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

AEO 2013 Electricity Working Group

Electricity Analysis Team

August 9th, 2012 | Washington, DC

1st Presentation for stakeholders

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
AEO 2013 Working Group Meetings

• Macroeconomic/Industrial 

• Buildings - Residential/Commercial 

• Oil and Gas

– Petroleum Markets 

– Natural Gas Production/Natural Gas Markets

• Renewables

• Coal

• Electricity

• Transportation 

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AEO 2013 Electricity Working Group

Washington, DC, August 9th, 2012

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
AEO 2013 - Expected timeline

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 3

• Compressed timeline

– AEO 2012 (full version) was released in late June, 4 months latter than planned

– As a result, the AEO 2013 development cycle got off to a late start

• 1st electricity working group meeting (Today)

– to discuss key modeling and assumption changes, and cases we are 

considering for inclusion.

• 2nd electricity working group meeting (Mid Sept – Early 

October)

– Second meeting, date to be determined, to present preliminary results.

• Early release (Mid November)

• Full release (February 2013)

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
18%

15%

A look back to AEO 2012 - Electricity mix through 2035

4

electricity net generation

trillion kilowatthours per year

Source: EIA, Annual Energy Outlook 2012

2010

24%

20%

45%

10%

1%

38%

28%

1%

Nuclear

Oil and other liquids

Natural gas

Coal

Renewables

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Coal plant retirements through 2020 in side cases

5

0

10

20

30

40

50

60

70

80

90

gigawatts

Source: EIA, Annual Energy Outlook 2012

Higher / Lower 

Electricity Demand

Higher / Lower 

Coal Prices

Higher / Lower 

Natural Gas Prices

Shorter Investment 

Horizons

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Key electricity related modeling issues for 

AEO 2013

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 6

• Environmental regulations

• Projection horizon extended to 2040

– Evaluate the potential for new technologies

– Evaluate whether any new resource or operational constraints may be 

introduced for existing technologies

• Reported coal retirements and capacity expansion

• Fuel prices and electricity demand growth

– The electricity market module (EMM) takes these as inputs from other NEMS 

modules

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Environmental Regulations in AEO 2013

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 7

• Mercury and Air Toxics Rule - Yes

• Cross State Air Pollution Rule - Yes

• Cooling Water Intake 316b - No

• Coal Combustion Residuals - No

• GHG New Source Performance Standards - Maybe

• California AB 32 - Yes

– Integrated with other NEMS modules

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Planned Capacity Additions

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 8

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Nuclear Other Renewables

Solar Wind

Coal Natural Gas

gigawatts, net summer

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Reported coal-fired capacity retirements in the 

electric power sector by coal demand region, 2011-2035

9

0

1

2

3

4

5

6

7

8

9 Reported to EIA in 2011

Reported to EIA in 2012

gigawatts, net summer

Source: U.S. Energy Information Administration (EIA), Annual Energy Outlook 2012, Reference Case; and 

EIA, Form EIA-860, “Annual Electric Generator Report”

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Updated capital costs

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 10

• EIA has funded a task with R.W. Beck/SAIC (now SAIC 

Energy, Environnent & Infrastructure, LLC) to update 

technology costs used in the electric power sector

– R.W. Beck did a similar report for EIA in 2010, which serves as the basis for 

AEO 2011 and AEO 2012 capital costs

– The contract was recently awarded, and work should be substantially 

completed by mid September

– We will try to prioritize preliminary data to focus on technologies that have seen 

the biggest changes in cost over the past 2 years

• Refining methodology for calculating Dry Sorbent Injection, 

Fabric Filter, and Activated Carbon Injection costs

– Better representation of costs for MATS compliance

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

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Focus on nuclear

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012 11

• Uprates – No Change from AEO 2012

– No change from AEO 2012

• Retirements – No Change from AEO 2012

– Limited amount of capacity is retired that is meant to represent older, smaller, 

costly plants to operate.

– Between 2036 and 2040, 13 additional units reach their 60 year operating 

mark. However, these units are relatively younger & are already equiped with 

post – TMI retrofits. Therefore, we assume they will cross the 60 year hurdle

• New plants

– Levy Project is added to planned capacity 

– Joins Vogtle, VC Summer, Watts Bar 2 & Bellefonte 1

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Planned Additions for AEO 2013

AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012

• 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 new plants, but is able to 

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

– The planned additions are intended to account for growth during this “blind 

spot” in model coverage

• 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 nuclear we relax these assumptions to reflect the long lead times and 

regulatory steps involved in new nuclear power plant construction

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE 
Feedback from the Working Group

• Issues with Prior AEO Studies

– Assumptions

– Results

• Suggestions for AEO2013 Analyses

– Input Assumptions

– Scenarios/Sensitivity Analyses

• Questions/Comments

– Provide Name, Organization

– Contact info

• michael.leff@eia.gov 202-586-1297

• Jim.Diefenderfer@eia.gov 202-586-2432

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AEO 2013 Electricity Working Group 

Washington, DC, August 9th, 2012

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE