Focus on the Electricity Supply Mix for Natural Gas Power Generation US May 18 2015 Philadelphia Pennsylvania by Howard Gruenspecht Deputy Administrator US Energy Information Administration ID: 131969
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Slide1
Energy Outlook 2015:Focus on the Electricity Supply Mix
for
Natural Gas Power Generation US
May 18,
2015 |
Philadelphia, Pennsylvania
by
Howard Gruenspecht, Deputy Administrator Slide2
U.S. Energy Information Administration
2
Statistical and analytical agency within the U.S. Department of Energy
Produces monthly short-term and annual long-term projections
Produces special analyses of emerging issues and regulatory changesEIA’s analyses and projections are independent, by law, and should not be seen as representing the views of the Department of Energy, the Administration, or any other organization.
Energy Outlook 2015
May 18, 2015Slide3
Short-term
Energy Outlook 2015
May 18, 2015
3Slide4
U.S. Monthly Net Electric Power Generation, 2010 - 2016
4
U.S. electricity generation by energy source
gigawatthours
per daySource: EIA, Short-Term Energy Outlook, April 2015
Energy Outlook 2015 May 18, 2015Slide5
average daily power generation, by fuel source, April through October
billion kilowatt hours per day
In EIA’s forecast, coal’s share of summer generation falls to historic low while natural gas and renewables match or exceed record highs
Source: Electric Power Monthly, EIA Short-Term Energy Outlook April 2015
Energy Outlook 2015 May 18, 2015
5Slide6
Coal plant retirements have had minimal impact on gas use for generation to date
6
Energy Outlook 2015
May 18, 2015
Coal Retirements by Year, Net Summer Capacity (MW)
Capacity Factor Based on 2013
April – October Generation
2013 April – October Generation (thousand
MWh
)
Equivalent
Natural Gas Consumption (Bcf/d)
2014
2,758
11%
1,615
0.1
2015
13,939
25%
18,086
0.7
2016
4,58746%10,7240.4
Recent and near-term coal retirements have operated at below-average capacity factorsAverage capacity factor for coal plants is 58%Low natural gas prices have been the main driver of coal displacement
Note: Estimates for 2015 and 2016 subject to change based on EIA-860 survey responses
Source
:
EIA, Annual Energy Outlook 2015; Electric Power Annual 2013Slide7
EIA forecast for Henry Hub prices is slightly above the Nymexstrip through 2016; however, confidence intervals based on options values suggest a wide band of uncertainty in price projections
7
Source: EIA, Short-Term Energy Outlook,
May 2015
Henry Hub spot pricedollars per million Btu
Effects of low oil prices May 12, 2015Slide8
Natural gas consumptionbillion cubic feet per day
annual
change
billion cubic feet per day
Effects of low oil prices May 12, 2015Industrial and power sectors drive natural gas consumption growth in the forecast
Source: EIA, Short-Term Energy Outlook, May 20158Slide9
Long-term
Energy Outlook 2015
May 18, 2015
9Slide10
AEO2015 underpinnings
10
Reference case: assumes current laws and regulations
Reinstatement of the Clean Air Interstate Rule (CAIR) after the court's announcement of intent to vacate the Cross-State Air Pollution Rule (CSAPR)
Includes representation of Mercury and Air Toxics Standards (MATS), with effective implementation date assumed to be 2016 rather than 2015Includes state renewable portfolio standardsRepresents California’s cap-and-trade program and the Northeast’s RGGI programDOES NOT include EPA’s proposed Clean Power
Energy Outlook 2015
May 18, 2015Slide11
Key results from AEO2015
11
In most AEO2015 cases, U.S. net energy
imports, including all fuels, decline
