meeting up for questions and comments regarding updates we are considering for 

AEO2022 and beyond.

Discussion

The discussion following the presentation focused on a number of more detailed topics.

Several participants asked us how we plan to model transmission in both AEO2022 and future Annual 

Energy Outlooks, namely with regard to transmission and distribution spending and how transmission 

will play into renewable development. We explained that transmission is one of the areas we are 

thinking about improving in the model as part of our long-term model development activities. The 

National Energy Modeling System (NEMS) currently has some transmission features, but they are not 

sufficient to address the issues raised by the participants. 

Participants were also interested in how we are continuing to model storage technologies, specifically 

longer-duration batteries and hydrogen. We explained that a four-hour battery is currently modeled 

both as stand-alone storage and as dedicated storage paired with solar in the model. Currently, we do 

not plan to add a longer-duration battery into the model for AEO2022. In addition, we are currently 
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

developing a hydrogen submodule for the model, but this submodule will probably not be ready for us 

to incorporate into NEMS for AEO2022. 

One participant inquired about including the 45Q tax extension. We noted that the 45Q extension will 

be included in AEO2022, even though it was not on the slide about updated current laws and 

regulations.

Attendees

We hosted the working group meeting entirely online, and 70 people attended, including both EIA staff 

and external participants.

Guests

Name Affiliation 

Justin Baca Solar Energy Industry Association

Wesley Cole National Renewable Energy Laboratory

Matt Crozat Nuclear Energy institute

Thomas Dandres Environment Canada

Michelle D'Angelo Con Edison

Naveen Dasri Rhodium Group

Jacob Dubbs-Stubblefield Western Area Power Administration

Nelson Eng Con Edison

Michael Freels Oregon Department of Energy

Kathy Gramp Congressional Buget Office

Whitney Herndon Rhodium Group

Bryan Just American Petroleum Institute

Serpil Kayin U.S. Environmental Protection Agency

Lauren Khair National Rural Electric Cooperative Association

Ben King Rhodium Group

Jordan Kislear U.S. Department of Energy

Hannah Kolus Rhodium Group

Aaron Krupkin Congressional Budget Office

Michael Leitman National Rural Electric Cooperative Association

Yanghe Liu Entergy

Cara Marcy U.S. Environmental Protection Agency

Emily Medine Energy Ventures Analysis

Jim Moore Spire Energy

Karen Obenshain Edison Electric Institute

Eric O'Rear Rhodium Group

Hannah Pitt Rhodium Group

Alfredo Rivera Rhodium Group

Sharon Showalter OnLocation

Norman Sproehnle ISO New England

Ken Walsh Leidos

Robin White Environment Canada
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

David White Synapse Energy

Robert Wilson Covanta

Frances Wood OnLocation

Paul Zummo Public Power

EIA staff attendees

Name

Lori Aniti

Katherine Antonio

Erin Boedecker

Richard Bowers

Kien Chau

Matt Chester

Jim Diefenderfer

Kenneth Dubin

Kathryn Dyl

Mindi Farber-DeAnda

David Fritsch

Tyler Hodge

Thaddeus Huetteman

Kevin Jarzomski

Scott Jell

Ari Kahan

Mala Kline

Augustine Kwon

Angelina LaRose

Mary Lewis

Perry Lindstrom

Vikram Linga

Laura Martin

Kyle Morley

Kevin Nakolan

Chris Namovicz

April Patel

James Preciado

Andri Rizhakov

Syne Salem

Courtney Sourmehi

Manussawee Sukunta

Edward Thomas

Bonnie West

Stephen York