1. Energy Outlook 2015: Focus on the Electricity Supply Mix
for
Natural Gas Power Generation US
May 18, | Philadelphia, Pennsylvania by
Howard Gruenspecht, Deputy Administrator
Thank you for the kind introduction.
It’s a pleasure to be here to continue the exchange of ideas between EIA and CSIS.
The trends discussed here focus on the AEO2015, which is a shorter edition completed under a newly adopted two-year release cycle. Under this approach, full and shorter editions of the AEO will be produced in alternating years. The shorter edition of the AEO includes a more limited number of model updates, predominantly to reflect historical data updates and changes in legislation and regulation. It includes a publication that discusses the Reference case and five alternative cases (Low and High Economic Growth Case, Low and High Oil Prices cases, and a High Oil and Gas Resource case), and an accompanying Assumptions Report.
Other AEO reports—including documentation for each of the NEMS models and a Retrospective Review—will be completed only in years when the full edition of the AEO is published.
The AEO2015 Reference case and alternative cases provide the basis for examination and discussion of energy market trends and serve as a starting point for analysis of potential changes in U.S. energy policies, rules, or regulations or potential technology breakthroughs.

2. U.S. Energy Information Administration
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 changes
EIA’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, 2015

3. Short-term
Energy Outlook 2015
May 18, 2015

4. U.S. Monthly Net Electric Power Generation, 2010 - 2016
U.S. electricity generation by energy source
gigawatthours per day
Source: EIA, Short-Term Energy Outlook, April 2015
Energy Outlook 2015
May 18, 2015

5. In EIA’s forecast, coal’s share of summer generation falls to historic low while natural gas and renewables match or exceed record highs
average daily power generation, by fuel source, April through October
billion kilowatt hours per day
This graph shows generation by fuel source.
The use of natural-gas-fired generation is projected to average 32% of total generation during April through October compared with 29% during 2014.
Much of the growth in natural gas comes from the displacement of coal, which share falls to 35%, which is a historic low.
Source: Electric Power Monthly, EIA Short-Term Energy Outlook April 2015
Energy Outlook 2015
May 18, 2015

6. Coal plant retirements have had minimal impact on gas use for generation to date
Recent and near-term coal retirements have operated at below-average capacity factors
Average capacity factor for coal plants is 58%
Low natural gas prices have been the main driver of coal displacement
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
                      4,587
46%
10,724
0.4
Much has been discussed concerning the effect that coal retirements due to the implementation of MATS will have on shifting towards more gas generation. While there are close to 13 GW of coal capacity slated to retire in 2015, most in the April to June time frame, these facilities have operated significantly lower than their capacity. The average capacity factor for coal plants are 58%. The coal plants that retired last year and are expected to retire this year have, on average, much lower capacity factors—11% and 25% respectively. If all the generation from these retired plants was replaced by gas, EIA estimates that that would add less than 1 Bcfd to consumption.
Note – many operators have been granted one-year extensions for MATS (2016)
According to CSX, coal stocks are above average in both the north and south, and nearly three times above average in the south, for the utilities it serves.
Note: Estimates for 2015 and 2016 subject to change based on EIA-860 survey responses
Source: EIA, Annual Energy Outlook 2015; Electric Power Annual 2013
Energy Outlook 2015
May 18, 2015

7. EIA forecast for Henry Hub prices is slightly above the Nymex strip through 2016; however, confidence intervals based on options values suggest a wide band of uncertainty in price projections
Henry Hub spot price
dollars per million Btu
Source: EIA, Short-Term Energy Outlook, May 2015
Effects of low oil prices May 12, 2015

8. Industrial and power sectors drive natural gas consumption growth in the forecast
billion cubic feet per day
annual change
billion cubic feet per day
Source: EIA, Short-Term Energy Outlook, May 2015
Effects of low oil prices May 12, 2015

