U.S. Energy Information Administration Independent Statistics & An

AEO2017 Electricity Sector Working GroupPolicy Assumptions and Key Model UpdatesForElectricity Working GroupSeptember 1, 2016ByThad Huetteman, Team Lead, Electricity TeamOffice of Electricity, Coal, Nuclear, and Renewables Analysis
What to look for re: Electricity in AEO2017

• Evolution of new longer-term forecast horizon (extend Reference 

including:

– Renewables: integration/ distributed generation– Nuclear: retirements/uprates/plant life extension– Continued updates: generating technology costs

• Retain key elements of 2016 Reference Case

– Coal: resolution of coal unit reporting issues– Maintain Clean Power Plan (as part of current laws & regulations in Reference 

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OCITE AS RESULTS ARE SUBJECT TO CHANG
What to look for re: Electricity in AEO2017 (cont’.)

• Key changes in modeling generation

– Coal: more detailed representation of coal unit performance/potential for coa– Renewables: more accurate modeling of distributed generation/regional capi

differences 

• Changes in other areas which may affect electric sector outlook

– Macro: expected lower interest rates; reduced federal spending– Natural gas: changing expectations with regard to U.S. natural gas exporter r

• Caveat: 2017 is a shorter forecast cycle year

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTATION FODISCUSSION PURPOSES. DO NOT QUOCITE AS RESULTS ARE SUBJECT TO CH
Updates/improvements for electric sector in AEO2

• Improving level of resolution in modeling generation 

– Introducing detailed breakout of generator cost and performance by operatin

• Better reflection of impacts of latest pollution control equipment 

– Modifying plant configuration to more closely correspond to MATS compliant 

• Tracking continued improvements in generation technology cos

– Updating capital cost assumptions as needed

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTADISCUSSION PURPOSES. DO NCITE AS RESULTS ARE SUBJEC
Ongoing efforts at updating electric sector modelin

• Accounting for shifts in regional power market structure

– Contract to evaluate EMM region composition

• Improved understanding of transmission & distribution costs

– Contract for T&D pricing enhancements

• Evaluation of changes in electric sector plant financing

– Contract to study renewables (and other generator type) financing paramete

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTATDISCUSSION PURPOSES. DO NOCITE AS RESULTS ARE SUBJEC
Impact of installing MATS-compliant controls

• Status: finishing internal analysis on recently released 2015 Form 

control equipment updates

• Key elements: 

– Comprehensive re-assessment of MATS compliance status for all operating c– Redefined compliance configurations to include characteristics of key MATS t

• Expected benefits of clearly specifying MATS-compliant controls

– Lower levels of endogenous coal retirements for units with previously unspec

technology

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTADISCUSSION PURPOSES. DO NCITE AS RESULTS ARE SUBJEC
AEO2017 Electricity Working Group 

September 1, 2016 

AEO2017 reported coal retirements

gigawatts

WORKING GROUP PRESENDISCUSSION PURPOSES. DCITE AS RESULTS ARE SUB
Issues in treatment of Clean Power Plan in AEO2017

• Mass-based vs. rate-based allowance allocation: selected m

as apparent preferred option based on familiarity of states

• Patchwork vs. uniform state program selection: all states as

follow same program type

• Existing vs. all fossil source coverage: applied budgets cove

existing units and new source complement (no “leakage”)

• Minimize rate impacts: assumes allocation to load-serving e

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTDISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJ
Improving modeling of distributed generation

• Results of new study will allow for more accurate modeling of imp

distributed PV on demand for electricity by end-use service categ

• Shift from modeling of PV in AEO2016

– On the EMM side, we are treating end-use PV generation as if it were from uti– This allows PV impacts on grid planning and operating constraints to be fully s– With more time for development, the reporting issues that prevented use of th

being addressed

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTADISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJE
“Higher resolution” in modeling generation

• Status: currently completing contract analysis and testing/progra

NEMS

• Key elements: 

– Heat rates based on different operating modes calculated using EPA CEMS – Input heat rate adjustments into NEMS for use at different operating levels

• Preliminary results of higher resolution for generation

– Seeing greater variability in coal generation in response to CPP constraints– Additional 3-4 GW of coal retirements

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTDISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJ
Accelerated nuclear retirements continued in 2016 

• Financial uncertainty and regulatory issues prompted retirement announ

2016.

