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

Annual Energy Outlook 2022 (AEO2022)

Working Group for Electricity, Coal, and Renewables Analysis: 

Preliminary Results

For

EIA Joint Working Group for Electricity, Coal, and Renewables

September 21, 2021

By

Office of Long-Term Energy Modeling—Electricity, Coal, and Renewables Modeling
Overview of Second Working Group

• Review of current laws and regulations and key model developments

• Preliminary results for AEO2022 Reference case

– Only case being discussed at this working group

• Additional core side cases to be published:

– High and Low Oil Price

– High and Low Economic Growth

– High and Low Oil and Gas Supply

– High and Low Renewables Cost

– Side cases for Issues In Focus articles (to be determined)

2

AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

WORKING GROUP PRESENTATION FOR

DISCUSSION PURPOSES. DO NOT QUOTE OR

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Review of current laws and regulations and 

key model developments

3

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Updated Legislation and Regulations

• Updated renewable portfolio standards

– Oregon Clean Energy Standard: 80% carbon-free generation by 2030, 90% carbon-free generation by 2035, 

100% carbon-free generation by 2040 for investor-owned utilities (IOUs), 50% carbon-free generation by 

2040 for all others

– Delaware increased its renewable portfolio standard target to 40% by 2035.

• Added extension of the production tax credit (PTC) and investment tax credit (ITC) 

(December 2020)

• Removed Affordable Clean Energy (ACE) rule (January 2021)

• Updated Cross-State Air Pollution Rule (CSAPR) (March 2021)

– Updates to seasonal nitrogen oxides budgets for 12 states for 2021–2024

• Removed Ohio’s zero energy credit (ZEC) program for nuclear power plants

4

WORKING GROUP PRESENTATION FOR 

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Other Policy and Regulatory Considerations

• We are actively tracking reconciliation and infrastructure bills. We are 

assessing some features, but the complexity of incorporating them and the 

timing for enactment of the legislation will influence our approach for 

AEO2022.

– Clean Electricity/Energy Payment Plan (CEPP)

– Tax credit extensions for PTC, ITC, and bonus credits

• Illinois’s zero emissions credit (ZEC) payments to nuclear power plants will 

be available to other reactors in the state. Dresden and Byron will remain 

online throughout the program, and retirement is determined by model 

economics after the reactors retire.

5

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Key Developments for AEO2022 in Electric Sector 

Modeling

• Electricity and nuclear

– Improved market sharing algorithm (adjusts ECP build decisions among competitive 

technologies)

• Previously acted only on unsubsidized technologies. Now the model checks if subsidy is 

present before entering the algorithm

• If the emissions tax is present, the model allows market sharing within dispatchable and 

non-dispatchable technologies

– Revised operating modes available for baseload technologies so that they can operate more 

flexibly by responding to changes in net load based on intermittent electricity generation in a 

region

AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021 6

WORKING GROUP PRESENTATION FOR

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Key Developments for AEO2022 in Electric Sector 

Modeling

• Renewables

– Added capacity for standalone battery storage

– Implemented new declining credit algorithm energy 

– Enabled wind retirements

– Updated solar inverter loading ratio for standalone solar PV from 1.20 to 1.30 (implemented 

for hybrid solar PV with its inclusion in AEO2021)

– Updated biomass supply curve and improved its interaction with oil prices

• Coal

– Reconciled U.S. exports with the International Coal Market Module

– Revised U.S. coal transportation rates based on 2017–19 EIA survey data

– Updated Coal Market Module base year for coal supply to 2020

AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | September 

21, 2021 7

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Implementation of New Declining Capacity Credit Algorithm for 

standalone energy storage

• Storage is most valuable in hours with high net load and is less valuable as 

the ratio of available storage to net load increases in those hours.

• The new algorithm calculates the storage capacity credit based on the ratio 

of storage level to net load in the top 1% of hours.

8

0

5

10

15

20

25

30

35

40

2010 2020 2030 2040 2050

new 

previous 

capacity credit 

method

Standalone storage power capacity additions

Reference case

gigawatts

WORKING GROUP PRESENTATION FOR

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Enabled retirement options for wind generators

• We used the methodology similar to the approach used to evaluate nuclear 

retirements to:

– Add operations and maintenance costs of $2.50 per kilowatt per year after age 30 and $5.00 per kilowatt per 

year after age 40

– Calculate that 0.84 gigawatts of wind capacity retires by 2050

Source: ref2021.1018a, ref2022.0918d

9

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

0.0

0.2

0.4

0.6

0.8

1.0

2010 2020 2030 2040 2050

without wind

retirements

with wind

retirements

Cumulative wind retirements, 2010–2050

2021

history projections
Preliminary Results for AEO2022

10

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Summary of Preliminary Results

• Demand is lower due to updates in the commercial sector as well as increased self-generation.

• The level of capacity additions is higher compared with AEO2021—nearly 50 gigawatts more from 

planned additions and nearly 38 gigawatts more from unplanned additions.

