Clean Power Plan Accelerates Growth Of US Renewable Electricity Generation
Originally published on EIA.
EIA’s Annual Energy Outlook 2016 (AEO2016) Reference case projects that natural gas-fired electricity generation will exceed coal-fired electricity generation by 2022, while generation from renewables—driven by wind and solar—will overtake coal-fired generation by 2029. The shift away from coal-fired generation to a combination of higher natural gas-fired and renewables generation and greater energy efficiency is expected to be accelerated by the U.S. Environmental Protection Agency’s Clean Power Plan (CPP).
Notably, the share of natural gas-fired generation exceeded coal-fired generation in 2016, according to EIA’s latest Short-Term Energy Outlook. However, in the AEO2016 Reference case, the natural gas-fired share of generation declines temporarily after 2016, then resumes rising in about 2020 and once again exceeds the coal-fired share in 2022 and throughout the rest of the AEO2016 projection to 2040.
Even without the CPP, significant growth in renewables generation is projected throughout the country, due in large part to Congress’s recent extension of favorable tax treatment for renewable energy sources. From 2015 to 2030, for the nation as a whole in a scenario where the CPP is never implemented, EIA projects that renewables generation will increase at an annual average rate of 3.9%, while natural gas generation will grow at 0.6% per year. In the Reference case, which assumes the implementation of the Clean Power Plan, renewables and natural-gas fired generation grow at 4.7% and 1.6% annually from 2015 to 2030, respectively.
In the final version of the CPP, states with higher intensity levels generally have greater requirements for reduction of CO2 emissions.
EIA’s analysis of the U.S. electricity market is divided into 22 regions, which in this discussion are further reduced to 9 regions shown above. The current generation mix across these regions varies considerably, with significant differences in the use of fossil-fuel, nuclear, and renewable energy sources.
Certain regions such as the Midwest/Mid-Atlantic, Southwest/Rockies, and Northern Plains—regions that are home to much of U.S. coal production—tend to have greater reliance on coal-fired electricity generation. These regions have among the highest CO2 reduction requirements and are expected to have the largest shifts in their generation mix. In the Midwest/Mid-Atlantic region, a large decline in coal generation is offset by an increase in natural gas generation and relatively modest growth in renewable generation. These projected changes are expected to result in a 26% decline in the Midwest / Mid-Atlantic region’s emission rate—from 1,826 to 1,357 pounds of CO2 per megawatthour, the largest drop of any region in both percentage and absolute terms.
The Southwest/Rockies region is projected to see an expansion of renewables generation that is nearly twice as large as the decline in coal generation. In the Northern Plains region, a decline in coal generation is exceeded by a slightly larger shift to renewables generation, with smaller growth in natural gas generation. Other regions, such as Texas, the Southern Plains, and the Southeast, rely more on natural gas-fired generation. The projected decline in these regions’ coal generation is more modest, and they all are expected to see strong gains in renewables generation, with some additional growth in natural gas generation.
Finally, the Northeast region and California currently have almost no coal generation and meet most of their demand with natural gas generation, along with renewables generation in California and a mix of nuclear and renewables generation in the Northeast. While the Northwest region does have some coal generation, it has the largest renewable generation total of any region because of its extensive hydroelectric resources. These regions have among the lowest emission reduction requirements, and as a result are expected to register small or no change in generation mix as a result of the CPP.
California sees strong growth in renewable generation by 2030 as a result of the state renewable targets. Similarly, the Northwest region is expected to increase renewables generation as well. The Northeast shows an increase in both natural gas and renewables generation by 2030, and a small decline in nuclear generation due to planned retirements.
The Reference case assumes that all states implement the Clean Power Plan using a mass-based standard that caps emissions from both existing and new plants, with allowance revenues rebated to rate payers. Because the plan allows flexibility in implementation approaches, EIA produced several alternative cases that consider how outcomes change with different implementation approaches, and in a scenario with tighter standards beyond 2030. Compliance decisions by the states (as well as any future court decision that would vacate the rule) have implications for plant retirements, capacity additions, and generation by fuel type, demand, and prices. An AEO2016 Issues in focus article released early next week will explore the results of this analysis.
Principal contributors: Thad Huetteman, Laura Martin
Reprinted with permission.
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As always, the EIA underestimates the speed of the US’s transition to renewables.
Shouldn’t EIA articles come with some sort of standard disclaimer to this effect, at least on CleanTechnica?
