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

Fuels Used in Electricity Generation

For U.S. Nuclear Infrastructure Council June 05, 2013 | Washington, DC By Adam Sieminski, Administrator

Over time the electricity mix gradually shifts to lower-carbon options, led by growth in natural gas and renewable generation

2

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

U.S. electricity net generation trillion kilowatthours

25%

19%

42%

13%

1%

Nuclear

Oil and other liquids

Natural gas

Coal

Renewables

2011 Projections History

17%

16%

35%

30%

1%

1993

53%

13%

19% 11%

4%

Source: EIA, Annual Energy Outlook 2013

Adam Sieminski, USNIC June 05, 2013

Key results from the AEO2013 reference case relating to the electric power sector

Adam Sieminski, USNIC June 05, 2013 3

• While coal still remains the largest single source of U.S. electricity generation, it’s role declines as natural gas and renewables pick up increasing market share

• Natural gas production is higher throughout the reference case projection than it was in AEO2012, serving the industrial and power sectors and an expanding export market

• Role of nuclear power in the U.S. generation mix stays relatively steady

• The U.S. becomes a larger exporter of natural gas and coal than was projected in the AEO2012 reference case

• U.S. energy-related carbon dioxide emissions remain more than five percent below their 2005 level through 2040, reflecting increased efficiency and the shift to a less carbon-intensive fuel mix

Why we might could will be wrong?

Adam Sieminski, USNIC June 05, 2013 4

• Changing policies and regulations

• Changing consumer preferences

• Faster / slower economic growth

• Faster / slower technological progress

• Different relative fuel prices

• Technological breakthroughs

Electricity demand: growth in electricity use slows, but still increases by 28% from 2012 to 2040

Adam Sieminski, USNIC June 05, 2013 5

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

percent growth (3-year compounded annual growth rate)

Source: EIA, Annual Energy Outlook 2013

History Projections

2011

Electricity Use

GDP 2.4%

0.9%

2011 – 2040 average

Natural gas and coal prices: coal regains competitive advantage relative to natural gas over time on a national average basis

6

0

2

4

6

8

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

ratio of natural gas price to steam coal price

Source: EIA, Annual Energy Outlook 2013

0

2

4

6

8

10

1990 2000 2010 2020 2030 2040

History Projections

2011 2011 dollars per Btu

History Projections 2011

Competitive parity

Energy prices to the electric power sector

Coal

Natural gas

Adam Sieminski, USNIC June 05, 2013

Domestic production of shale gas has grown dramatically over the past few years

Adam Sieminski, USNIC June 05, 2013 7

shale gas production (dry) billion cubic feet per day

Sources: LCI Energy Insight gross withdrawal estimates as of April 2013 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play.

0

5

10

15

20

25

30

2000 2002 2004 2006 2008 2010 2012

Rest of USMarcellus (PA and WV)Haynesville (LA and TX)Eagle Ford (TX)Bakken (ND)Woodford (OK)Fayetteville (AR)Barnett (TX)Antrim (MI, IN, and OH)

New power plant costs: levelized cost of electricity

Adam Sieminski, USNIC June 05, 2013 8

costs for new U.S. electricity power plants in 2018 2011 dollars per megawatthour

Source: EIA, Annual Energy Outlook 2013

0 50 100 150 200 250

Offshore Wind

Solar PV

Pulverized Coal with CCS

IGCC Coal

Biomass

Nuclear

Pulverized Coal

Natural Gas Combined…

Onshore Wind

Natural Gas Combined…Levelized Capital CostFixed O&M CostVariable O&M Cost Including FuelTransmission Costs

Adam Sieminski, USNIC June 05, 2013 9

The fuel mix for electricity generation varies widely across U.S. regions (2011)

Source: EIA, Annual Energy Outlook 2013, based on Form EIA-923

National Average Minimum Maximum

Coal 42% 0% 80%

Natural Gas 25% 2% 87%

Nuclear 19% 0% 41%

Renewables 13% 1% 65%

Oil / Other 1% 0% 5%

Share of Generation by Fuel, 2011

Adam Sieminski, USNIC June 05, 2013 10

The projected fuel mix for electricity generation by region (2040)

Source: EIA, Annual Energy Outlook 2013

National Average Minimum Maximum

Coal 35% 0% 69%

Natural Gas 30% 2% 81%

Nuclear 17% 0% 36%

Renewables 16% 1% 53%

Oil / Other 1% 0% 2%

Share of Generation by Fuel, 2040

Additions to electricity generation capacity, 1985-2040

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U.S. electricity generation capacity additions gigawatts

