WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

June 19, 2018

MEMORANDUM FOR: Ian Mead

Assistant Administrator for Energy Analysis

FROM: Jim Diefenderfer

Director, Office of Electricity, Coal, Nuclear, and Renewables Analysis

SUBJECT: Summary of AEO2018 Electricity Working Group Meeting held on May 

9, 2018

This memorandum summarizes the presentation given during the first AEO2019 Electricity Working 

Group meeting and the resulting discussion that took place. The presentation materials are available in 

a separate document on EIA’s website. 

Background

At the outset, EIA mentioned that AEO2019 will be a short AEO cycle and will include the 6 core side 

cases (High/Low Macro, High/Low Oil Price, High/Low Oil and Gas Resource and Technology cases), 

along with the Reference case.

EIA staff explained that the first working group meeting is being held earlier in the development cycle 

than in the past to discuss the results in the recently released AEO2018 and solicit stakeholder feedback 

for consideration in future modeling efforts earlier in the development process. The first set of working 

group meetings also provide an opportunity to identify issues or topics that might be more effectively

addressed through smaller, targeted working group discussions.

Afterwards, a summary of AEO2018 results were presented and EIA staff addressing issues that had 

been raised in early coverage of the release:

• Inadequate reflection of coal generation at risk

• Shift in the composition of projected non-hydro renewables additions over the long term

• Turnaround in load growth between recent history and mid-term projections

• Virtually all renewables additions after the early 2020’s are solar PV, rather than a balance of 

solar and wind

The meeting then proceeded with a discussion of the laws and regulations impacting AEO2019 before

soliciting comments on future NEMS Electricity Market Module (EMM) modeling efforts.
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

Model updates (AEO2019)

A number of model updates will need to be considered to represent current laws and policies in the 

AEO2019 Reference case:

• Incorporating the impact of tax reform on the electric sector (the Tax Cuts and Jobs Act of 2017) 

as well as the Section 45Q tax credit for Carbon Capture and Storage

• Continue to monitor the status of any revised regulations associated with EPA’s announced 

intention to replace the Clean Power Plan (CPP)

• Accounting for new regional-level programs, including California’s recent extension of its carbon 

cap-and-trade program to 2030 (AB 398) as well as the Regional Greenhous Gas Initiative

• Modeling state programs providing subsidies to non-emitting generation (zero emission credit) 

programs, including New Jersey’s newly-approved Senate Bill 2313 law (signed by the governor 

on May 23, 2018) in addition to the Illinois and New York programs

In addition to updates in current laws and policies, the following updates are being considered for 

AEO2019:

• Incorporating results from the Sargent & Lundy on Generating Unit Annual Capital and Life 

Extension Costs for fossil generators

• Updating the method to identify generation-at-risk for purposes of supporting endogenous 

retirement projections

• Presenting results from alternative approaches to value electric generation system 

reliability/resilience characteristics approaches

• Updating new generator cost and performance characteristics; soliciting comments on which 

generating technologies to include for further analysis

The following modeling updates are also being considered for incorporation after AEO2019:

• Updating regional definition to account for the changes in the structures of the ISO/RTOs and 

regional power market developments

• Revisiting electric T&D spending projections to account for the potential long term cyclical 

pattern in electric system T&D spending

• Evaluating of the relationship between annual electric utility expenditure patterns and existing 

generator unit performance

• Assessing the capital cost and performance of new electric generating technologies

Discussion

The discussion following the presentation focused on electricity demand, side cases, and technological

representation in addition to a few other miscellaneous topics.
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

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

Electricity demand

EIA staff noted that electricity demand growth resumed after having declined in recent history and was 

asked why load would start to grow again when we’ve seen flat demand in recent years. EIA staff 

responded that under current laws and regulations, existing energy efficiency standards are reflected for 

the residential and commercial sector so demand for electricity will overtake the impact of those 

standards over time. The composition of the industrial sector is changing over time and will be more 

reliant on electricity. Industries that use a lot of electricity, such as metal-based durables, are expanding 

more quickly than other energy-intensive industries.

As a follow-up question, EIA staff was asked if the industrial sector driving load growth is consistent with 

the growth in renewable builds. EIA staff responded that the model doesn’t build specific technologies 

to meet specific demand uses. Rather, it takes into account the load shape and builds a mix of 

technologies to best meet overall demand.