9. Long-term
Energy Outlook 2015
May 18, 2015

10. AEO2015 underpinnings
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 2015
Includes state renewable portfolio standards
Represents California’s cap-and-trade program and the Northeast’s RGGI program
DOES NOT include EPA’s proposed Clean Power
The implementation date for MATS is assumed to be 2016 rather than 2015 because of the expectation that EPA will grant extensions to generators for compliance. (MATS addresses both acid gases and mercury. For acid gases: either scrubbers or dsi (dry sorbent injection) and fabric filters are required. For mercury: mercury emissions are reduced by 90% from uncontrolled levels -- This represents an approximation of the more specific regulation.)
30 States + D.C. are covered by enforceable RPS (renewable portfolio standards).
Only the electricity sector was addressed in the AB32 modeling effort for the AEO For AEO2013, the modeling was extended to include all of the affected sectors.
Other miscellaneous items:
Wind production credits expires by end of 2012
Hydro, biomass, geothermal PTC end of 2013
Solar investment tax credit reverts from 30% to a permanent 10% ITC in 2016
Energy Outlook 2015
May 18, 2015

11. Key results from AEO2015
In most AEO2015 cases, U.S. net energy imports, including all fuels, decline and ultimately end by 2030 for the first time since the 1950s
U.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 regulations
Renewables 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 capacity
Improved 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
Net energy imports end by 2030 in the AEO2015 Reference case and earlier in the High Oil Price and High Oil and Gas Resource cases (by 2019). Significant net energy imports persist only in the Low Oil Price and High Economic Growth cases, where U.S. supply is lower and demand is higher.
Through 2020, strong growth in domestic crude oil production from tight formations leads to a decline in net petroleum imports and growth in condensate and product exports in all AEO2015 cases. The net import share of petroleum and other liquids product supplied falls from 26% in 2014 to 15% in 2025 and then rises slightly to 17% in 2040 in the Reference case.
The United States transitions from being a net importer of natural gas to a net exporter by 2017 in all cases, with net exports in 2040 ranging from 3.0 trillion cubic feet (Tcf) in the Low Oil Price case to 13.1 Tcf in the High Oil and Gas Resource case.
U.S. energy use grows at a modest annual rate of 0.3%/year from 2013 through 2040 in the Reference case, far below the rates of economic growth (2.4%/year) and population growth (0.7%/year). Declines in energy use reflect the use of more energy-efficient technologies and existing policies that promote increased energy efficiency.
Continued growth in renewable electricity production—combined with slower growth in electricity demand, rising natural gas prices, and little change in nuclear capacity—leads to relatively limited growth in natural gas use for electricity generation and increased use of renewables.
Energy Outlook 2015
May 18, 2015

