Driving Forces Behind Generation Fuel Mix In the Annual Energy Outlook 2006

Transcription

1 Driving Forces Behind Generation Fuel Mix In the Annual Energy Outlook rd Annual PURC Conference February 24, 26

2 Energy Information Administration Independent statistical agency within the Department of Energy Produce monthly short-term and annual long-term forecasts of U.S. and world energy markets Short Term Energy Outlook Annual Energy Outlook, 26 International Energy Outlook, 25 Produce special analyses of emerging issues and the impacts of regulatory/legislative changes EIA s analyses and projections should not be seen as advocating or reflecting any position of the Department of Energy, the Administration, or any other organization.

3 About the Annual Energy Outlook 26 Energy markets are uncertain! AEO26 based on current rules and regulations as of October 25 AEO26 includes over 35 cases, including: Three alternative economic growth cases Three alternative oil/gas price cases Three coal price cases Dozens of alternative technology cases Several regulatory sensitivity cases Across cases: 23 world oil price ranges from $28 to $9 per barrel 23 wellhead natural gas price ranges $4.97 to $7.71 per thousand cubic feet All cases should be considered All forecasts are wrong!

4 Extension to 23 Key Changes to AEO26 Incorporation of nitrogen oxide (NO x ) and sulfur dioxide (SO 2 ) emission regulations in the Clean Air Interstate Rule (CAIR) Incorporation of mercury regulations of Clean Air Mercury Rule (CAMR) Representation of standards and tax incentives in the Energy Policy Act of 25 Higher world oil prices Higher U.S. natural gas prices Slower electricity demand growth

5 Factors in Fuel / Technology Selection Demand Growth and Load characteristics Existing technology mix New technology cost and performance characteristics Fuel prices Interest rates / cost of capital Tax and other policy incentives Environmental regulations Regulatory structure

6 14% 12% 1% 8% 6% 4% 2% % Growth Continues but Slows 3-Year Moving Average Growth Rates Electricity Sales GDP

7 Electricity Must be Supplied As Needed 25 Max and Min Load Days, PJM-E 7, 6, 5, 27-Jul 3-May Megawatts 4, 3, 2, 1, Hours of the Day Source:

8 4+ Percent of Capacity Often Fully or Partially Idle 6, 24 PJM-E Load Duration Curve Load in Megawatts 5, 4, 3, 2, 1, Source:

9 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 Overnight Construction Costs (Dollars per Kilowatt) IGCC Combined Cycle Combustion Turbine Fuel Cells Nuclear Biomass Geothermal Wind Solar Thermal Photovoltaic Pulverized Coal

10 Delivered Fuel Costs (dollars per million Btu) $12 Distillate Residual Oil Natural Gas Coal Biomass $1 $8 $6 $4 $2 $

11 Biomass Geothermal Levelized Costs Transmission Variable Costs Fixed O and M Capital Advanced Combustion Turbine Advanced Nuclear Fuel Cell Wind Photovoltaic Advanced Coal Advanced Combined Cycle Dollars per megawatthour

12 Total Costs of Generation by Technology Coal Combined Cycle Combustion Turbine Total cost Combustion Turbine Combined Cycle Operating hours per year Coal

13 Electricity Capacity Additions by Year Coal Oil and Gas Nuclear Hydro Other

14 7, 6, 5, 4, 3, 2, 1, Electricity Generation by Fuel, 195 to 24 Coal Natural Gas Hydroelectric Oil and Other Nuclear Non-Hydro Renewable

15 Power Sector SO 2 and NO x Emissions (1 short tons) 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, SO2 NOx

16 Power Sector Mercury Emissions (Tons)

17 Power Sector CO 2 Emissions (Million Metric Tons) 3,5 3, 2,5 2, 1,5 1,

18 Electricity Prices (24 Cents per Kilowatt-hour)

19 Uncertainty All forecasts are wrong - only the publication frequency varies! Why might our reference case be wrong: More/less rapid changes in the cost and/or performance of generating technologies Different fuel costs Changes in environmental regulations or other policies Changes in consumer preferences Annual Energy Outlook includes a wide array of scenarios which consider some of these uncertainties

20 Key Alternative Cases Low oil/gas price case High oil/gas price case Low coal price case High coal price case Low nuclear cost case Nuclear vendor cost case 1-year renewable production tax incentive (PTC) case (prepared for Joint Tax Committee)

21 4, 3,5 3, 2,5 2, Coal Generation in Alternative Cases (Billion Kilowatt-hours) 1,5 Reference High Coal Cost 1, Low Coal Cost Low Oil/Gas Cost Nuclear Vendor High Oil/Gas Cost Low Nuclear Cost 1-Year PTC

22 Natural Gas Generation in Alternative Cases (Billion Kilowatt-hours) 1,8 1,6 1,4 1,2 1, Reference Low Coal Cost High Coal Cost High Oil/Gas Cost Low Oil/Gas Cost Nuclear Vendor Low Nuclear Cost 1-Year PTC

23 Nuclear Generation in Alternative Cases (Billion Kilowatt-hours) 1,6 1,4 1,2 1, Reference Low Coal Cost High Coal Cost High Oil/Gas Cost Low Oil/Gas Cost Nuclear Vendor Low Nuclear Cost 1-Year PTC

24 Renewable Generation in Alternative Cases (Billion Kilowatt-hours) Reference High Coal Cost 2 Low Coal Cost High Oil/Gas Cost Low Oil/Gas Cost Nuclear Vendor Low Nuclear Cost 1-Year PTC

25 Electricity Prices in Alternative Cases (24 Cents per Kilowatt-hour) 5 Reference High Coal Cost Low Coal Cost Low Oil/Gas Cost Nuclear Vendor High Oil/Gas Cost Low Nuclear Cost 1-Year PTC

26 Coal Generation With Greenhouse Gas Emission Limits 3, 2,5 Reference S. 228 S. 139 Billion Kilowatthours 2, 1,5 1, Source: Analysis of Senate Amendment SA 228, the Climate Stewardship Act of 23