Annual Energy Outlook 2016 2 nd Coal Working Group Coal and Uranium - - PowerPoint PPT Presentation

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Annual Energy Outlook 2016 2 nd Coal Working Group Coal and Uranium - - PowerPoint PPT Presentation

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WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. Annual Energy Outlook 2016 2 nd Coal Working Group Coal and Uranium Analysis Team February 9, 2016|

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www.eia.gov

U.S. Energy Information Administration

Independent Statistics & Analysis

Annual Energy Outlook 2016 2nd Coal Working Group

Coal and Uranium Analysis Team February 9, 2016| Washington, D.C.

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Key results for the AEO2016 Reference case

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  • Coal-fired generation, production, and capacity are all lower in the

preliminary AEO2016 Reference case

– Coal’s share of total electricity generation falls from 38% in 2014 to 18% by 2040, compared to 33% in AEO2015 – Coal production decreases from 996 million tons in 2014 to 640 million tons by 2040, compared to 1,117 in AEO2015 – Coal capacity retirements accelerate in the period from 2015 to 2040 to 109 GW, compared to only 37 in AEO2015

  • The key drivers behind the reduction in the outlook for coal relative

to the AEO2015 results include:

– The inclusion of the final Clean Power Plan (CPP) – Lower projected natural gas prices – A reduction in the estimated installation costs for renewables compared to higher costs for coal-fired generation (with partial CCS) – Lower coal export expectations

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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AEO2016 Reference case final Clean Power Plan must assume some policy choices

3 Coal Uranium and Analysis Team Washington, DC, February 9, 2016

  • The Reference case will assume that states select a mass-

based approach that covers both new and existing sources

  • Credit trading will be represented at the EMM region level
  • Allowances will be allocated to load serving entities
  • Side cases will explore alternative approaches

– Rate-based regulation – Credit trading at the interconnect level – Allocation of allowances to generators – No Clean Power Plan

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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SLIDE 4

Natural Gas prices are significantly lower than AEO 2015

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2013$/MMBtu

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 Source: AEO2016 NEMS run ref2016.1.0203a.RAN, AEO2015 Ref2015, rf15_111_all.0306a.RAN

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00

Coal- AEO2016 Reference Coal-AEO2015 Reference Coal-2015 EIA Clean Power Plan Study Gas- AEO2016 Reference Gas-AEO2015 Reference Gas-2015 EIA Clean Power Plan Study WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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We have commissioned a new study to update power-sector capital costs

5 Coal Uranium and Analysis Team Washington, DC, February 9, 2016

  • We have limited the scope of the update to technologies we

think may have changed substantially and technologies that are likely to be built in the model

  • The initial cost estimates are complete
  • Stakeholder outreach identified several key questions/issues

– Need for a 111b compliant coal technology – Lack of differentiation between fixed tilt and tracking PV costs – Large discrepancy for wind costs with other public sources

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Coal, solar, and wind capital costs differ significantly from AEO2015 assumptions

6 Coal Uranium and Analysis Team Washington, DC, February 9, 2016

* Technology specification on some items may have changed from report to report. Pulverized coal has changed from super-critical to ultra-supercritical with 30% CCS.

1,000 2,000 3,000 4,000 5,000 6,000

Pulverized Coal * Coal/Biomass Co-Fire (15%Biomass) Adv Gas/Oil Comb. Cycle Conv Gas/Oil Comb Cycle Conventional Comb. Turbine Advanced Comb. Turbine PV (fixed tilt) PV (tracker) Wind Farm - Onshore

Total Overnight Capital Costs (2014$/KW)

Leidos 2015 (latest) AEO 2015 SAIC 2013 R.W. Beck 2010

2014$/KW

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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SLIDE 7

U.S. electricity net generation trillion kilowatthours

Source: Preliminary AEO2016 (NEMS run ref2016.d020616a) 7

1 2 3 4 5 6 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 13%

Renewables and natural gas together account for 66% of generation in 2040 while coal’s share falls to 18%

27% 19% 38% 13% 1% Nuclear Oil and other liquids Natural gas Coal Renewables 2014 Projections History 16% 26% 18% 40% 1% 1993 11% 13% 19% 53% 4% 33% 18% 26% 22% 1% 2025 2040

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Electricity Generation by Fuel, 1980-2040

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billion kilowatthours Coal Petroleum Natural Gas Renewables Nuclear 500 1000 1500 2000 2500 1980 1990 2000 2010 2020 2030 2040