12. Reductions in energy intensity largely offset impact of GDP growth, leading to slow projected growth in energy use
U.S. primary energy consumption
quadrillion Btu
History
2013
Projections
2025
2040
Renewables (excluding liquid biofuels)
29%
27%
27%
Natural gas 8% 9%
10%
18%
19%
18%
Coal 8% 8% 8%
Total U.S. primary energy consumption in the AEO2015 Reference case grows from 97 quadrillion Btu in to 106 quadrillion Btu in Most of the growth is in consumption of natural gas and renewable energy.
Total petroleum and other liquids consumption increases from 36.9 quadrillion Btu in 2013 to quadrillion Btu in 2020, and then declines to 36.2 quadrillion Btu in The transportation sector continues to dominate demand for petroleum and other liquids, but there is a shift from motor gasoline to distillate.
Natural gas consumption in the AEO2015 Reference case increases from 26.9 quadrillion Btu in 2013 to quadrillion Btu in The largest share of the growth is for electricity generation in the electric power sector, where demand for natural gas grows from 8.4 quadrillion Btu in 2013 to 9.6 quadrillion Btu in 2040, in part as a result of the retirement of 40 GW of coal-fired capacity between 2013 and 2025 (9 GW have been retired as of April 2015 with another 7 GW planned for retirement by the end of 2015 and 8 GW planned for retirement in 2016). Natural gas consumption in the industrial sector also increases, rapidly through 2016 and then more slowly through 2040, benefiting from the increase in shale gas production that is accompanied by slower growth of natural gas prices.
Coal use in the Reference case grows from 18.0 quadrillion Btu in 2013 to 19.0 quadrillion Btu in The Reference case and other AEO2015 cases do not include EPA’s proposed Clean Power Plan, which if implemented would likely have a significant effect on coal use.
Consumption of renewable energy increases by about 3.6 quadrillion Btu in the Reference case, from 9.0 quadrillion Btu in 2013 to 12.5 quadrillion Btu in 2040, with most of the growth in the electric power sector. Hydropower, the largest category of renewable electricity generation in 2013, contributes little to the increase in renewable fuel consumption. Wind-powered generation, the second-largest category of renewable electricity generation in 2013, becomes the largest contributor in 2038.
Nuclear generation remains close to the current level through most of the projections as the impact of new plant additions are offset by retirements.
Nuclear 1% 1%
Liquid biofuels 1%
36%
35%
33%
Petroleum and other liquids
Source: EIA, Annual Energy Outlook 2015 Reference case
Energy Outlook 2015
May 18, 2015

13. Gross domestic product
Growth in electricity use slows, but electricity use still increases by 24% from 2013 to 2040
Period Average Growth__ Electricity use GDP
1950s
1960s
1970s
1980s
1990s
U.S. electricity use and GDP
percent growth (rolling average of 3-year periods)
History
2013
Structural Change in Economy - Higher prices - Standards - Improved efficiency
Projections
Electricity use
Over the next three decades electricity use (including direct use) is expected to continue to grow but, as shown here, the rate of growth slows over time as it has almost continuously over the last 60 years. In the ‘50s, ‘60s, and ‘70s the use of electricity often increased more than 5% per year. It then slowed to 2 to 3% per year in the ‘80s and ‘90s and over the last decade it has fallen to less than one percent per year.
The economy and electricity demand growth remain linked but the linkage is shifting towards much slower electricity demand growth relative to economic growth.
The factors driving this trend include slowing population growth, near market saturation of key electricity using appliances like air conditioners, water heaters, stoves, dishwashers, etc., and the improving efficiency of nearly all equipment and appliances in response to standards and technological change and a shift in the economy towards less energy intensive industry.
While there is always uncertainty about future electricity demand, efficiency standards for lighting and other appliances that have been put in place over the past few years will continue to put downward pressure on growth as new equipment is added and existing stock is replaced. Absent a very rapid introduction of some new electricity using device – perhaps EVs – a sharp rebound in electricity demand growth is not expected.
Gross domestic product
Source: EIA, Annual Energy Outlook 2015 Reference case
Energy Outlook 2015
May 18, 2015 13

14. Petroleum and other liquids
Over time the electricity mix gradually shifts to lower-carbon options, led by growth in renewables and gas-fired generation
electricity net generation
trillion kilowatthours
History
Projections
2013
1993
2025
2040
31%
27%
Natural gas
27%
13%
18%
13%
16%
Renewables
11%
39%
38%
The share of total generation from natural gas and renewables grows while the shares from coal and nuclear decline.
The share of total generation from renewables other than hydropower grows from 6.4% in 2013 to 9.3% in 2025 and 12.1% in
The natural gas share grows throughout the projection as coal and nuclear capacity retirements occur and new additions are limited.
The natural gas share of generation remains between 26% and 28% over the next ten years, then rises steadily to 31% by 2040.
There is no net additional increase in coal generation as retirements offset new plant additions.
Coal generation remains flat throughout the forecast, resulting in a declining share of the total, falling from 39% in 2013 to 34% in 2040, both well below the 48% share seen as recently as 2008.
Coal generation doesn’t reach 2008 levels again.
Despite some new nuclear capacity, the share of nuclear power in total generation declines from 20% to 16% between 2013 and Nuclear capacity is 99 gigawatts in 2013 (a year in which 4 reactors were retired) and grows to 105 GW by 2040.
Coal
34%
53%
Petroleum and other liquids
19%
18%
19%
16% 1% 1%
Nuclear 1% 4%
Source: EIA, Annual Energy Outlook 2015 Reference case
Energy Outlook 2015
May 18, 2015 14 14