Source: EIA Form 860 & EIA, Annual Energy Outlook 2013

0

10

20

30

40

50

60

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

CoalHydroNatural GasNuclearWindSolar

Projection History

Changes in nuclear capacity for the AEO2013 reference case

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gigawatts

Source: EIA, Annual Energy Outlook 2013

101.1 8.0

5.5 5.5 7.1 113.1

0

20

40

60

80

100

120

140

2011 Capacity Uprates PlannedAdditions

UnplannedAdditons

Retirements 2040 Capacity

Nuclear relevant side cases in AEO2013

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• High/low nuclear

• High/low oil and gas resource

• Small modular reactors (SMRs) ???

• CO2 fee cases

Adam Sieminski, USNIC June 05, 2013 14

0 5 10 15 20 25 30 35

High Oil and Gas Resource(low natural gas prices)

Low Oil and Gas Resource(high natural gas prices)

Low Nuclear

High Nuclear

Reference

capacity additions gigawatts

Source: EIA, Annual Energy Outlook 2013

Planned Unplanned

Nuclear capacity additions in AEO2013 vary under different assumptions

0

500

1,000

1,500

2,000

2,500

2000 2005 2010 2015 2020 2025 2030 2035 2040

If natural gas prices stay low, coal is permanently displaced as the leading generation source in the near future

Adam Sieminski, USNIC June 05, 2013 15

billion kilowatthours

Source: EIA, Annual Energy Outlook 2013

Coal

Natural Gas

Reference

High Oil and Natural Gas Resource

Projections

Adam Sieminski, USNIC June 05, 2013 16

0 250 500 750 1,000 1,250

2011

Reference

Low Oil andGas Resource

High Oil andGas Resource

Low Coal Cost

High Coal Cost

capacity gigawatts

Source: EIA, Annual Energy Outlook 2013

Coal

Oil/gas steam Natural gas combined cycle

Nuclear Natural gas combustion turbine

Renewable/other

2040

Power sector electricity generation capacity by fuel in five cases, 2011 and 2040

Small Modular Reactors (SMR)

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• SMR technology differs from traditional, large-scale light-water reactor technology in both reactor size and plant scalability

• EIA conducted a side case to evaluate the effect of a shorter construction period on future nuclear capacity expansion

• The case showed that there are potential cost saving from the shorter construction periods but uncertainty about potential future operations costs remains.

Adam Sieminski, USNIC June 05, 2013 18

Changing electricity generation mix in AEO2013 reference case and carbon fee allowance side cases U.S. electricity net generation trillion kilowatthours

Source: EIA, Annual Energy Outlook 2013

0

1

2

3

4

5

1995 2010 2025 20400

1

2

3

4

5

1995 2010 2025 20400

1

2

3

4

5

1995 2010 2025 2040

2013 Reference Case

Natural gas

Renewables

Nuclear

Coal

2011

24%

13%

19%

42%

30%

16%

17%

35%

Natural gas

$15 Carbon Fee

Renewables

Nuclear

Coal

34%

22%

27%

16%

$25 Carbon Fee

Natural gas

Renewables

Nuclear

Coal

34%

23%

38%

4%

U.S. dependence on imported liquids depends on both supply and demand

19

U.S. liquid fuel supply million barrels per day

Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, April 2013

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Consumption

Domestic supply

Net imports 37%

Projections History

Petroleum Exports

-8%

32% STEO forecast for 2014

2014

40%

2012

Adam Sieminski, USNIC June 05, 2013

Adam Sieminski, USNIC June 05, 2013 20

Keynote Speakers

Dr. Ernest J. Moniz U.S. Secretary of Energy

Lisa Murkowski United States Senator

Alaska

Thomas Fanning Chairman, President and CEO

Southern Company

Aldo Flores-Quiroga Secretary General International Energy Forum

Hans Rosling Chairman Gapminder

EIA.gov

For more information

Adam Sieminski, USNIC June 05, 2013 21

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

Annual Energy Outlook | www.eia.gov/forecasts/aeo

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

International Energy Outlook | www.eia.gov/forecasts/ieo

Today In Energy | www.eia.gov/todayinenergy

Monthly Energy Review | www.eia.gov/totalenergy/data/monthly

Annual Energy Review | www.eia.gov/totalenergy/data/annual