www.eia.gov

For

AEO Electricity Working Group

July 31, 2014, 1:00 PM

Electricity Analysis Team

Office of Electricity, Coal, Nuclear, and Renewables Analysis

Electric Power in the Annual Energy 

Outlook

AEO2014 results and status updates for the AEO2015

Working group presentation for discussion purposes. Do not quote or cite, as preliminary AEO2015 data and results are subject to change.
Agenda

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

• Review of AEO2014

– Changes made for AEO2014

– Review of Results

• Status of AEO2015 

• Updates planned for AEO2015

2
Review of Annual Energy Outlook 2014

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 3
Updates included in AEO2014

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

Model Updates Data Updates

Regional Greenhouse Gas Initiative 

(RGGI) cap tightened to reflect 

February 2013 MOU

Updates of planned capacity builds 

and retirements based on updated 

Form EIA-860 data

Updates to NEMS modeling of 

Mercury and Air Toxics Standards

(MATS)

Operations and maintenance cost 

updates

Reserve margin and capacity 

payments changes

Municipal utility pricing data updates

Operating reserves modeling changes

4
AEO2014 Reference case: Electricity generation capacity additions by fuel 

type mainly natural gas after 2015

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

0

10

20

30

40

50

60

2013-2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040

Coal Nuclear Renewables and other Natural gas

capacity additions

gigawatts

Source: EIA, Annual Energy Outlook 2014

5
AEO2014: projected annual capacity additions moderate relative to post-2000 levels

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

0

10

20

30

40

50

60

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Other renewables

Solar

Wind

Natural gas and oil

Nuclear

Hydropower and other

Coal

Additions to electricity generating capacity in the AEO2014 Reference case, 1985-2040

gigawatts

Source: EIA, Annual Energy Outlook 2014

History 2012 Projections

6
Coal accounts for more than half of the projected capacity 

retirements in the AEO2014 Reference case

U.S. electricity generation capacity retirements

gigawatts

Source: Form EIA-860 and AEO2014 Reference Case (April 2014) 

0

5

10

15

20

25

30

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Renewables/Other

Nuclear

Natural Gas / Oil

Coal

History Projections

 0.9

 4.8

 40.3

 50.8

Cumulative 

Totals:

2013-2040

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 7
Natural gas is projected to surpass coal as the leading generating 

fuel type by 2035 in the AEO2014 Reference case

billion kilowatthours

Coal

Petroleum

Nuclear

Natural Gas

Renewables

0

500

1000

1500

2000

2500

1980 1990 2000 2010 2020 2030 2040

Note: Includes generation from plants in both the electric power and end-use sectors.

Sources: Projections: EIA, Annual Energy Outlook 2014

History: EIA, Annual Energy Review; 

History 2012 Projections

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 8
U.S. electricity net generation in the AEO2014 Reference case

trillion kilowatthours

Source: EIA, Annual Energy Outlook 2014

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

13%

Changing roles of natural gas and renewables in the U.S. 

electricity generation mix

30%

19%

37%

12%

1%

Nuclear

Oil and other liquids

Natural gas

Coal

Renewables

2012 History Projections

16%

16%

32%

35%

<1%

1993

11%

13%

19%

53%

4%

30%

17%

37%

15%

1%

2025 2040

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 9
Carbon dioxide emissions from the electric power sector in 2030 are 7.9% 

below 2005 levels in the AEO2014 Reference case

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

0

500

1,000

1,500

2,000

2,500

2005 2010 2015 2020 2025 2030 2035 2040

2030

carbon dioxide emissions

million metric tons

History Projections 2012

Source: AEO2014 (April 2014)

10
Average retail electricity prices in the AEO2014 Reference case, 2005-2040

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

8

9

10

11

12

2005 2010 2015 2020 2025 2030 2035 2040

average electricity prices

2012 cents per kilowatthour

Source: EIA, Annual Energy Outlook 2014

History 2012 Projections

11
Annual Energy Outlook 2015

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 12
The AEO2015 will be abridged compared to 

AEO2014

• The U.S. Energy Information Administration is revising the schedule for production of 

the International Energy Outlook (IEO) and Annual Energy Outlook (AEO). The IEO 

and AEO will alternate annually between full and interim versions.

• The AEO2015 will be the first interim version of the Annual Energy Outlook.