15. High Oil and Gas Resource
Future domestic natural gas prices depend on both domestic resource availability & technology and world energy prices
average Henry Hub spot prices for natural gas
2013 dollars per million Btu
History
2013
Projections
High Oil Price
Reference
Low Oil Price
In the Reference case, the Henry Hub natural gas spot price (in 2013 dollars) rises from $3.69/million Btu in 2015 to $4.88/million Btu in 2020 and to $7.85/million Btu in 2040, as increased demand in domestic and international markets leads to the production of increasingly expensive resources.
The Henry Hub natural gas spot price is lowest in the High Oil and Gas Resource case, which assumes greater estimated ultimate recovery per well, closer well spacing, and greater gains in technological development. In the High Oil and Gas Resource case, the Henry Hub natural gas spot price peaks at $4.38/million Btu in 2040 (44% below the Reference case price that year).
Henry Hub natural gas spot prices are highest in the High Oil Price case, which assumes the same level of resource availability as the Reference case, but different Brent crude oil prices. In the High Oil Price case, the Henry Hub natural gas spot price remains close to the Reference case price through 2020; however, higher overseas demand for U.S. LNG exports raises the average Henry Hub price to $10.63/million Btu in 2040, which is 35% above the Reference case price.
The opposite occurs in the Low Oil Price case: low Brent crude oil prices cause oil- linked LNG contracts to become relatively less expensive and make U.S. LNG exports less competitive. Lower overseas demand for U.S. LNG exports causes the average Henry Hub price to reach only $7.15/million Btu in 2040, 9% lower than in the Reference case.
High Oil and Gas Resource
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

16. With lower natural gas prices in the High Oil and Gas Resource case, coal is displaced as the leading generation source before 2020
net electricity generation
trillion kilowatthours
History
2013
Projections
Natural gas: High Oil and Gas Resource
Coal: Reference
Coal: High Oil and Gas Resource
Natural gas: Reference
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

17. In 2013, the average delivered price of coal to electricity generators varied widely across U.S. regions – transport costs are a key reason
Delivered coal prices, 2013 dollars per million Btu
$3.98
$2.42
$2.52
$2.43
N/A
$1.69
$1.74
N/A
$2.44
$2.53
$1.78
$1.71
$2.11
$1.98
$2.30
$3.66
$2.10
$2.12
$2.13
$3.09
National Average
Minimum
Maximum
$2.34
$1.69
$3.98
$2.10
$3.69
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

18. Cumulative additions to electricity generation capacity by fuel in six cases, 2013-2040
capacity additions
gigawatts
Other
Other renewables
Solar
Wind
Nuclear
Natural gas/oil
Coal
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

19. Cumulative coal-fired capacity retirements, 2014-40
gigawatts
Source: Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

20. Electricity generation by fuel in six cases, 2013 and 2040
electricity net generation
trillion kilowatthours
Oil/Other
Nuclear
Renewables
Natural gas
Coal
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