Alternative side cases

One participant mentioned that it would be interesting to see some high and low demand side cases 

that are not driven by macroeconomic conditions (i.e., high demand driven by electric vehicles or low 

demand driven by increased energy efficiency). EIA responded that a number of different policy cases 

would be coming out shortly in the AEO2018 Issues in Focus article, entitled Alternative Policies in Power 

Generation and Energy Demand Markets (which was subsequently released on May 14, 2018).

Technology representation in NEMS

Another participant asked if coal with 90% Carbon Capture and Sequestration (CCS) was the only 

generating technology with CCS modeled in AEO2018 and pointed out that DOE’s Office of Fossil Energy 

has done an analysis on the 45Q CCS credit that they will forward for EIA review. EIA staff responded 

that for AEO2018 EMM still modeled coal with both 30% and 90% CCS, both of which would satisfy EPA’s 

New Source Performance Standard for CO2 emissions from coal steam electric generating units, which 

EPA has under review.

Additional topics

A participant queried whether EIA had considered non-regulatory driven demand for renewables or 

whether there were other reasons for developing PV. EIA staff responded that the decision to add 

renewable capacity is modeled in EMM as an economic decision and the companies are mainly doing it 

to save money, but staff noted that the new residential PV model incorporates factors beyond just 

economics.

Another participant noted that if EIA is modeling the contribution to reliability and resilience of 

generating technologies out to 2050, then EMM would need to reflect the prospect for innovation and 

technology change for different generation types through 2050. Technologies that are unable to 

contribute to certain attributes now, may be able to in the future, with which EIA agreed.
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

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

One participant asked whether EMM models a learning curve adjustment for heat rates. EIA responded 

that EMM reflects a heat rate cost adjustment for new plants which declines over time, so later builds 

are more efficient that current builds, as described in the Assumptions document.

Finally, one last participant asked whether there is background information on battery storage available 

in AEO2018. EIA noted that it would be releasing a report on battery storage shortly (subsequently

published on May 21, 2018).
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

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

Attendees

Guests (in person)

Name Affiliation

Mikhail Adamantiades Environmental Protection Agency

Paul Donohoo-Vallett U.S. Department of Energy

Sarah Forbes U.S. Department of Energy

Ronald Hagen U.S. Department of Energy

Paul Spitsen U.S. Department of Energy

Guests (WebEx/phone)

Name Affiliation

Justin Baca Solar Energy Industries Association

Mark C Bowles Entergy

Kikelomo Buari Southern Company

Wesley Cole National Renewable Energy Laboratory

Leslie Coleman National Mining Association

Whitney Herndon Rhodium Group

Lauren Khair National Rural Electric Cooperative Association

Michael Leff Con Edison

Britny Lockridge Southern Company

Jim Moore Spire

Jay Ratafia-Brown Leidos

Jorge Reyes NJ Department of Environmental Protection

Sandra Sattler Union of Concerned Scientists

Robert Schmitt U.S. Department Of Energy

Sharon Showalter OnLocation Inc.

Alexander Smith Federal Energy Regulatory Commission

Bill Stevens

Mark Strohfus grenergy

Lynsey Tibbs Southern Company

Chen-Hao Tsai Midcontinent Independent System Operator

Kenneth Walsh Leidos

David White Synapse

Evelyn Wright Sustainable Energy Economics
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES ONLY.

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

EIA Staff (in person)

Name Affiliation

Greg Adams U.S. Energy Information Administration 

Erin Boedecker U.S. Energy Information Administration 

Michelle Bowman U.S. Energy Information Administration

John Conti U.S. Energy Information Administration 

Jim Diefenderfer U.S. Energy Information Administration

Kenneth Dubin U.S. Energy Information Administration

David Fritsch U.S. Energy Information Administration

Marta Gospodarczyk U.S. Energy Information Administration

Elias Johnson U.S. Energy Information Administration

Jeffrey Jones U.S. Energy Information Administration

Augustine Kwon U.S. Energy Information Administration

Perry Lindstrom U.S. Energy Information Administration

Cara Marcy U.S. Energy Information Administration

Laura Martin U.S. Energy Information Administration

Ian Mead U.S. Energy Information Administration

Christopher Namovicz U.S. Energy Information Administration

Shirley Neff U.S. Energy Information Administration

Michael Scott U.S. Energy Information Administration

Manussawee Sukunta U.S. Energy Information Administration

EIA Staff (WebEx/phone)

Name Affiliation

Lori Aniti U.S. Energy Information Administration 

David Daniels U.S. Energy Information Administration 

Tyler Hodge U.S. Energy Information Administration 

April Lee U.S. Energy Information Administration 

Nilay Manzagol U.S. Energy Information Administration