Note: Includes generation from plants in both the electric power and end-use sectors. Source: History: U.S. Energy Information Administration (EIA), Annual Energy Review; Projections: Preliminary AEO2016 (NEMS run ref2016.d020616a)

Projections History 2014

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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SLIDE 9

Electricity Generation by Fuel, 1980-2040

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billion kilowatthours Renewables 500 1000 1500 2000 2500 1980 1990 2000 2010 2020 2030 2040

AEO2016 AEO2015

Note: Includes generation from plants in both the electric power and end-use sectors. Source: History: U.S. Energy Information Administration (EIA), Annual Energy Review; Projections: Preliminary AEO2016 (NEMS run ref2016.d020616a), AEO2015 Reference Case (April 2015).

Projections History 2014

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

Natural Gas Coal

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Natural gas, renewables, and coal-fired generation, AEO2015 Reference Case, EIA CPP Study 2015 vs. preliminary AEO2016

10 Coal Uranium and Analysis Team Washington, DC, February 9, 2016

Source: AEO2016 NEMS run ref2016.0206a.RAN, rf15_111_all.0306a.RAN Billion kilowatthours Billion kilowatthours

200 400 600 800 1000 1200 1400 1600 1800 2000 Coal-AEO2015 Reference Gas-AEO2015 Reference Renew-AEO2015 Reference

200 400 600 800 1000 1200 1400 1600 1800 2000

Coal-AEO2016 Reference Gas-AEO2016 Reference Renew-AEO2016 Reference

200 400 600 800 1000 1200 1400 1600 1800 2000 Coal-2015 EIA Clean Power Plan Study Gas-2015 EIA Clean Power Plan Study Renew-2015 EIA Clean Power Plan Study

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Total coal production, 1970-2040

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million short tons 200 400 600 800 1000 1200 1400 1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 CPP Base Policy AEO2015

2014* Projections History

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), proposed Clean Power Plan (rf15_111_all.d030615a; *2014 data is estimated. Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Coal production by region, 1970-2040

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million short tons Appalachia Interior Western Total U.S. 200 400 600 800 1000 1200 1400 1970 1980 1990 2000 2010 2020 2030 2040

16 Total U.S. 15 Total U.S.

AEO2016 AEO2015 2014* Projections History

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), proposed Clean Power Plan (rf15_111_all.d030615a *2014 data is estimated.

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Coal production by region, 1970-2040

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million short tons Appalachia Interior Western Total U.S. 200 400 600 800 1000 1200 1400 1970 1980 1990 2000 2010 2020 2030 2040

proposed… 15 Total U.S.

AEO2016 CPP Base Policy 2014* Projections History

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE. Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), proposed Clean Power Plan (rf15_111_all.d030615a

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Coal production, AEO2016 vs. AEO 2015 in 2040 (and 2014*) (million short tons)

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233 5 – 5 (14) 62 18 – 30 (26) 1 – 1 (1) 129 – 239 (143) 86 – 130 (137) 46 – 83 (120) 13 – 16 (19) 39 – 60 (46) 18 - 29 (30) 20 – 26 (42) 238 – 430 (380)* 5 – 4 (1)** 24 – 58 (37) U.S. Total: 640 – 1,117 (996)

Source: *2014 (preliminary): Mine Safety and Health Administration, Form 7000-2, “Quarterly Mine and Employment and Coal Production Report;” 2040: Preliminary AEO2016 (NEMS run ref2016.d020616a); and AEO2015.

* Includes production from all mines in Wyoming’s Powder River Basin. ** Includes production from mines in both Alaska and Washington.

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Appalachian coal production, 1970-2040

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million short tons 50 100 150 200 250 300 350 400 450 500 1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 Reference AEO2015 Reference

Northern Appalachia Central Appalachia Southern Appalachia

Total Appalachia

AEO2016 AEO2015

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015) Except for Appalachian total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines

2014 Projections History

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Interior coal production, 1970-2040

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million short tons Total Interior 50 100 150 200 250 300 1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 AEO2015

Eastern Interior Gulf Lignite

2014 Projections History

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Western coal production, 1970-2040

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million short tons 100 200 300 400 500 600 700 1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 AEO2015

Other West 2014 Projections History

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

Total West WY PRB

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SLIDE 18

Western coal production, 1970-2040

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million short tons 100 200 300 400 500 600 700 1970 1980 1990 2000 2010 2020 2030 2040

AEO2016 CPP Base Policy

Other West 2014 Projections History

Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), Except for Interior total, data for 1978-1985 exclude production from small (<10,000 short tons) coal mines Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