Perhaps the EIA doesn’t read the news or know how to use Google. Example: all of the coal plants in the northwest are shutting down before 2030, but EIA shows only a tiny reduction in coal output for the northwest. Hey EIA, I googled some stuff for you:
Boardman and Centralia, Oregon and Washington’s only plants, done by 2025:
http://latimesblogs.latimes.com/greenspace/2011/03/last-coal-plant-in-pacific-northwest-to-shut-beginning-2020.html
Valmy, Nevada’s only plant, will shut down in 2025:
http://www.news4nevada.com/Content/Home/Home/Article/Valmy-s-closure-still-a-decade-away/-2/-2/22973
The CPP will require closing all Wyoming plants by 2030:
http://trib.com/business/energy/commission-wyoming-will-need-to-close-four-coal-plants-to/article_847df629-f8fa-5384-a360-c50a2b7d3303.html
Even the Republicans in Montana say that Colstrip will be closed by 2030:
http://mtpr.org/post/rising-costs-make-closure-montanas-largest-coal-fired-plant-foregone-conclusion#stream/0
The EIA suffers from multiple personality complex.
One EIA knows what is happening in the energy field. They do excellent reporting of what has been generated and how. They report on scheduled plant construction and closures.
The other EIA is unaware of facts and trends. They just say stuff….
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Another weird prediction is that overall electricity demand will increase, unlike the recent trend. Energy efficiency will go on improving, in lighting, motors, electronics, air conditioning. The EIA has to assume truly spectacular growth in EVs to offset this. Or have they just not noticed the arrival of the IoT?
Let’s hope they are as usual spectacularly wrong. To meet even the lower Paris goal of a 2 deg C warming cap, electricity generation has to go zero net everywhere round 2040. That means closing every coal and natural gas plant.
“The EIA has to assume truly spectacular growth in EVs to offset this.”
In line with this they would also have to assume truly a spectacular rise in energy intensity and primary energy waste from future EVs, along with no energy savings from less pumping crude, less refining of gas and lower retail deliveries of liquid fuels for transport.
All in all a spectacular array of assuming.
There is a misperception of what these EIA studies are, these are projections not predictions. They’re used to model the differences between different policy choices, not to predict the future.
There is no reasonable future scenario to which these EIA graphs apply. That makes them bad projections, or predictions, or whatever word you want to use.
Oh, bullshit.
This prediction/projection thing is a tapdance that the EIA has engaged in after they were publicly shamed by their inability to use even their own data.
Look at what they said in their 2014 Energy Outlook –
“The Annual Energy Outlook 2014 (AEO2014), prepared by the U.S. Energy Information Administration (EIA), presents longterm annual projections of energy supply, demand, and prices focused on the U.S. through 2040, based on results from EIA’s National Energy Modeling System (NEMS). NEMS enables EIA to make projections under alternative, internally-consistent sets of assumptions, the results of which are presented as cases. The analysis in AEO2014 focuses on five primary cases: a Reference case, Low and High Economic Growth cases, and Low and High Oil Price cases. Results from a number of other alternative cases also are presented, illustrating uncertainties associated with the Reference case projections. EIA published an Early Release version of the AEO2014 Reference case in December 2013.”
They are using projection as a synonym for prediction.
pro·jec·tion
prəˈjekSH(ə)n/
noun – an estimate or forecast of a future situation or trend based on a study of present ones.
synonyms: forecast, prediction, prognosis, outlook, expectation, estimate
pre·dic·tion
prəˈdikSH(ə)n/
noun – a thing predicted; a forecast.
synonyms: forecast, prophecy, prognosis, prognostication
And they knew in 2040 that there would not be enough coal plant capacity in 2040 to support the level of coal-electricity they were predicting, er, projecting.
Their models based on ” internally-consistent sets of assumptions” failed to include commonly known facts. Including facts the EIA had on hand.
They seem to lack meaningful checks and constraints. Any curve should continue its slope from today. Existing trends don’t suddenly reverse. They seem to overestimate the effects of policy and underestimate market forces. That leaves them with self fulfilling prophecy, a sure fire way to get things wrong. I confess to have no idea why they think coal will reverse its fall. It’s just anomalous. Almost as if there is a coal lobby at work inside EIA. Natural gas falls, too.
Given that new capacity is all gas, wind, and solar, it’s inexplicable.
If you’re talking the ~2017 to 2020 small uptick in coal use they could be correct. An increase in NG prices could cause utilities to burn more coal in order to save fuel costs.
