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Fuels Used in Electricity Generation Fuels Used in Electricity Generation For U.S. Nuclear Infrastructure Council June 05, 2013 | Washington, DC By Adam Sieminski, Administrator U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov Over time the electricity mix gradually shifts to lower-carbon options, led by growth in natural gas and renewable generation U.S. electricity net generation trillion kilowatthours 1993 History 2011 Projections 6 5 30% Natural gas 4 25% 16% Renewables 3 13% 13% 11% 19% Nuclear 17% 2 19% 35% 1 53% 42% Coal Oil and other liquids 4% 1% 0 1% 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 2 Key results from the AEO2013 reference case relating to the electric power sector • 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 Adam Sieminski, USNIC June 05, 2013 3 Why we might could will be wrong? • Changing policies and regulations • Changing consumer preferences • Faster / slower economic growth • Faster / slower technological progress • Different relative fuel prices • Technological breakthroughs Adam Sieminski, USNIC June 05, 2013 4 Electricity demand: growth in electricity use slows, but still increases by 28% from 2012 to 2040 percent growth (3-year compounded annual growth rate) 2011 14% History Projections 12% 10% 8% Electricity Use 6% 2011 – 2040 4% average 2.4% 2% GDP 0.9% 0% -2% 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 5 Natural gas and coal prices: coal regains competitive advantage relative to natural gas over time on a national average basis ratio of natural gas price to steam coal price Energy prices to the electric power sector 2011 2011 dollars per Btu 8 10 History 2011 Projections 8 Natural gas 6 6 4 2 Coal 4 0 1990 2000 2010 2020 2030 2040 2 Competitive parity History Projections 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 6 Domestic production of shale gas has grown dramatically over the past few years shale gas production (dry) billion cubic feet per day 30 Rest of US Marcellus (PA and WV) 25 Haynesville (LA and TX) Eagle Ford (TX) 20 Bakken (ND) Woodford (OK) 15 Fayetteville (AR) Barnett (TX) 10 Antrim (MI, IN, and OH) 5 0 2000 2002 2004 2006 2008 2010 2012 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. Adam Sieminski, USNIC June 05, 2013 7 New power plant costs: levelized cost of electricity costs for new U.S. electricity power plants in 2018 2011 dollars per megawatthour Natural Gas Combined… Levelized Capital Cost Onshore Wind Fixed O&M Cost Variable O&M Cost Including Fuel Natural Gas Combined… Transmission Costs Pulverized Coal Nuclear Biomass IGCC Coal Pulverized Coal with CCS Solar PV Offshore Wind 0 50 100 150 200 250 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 8 The fuel mix for electricity generation varies widely across U.S. regions (2011) Share of Generation by Fuel, 2011 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% Source: EIA, Annual Energy Outlook 2013, based on Form EIA-923 Adam Sieminski, USNIC June 05, 2013 9 The projected fuel mix for electricity generation by region (2040) Share of Generation by Fuel, 2040 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% Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 10 Additions to electricity generation capacity, 1985-2040 U.S. electricity generation capacity additions gigawatts 60 Coal History Projection Hydro Natural Gas 50 Nuclear Wind 40 Solar 30 20 10 0 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA Form 860 & EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 11 Changes in nuclear capacity for the AEO2013 reference case gigawatts 140 7.1 5.5 5.5 120 113.1 8.0 101.1 100 80 60 40 20 0 2011 Capacity Uprates Planned Unplanned Retirements 2040 Capacity Additions Additons Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 12 Nuclear relevant side cases in AEO2013 • High/low nuclear • High/low oil and gas resource • Small modular reactors (SMRs) ??? • CO2 fee cases Adam Sieminski, USNIC June 05, 2013 13 Nuclear capacity additions in AEO2013 vary under different assumptions capacity additions gigawatts Planned Unplanned Reference High Nuclear Low Nuclear Low Oil and Gas Resource (high natural gas prices) High Oil and Gas Resource (low natural gas prices) 0 5 10 15 20 25 30 35 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 14 If natural gas prices stay low, coal is permanently displaced as the leading generation source in the near future billion kilowatthours Projections 2,500 Coal Reference 2,000 1,500 1,000 High Oil and Natural Gas Resource Natural 500 Gas 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 15 Power sector electricity generation capacity by fuel in five cases, 2011 and 2040 Oil/gas steam Natural gas combined cycle capacity Natural gas combustion turbine gigawatts Coal Nuclear Renewable/other 2011 2040 Reference Low Oil and Gas Resource High Oil and Gas Resource Low Coal Cost High Coal Cost 0 250 500 750 1,000 1,250 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 16 Small Modular Reactors (SMR) • 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 17 Changing electricity generation mix in AEO2013 reference case and carbon fee allowance side cases U.S. electricity net generation trillion kilowatthours 2013 Reference Case $15 Carbon Fee $25 Carbon Fee 5 5 5 2011 30% 4 4 Natural gas 34% 4 34% 24% Natural gas Natural gas 16% 3 Renewables 3 3 13% 22% Renewables 23% 17% 19% Nuclear Renewables 2 2 2 Nuclear 27% Nuclear 1 42% Coal 35% 1 1 38% Coal 16% Coal 4% 0 0 0 1995 2010 2025 2040 1995 2010 2025 2040 1995 2010 2025 2040 Source: EIA, Annual Energy Outlook 2013 Adam Sieminski, USNIC June 05, 2013 18 U.S. dependence on imported liquids depends on both supply and demand U.S. liquid fuel supply million barrels per day History 2012 2014 Projections 25 32% STEO forecast for 2014 20 -8% Consumption 15 37% Net imports 40% Petroleum Exports 10 Domestic supply 5 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2013 and Short-Term Energy Outlook, April 2013 Adam Sieminski, USNIC June 05, 2013 19 Keynote Speakers Dr. Ernest J. Moniz U.S. Secretary of Energy Lisa Murkowski Aldo Flores- United States Senator Alaska Quiroga Secretary General International Energy Forum Thomas Fanning Chairman, President and CEO Southern Company Hans Rosling Chairman Gapminder EIA.gov Adam Sieminski, USNIC June 05, 2013 20 For more information 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 Adam Sieminski, USNIC June 05, 2013 21 .
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