21. Non-hydro renewable generation grows to double hydropower generation by 2040
renewable electricity generation by fuel type
billion kilowatthours
History
Projections
2013
Conventional Hydroelectric Power
Wind
Solar
The growth in non-hydro renewable generation is driven by a combination of state renewable portfolio standards and federal tax incentives that spur growth in the near-term and declining renewable technology costs combined with an increase in fossil fuel prices that make them more competitive in the long term.
Wind, biomass, geothermal and solar account for the vast majority of the growth. Wind, geothermal, and biomass generation primarily grow in utility-scale facilities; biomass generation growth in the mid-term primarily occurs in co-firing applications as a co-fuel with coal, while longer-term growth is increasingly driven by facilities that generate electricity exclusively from biomass.
Growth in solar generation occurs in utility scale and distributed applications. Among the individual fuels solar shows the most rapid annual growth between now and 2040, and provides 12% of the total renewable generation in 2040.
Wind generation surpasses hydro generation by the end of the forecast, representing 35% of total renewable generation in 2040, compared to a 33% share for hydro.
Geothermal
Biomass
Municipal waste/Landfill gas
Source: EIA, Annual Energy Outlook 2015 Reference case
Energy Outlook 2015
May 18, 2015 21

22. Growth in wind and solar generation meets a significant portion of projected total electric load growth in all AEO2015 cases
U.S. renewable generation in all sectors by fuel
billion kilowatthours
2040
Wind
Solar
Biomass
and waste
Geothermal
Renewable electricity generation in the AEO2015 Reference case increases by 72% from 2013 to 2040, and more than doubles in the High Oil Price and High Economic Growth cases. There is slower renewable growth when natural gas prices are lower or demand growth is lower, but renewable generation still grows by at least 48% from 2013 levels across all cases.
Renewable generation meets 38% of total electricity generation growth from 2013 to 2040 in the AEO2015 Reference case, and over half of the total in the High Oil Price case, when natural gas prices are also much higher than the Reference case.
Wind and solar generation account for nearly two-thirds of the increase in total renewable generation in the Reference case, and over 50% of the total across all cases.
Conventional
hydroelectric
power
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

23. 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
Affected Generators
Additional elements included in compliance denominator
Existing coal (steam and IGCC)
6% of existing nuclear
Existing oil/gas steam
Under construction nuclear
Existing gas combined cycle
Existing non-hydro renewable
New renewables (including hydro)
Energy Efficiency savings
Compliance CO2 intensity rate = emissions from affected generators affected generation base =
(coal emissions) + (oil/gas emissions)
________________________________________________________________________________________________________
(coal gen) + (oil/gas gen) + (eligible nuclear gen) + (eligible renew gen) + EE
Affected generators are limited to plants greater than 25 MW and can include combustion turbine if they operate above certain levels (>33% capacity factor, or >219,000 MWh of generation in 2012) – EIA could not include these restrictions in the analysis and excluded all CT, and included all sizes of other fossil
MSW/Landfill gas generators are excluded from the program
In 2020, coal generation and emissions from coal both decline (heat rate improvements can also cause coal emissions to fall at a greater rate than the generation). Natural gas emissions and generation increase, indicating switching from coal to NGCC. Renewable generation increases slightly, and only affects the denominator, so any increase will lower the average rate.
In 2030, coal emissions and generation decline further, and natural gas use also declines from the baseline, lowering emissions. Generation from renewables and EE increase to achieve a lower average rate.
Energy Outlook 2015
May 18, 2015

24. For more information
U.S. Energy Information Administration home page |
Annual Energy Outlook |
Short-Term Energy Outlook |
International Energy Outlook |
Today In Energy |
Monthly Energy Review |
State Energy Portal |
Drilling Productivity Report |
And with that, all that remains is to remind you of some of the many energy information products available from EIA, and to thank you for your kind consideration of EIA’s latest outlook
Now I’ll turn back over to our hosts from the CSIS to begin the dialogue.
Energy Outlook 2015
May 18, 2015

