The Electricity Capacity Challenge: A View from The Energy Information Administration for POWERING THE NEXT DECADE: KEY ISSUES FOR THE INCOMING ADMINISTRATION Technology Policy Institute The National Press Club Howard Gruenspecht…
Outline 1. WHERE WE ARE TODAY, AND HOW WE GOT THERE Review of the Electricity Supply Mix Past and Projected Demand Trends 2. KEY FACTORS AFFECTING CAPACITY CHOICES Capital Costs Fuel Costs Climate Policy (and/or expectations…
Coal Continued to Dominate the U.S. Generation Mix in 2007 2% 6% Coal 19% Oil & Other Natural Gas 50% Nuclear Hydroelectric Other Renewable 21% 2% 2 Technology Policy Institute, H. Gruenspecht, 9/26/2008
Electric Generating Capacity Additions, 1950-2006 (gigawatts) Significant amounts of coal and nuclear capacity, which have relatively low operating costs, were added in the 1980s. Large amounts of natural gas-fired generating…
Electricity Demand Growth Continues to Slow (3-year rolling average percent growth) Electricity demand growth has slowed over time. However, electricity demand is still expected to grow more than 25% above todays level by 2030. 14…
3 Competitive Arenas and 4 Key Factors Driving Capacity Choices 7 Technology Policy Institute, H. Gruenspecht, 9/26/2008
Three Competitive Arenas Vs. Vs. Vs. 8 Technology Policy Institute, H. Gruenspecht, 9/26/2008
Capital Costs of New Plants: New vs. Old/New IHS-CERA Power Capital Cost Index (PCCI) AEO 2005 AEO 2008 Current Thinking With and Without Nuclear 3500 250 Q3 2007: 233 Q1 2008: 231 3000 230 210 2500 Q1 2007: 194 190 2000…
Fuel Costs Affect All Areas of Competition 10 8 per million Btu 6 4 2 0 1994 1996 1998 2000 2002 2004 2006 Coal Natural Gas Natural gas prices have risen dramatically since 2000. Coal prices have also risen, but to…
Climate Policy Impact on Operating Costs: OLD vs. OLD Fuel Cost For Existing Coal and Combined Cycle Gas Units With a Value Placed on CO2 Emissions 160 per Mwh (2007) 140 120 Gas CC at 13 100 80 Gas CC at 7 60 40 Coal at 2…
Climate Policy Impact on Levelized Cost: NEW vs.OLD/ NEW Levelized Costs for New Plants in 2025 With a Value Placed on CO2 Emissions 240 220 ed Coal per Mwh (2007) 200 P ul ve r iz C 180 Coal IGC 160 140 as as Gas CC w/ 7…
Demand is Also Uncertain EIAs reference electricity demand projection is sensitive to: the projected rate of economic growth and its mix: faster growth and more growth in energy intensive sectors would raise demand the pace of…
Wild Cards Production Tax Credits (PTC) Qualifying technologies that enter service by the end of 2008 receive the PTC. Wind receives 2.0 cents per kilowatt hour with adjustment for inflation, for 10 years. The PTC has repeatedly…
Electricity Generation Mix in 2006 and 2030, Assuming No Policies to Limit Greenhouse Gas Emissions (billion kilowatthours) 3000 180 160 2500 140 120 100 80 2000 60 40 20 1500 0 Geothermal Solar Wind Biomass MSW/LFG…
Projected Impacts of L-W Climate Policy on Electricity Generation by Fuel in 2030 (billion kilowatthours) 6,000 Coal without CCS Coal With CCS Nuclear Renewables Natural Gas Oil/Other 5,000 741 897 4,000 656 806 1,794 917…
Projected Impacts of L-W Climate Policy on Cumulative Electric Capacity Additions,2007-2030 (Gigawatts) Coal no CCS Coal with CCS Nuclear 700 Renewables Natural Gas/Oil 600 500 196 134 400 300 232 96 357 200 47 100 17…
Summing up The rate of demand growth, fuel costs, capital costs, and climate change policies are key drivers of the capacity decisions. KEY FUEL COST ISSUE: The natural gas supply and demand balance. KEY CAPITAL COST ISSUE: The…
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