• The shorter version will include an abbreviated discussion and results from select 

cases.

2014 2015

International 

Energy Outlook

Interim Edition to be 

released summer

2014

Full Edition will be released in spring 2015

Annual Energy 

Outlook

Full Edition released 

in spring 2014

Interim Edition will be released by early 2015

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 13
Limited modeling updates for AEO2015

• Modeling changes planned for AEO 2015

– Cross State Air Pollution Rule (Transport Rule/CSAPR) – U.S. Supreme Court 

overturned D.C. Circuit Court’s decision vacating the rule. 

• EPA has filed to have the stay lifted and we are actively monitoring the 

status in order to restore CSAPR modeling when appropriate.

– Updates to NEMS modeling of California SB1368 to remove firm contractual 

arrangements for coal plants upon expiration.

• EIA only models current laws and policies

– EPA’s proposed greenhouse gas regulations for new and existing plants (under 

Clean Air Act sections 111(b) and 111(d)) are not final rules 

• Not included in AEO2015; we are actively monitoring the status of the 

proposed rules

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 14
Changes to legislative and regulatory 

assumptions in AEO2015

• Cross-State Air Pollution Rule (CSAPR) to replace Clean Air 

Interstate Rule (CAIR) in AEO2015 if reinstated timely to 

EIA model development schedule

– Requires states to reduce emissions that contribute to ozone and fine particle 

pollution in other states

– U.S. Supreme Court upheld EPA’s approach to CSAPR on April 29, 2014 

– EPA filed to lift stay on CSAPR on June 26, 2014

– Previously incorporated in AEO2012 cycle prior to D.C. Circuit court stay

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 15
Changes to legislative and regulatory 

assumptions in AEO2015 (2)

• Updates to NEMS modeling of California SB1368 to remove firm 

contractual arrangements for coal plants upon expiration

– Law prohibits CA utilities from entering into long-term financial commitments 

for base load generation, unless it complies with the CO2 emissions 

performance standard.

– The CO2 emissions level must be equal, or below the emissions performance 

standard of 1,100 lbs. per megawatt-hour (MWh).

• EIA modeling changes

– Reduce firm imports to represent expiration of contracts with the Four Corners, 

Navajo, Reid Gardner, San Juan, and Boardman plants

– Adjust carbon emission rate for firm imports in accordance with the expiration 

of contracts

– Retire Intermountain plant in 2025. 

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 16
EPA 111(b) proposed rule – Not Included

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

• The proposed rule imposes GHG controls on new generation 

units. 

• Limits for new coal plants designed with the assumption that 

plants are built with carbon capture and sequestration (CCS)

• EPA proposed two standards for natural gas-fired stationary 

combustion units, depending on size

• Proposed limits are based on the performance of modern natural 

gas combined cycle (NGCC) units

• Final rule expected in January, 2015

• Anticipate representing the final rule in AEO2016

17
EPA 111(d) proposed rule – Not Included

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

• The proposed rule issued by EPA on June 2 establishes statelevel targets to reduce CO2 emissions from existing generating 

plants that burn fossil fuels to produce electricity. The targets for 

each state, applied over 2020-2030, reflect four “building blocks”:

– heat rate improvement at existing coal units 

– increased dispatch of existing natural gas plants

– expanded use of renewable resources

– load reduction through energy efficiency programs

• These building blocks comprise EPA’s proposed ‘Best System of 

Emission Reductions’ (BSER) under the Clean Air Act Section 

111(d), but the states have broad flexibility in their specific 

compliance measures, including the option to engage in regional 

compliance partnerships

• EIA is actively monitoring the status of this proposed rule

18
Limited data updates for AEO2015

• Capacity additions, retirements, and retrofits, based on 

updated Form EIA-860 data

• Historical data overwrites

• Updates to Canadian supply curves

• Calibration with the Short Term Energy Outlook

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 19
0

2

4

6

8

10

12

14

16

18

2013 2014 2015 2016 2017 2018 2019

Preliminary AEO 2015

Planned New Plant Capacity Additions

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

gigawatts

-2

3

8

13

18

2013 2014 2015 2016 2017 2018 2019

AEO 2014

Coal Natural Gas Nuclear Wind Solar Biomass Hydro-Electric Other

Planned Capacity Additions gigawatts (2013-2019)