25. Key takeaways regarding the outlook for natural gas storage levels
Natural 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 Bcf in 2014 following large withdrawals due to the exceptionally cold winter of
Strong production: EIA forecasts average production over the upcoming injection season to be 3.5 Bcf/d greater than production the same time last year
Near-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 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 2014
Last year, in mid-May, in one of these meetings, EIA spoke to you about natural gas storage. At the time, we had exited the winter with natural gas inventories that were at 10-year lows, and there were some concerns from analysts regarding what type of position we would be in entering the coming winter. EIA didn’t think the outlook was as bad as it seemed, and spoke to you about this. This year is much different picture. Our forecast reflects a very well-supplied natural gas market and relatively low natural gas price prices that reflect that. Spurred by this price environment, we are forecasting natural gas consumed in the electric power sector that reach close to 2012’s record levels.
Some of the details:
We exited the heating season on March 31st with stocks that totaled around 1470 Bcf, which is over 75% more than in 2014.
Similar to what we have been seeing in previous years, over the next coming months, we have forecasts for continued year-over-year production gains. Production makes up over 95% of supply during the injection season, and is expected to increase 5% over 2014 levels.
We are showing year-over-year growth in consumption over the injection season as well. The largest consuming sector of natural gas in the summer is the electric power sector, which is forecasted to have an 11% year-over-year increase. There is a lot of uncertainty around natural gas consumption in the electric power sector and electric demand is very sensitive to weather (which noaa is forecasting to be 7% warmer this year), and electric consumption of natural gas in particular, is very sensitive to the relative prices of coal and gas.
We are forecasting prices over the injection season that are over 25% lower than prices last year.
By the end of October, EIA is forecasting inventories that near 3.8 Tcf, over 5% higher than last year’s levels.
Energy Outlook 2015
May 18, 2015

26. Forecast 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 levels
consumption of natural gas in the electric power sector in the U.S.
billion cubic feet per day
Taking a closer look at the components of supply and demand for the injection season, starting with consumption:
The electric power sector is the largest natural gas consuming sector from April through October.
Power generators are using more natural gas than last year, primarily because of lower natural gas prices compared with coal prices.
Natural gas consumed in the electric power sector is forecast to be about 11% higher than last summer’s levels.
As you can see from the graph, consumption of gas in the electric power sector is close to high than levels that we have seen over the last several years with the exception of 2012, which had record high consumption levels due to a very mild winter, that left inventories high, and drove prices down.
Source: Natural Gas Monthly, EIA Short-Term Energy Outlook April 2015
Energy Outlook 2015
May 18, 2015

27. High Oil and Gas Resource
U.S. net energy imports continue to decline in the near term, reflecting increased oil and natural gas production coupled with slow demand growth
U.S. net energy imports
quadrillion Btu
History
2013
Projections
Low Oil Price
Reference
U.S. net energy imports decline and ultimately end in most AEO2015 cases, a first since the 1950s, driven by growth in U.S. energy production— led by crude oil and natural gas—increased use of renewables, and only modest growth in demand. The net import share of total U,S. energy consumption was 13% in 2013 and about 30% as recently as 2005.
Net imports of energy come into balance in the AEO2015 Reference case, starting in 2028, although liquid fuel imports continue, at a reduced level, throughout the Reference case. In the High Oil Price and High Oil and Gas Resource cases, with higher U.S. crude oil and dry natural gas production and lower imports, the United States becomes a net exporter of energy in In contrast, in the Low Oil Price case, the United States remains a net energy importer through 2040.
Economic growth assumptions also affect the U.S. energy trade balance. In the Low Economic Growth case, U.S. energy imports are lower than in the Reference case, and the United States becomes a net energy exporter in In the High Economic Growth case, the United States remains a net energy importer through 2040.
High Oil Price
High Oil and Gas Resource
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

