Annual Energy Outlook 2013 Renewable Electricity Working Group

Summary, Aug. 2, 2012

On Thursday, August 2 EIA held the first of two Renewable Electricity Working Groups to discuss issues 

related to the development of the Annual Energy Outlook 2013. The meeting was well attended by 

stakeholders from EIA, other DOE staff, industry associations, and interested consultants. Attendance

included those there in person and through conference call/web interface. The meeting agenda can be 

found on Page 2 of the attached meeting presentation. 

The focus of this meeting was to discuss EIA’s plans for model updates for the AEO 2013, and to identify 

any areas that needed to be covered. Chris Namovicz, Senior Renewable Energy Analyst with the Office 

of Electricity, Coal, Nuclear, and Renewable Analysis (ECNRA), led the meeting.

Mr. Namovicz noted that completion of the AEO 2012 had been significantly delayed, leading to a 

significantly compressed model development schedule compared to previous years. Because of this 

compressed schedule, exacerbated in some instances by the late awarding of model development 

contracts, EIA was not planning a lot of major new model development efforts, but would focus on 

updating and maintaining current model data.

The first data update effort discussed was a new task to update the capital costs used for the electric 

power sector, including renewable generators. The contract task has been awarded to SAIC Energy, 

Environment & Infrastructure LLC (formerly R.W. Beck Inc.), who conducted a similar analysis for EIA in 

2010. This task will continue EIA’s effort to maintain current and consistent evaluation of power-sector 

capital costs across technologies. EIA is expecting to receive results from this study in time for inclusion 

in the AEO 2013. The 2010 study included significant stakeholder involvement, and while EIA expects to 

obtain stakeholder feedback on results of the current study, opportunity for an extensive stakeholder 

process as occurred in 2010 will likely be limited by the significant time constraints in the current AEO 

development cycle. An industry stakeholder expressed concern that cost estimates for wind technology 

in the previous R.W. Beck study did not appear to match statistically derived averages published by the 

DOE/LBNL. Mr. Namovicz noted that the approach used by Beck was not intended to replicate statistical 

data, which is not available for most technologies modeled and includes data of uncertain composition 

and quality, but rather to provide a consistent accounting across technologies to include the same types 

of costs for each technology and ensure that all costs are accounted for (including costs such as owners 

costs that may not typically be found in “press release” or tax filing reports of cost). Fred Mayes 

(ECNRA) noted that EIA is considering adding questions to its 2014 electric power sector surveys on 

plant cost.

EIA is also in the process of developing a task to update costs for new hydro electric generators, apart 

from the R.W. Beck/SAIC EEI study. Because of the site specific nature of the hydro electric supply 

curve, EIA cannot apply the results of the R.W. Beck/SAIC EEI to this resource, and will be relying on the 

Idaho National Laboratory to update the cost numbers they had originally developed for EIA. This task 

has not been finalized yet, and will not be completed for AEO 2013.
Several other updates of technical data and parameters were discussed, including updates of wind 

capacity factors and the split between biogenic and non-biogenic municipal solid waste generation. An 

industry stakeholder expressed concern that basing wind capacity factors using historical observations 

may not appropriately account for regional curtailment of wind generation resulting from transmission 

constraints. EIA noted that the current approach groups wind plants by observed performance to 

establish capacity factors based on assumed resource characteristics. While curtailments may result in 

some plants being mischaracterized into a lower-performing group, this should not generally affect EIA’s 

assessment of the performance potential of higher-quality resources that are not curtailed.

Mr. Namovicz also discussed the role of state and Federal policy in the development of EIA’s Reference 

case projections. In particular, he noted that the scheduled December 2012 expiration and potential 

extension or modification of the Federal Production Tax Credit (PTC) for wind may not be well 

synchronized with the AEO development schedule. Depending on when a potential extension or 

modification is passed into law, it may not be reflected in the AEO or may affect the AEO release 

schedule. Mr. Namovicz also noted that EIA will continue to monitor state-level policy, and update the 

AEO assumptions as necessary to reflect key changes to state Renewable Portfolio Standards or other 

laws affecting renewable electricity markets.

To ensure adequate representation of near-term capacity developments, EIA collects data on capacity 

additions that are currently planned by utilities and independent power providers. While EIA only 

includes plants known to be under construction for conventional generation sources, for some 

renewable generators, EIA also includes plants that have received regulatory approvals but have not 

started construction. This adjustment is necessary to account for both the relatively short construction 

period for some renewable power plants, as well as the market pressures created by the near-term 

expiration of Federal tax credits. EIA requested stakeholders assistance in identifying any new projects 

that might qualify for inclusion in the AEO on this basis.

Erin Boedecker of the Office of Energy Consumption and Efficiency Analysis presented a brief overview 

of renewables-related development for renewable generators in the end-use sector. Ms. Boedecker 

noted that they will also be updating cost information for renewable installations, and will be using data 

collected by the Department of Energy and its National Laboratories. Based on concerns raised by an 

industry stakeholder, EIA clarified that utility-sector costs are, and will be, based on the results of the 

R.W. Beck/SAIC EEI study, whereas end-use sector costs may be updated on other sources, as the 

availability of data may vary between the two sectors. Another industry stakeholder noted concerns 

over the interpretation of some National Laboratory data for solar installations completed under a 

leasing agreement, and a National Laboratory stakeholder indicated that EIA should be looking at 

moving end-use modeling from purchase-based financing to lease-based financing to reflect changes in 

the residential market for PV. Ms. Boedecker agreed that this was a useful thing to look at, but that 

time constraints would likely limit EIA’s ability to reflect any changes in AEO 2013.

Mr. Namovicz noted that EIA is planning on extending the published forecast horizon to 2040 in AEO 

2013, from the 2035 horizon used in AEO 2012. While most of the model development work has 

already been completed for this change, EIA needs to closely examine the results to determine what, if 
any, issues arise with respect to resource, operational, technology, or other issues that may see 

significant change beyond the current forecast horizon.

Robert Smith(ECNRA), briefed the attendees on current efforts to update the biomass supply curves and 

improve the function of the biomass supply model. Current efforts are underway with the University of 

Tennessee and EIA contractors to substantially improve biomass modeling. Dr. Smith noted that current 

plans are to include this new module with AEO 2013, but cautioned that the compressed model 

development schedule may necessitate updating of the supply curve data for AEO 2013, with full 

implementation of the revised model to follow in AEO 2014. A DOE stakeholder asked if EIA was 

considering assigning fuel- or process-specific carbon intensities to biomass energy resources. Dr. Smith 

noted that the U.S. Environmental Protection Agency was still studying the issue and that EIA would 

likely wait for regulatory clarity on the issue before proceeding to model it.

Mr. Namovicz discussed a task to address certain aspects of wind intermittency, especially as it may 

affect the ramping and cycling behavior of existing fossil steam plants. While a contract task has been 

initiated for this work, the late task initiation and compressed development schedule will put this model 

development exercise on track for AEO 2014 completion. An industry stakeholder indicated that the 

National Renewable Energy Laboratory is doing work on this subject, which may be helpful for EIA to 

examine as work on the task progresses.

Finally, Mr. Namovicz solicited comments from the stakeholders. These comments are incorporated 

above to correspond more closely with the specific presentation areas that they address. A follow-up 

meeting will be held early in the fall to discuss EIA’s progress toward AEO 2013 implementation.