• June 2016 saw retirement announcements for 6 reactors (5.6 GW)

– Clinton (IL) (1,065 MW) – June 1, 2017 (captured in AEO2016)– Quad Cities Units 1 and 2 (IL) (1,819 MW) - June 1, 2018 (captured in AEO2– Fort Calhoun (NE) (479 MW) – late 2016– Diablo Canyon Units 1 and 2 (CA) (2,240 MW) – late 2025

• These retirements account for a net additional nuclear capacity loss of 2

was not reflected in the AEO2016. The Diablo Canyon retirement was nfinancial uncertainty.

• AEO2017 will include these retirements.

AEO2017 Electricity Working Group September 1, 2016 WORKING GROUP PRESEN

DISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUB
AEO2017 assumptions will consider additional acce

retirements

• AEO 2017 still includes 1,288 MW of announced (planned) retirements 

both of which were also included in AEO2016.

– 2019 Pilgrim (MA) (678 MW)– 2019 Oyster Creek (NJ) (610 MW)

• Although costs have decreased from 2013 through 2015, financial unce

to revenues is still an issue.

• To address financial uncertainty, EIA is considering 3 GW of generic ret

addition to those above and in the previous slide.

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESENTADISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJE
Extension of projection horizon to 2050 will requi

examination of license extension issues

• Two utilities have announced plans to pursue subsequent license renewal to 

– Dominion for Surry Units 1 and 2 (1.7 GW)– Exelon for Peach Bottom Units 2 and 3 (2.5 GW).

• However, retirements prior to 80 years are likely for a variety of reasons that 

O&M cost implications.

• Sensitivity studies for retirements of capacity prior to SLR are underway.• AEO2018 will address long-term operations (SLR) in more detail. Project is 

AEO2017 Electricity Working Group September 1, 2016 

WORKING GROUP PRESEDISCUSSION PURPOSES. CITE AS RESULTS ARE SU
02468

1012

2029 2032 2035 2038 2041 2044 2047 2050 205

Annual Retirement Capacity Cumulative Retirement Capacity

AEO2017 Electricity Working Group September 1, 2016 

Annual and cumulative nuclear retirements assumyears of operation

gigawatts

WORKING GROUP PRESENDISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUB
Nuclear new build assumptions will be reflected in 

AEO2017

AEO2017 Electricity Working Group September 1, 2016 

• AEO2017 continue to reflect the new builds for Vogtle Units 3 and 4 and 

Units 2 and 3 – (4.8 GW in total)

• Although COLs were issued for 3 reactors in 2015 and 2016, these reac

be included in the AEO2017. Utilities have not announced plans to initiaconstruction.

– South Texas Units 3 and 4 (TX), AP1000, approved 2016 (2.2 GW)– Fermi Unit 3 (MI), AP1000, approved 2015 (1.5 GW)

WORKING GROUP PRESENDISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUB
Potential for nuclear uprate assumptions will be ev

for AEO2017

AEO2017 Electricity Working Group September 1, 2016 

• Although there are >6,100 MW of 

potential nuclear fleet uprates, not all of these are realistic based on uprate experience.

• Initial assessment of uprate 

potential is ~4,700 MW.

– Merchant market plants: ~1,300 MW– Regulated plants: ~3,400 MW

• Generally, these uprates are in 

excess of 100 MW each.

0

100200300400500600

Regulated v. merchant uprate potential to 2040MWe 

WORKING GROUP PRESENTDISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJ
Contact info for EIA Electricity Team

AEO2017 Electricity Working Group September 1, 2016 

• Thad Huetteman Team Leader - Electricity Team Thaddeus.Huetteman@eia.gov (20• Jeff Jones Jeffrey.Jones@eia.gov (202) 586-2038• Laura Martin Laura.Martin@eia.gov (202) 586-1494• Tyler Hodge Tyler.Hodge@eia.gov (202) 586-0442• Lori Aniti Lori.Aniti@eia.gov (202) 586-2867• Augustine Kwon Augustine.Kwon@eia.gov (202) 586-3645• Scott Jell Scott.Jell@eia.gov (202) 586-5196• Nilay Manzagol Nilay.Manzagol@eia.gov (202) 586-3704

WORKING GROUP PRESENTADISCUSSION PURPOSES. DO CITE AS RESULTS ARE SUBJE