Energy Mix Predictions for 2035

The energy industry “is caught in the middle of the world’s uncertainty whirlpool, surrounded by currents of market, regulatory and technical forces that all await resolution,” Black & Veatch (B&V), a large global engineering, consulting and construction company, writes.

But while there is plenty of uncertainty, many of us want and need to know what to expect from the future. Rather than throw its hands up in wonder, B&V recently conducted its bi-annual Energy Market Perspective report [PDF], which looked at both where the U.S. energy market is today and how it is expected to change in the next 25 years. According to the report:

More than ever before, infrastructure decisions in the electric power industry will address a host of uncertain energy policies and regulations

• Shifts in public sentiment and political power
• Multiple environmental regulations impacting coal-fired generation
• Transmission Siting
• Tax Policy
• Carbon emission regulations
• Renewable portfolio standard

Relative costs will still be a factor

• Capital costs
• Fuel Costs
• Operating costs, including environmental compliance

Net result is an uncertain future likely to emphasize natural gas, renewable energy and nuclear power.

Yeah, sounds about right, in general…. Here are more details from the report, as well as a little commentary of my own.

Natural Gas

Marcellus Shale natural gas production has skyrocketed in the past couple years, as indicated by the graph below, and that is expected to continue if gas companies can overcome environmental hurdles related to hydraulic fracturing (seems unlikely to me) or if political pressure from environmental groups and citizens isn’t strong enough to overcome political pressure from the natural gas industry (again, I think this is unlikely given recent activism successes and media attention and the clear environmental problems, but this is really still uncertain at this point in time). We’ll see what actually happens regarding this matter. B&V’s prediction is that demand and production will increase considerably in the years to come as governments try to phase out coal.

Coal

For obvious reasons, dirty coal is facing a lot of environmental regulatory hurdles (see below), not even counting potential regulations due to global warming.

B&V predicts that over 15% of coal plants in the U.S. will potentially retire rather than clear these hurdles between 2015 and 2020.

“Once Through Cooling” Legislation in California

“On May 4, 2010, the California State Water Resources Board passed a ruling that requires the  remediation or elimination of plants using once through cooling technology due to negative impacts to the marine environment,” B&V reports. This is expected to have a strong impact on gas and nuclear plants, but B&V is expecting all nuclear plants will either be able to comply or find an exemption, whereas many gas plants won’t. (See below)

Energy Mix Transition

OK, now the part you have really been waiting for — projected changes in the U.S. energy mix. B&V’s analysis comes to the conclusion that coal will drop from 48% of U.S. electricity consumption to 21% by 2035; natural gas will increase considerably from 21% to 40%; and renewable energy sources will increase from 4% t0 11%. Other energy sources (i.e. nuclear and hydro) will remain at more or less the same level, relatively speaking.

Of course this is based on numerous assumptions, including those mentioned above as well as a U.S. greenhouse gas cap and trade system being implemented in 2016. Whether natural gas overcomes its environmental hurdles and doesn’t run into more; or whether the demand for low-cost alternatives to coal are strong enough for the environmental concerns related to natural gas to be ignored by politicians; is yet to be seen. Whether renewable energy increases as much as predicted or more (or less) will depend a lot on federal, regional, and state policies (as we discuss here on Cleantechnica all the time).

Here’s another look at how B&V predicts our energy infrastructure will change by 2035. Of course, it aptly concludes that while tremendous changes can be expected, “uncertainties abound.”

Any more thoughts on this matter?

All images via Energy Market Perspective [PDF]