Annual Energy Outlook 2016 Renewables Working Group ... · Renewable Electricity Analysis Team February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR

www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis

Annual Energy Outlook 2016

Renewables Working Group

Preliminary Results

Renewables AEO2016 Working Group

February 9, 2016| Washington, DC

By

EIA, Renewable Electricity Analysis Team

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE

Overview

2Renewable Electricity Analysis Team

February 9, 2016

• Key policy provisions

• Update on CPP model representation

• Update on status of Leidos capital cost study

• Preliminary results

WORKING GROUP PRESENTATION FOR

DISCUSSION PURPOSES. DO NOT QUOTE OR

CITE AS RESULTS ARE SUBJECT TO CHANGE.

Assumptions

3Renewable Electricity Analysis Team February 9,

2016




AEO 2016 reflects new RPS policies and the

ITC/PTC extension


February 9, 2016

• RPS updates:

– Vermont 75% RPS, Hawaii 100% RPS, California 50% RPS

– We do not directly model HI, but evaluated an exogenous representation of

their targets to include in results accounting

– Kansas has ended their RPS requirement

• ITC/PTC were extended in December 2015:

– ITC for utility-scale solar will remain at 30% through the end of 2019, then

decrease to 10% by 2022.

– PTC for wind is extended at full value through 2016, then phase down to zero

for projects under construction by 2020.




AEO2016 Reference case final Clean Power

Plan must assume some policy choices


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 CPP case




We have commissioned a new study to

update power-sector capital costs


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




Costs have seen the most change for coal,

solar, and wind


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.

0

1,000

2,000

3,000

4,000

5,000

6,000

Pulverized Coal * Coal/Biomass Co-Fire

(15%Biomass)

Adv Gas/OilComb. Cycle

Conv Gas/OilComb Cycle

ConventionalComb. Turbine

Advanced Comb.Turbine

PV (fixed tilt) PV (tracker) Wind Farm -Onshore

Total Overnight Capital Costs (2014$/KW)Leidos 2015 (latest) AEO 2015 SAIC 2013 R.W. Beck 20102014$/KW




New wind costs yield a capacity-weighted average of approximately

$1770/kW (in 2015$), when compared to 2014 capacity additions

8

• LBNL reports $1743/kW cap-wt average for 2014 ( 2015$, reported as $1710/KW in

2014$)

Region

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Net Reg.

Cost

(2015$/KW) 1,654 2,444 2,256 1,861 2,301 2,301 2,301 2,301 2,301 2,256 2,256 2,444 2,256 2,444 2,444 2,444 1,555 1,555 2,021 2,021 2,021 1,555

2014 New

Cap. (MW) 577 0 0 1,259 0 0 0 37 0 317 240 0 0 0 0 0 0 1781 0 331 20 235

Renewable Electricity Analysis Team

February 9, 2016




EIA has adjusted capacity factor assumptions up by 3 pts to

reflect recent turbine models

9

• However, cap-wt avg. capital costs approx. match recent installations

– Performance also reflects performance of the fleet, not just an individual model

0

5

10

15

20

25

30

Number of Observations

Annual Net Capacity Factor

CF Distribution, Wind Plants Built in 2011-2013

Class 3Class 6

Class 3

Class 6

AEO 15 performance by class2015 vintage

NREL estimated performance by class,GE 1.7 x 100 m

Class 6

48%

Class 5

43%

Class 4

38%Class 3

33%

AEO 16 performance by class2015 vintage


February 9, 2016




Solar PV costs decline sharply in the short-term, and continue to

decrease slowly in the long-term

10

• Initial PV costs are ~20% lower; increased PV uptake results in faster, deeper cost reductions

over time

• For 2014, LBNL reports $3,800/kW cap-wt average (all tech), with $2,800/kW median for fixed-tilt

c-Si


February 9, 2016




0

500

1000

1500

2000

2500

3000

3500

2014 2019 2024 2029 2034 2039 2044

PV Cost Trajectory

AEO2016 AEO2015$/kW

EIA PV learning is more optimistic than fleet average, similar to

fixed tilt average

11

• Note: AEO shows gross cost reduction from learning and macro cost adjustments

$/W

ac

Cumulative Installed Capacity (MW)

~5% reduction in cost per doubling of capacity

~10% reduction in cost per doubling of capacity

1.00

10.00

1 10 100 1,000 10,000 100,000 1,000,000

LBNL, all tech

LBNL, Fix c-Si

AEO 2016


February 9, 2016




Results


February 9, 2016




Summary results changes in renewables

• More renewable capacity additions through 2025 and 2030-

2040. Renewable capacity is over 30% higher by 2040 in the

AEO2016 than AEO2015, primarily from solar PV and wind.