• We expect more capacity to retire from coal power plants and older, less efficient peakers because 

of expected lower electricity prices, lower demand, and higher renewables capacity additions.

• Solar PV continues to make up the majority of capacity additions for renewables, leading to higher 

standalone energy storage capacity additions than expected in AEO2021.

• Wind capacity additions are lower (despite a PTC extension) due to competition from solar and 

natural gas.

• Natural gas-fired generation is higher in the near term, but it stays around the same level as in 

AEO2021 despite lower natural gas prices.

11

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | September 

21, 2021

Short-Term Economic Outlook Improves Relative to AEO2021 

Although Electricity Demand From End-Users is Lower

Source: ref2021.1018a, ref2022.0918d

12

WORKING GROUP PRESENTATION FOR

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$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2000 2010 2020 2030 2040 2050

AEO2021

AEO2022

Real gross domestic product

billion 2012 dollars

2021

history projections

3,000

3,250

3,500

3,750

4,000

4,250

4,500

4,750

5,000

2015 2020 2025 2030 2035 2040 2045 2050

Total electricity sales

billion kilowatthours

AEO2021

AEO2022

2021

history projections
Projected Shares of Electricity Generation by Fuel

Source: ref2021.1018a, ref2022.0918d

13

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040 2050

renewables

nuclear

petroleum

natural gas

coal

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040 2050

Share of electricity generation from selected fuels

AEO2022

Share of electricity generation from selected fuels

AEO2021
Installed Capacity by Fuel Type, 2010–2050

CC is combined cycle natural gas generators

Source: ref2021.1018a, ref2022.0918d

14

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2020 2025 2030 2035 2040 2045 2050

coal steam cc turbines nuclear hydro solar wind

Cumulative installed capacity by fuel type, 2010–2050 AEO 2021

gigawatts (GW)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2020 2025 2030 2035 2040 2045 2050

coal steam cc turbines nuclear hydro solar wind

Cumulative installed capacity by fuel type, 2010–2050 AEO2022

gigawatts (GW)
Natural Gas Prices Continue to Trend Lower Over the Long 

Term

Source: ref2021.1018a, ref2022.0918d

15

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2015 2020 2025 2030 2035 2040 2045 2050

Henry Hub natural gas spot price

2020 dollars per million British thermal units

AEO2021

AEO2022

2021

history projections
Coal Production and exports

16

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
Coal Production by Region, 1970–2050

Source: ref2022.d091921b, ref2021.113020a *2021–2022 data are estimated based on the Short-Term Energy Outlook forecasts.

17

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

Appalachia

Interior

Western

U.S. total.

0

200

400

600

800

1,000

1,200

1970 1980 1990 2000 2010 2020 2030 2040 2050

Regional coal production, 1970–2050

million short tons

21 Total U.S.

20 Total U.S.

AEO2022

AEO2021

2021

history projections
U.S. Continues Its Role as a World Swing Producer of Coal 

With Continued Exports

18

Source: ref2022.091921b Projection based on forthcoming EIA International Energy Outlook 2021

WORKING GROUP PRESENTATION FOR

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021

0

20

40

60

80

100

120

140

1995 2000 2005 2010 2012 2015 2018 2020 2021 2025 2030 2035 2040 2045 2050

coking

steam

history projections

U.S coal exports, 1995–2050

million short tons 2021
Contact Information for EIA Electricity, Coal, and 

Renewable Modeling Team

• Chris Namovicz, Team Leader Chris.Namovicz@eia.gov (202) 586-7120

• Laura Martin Laura.Martin@eia.gov (202) 586-1494

• Augustine Kwon Augustine.Kwon@eia.gov (202) 586-3645

• Syne Salem Syne.Salem@eia.gov (202) 586-5000

• David Fritsch David.Fritsch@eia.gov (202) 287-6538

• Kien Chau Kien.Chau@eia.gov (202) 586-4280

• Manussawee Sukunta Manussawee.Sukunta@eia.gov (202) 586-0279

• Richard Bowers Richard.Bowers@eia.gov (202) 586-8586

• Vikram Linga Vikram.Linga@eia.gov (202) 586-9224

• Kenneth Dubin Kenneth.Dubin@eia.gov (202) 586-0477

• Ed Thomas Edward.Thomas@eia.gov (202) 586-3704

• Singfoong Cheah Singfoong.Cheah@eia.gov (202) 586-0465

19

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021
For More Information 

U.S. Energy Information Administration homepage | www.eia.gov

Annual Energy Outlook | www.eia.gov/aeo

Short-Term Energy Outlook | www.eia.gov/steo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

State Energy Profiles | www.eia.gov/state

Coal Data Browser | www.eia.gov/coal/data/browser

U.S. Energy Mapping System | www.eia.gov/state/maps.php?v=Coal

International Energy Portal | www.eia.gov/beta/international/?src=home-b1

20

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AEO2022 Working Group for Electricity, Coal, and Renewables Analysis | 

September 21, 2021