and ultimately end by 2030 for the first time since the 1950sU.S. energy consumption grows at a modest rate over the projection with reductions in energy intensity resulting from improved technologies and trends driven by existing laws and regulationsRenewables provide an increased share of electricity generation, reflecting rising long-term natural gas prices and the high capital costs of new coal and nuclear generation capacityImproved efficiency of energy consumption in end-use sectors and a shift away from more carbon-intensive fuels help to stabilize U.S. energy-related carbon dioxide emissions, which remain below the 2005 level through 2040
Hydrocarbon production varies significantly across regions and cases; shifts in flows between regions require infrastructure adjustments
The AEO2015 cases generally reflect current policies, including final regulations and the sunset of tax credits under current law;
they do not consider EPA’s
proposed Clean Power Plan
for
existing fossil-fired electric generating units or the effects of relaxing current limits on crude oil exports
Energy Outlook 2015
May 18, 2015Slide12
Reductions in energy intensity largely offset impact of GDP growth, leading to slow projected growth in energy use
12
U.S. primary energy consumption
quadrillion Btu
Source: EIA, Annual Energy Outlook 2015 Reference case
History
Projections
2013
36%
18%
27%
8%
8%
1%
33%
10%
18%
29%
8
%
1%
Nuclear
Petroleum and other liquids
Natural gas
Coal
Renewables (excluding liquid biofuels)
2025
35%
19%
27%
8%
9
%
1%
Liquid biofuels
2040
Energy Outlook 2015
May 18, 2015Slide13
Growth in electricity use slows, but electricity use still increases by 24% from 2013 to 2040
13
U.S. electricity use and GDP
percent growth (rolling average of 3-year periods)
Source: EIA, Annual Energy Outlook 2015 Reference case
Structural Change in Economy - Higher prices - Standards - Improved efficiency
Projections
History
2013
Period
Average Growth__
Electricity use GDP
1950s 9.8 4.2
1960s 7.3
4.5
1970s
4.7
3.2
1980s
2.9
3.1
1990s 2.4 3.2
2000-2013 0.7 1.9
2013-2040 0.8 2.4
Gross domestic productElectricity useEnergy Outlook 2015 May 18, 2015Slide14
Over time the electricity mix gradually shifts to lower-carbon options, led by growth in renewables and gas-fired generation
14
e
lectricity net generation
trillion kilowatthours
Source: EIA, Annual Energy Outlook 2015 Reference case
27%
19%
39%
13%
1%
Nuclear
Petroleum and other liquids
Natural gas
Coal
Renewables
2013
Projections
History
16%
18%
34%
31%
1%
1993
11%
13%
19%
53%
4%
27%
18%
38%
16%
1%
2025
2040
Energy Outlook 2015
May 18, 2015Slide15
Future domestic natural gas prices depend on both domestic
resource
availability & technology and world energy prices
15
average Henry Hub spot prices for natural gas2013 dollars per million BtuSource: EIA, Annual Energy Outlook 2015
History
Projections
2013
High Oil Price
Reference
High Oil and Gas Resource
Low Oil Price
Energy Outlook 2015
May 18, 2015Slide16
With lower natural gas prices in the High Oil and Gas Resource case, coal is displaced
as the leading generation
source before 2020
Energy Outlook 2015
May 18, 201516
net electricity generationtrillion kilowatthoursSource: EIA, Annual Energy Outlook 2015
Coal: High Oil and Gas Resource
Coal: Reference
Natural gas: High Oil and Gas Resource
Projections
History
2013
Natural gas: ReferenceSlide17
Energy Outlook 2015 May 18, 2015
$2.10
$
2
.10
$1.71
$2.13
$1.74
$1.78
$2.12
$1.98
$1.69
$2.30
$2.44
$3.66
$3.69
$3.09
$2.11
$2.42
$2.52
$3.98
$2.43
$2.53
N/A
N/A
National Average
Minimum
Maximum
$2.34
$1.69
$3.98
Delivered coal prices, 2013 dollars per million Btu
Source: EIA, Annual Energy Outlook 2015
In 2013, the
average delivered price of coal to electricity generators varied widely across U.S. regions – transport costs are a key reason
17Slide18
Cumulative additions to electricity generation capacity by fuel in six cases, 2013-2040
Energy Outlook 2015
May 18, 2015