Total West WY PRB

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Average minemouth coal prices by region, 1980-2040

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2014 dollars per short ton Appalachia Interior West

10 20 30 40 50 60 70 80 90 1980 1990 2000 2010 2020 2030 2040

AEO2015 U.S. Average AEO2016 U.S. Average

2014*

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015), *2014 is estimated. WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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U.S. Coal Exports, 1995-2040

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million short tons

20 40 60 80 100 120 140

1995 2000 2005 2010 2012 2015 2020 2025 2030 2035 2040

Coking Steam

Source: History: U.S. Energy Information Administration (EIA), Quarterly Coal Report; Projections: Preliminary AEO2016 (NEMS run ref2016.d020616a).

History Projections

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Coal exports by major supply region, 2010-2040

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million short tons 20 40 60 80 100 120 140 160 2010 2015 2020 2025 2030 2035 2040

AEO2015 AEO2016

Western Appalachia Total

Source: 2010-2012: U.S. Energy Information Administration (EIA), Annual Coal Distribution Report; 2013-2040: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015)

Interior

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

2014

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22 Coal Uranium and Analysis Team Washington, DC, February 9, 2016

10 20 30 40 50 60 2000 2005 2010 2015 2020 2025 2030 2035 2040 History Projections

AEO2015 Reference

10 20 30 40 50 60 2000 2005 2010 2015 2020 2025 2030 2035 2040

Capacity Added (GW) Coal Other Nuclear Oil and Gas Wind Solar

AEO2016 Reference

Additions to electricity generating capacity, 2000-2040

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Cumulative coal retirements are up relative to previous CPP study, 2015-2040

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gigawatts

Coal Uranium and Analysis Team Washington, Washington, DC, February 9, 2016 Source: AEO2016 NEMS run ref2016.1.0203a.RAN, AEO2015 Ref2015, rf15_111_all.0306a.RAN

20 40 60 80 100 120 140 160 180 200 AEO2016 Reference AEO2015 Reference 2015 EIA Clean Power Plan Study Nuclear Gas CC O&G Steam Coal

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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SLIDE 24

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Coal demand regions

Source: U.S. Energy Information Administration, Office of Energy Analysis Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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SLIDE 25

25

Net summer coal-fired generating capacity in the electric power sector by coal demand region, 2014 and 2040

gigawatts

10 20 30 40 50 60

01NE (CT,MA,ME,NH,RI,VT) 02YP (NY,PA,NJ) 03S1 (WV,MD,DC,DE) 04S2 (VA,NC,SC) 05GF (GA,FL) 06OH (OH) 07EN (IN,IL,MI,WI) 08KT (KY,TN) 09AM (AL,MS) 10C1 (MN,ND,SD) 11C2 (IA,NE,MO,KS) 12WS (TX,LA,OK,AR) 13MT (MT,WY,ID) 14CU (CO,UT,NV) 15ZN (AZ,NM) 16PC (AK,HI,WA,OR,CA)

2014 AEO2015 AEO2016

U.S. Total 2014: 294 AEO2015: 257 AEO2016: 173 Coal Uranium and Analysis Team Washington, DC, February 9, 2016 Source: Preliminary AEO2016 (ref2016.d020616a), AEO2015 Reference Case (April 2015) WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Cumulative net summer coal-fired capacity retirements by coal demand region, 2015-2040

gigawatts

5 10 15 20

01NE (CT,MA,ME,NH,RI,VT) 02YP (NY,PA,NJ) 03S1 (WV,MD,DC,DE) 04S2 (VA,NC,SC) 05GF (GA,FL) 06OH (OH) 07EN (IN,IL,MI,WI) 08KT (KY,TN) 09AM (AL,MS) 10C1 (MN,ND,SD) 11C2 (IA,NE,MO,KS) 12WS (TX,LA,OK,AR) 13MT (MT,WY,ID) 14CU (CO,UT,NV) 15ZN (AZ,NM) 16PC (AK,HI,WA,OR,CA)

AEO2015 AEO2016

Coal Uranium and Analysis Team Washington, DC, February 9, 2016 U.S. Total AEO2015: 37 AEO2016: 109 Source: Preliminary AEO2016 (NEMS run ref2016.d020616a), AEO2015 Reference Case (April 2015). WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.

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Coal Uranium and Analysis Team Washington, DC, February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR CITE AS AEO2016 MODELING ASSUMPTIONS AND INPUTS ARE SUBJECT TO CHANGE.