AEO 2015 AEO 2014

Coal 2.30 2.16

Natural Gas 18.45 13.41

Nuclear 5.52 5.52

Wind 10.40 1.54

Solar 8.48 6.23

Biomass 0.65 0.44

Hydro-Electric 0.88 0.66

Other 0.15 0.15

20
Reported Coal Retirements By Year –

Preliminary EIA-860 reporting 

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

0

2

4

6

8

10

12

14

2013 2014 2015 2016 2017 2018 2019 2020 2021

AEO2015 preliminary

Gigawatts of Reported Coal Capacity Retirements

21
Preliminary Nuclear Power Assumptions for 

AEO2015

• New Plants – 5,500 MW 

– Watts Bar (2015) 

– Summer 2 & 3 (2017 & 2018)

– Vogtle 3 & 4 (2016 & 2017)

• Uprates 

– Only reported uprates on the Form EIA-860 will be incorporated in the 

Reference case. ~100 MW reported.

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 22
Preliminary Nuclear Power Assumptions for 

AEO2015 (2)

• Planned Retirements – 1,219 MW

– Vermont Yankee (2014)

– Oyster Creek (2019)

• Unplanned Retirements

– AEO2014 assumed 5.7 GW of unplanned generic retirements

• This assumption will be relaxed in AEO2015 

• Evolving Issues

– Potential post-Fukushima Operational Impacts

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 23
Future Enhancements

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 24
Ongoing modeling and data enhancements

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.

• EIA staff are working with a contractor to develop cost 

estimates for added O&M and capital costs related to plant 

aging.

• EIA staff are working with a contractor to re-evaluate and 

performance estimates for small, distributed generation 

technologies in the Electricity Market Module of NEMS.

25
For more information

Eric Krall - Team Lead, Electricity Analysis Team

eric.krall@eia.gov

Jeff Jones – Operations Research Analyst, Electricity Analysis Team

jeffrey.jones@eia.gov

Laura Martin - Operations Research Analyst, Electricity Analysis Team

laura.martin@eia.gov

Lori Aniti – Industry Economist, Electricity Analysis Team

lori.aniti@eia.gov

Annual Energy Outlook | http://www.eia.gov/forecasts/aeo/

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 26
Additional Information

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change. 27
28

AEO2014 Reference case cumulative SO2 scrubber and DSI 

retrofits, 2013-2040

gigawatts

0

5

10

15

20

25

30

35

40

45

50

2010 2015 2020 2025 2030 2035 2040

DSI**

SO2 Scrubbers

2016*

Source: AEO2014 Reference Case (April 2014)

*MATS compliance assumed to begin; **DSI: Dry Sorbent Injection 

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.
Electricity Sector Net Summer Generating Capacity by SO2

Control Type and Region, 2012 and 2020 in AEO2014

29

Source: AEO2014 Reference Case (April 2014)

0

50

100

150

2012 2020

Northeast

gigawatts

0

50

100

150

2012 2020

Midwest

gigawatts

0

50

100

150

2012 2020

South

gigawatts

0

50

100

150

2012 2020

West

gigawatts

111

196

212

45

3

0

50

100

150

200

250

300

350

2012 2020

U.S. total

gigawatts

uncontrolled

scrubbed

dry sorbent

injection

new capacity

Note: Scrubbed capacity includes 

capacity equipped with flue gas 

desulfurization (FGD) equipment and 

coal plants employing integrated 

gasification combined (IGCC) cycle or 

circulating fluidized bed (CFB) 

combustion technologies.

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.
Average levelized electricity costs for new power plants, excluding subsidies, 

in the Reference case, 2020 and 2040

30

0 2 4 6 8 10 12

Natural gas

combined cycle

Wind

Advanced nuclear

Conventional Coal

Coal IGCC

Natural gas

combined cycle

Wind

Advanced nuclear

Conventional Coal

Coal IGCC

new power plant costs, 2012 cents per kilowatthour

Incremental

transmission

costs

Fixed

costs

Variable costs,

Capital costs including fuel

2040

2020

Source: AEO2014 Reference Case (April 2014)

Office of Electricity, Coal, Nuclear and Renewables Analysis | July 31, 2014 | Working group presentation for 

discussion purposes. Do not quote or cite as preliminary AEO2015 data and results are subject to change.