18
capacity additionsgigawatts
Source: EIA, Annual Energy Outlook 2015
Solar
Wind
Nuclear
Natural gas/oil
Coal
Other renewables
OtherSlide19
Cumulative coal-fired capacity retirements, 2014-40
19
gigawatts
Source: Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015Slide20
Electricity generation by fuel in six cases, 2013 and 2040
Energy Outlook 2015
May 18, 2015
20
electricity net generationtrillion kilowatthours
Source: EIA, Annual Energy Outlook 2015
Nuclear
Natural
gas
Coal
Oil/Other
RenewablesSlide21
Non-hydro renewable generation grows to double hydropower generation by 2040
21
r
enewable electricity generation by fuel type
billion kilowatthoursSource: EIA, Annual Energy Outlook 2015 Reference case
Solar
Geothermal
Biomass
Municipal waste/Landfill gas
Wind
2013
Projections
History
Conventional Hydroelectric Power
Energy Outlook 2015
May 18, 2015Slide22
22
U.S. renewable generation in all sectors by fuel
billion kilowatthours
Source: EIA, Annual Energy Outlook 2015
Growth in wind and solar generation meets a significant portion of projected total electric load growth in all AEO2015 cases
Wind
Solar
Conventional
Geothermal
Biomass
and waste
2040
hydroelectric
power
Energy Outlook 2015
May 18, 2015Slide23
23
Energy Outlook 2015
May 18, 2015
The proposed Clean Power Plan for existing units under 111(d) is
not a simple emission rate standard for existing units; provisions affecting the denominator in compliance calculations play a key role Compliance CO2 intensity rate =
=
(
coal
emissions
)
+
(
oil/gas emissions
)
________________________________________________________________________________________________________
(
coal gen
) + (
oil/gas gen
)
+ (
eligible nuclear gen
)
+
(
eligible renew
gen) + EE Affected Generators Additional elements included in compliance denominatorExisting coal (steam and IGCC)6% of existing nuclearExisting oil/gas steamUnder construction nuclear
Existing gas combined cycle
Existing non-hydro renewable
New renewables (including hydro)
Energy Efficiency savingsSlide24
For more information
24
U.S. Energy Information Administration home page |
www.eia.gov
Annual Energy Outlook | www.eia.gov/forecasts/aeoShort-Term Energy Outlook | www.eia.gov/forecasts/steoInternational Energy Outlook | www.eia.gov/forecasts/ieoToday In Energy | www.eia.gov/todayinenergyMonthly Energy Review | www.eia.gov/totalenergy/data/monthly
State Energy Portal | www.eia.gov/state Drilling Productivity Report | www.eia.gov/petroleum/drilling
Energy Outlook 2015
May 18, 2015Slide25
Key
takeaways regarding the outlook for natural gas storage
levels
25
Energy Outlook 2015 May 18, 2015Natural gas storage is substantially higher than at this time last year: End-of- March 2015 inventories total an estimated 1,471 Billion cubic feet (Bcf), compared to 857 Bcf in 2014 following large withdrawals due to the exceptionally cold winter of 2013-2014
Strong production: EIA forecasts average production over the upcoming injection season to be 3.5 Bcf/d greater than production the same time last yearNear-record natural gas consumption for electric generation expected due to relatively low natural gas prices and warmer summer weather: EIA forecasts that the average Henry Hub price over the injection season is $3.06/MMBtu
, much lower than the average of $4.21/
MMBtu
last year. NOAA’s forecast of cooling degree days for the April – October 2015 injection season is 6.9% above the comparable 2014 period, implying more air conditioning demand
Relatively strong injections in the coming months:
EIA expects an overall injection of 2,310
Bcf
between April and October, with stocks at the end of October forecast to reach 3,781
Bcf
, 194
Bcf
higher than
2014Slide26
c
onsumption of natural gas in the electric power sector in
the
U.S.
