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

Annual Energy Outlook 2014

Renewable Electricity Working Group

Chris Namovicz, Renewable Electricity Analysis Team

July 9, 2013
Agenda

• Review status of AEO 2013

• Discuss new model updates and development efforts for AEO 

2014 and future AEOs

– Model updates

– Policy updates

– Planned additions updates

– Performance updates

• Obtain feedback from stakeholders on any key items that EIA 

should look at

Chris Namovicz, July 9 2
Status of AEO 2013

Chris Namovicz, July 9

• AEO 2013 was released in stages this year

– Reference case on December 5, 2012

– Other text and side-cases from April 15 – May 2

– Expect that this will be the new model for release

• PTC extension came late in the development process

– Inclusion in the Reference case and all side cases would have substantially 

delayed full AEO publication

– Instead, the law was accounted for in a side case as part of the AEO

– This side case will be used as a “current laws and policies” reference case for 

post-AEO analysis requests

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Model Updates: Biomass Supply Integration

Chris Namovicz, July 9

• Current supply curves for conventional and cellulosic 

biomass are exogenously determined

– Static representation of dynamic process of planting decisions

– Solutions for cellulosic and conventional feedstocks may diverge, even though 

they are tightly linked in the real world

• EIA expects to have the POLYSYS model integrated with 

NEMS for AEO 2014

– Initial integration will endogenously determine a supply curve for energy crops 

and agricultural residues

– Future work will allow an endogenously determined and internally consistent 

supply curve for conventional crops used as energy resources (especially corn 

and soy)

4
Model Updates: End-Use Solar Load Shape

Chris Namovicz, July 9 5

• Output from commercial and residential solar installations is 

currently fed-back to the electricity model based on its impact 

on key end-use demand services (such as air conditioning 

load)

– This is a reasonable approximation of solar value to the end-use sector

– At high penetration levels it can distort the electric power sector dispatch curve

• EIA is exploring a number of options to ensure that the 

electricity market module is seeing a better approximation of 

the impact that end-use solar has on the load demand curve.
Model Updates: Wind Intermittency

Chris Namovicz, July 9

• EIA has funded a task to look at several aspects of wind 

intermittency and impacts of variable operation on the 

efficiency of fossil generators

• EIA received a report with recommendations to better 

represent operating reserve requirements

– Should allow for a more accurate representation of the impact of intermittent 

generation on ancillary service requirements such as spinning reserve and 

ramping

– Should also allow for a fuller representation of the role of CTs, hydro, and other 

fast-response capacity on the grid

• Funding for implementation came late in the process, so full 

implementation may be delayed until AEO2015

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Model Updates: Buildings Sector

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• Annual updates

– Interconnection limitations (DSIRE)

– Historical generation by and capacity of combined heat and power and 

renewable distributed generation systems (EIA- 860, IREC, AWEA)

Chris Namovicz, July 9
Model Updates: Hydro Uprates

Chris Namovicz, July 9 8

• NEMS is not able to model increases in capacity at existing 

hydro units resulting from repowering or refurbishment

– Note that we do represent additional capacity at existing plants from the 

addition of new units

• These increases in existing-unit capacity could be a 

significant source of capacity or generation growth for hydro

• We are currently evaluating FERC relicensing data to 

determine a basis for modeling these hydro uprates
Input Updates: Policy

Chris Namovicz, July 9 9

• PTC extension was incorporated into AEO 2013 side case 

and will be the basis for AEO 2014

• We are monitoring state RPS modifications

– We have found no new RPS policies so far this year, and only a few substantive 

modifications (Colorado, Connecticut, Minnesota). While there have been 

attempts in several to either weaken or repeal existing RPS policies, none of 

these efforts have yet been successful.

– We will continue to consider modification through the end of August

• We are monitoring EPA rulemaking on carbon emissions from 

new and existing power plants

– Recent Presidential pronouncement does not necessarily constitute formal 

rulemaking

– We will consider new regulations as they are formally promulgated
Input Updates: Planned Additions

Chris Namovicz, July 9

• Planned additions are power plants that have reported to EIA 

as being in the process of planning and construction

– Our model cannot pick-up very near-term demand for most new plants, but is 

able to make projections for most plant types over the next 2 to 5 years

– The planned additions are intended to account for plants known to be entering 

service during this period

• In general, EIA only includes plants that have started 

construction in the AEO projections

– Past experience suggests a high degree of uncertainty over plants that report 

earlier planning milestones

• For some renewables, EIA has previously included plants 

that have received regulatory approvals as well

– This is a result of the short lead-times and pressures of expiring tax credits

– We will need to re-evaluate our inclusion criteria given the potential for tax 

credit expiration, extension, or modification

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Input Updates: Planned Additions

Chris Namovicz, July 9 11

Based on current data and inclusion criteria, we do not expect 

that planned additions for wind or hydro will be significantly 

different in the AEO2014 than AEO2013.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

wind-AEO13 wind-AEO14 hydro-AEO13 hydro-AEO14

2016

2015

2014

2013

existing 2012

Existing and Planned Additions – AEO2013 and AEO2014*

megawatts

* = preliminary
Input Updates: Planned Additions

Chris Namovicz, July 9 12

Solar PV exhibits the most dramatic increase in planned 

additions in the AEO2014 compared to the AEO2013, though 

we also see a little bit more planned solar thermal (CSP) and 

biomass 2014+.

Existing and Planned Additions – AEO2013 vs AEO2014*

megawatts

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000 2016

2015

2014

2013

existing 2012

* = preliminary
Input Update: Cost and Performance

Chris Namovicz, July 9 13

• We plan on updating wind and solar time-of-day performance 

profile

– For solar, we would like a mix of performance profiles to add flexibility to our 

technology assumptions for both the electric power sector and the end-use 

sector (see previous item on end-use load shapes)

– For wind, we would like a better offshore performance profile, and would like to 

update wind supply curves to account for transmission build-out

• Funding does not look like it will be available for AEO 2014

• We will not be commissioning an updated capital cost study 

for the AEO2014. For most technologies, this is unlikely to 

be problematic. However, for more dynamic technologies, 

we will monitor third-party data sources to evaluate whether it 

is necessary to update individual assumptions.
Feedback

Chris Namovicz, July 9

• We will be soliciting feedback specifically on our capital cost 

updates, but any input on this issue would be welcome ahead 

of time.

• Are there any cost, performance, technology, or policy trends 

that we need to be aware of?

• Are there any other issues that we need to address?

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For more information

Chris Namovicz, July 9

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