AEO2010 Commercial Sector Projections Energy Forecasting Group Annual Meeting April 29, 2010 Las Vegas, Nevada Erin Boedecker, Operations Research Analyst
Overview What s changed Modeling changes Review of stimulus provisions and handling How it looks Highlights Focus on electricity 2
NEMS Commercial projects for AEO2010 Extend the model time horizon to 2035 Incorporate new or updated Federal efficiency standards Fluorescent and reflector lamps Refrigerated display cases and vending machines Commercial boilers Incorporate regional standards for residential-style CAC Update building retirement parameters Update hurdle rate distribution Incorporate ENERGY STAR 5.0 for PCs and monitors Add an extra stage to the technology choice algorithm for fuel choice Include impacts of American Recovery and Reinvestment t Act of 2009 (also in updated d AEO2009) 3
ARRA09 provisions modeled in the commercial sector Appropriations for energy programs $3.1 billion to DOE s State Energy Program (SEP) Grants to State Energy Office to implement building codes, etc. $3.2 billion to Energy Efficiency and Conservation Block Grant Program $8.8 billion to upgrade/renovate educational facilities as green certified (LEED, etc.) $3.7 billion to Department t of Defense and $4.5 billion to General Services Administration for Federal buildings $4.5 billion to smart grid investment Tax Credits Removes $4000 cap on 30% investment tax credit for wind 4
NEMS implementation of ARRA09 provisions Energy programs Assume new construction meets ASHRAE 90.1-2007 standards for building shell measures by 2018 Reduce hurdle rates used by government-owned share of floorspace (new construction and equipment replacement) for years funding is available Assume a portion of funding is used for solar photovoltaic and wind installations Assume deployment of smart grid devices leads to increased short-term elasticity of demand for some uses Tax Credits Allow full 30% credit in cash flow analysis for wind 5
Commercial Highlights from AEO2010 Commercial floorspace in 2030 similar to updated AEO2009 Slower growth expected near term, relative to updated AEO2009 Electricity Sales down 3.2 percent in 2030, relative to updated AEO2009 Real price higher through 2015, down 4.3 percent in 2030, relative to updated AEO2009 Natural gas Consumption up 3.7 percent in 2030, relative to updated AEO2009 Real price down 7.9 percent in 2030, relative to updated AEO2009 6
Commercial electricity use per square foot shows influence of technology assumptions index, 2005=1 1.2 1.1 Frozen technology 1 Reference 0.9 High technology 0.8 0.7 0.6 2005 2010 2015 2020 2025 2030 2035 Source: Annual Energy Outlook 2010 7
Efficiency gains contribute to decline in electricity use per square foot for major uses Electric Other Medical Imaging Office Equip NonPC Electric vehicles All Uses Ventilation Cooling Coffee Brewers Elevators/Escalators Nonbuilding Uses Lighting Office Equip PC Hot Water Heating Cooking Transformers Refrigeration -1.3-1.3-1.3-1.4-1.4-0.7-0.7 07-0.1-0.2-0.2-0.3-0.4 0.0 0.8 12 1.2 2.6 3.1 2008 to 2035 growth -2.0-1.0 0.0 1.0 2.0 3.0 4.0 Annual percent growth in commercial electricity intensity Source: Annual Energy Outlook 2010 8
Miscellaneous uses drive commercial electricity sales growth Electric Other Nonbuilding Uses Office Equip NonPC Ventilation Cooling Lighting Mdi Medical limaging Office Equip PC Electric vehicles Elevators/Escalators Coffee Brewers Cooking Hot Water Transformers Heating Refrigeration -1-1 -1-5 13 10 3 2 1 0 67 66 55 48 47 2008 to 2035 265-50 0 50 100 150 200 250 300 Change in commercial electricity sales (billion kwh) Source: Annual Energy Outlook 2010 9
Standards boost efficiency increases for lighting, refrigeration Refrigeration 47 Electric space heat 33 Lighting 24 Electric cooling Gas cooling 15 22 2008 to 2035 Gas space heat 9 Electric water heat 5 Gas water heat 4 0 10 20 30 40 50 Stock efficiency improvement (percent) Source: Annual Energy Outlook 2010 10
Commercial projections include a variety of new and updated equipment standards Residential and commercial lamps General Service (2013,2020) 2020) Incandescent reflector (2013) Linear fluorescent (2013) Commercial lighting (in addition to lamp standards) Fluorescent ballasts (2005,2009) Metal halide fixtures (2009) Mercury vapor ballasts-ban (2008) Boilers (2012) Air conditioners and heat pumps (2010) Commercial refrigeration (2009, 2010, 2012) Ice makers (2010) and vending machines (2012) Source: Annual Energy Outlook 2010 11