billion cubic feet per dayForecast for natural gas consumed in the electric power sector is about 11% greater than last summer’s levels, but 4% below 2012’s record high levelsSource: Natural Gas Monthly
, EIA Short-Term Energy Outlook April 2015Energy Outlook 2015 May 18, 2015
26Slide27
U.S. net energy imports continue to decline in the near term, reflecting increased oil and natural gas production coupled with slow demand growth
27
U.S. net energy imports
q
uadrillion Btu
Source: EIA, Annual Energy Outlook 2015History
Projections
2013
High Oil Price
High Oil and Gas Resource
Reference
Low Oil Price
Energy Outlook 2015
May 18, 2015Slide28
CO
2
emissions are sensitive to the influence of future economic growth and energy price trends on energy consumption
28
energy-related carbon dioxide emissionsm
illion metric tonsSource: EIA, Annual Energy Outlook 2015
High Economic Growth
High Oil and Gas Resource
Reference
Low Economic Growth
History
Projections
2013
Energy Outlook 2015
May 18, 2015Slide29
CO2 emissions per dollar of GDP decline faster than energy use per dollar of GDP with a shift towards lower-carbon fuels
29
e
nergy and emission intensity
index, 2005=1
Source: EIA, Annual Energy Outlook 2015 Reference caseHistory
Projections
2013
Carbon dioxide emissions
per 2009 dollar GDP
Energy use per 2009
dollar of GDP
Energy use per capita
2005
Energy Outlook 2015
May 18, 2015Slide30
Electricity prices increase with rising fuel costs and expenditures for electric transmission and distribution infrastructure
30
a
verage retail electricity prices
2013 cents per kilowatthourSource: EIA, Annual Energy Outlook 2015
High Oil Price
High Economic Growth
High Oil and Gas Resource
Reference
Low Oil Price
Low Economic Growth
Projections
Energy Outlook 2015
May 18, 2015Slide31
Average delivered coal prices to electric generators in six cases, 1990-2040
Energy Outlook 2015
May 18, 2015
31
average delivered coal price
2013 dollars per million BtuSource: EIA, Annual Energy Outlook 2015
Projections
History
2013
High Oil and Gas Resource
Reference
Low Oil Price
High Oil Price
Low Economic Growth
High Economic GrowthSlide32
From April through June 2015, over 10.6 GW of coal generation capacity is scheduled to retire
32
Energy Outlook 2015
May 18, 2015Slide33
From April through October 2015, nearly 4.1 GW of natural gas generation capacity is under construction
33
Energy Outlook 2015
May 18, 2015Slide34
Upcoming: EIA-930—hourly survey of electricity b
alancing
a
uthorities
34First near-real time report for EIADashboard view of the U.S. power gridHighly anticipated by EIA customersStatus: dev largely complete; awaiting OES data to continueLaunch: TBD
Energy Outlook 2015 May 18, 2015Slide35
Electricity generation by fuel in the AEO2015 and AEO2014 Reference cases, 2013, 2020, 2030, and 2040
Energy Outlook 2015
May 18, 2015
35
electricity net generationtrillion
kilowatthoursSource: EIA, Annual Energy Outlook 2015 and EIA, Annual Energy Outlook 2014
Coal
Renewables
Nuclear
Natural gas
Petroleum/other
2020
2030
2040Slide36
C
rude oil price projection is lower in the AEO2015 Reference case than in AEO2014, particularly in the near term
36
Brent crude oil spot price
2013 dollars per barrelSource: EIA, Annual Energy Outlook 2015 Reference case and Annual Energy Outlook 2014 Reference case
History
Projections
2013
AEO2014
AEO2015
Energy Outlook 2015 May 18, 2015