Our existing coal plants run well below their theoretical capacity factor of 85%. The last couple of years coal’s CF was under 60%. That might mean that at times when some fossil fuel input was needed coal plants might be fired up rather than CCNG plants turned on.
Longer term, fossil fuel use will fall. I question the steepness of their NG curve post 2020 and the shallowness of the renewable curve. I suspect that’s backwards. Utilities aren’t going to burn gas if they’ve got fuel free generation available.
Correct, they could have just said.
A) The “internally-consistent sets of assumptions” is not consistent with any likely reality, but is the easiest to do.
B) We know that the cost of RE in our assumptions for the future is higher that they were last year, but we don’t what to change them.
C) We get paid to make projects, we are not rated on how well they do. Our bosses like coal/oil so we always those are growing.
These do not qualify as projections. Projections would be based on reality; this is not.
Huh, wha? The American Energy Policy Institute! Why I had no idea. Perhaps in the future congress will authorize the Census Dept to enumerate energy use in light of this deficiency.
Also, I nominate anyone who is really good at just sayin stuff off the top of their head to run EIAs projections bureau in the meantime.
Interesting that for 2016 they’ve got coal generation exceeding last years production. This despite the fact that coal generation was down 24% for the first quarter of this year over last year, as reported by, guess who, themselves. I doubt that 24 % will be made up either in the second quarter or the fourth quarter. So that must mean they’re expecting high coal use this summer.
EIA was projecting a rise in the price of gas, leading to more use of coal. To be fair, gas is up about 40-50 cents from the lows of late winter 2016.
Here’s the data to date. Monthly for the last 2.25 years.
There is a normal summer uptick as demand rises off spring lows. But to get back above 2015 levels enough to surpass the 2015 total will be a stretch.
Marcellus shale drilling has essentially stopped, gas production decline may drive prices more than demand – punching new wells and getting them online takes a couple months.
The fracking companies are in a weird position. They’re nearly all insolvent. At these gas prices, they lose money by selling gas. But they’re all heavily leveraged. They need the cashflow to pay the interest payments on their debt, so they’re pumping as fast as they can.
It’s a form of “extend and pretend”. They’re hoping gas prices will go up again and return them to profitability before financiers notice that they’re all insolvent. However, because they’re all pumping at full blast in order to pay interest payments, gas prices *won’t* go up again until a bunch of them go bankrupt.
You can expect natgas prices to stay low until several of the fracking companies give up and declare bankruptcy. *Then* the prices will probably go up.
Here’s an interesting chart that I stumbled across last night. Shows the process efficiency of turning intermittent (excess) solar and wind into natural gas. 36% (power end use) and 60% (gas end use) isn’t great, but if you add heat recovery along the way, that’s the bare minimum. As we push towards 100% renewables, there’s going to be this excess available every windy sunny day. Basically, your input is free, and your output has value. I think this could be the eventual fracking killer.
https://uploads.disquscdn.com/images/9da40260b7ed2ea52189bf2a313649150f242429623e649093e22a5c3ac9c2c7.png
The input is never free. Wind farms are not going to give you electricity out of the goodness of their hearts. Grids aren’t going to transport electricity from farm to you door just to be nice.
“Free” electricity is an artifact of our current grid.
We have a large number of thermal plants which are hard to cycle off/on. They’ll sell at a loss in order to keep on keeping on. But they won’t be around in the long run. Coal and nuclear will go away.
And subsidies can create “free” electricity because they can allow farms to sell electricity for nothing and still make some money. That won’t last either.
So what are we left with? A storage system that takes in about 3x as much electricity as it gives out. That’s way, way under what we can get with pump-up hydro (as much as 85% efficient).
The next steps would be to compare infrastructure cost. The cost of converting and existing dam, rock quarry or open pit mine to PuHS vs. the cost of a hydrogen plant, a methane plant, methane storage, and a CCNG plant.
And to determine if the value of an intermittent supply of heat. Is there an industry which could use heat now and then? Not on the factory’s schedule, but determined by grid behavior.
If you own a wind farm, and can’t get paid for the output at sunny times of the day, and you decide to build such a plant, then your input is free. If you don’t own a wind farm, an owner might accept 0.1 cents/kWh – better than nothing. I take your point, it’s not free, but not far off.
Pumped hydro isn’t going to see Germany through the winter. They need 20 to 30 TWh of seasonal storage, and they already have the gas storage tanks for that. And if you need p2g, pumped hydro is duplication.