• Growth results from 3 major changes to AEO

– Extension and phase-out of federal tax credits

– Implementation of the Clean Power Plan

– Lower initial cost assumptions

• Natural gas prices still play a big role in renewable electricity

markets

• Mass-based CPP implementation is less favorable to

renewables than rate-based


February 9, 2016




Natural Gas prices are significantly lower than

AEO 2015


February 9, 2016




$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

2010 2015 2020 2025 2030 2035 2040

2013$/M

MB

tu

Coal-AEO2016 Reference Gas-AEO2016 Reference

Coal-AEO2015 Reference Gas-AEO2015 Reference

Coal-CPP2015 Gas-CPP 2015

Source: Ref2016.0206a, Ref2015.0209a, rf15_111_all.0306a


February 9, 2016




0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040

History Projections

AEO2015 Reference

0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040

Cap

acit

y A

dd

ed

(G

W)

Coal Other Nuclear Oil and Gas Wind Solar

AEO2016 Reference

Additions to electricity generating capacity in the

AEO2015 Reference case, 2000-2040

Natural gas and coal-fired generation, EIA CPP Study 2015 vs. preliminary

AEO2016

16




Billion kilowatthours Billion kilowatthours

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Coal-AEO2015 Reference

Gas-AEO2015 Reference

Renew-AEO2015 Reference

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Coal-AEO2016 Reference

Gas-AEO2016 Reference

Renewables-AEO2016 Reference

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Coal-2015 CPP 2015

Gas-CPP 2015

Renewables-CPP 2015



February 9, 2016

Renewable generation in AEO2016 is 43% higher by 2040 than

in AEO 2015, but lower than proposed CPP rule analysis


February 9, 2016




0

200

400

600

800

1000

1200

1400

1600

2000 2005 2010 2015 2020 2025 2030 2035 2040

Renewable Generation (bill KWh)

AEO2016 AEO2015 AEO2015-CPP


Solar grows to over 200 GW by 2040, with growth in both

utility and distributed sectors


February 9, 2016




0

50

100

150

200

250

300

350

2000 2005 2010 2015 2020 2025 2030 2035 2040

Utility Solar (bill KWh)AEO2016 AEO2015 AEO2015-CPP

0

50

100

150

200

250

300

350

2000 2005 2010 2015 2020 2025 2030 2035 2040

Solar PV--End Use (bill KWh)


Wind generation by 2040 is 42% higher in AEO2016 than in

AEO2015, but lower than rate-based proposed CPP rule

analysis


February 9, 2016

• Near-term growth is accelerated by PTC extension

– In longer-term, PV and low NG prices constrain growth

0

100

200

300

400

500

600

700

2000 2005 2010 2015 2020 2025 2030 2035 2040

Wind Generation (bill KWh)






Biomass generation is down at both dedicated and co-fired

facilities relative to AEO 2015


February 9, 2016

0

10

20

30

40

50

60

2000 2010 2020 2030 2040

Generation at dedicated biomass plants(bill KWh)


0

10

20

30

40

50

60

2000 2010 2020 2030 2040

Generation at cofiring biomass plants(bill KWh)





Geothermal growth is also constrained by more competitive PV

and natural gas


February 9, 2016

0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

Geothermal Generation(bill KWh)






Hydroelectric maintains historical generation levels


February 9, 2016

0

50

100

150

200

250

300

350

2000 2005 2010 2015 2020 2025 2030 2035 2040

Hydroelectric Generation (bill KWh)






For more information


February 9, 2016 23

U.S. Energy Information Administration home page | 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 Portal | www.eia.gov/state




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http://www.eia.gov/aeo

http://www.eia.gov/steo

http://www.eia.gov/ieo

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http://www.eia.gov/todayinenergy

http://www.eia.gov/state

Supplemental Slides


February 9, 2016 24




NREL “modeled” turbine performance provides a reasonable

bracket around observed performance for popular models

25

• Newer model used by Leidos lacks sufficient data for calibration

• Modeled performance skews a bit high

0

2

4

6

8

10

12

14

16

18

20

0.22 0.26 0.3 0.34 0.38 0.42 0.46 0.5 0.54 0.58

Nu

mb

er

of

Ob

serv

ati

on

s

Capacity Factor

Frequency Distribution of Capacity Factors (GE 1.5 SLE)

2013 2014Class 3

(32%)

Class 5

(40%)

Class 4

(37%)

Class 6

(44%)

Class 7

(52%)

Modeled NREL performance bywind class


February 9, 2016




Model changes in other areas may have significant impact on

the electric power sector


February 9, 2016

• Preliminary macro-economic updates suggest lower interest

rates, lower construction-cost escalation factors

– This is making the more capital intensive technologies (nuclear and

renewables) more attractive

• Near-term natural gas costs are lower than last year

– Longer-term price path remains to be seen

• With the CPP in place, slowing demand growth may have

less of an impact than in previous years

– Substantial coal retirements/re-dispatch will create opportunities for new

capacity not seen in several years




Documents

Annual Energy Outlook 2016 Renewables Working Group ... · Renewable Electricity Analysis Team February 9, 2016 WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. DO NOT QUOTE OR