Commercial lighting lower due to new standards, stimulus spending, higher near-term prices billion kilowatthours 375 350 Updated AEO2009 reference 325 AEO2010 reference 300 275 250 225 200 2005 2010 2015 2020 2025 2030 2035 Source: Annual Energy Outlook 2010 and updated Annual Energy Outlook 2009 reference cases 12
For more information U.S. Energy Information Administration home page www.eia.gov Short-Term Energy Outlook www.eia.gov/emeu/steo/pub/contents.html Annual Energy Outlook www.eia.gov/oiaf/aeo/index.html International Energy Outlook www.eia.gov/oiaf/ieo/index.html Monthly Energy Review www.eia.gov/emeu/mer/contents.html National Energy Information Center (202) 586-8800 Live expert from 9:00 AM 5:00 p.m. EST Monday Friday (excluding Federal holidays) email: InfoCtr@eia.doe.gov 13
Thank You Erin Boedecker Erin.Boedecker@eia.doe.gov 202-586-4791 U.S. Energy Information Administration www.eia.gov 14
Bonus Slides 15
How does the Annual Energy Outlook 2010 reference case handle public policy and technology? Generally assumes current laws and regulations provisions sunset if specified (e.g., renewable tax credits expire) excludes potential future laws and regulations (e.g., proposed greenhouse gas legislation is not included) some grey areas adopts proposed regulations that are not yet final, in order to inform the likely implementation of a statute adds a premium to the capital cost of CO 2 -intensive technologies to reflect market behavior regarding possible CO 2 regulation assumes implementation of existing regulations that enable building new energy infrastructure and resource extraction Includes technologies that are commercial or reasonably expected to become commercial in the next decade or so includes cost and efficiency improvements from learning, but not revolutionary or breakthrough technologies 16
Key results from the AEO2010 reference case Moderate energy consumption growth and greater use of renewables due to recent policies and rising energy prices Declining reliance on imported liquid fuels U.S. oil use remains near its present level through 2035 growth in overall liquids demand is met by biofuels, and ethanol accounts for >17% of gasoline consumption by 2035 Shale gas drives growth in U.S. natural gas production and reduces reliance on imported gas Electricity consumption grows by 1% per year over the projection Energy-related CO 2 emissions grow 0.3% per year, absent any new policies to limit emissions 17
Growth in electricity use continues to slow 3-year rolling average percent growth Period Annual Growth 14 History 1950s 9.8 1960s 7.3 12 1970s 4.7 1980s 2.9 10 1990s 2.4 2000-20082008 0.9 2008-2035 1.0 8 6 4 2 0 Projections -2 1950 1960 1970 1980 1990 2000 2010 2020 2030 Source: Annual Energy Outlook 2010 18
Natural gas and renewables account for the majority of capacity additions from 2008 to 2035 Nuclear 101 (10%) Other renewables 40 (4%) 2008 capacity Capacity additions 2008 to 2035 Hydropower* Hydropower* 99 (10%) 1 (0.4%) Nuclear 8 (3%) 1,008 gigawatts Coal 312 (31%) Other renewables 92 (37%) 250 gigawatts Coal 31 (12%) Other Other 119 (12%) 2 (1%) Natural gas 116 (46%) Natural gas 338 (33%) * Includes pumped storage Source: Annual Energy Outlook 2010 19
Renewables gain electricity market share; coal share declines billion kilowatthours and percent shares 6,000 History Projections 5,000 17.0 4,000 9.1 Renewable 20.8 3,000 21.4 Natural gas 2,000 48.5 Coal 43.8 1,000 15 1.5 Oil and other 1.4 19.6 Nuclear 17.1 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: Annual Energy Outlook 2010 20
Nonhydropower renewable sources meet 41% of total electricity generation growth from 2008 to 2035 billion kilowatthours 600 History Projections 500 400 300 Biomass 200 Wind 100 Solar Geothermal 0 Waste 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: Annual Energy Outlook 2010 21
Assuming no new policies, growth in energy-related CO 2 is driven by electricity and transportation fuel use 2008 2035 Buildings and Electric Power Electric Power Buildings and Industrial 2,359 (41%) 2,634 (42%) Industrial 1,5711 (25%) 1,530 (26%) 5,814 million metric tons 6,320 million metric tons 8.7% growth 0.3% per year Transportation 1,925 (33%) Transportation 2,115 (33%) Source: Annual Energy Outlook 2010 22