With the heat, I was picturing some being used to make electricity, to feed back into the electrolysis process during gas making, and back into power generation (e.g. preheat your water before making steam), during the gas to power stage. I don’t know, maybe that’s already been factored in.
I really don’t know what the optimal solutions will turn out to be, but I feel it’s important to have at least one solid answer on standby when somebody says “renewables can’t supply the German winter”. We can’t afford to hit a level where there is no use for the excess and let decision makers use that as an excuse to stop expansion of RE. People don’t like waste, even if what you’re wasting was “free” to begin with.
Transmission.
Germany doesn’t produce its own oil, coffee or chocolate. Germany imports what it doesn’t produce.
Northwest Europe has lots of hydro. Southern Europe and northern Africa have solar even in the winter. I’m guessing the North Atlantic has a lot of wind in the winter. The least expensive solution may be to import when supply is short.
We need to be careful about letting renewable energy skeptics define energy harvest regions smaller than they would optimally be.
Perhaps the math works for Germany to manufacture and store methane. We’ll have to wait to see what the least cost solution is going to be.
Thought of a few other reasons to have a bit of p2g on every grid.
First is the Nikola Truck, charged from an LPG turbine. If long haul trucks are running on LPG, best it be the carbon neutral kind.
Second is that even with the most concerted efforts to electrify (de-gas) homes and industrial processes, there will be laggards. Chefs for example, prefer to cook with gas.
Also, the peaker plants that will keep the grid afloat on dull calm days will exist already. Easier to displace the fuel with a carbon free variety, than to displace the whole plant.
Like I said (tried to say?), I don’t know how the p2g vs. PuHS works out, economically.
When I look at a system that wastes two-thirds of the energy input and requires a lot of infrastructure vs. an efficient system that can be set up with existing structures I’m not optimistic about the gas route. But I don’t have any data so I suspect it’s a ‘wait and see’.
We do have an existing NG system in some countries. The US has a lot of gas infrastructure.
Plus we probably should put flow batteries in the mix. Cheap chemicals stored in simple, non-pressurized tanks. Think no longer used gas/oil storage tanks.
And biomass is another possibility for deep backup. Make wood pellets from lumberyard waste and burn it in converted coal plants. A country without gas or hydro infrastructure to convert might have paid off coal plants that could be used.
My three examples were not about energy needs, they were about gas needs. If you own a restaurant and tell your chef you have replaced his/her gas range with an electric range, he/she will walk, muttering obscenities about cents per kWh. In trucking, it’s about energy density. With peaker plants, it’s about using existing infrastructure.
Cooking. Perhaps. We do have other methane sources. Landfill gas and sewage gas. Needs a little cleaning up before using, but you end up with methane.
That said, I was reading someone’s comments about induction ranges. They said that induction was as fast and as controllable as gas. I’ve got no experience with induction so I don’t know how well it would work to replace gas. It might make for cooler restaurant kitchens.
I don’t know about induction, let me assume it is as fast and controllable as gas, or even 5% better. Even with that it will be slow conversion at first. There is much emotion in cooking, and a lot of tradition.
Actually… we might end up wtih free electricity at random, intermittent times. You size your wind farm for expected production, and then you get extra-high production one night. Demand is the same as always. What happens to the excess? Essentially, it gets given away for free.
…probably to whoever has installed batteries! The battery owner then sits on the electricity and waits until prices are high to release it…
Think about 200 million EVs. Lots of them plugged in at any point in time.
Smart price-triggered chargers holding 200+ mile range EVs at a driver selected “comfortable minimum” charge and waiting for a buying opportunity.
Lots of people might need more than a 100 mile minimum only once a year when the go on vacation. They could sense a bargain basement electricity sale and charge up to 160 or more miles and then skip charging for a day or two.
Grids are likely to see bargains coming hours, maybe a day or two, ahead. Spring, warm, lower load. Really sunny over the entire harvest area. Wind predicted to blow like stink….
Actually, almost all other major drilling areas have seen their rig count crash while the Marcellus is the only one holding fairly steady:
https://marketrealist.imgix.net/uploads/2015/06/Shale-Rigs.jpg?w=660&fit=max&auto=format
Rigs have been getting more productive in response to low oil and gas prices, so these numbers don’t translate directly to production numbers.
Bob, I noticed that EIA data still has March 2016 listed as the last month for their reporting. Do they wait until 3rd quarter before spitting out April, May and June?
Or, is there just a typical two month lag on their reporting?
There’s a monthly report with a big lag. The May report had data for February. The June report which is due out in a week will have the March data.
http://www.eia.gov/totalenergy/data/monthly/
(I found March data in a preliminary report.)
Since 2000 wind and solar have been adding, annually, more than 20 to 50% each year. Those’re not fake capacity numbers, but real energy added to the grid. After 15 years, you would think the EIA would spot a trend. Instead, they have the growth pegged at only 4.7 percent!
Why can’t they use the average growth rate, over five, ten, or 15 years, of wind and solar to extrapolate the future? You wouldn’t assume your car that usually gets somewhere between 20 and 50 mpg will somehow only get 4.7 mpg in the future. The EIA would.
Anybody can go to the EIA and reference the past ten years of data to see the growth rates of wind and solar. It’s not secret. They, the EIA, just refuse to look at history.
I think it’s prediction by the straight line method. Lay a ruler on history and draw a straight line into the future.
That’s safe and defensible. Quick. Get ‘er done and go back to surfing for porn….
Your ruler method would give much better results than the elaborately wrong models they are using. Moniz is a scientist and should be professionally embarrassed by the work of his subordinates. At the very least, he can arrange an audit by eminent statisticians.
They’re not even assuming linear growth from now on out. For some reason the renewable growth is shown as declining in the 2020s just when renewables should be hitting there stride. After that the renewable rate is shown as accelerating while the decline in coal is shown as simultaneously decelerating. A bizarre set of predictions, forecasts, whatever they call them.
Their graphs fail simple tests. No real world graph should have a discontinuity starting from today. That is, there shouldn’t be a break point with a sudden slope change.
Coal suddenly stops falling, and natural gas suddenly stops rising. Renewables rise until 2020, then come to a screeching halt.
This is fantasy. Coal will continue its downward slope and natural gas will continue to rise. Renewables will continue growth after 2020.
New capacity in 2015 was dominated by wind and solar.
It’s the blind assumption that the expiration of the tax credits will hollow out the solar and wind industries for several years afterward. What they don’t understand is that renewables can achieve 30% cost reductions or more in a very short time, counter-acting the impacts of expiring tax credits. In fact, I’d wager the cost reductions can materialize as fast or if not faster than the step-down sunsetting of the tax credits. That way, solar and wind will be even cheaper than they are now with the tax credits by the time they expire in 2021.
They have to base their efforts on existing policy. However there is no reason they cannot also include projections from others and provide historical data on how those other groups have fared compared to them. Then it is fine for them to also include info on their methodology and assumptions. That allows them to do it their way while still providing helpful data for policy and decision making.
Where does the EIA get its money?
Department of Energy
Which gets its money from the US budget.
Taxpayers, if you want to go directly to the source.
Year after year they get away with total gibberish. Their graphs fail even the simplest of tests as eveee points out. And yet their graphs are used to justify government spending.
Maybe CT and others in the industry can get together and start some campaigns. Campaigns to make the EIA accountable to reality. Not to crony capitalism and lobbyists which appear to currently control them.
Maybe somebody or some groups within the wind and solar industry could get some sort of org chart and start figuring out where the moles are. Start adding heat on a large scale to make the EIA honest.
Well I suppose this is one reason it is good that they are more interested in lobbyists than anything else. The RE industry has a pretty good lobbying presence.
I would be surprised if the CO2 emissions in the northern plains doesn’t fall below 1,800 lb CO2/ Mwh by 2030. Wind generation from Kansas, Nebraska and Iowa will displace coal in Missouri. Wind from the Dakotas, Minnesota and Iowa will displace coal in Wisconsin and Illinois.
And the coal companies will fight it any way they can. The HVDC line through Missouri was nixed. I find it hard to imagine that big fossil fuel did not have a hand in that.
Embarassingly ridiculous EIA estimates again.
— They imagine that solar growth will slow down in 2020… for some unexplained reason. Black magic? By then, solar will be cheaper than *everything*.
— They imagine that coal will make a comeback in the next few years, which is absurd
— They imagine endless growth of natgas usage starting in 2020, which isn’t going to happen because the fracked wells are already running out. More fracking would be way more expensive than putting up solar panels.
— They imagine that nuclear production will be flat, despite the fact that plants are closing routinely and they’re not opening.
This is a typical piece of EIA incompetence. Disclaimers should have been added.
EIA, projections that would embarrass Bill Kristol (who is always wrong about everything).