28. High Oil and Gas Resource
CO2 emissions are sensitive to the influence of future economic growth and energy price trends on energy consumption
energy-related carbon dioxide emissions
million metric tons
History
Projections
2013
High Economic Growth
High Oil and Gas Resource
Reference
Energy-related carbon dioxide emissions stabilize with improvements in energy and carbon intensity of electricity generation. Improved efficiency in the end-use sectors and a shift away from more carbon-intensive fuels help to stabilize U.S. energy-related CO2 emissions, which remain below the 2005 level through 2040.
U.S. energy-related CO2 emissions in 2013 totaled 5,405 million metric tons. In the AEO2015 Reference case, CO2 emissions increase by 144 million metric tons (2.7%) from 2013 to 2040, to 5,549 million metric tons—still 444 million metric tons below the 2005 level of 5,993 million metric tons.
As noted earlier, the AEO2015 cases do not assume implementation of EPA’s proposed Clean Power Plan or other actions beyond current policies to limit or reduce CO2 emissions.
Among the alternative cases, emissions show the greatest sensitivity to levels of economic growth, with 2040 totals varying from 5,979 million metric tons in the High Economic Growth case to 5,160 million metric tons in the Low Economic Growth case.
Low Economic Growth
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

29. Carbon dioxide emissions
CO2 emissions per dollar of GDP decline faster than energy use per dollar of GDP with a shift towards lower-carbon fuels
energy and emission intensity
index, 2005=1
History
2013
Projections
2005
Energy use per capita
Energy use per 2009
dollar of GDP
The economy’s energy intensity, carbon intensity, and per-capita energy use are projected to decline even without new policies.
In the AEO2015 Reference case, energy use per dollar of GDP declines at an annual rate of 2.0% from 2013 through 2040, energy use per capita declines at an annual rate of 0.4%. As renewable fuels and natural gas account for larger shares of total energy consumption, carbon intensity per dollar of GDP declines at an annual rate of 2.3% from 2013 to 2040.
Macroeconomic growth has the largest impact on energy intensity among the AEO2015 alternative cases. In the Low Economic Growth case, even though energy use increases only slightly (growing by 0.9 quadrillion Btu from 2013 to 2040) because GDP growth is lower than in the other cases, energy intensity per dollar of GDP declines the least—an average rate of 1.8% per year from 2013 to However, the same case shows the largest decline in energy use per capita, averaging 0.5%/year from 2013 to 2040.
In the High Economic Growth case, real GDP increases at an average annual rate of 2.9%/year, population grows at an average annual rate of 0.8%/year, and energy use increases at an average annual rate of 0.7%/year from 2013 to As a result, the energy intensity per dollar of GDP declines at a slightly higher rate than in the Reference case, while the decline in energy use per capita is slower than in the Reference case.
Carbon dioxide emissions
per 2009 dollar GDP
Source: EIA, Annual Energy Outlook 2015 Reference case
Energy Outlook 2015
May 18, 2015

30. High Oil and Gas Resource
Electricity prices increase with rising fuel costs and expenditures for electric transmission and distribution infrastructure
average retail electricity prices
2013 cents per kilowatthour
Projections
High Oil Price
Reference
High Economic Growth
Low Economic Growth
Low Oil Price
The average retail price of electricity in real 2013 dollars increases in the AEO2015 Reference case by 18% from 2013 to 2040 as a result of rising costs for power generation and delivery, coupled with relatively slow growth in sales of electricity to end users (0.7%/year on average).
Electricity prices are determined by a combination of factors that include economic conditions; energy use and efficiency; the competitiveness of electricity supply; investment in new generation, transmission, and distribution capacity; and the fuel, operation, and maintenance costs of plants in service.
Fuel costs account for the largest portion of generation costs in consumer electricity bills, and projected increases in coal and natural gas prices contribute to rising electricity prices.
In the Reference case, prices increase from 10.1 cents/kWh in 2013 to cents/kWh in 2040, with 2040 prices ranging from 10.3 cents/kWh in the High Oil and Gas Resource case to 12.9 cents/kWh in the High Oil price case.
High Oil and Gas Resource
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

31. High Oil and Gas Resource
Average delivered coal prices to electric generators in six cases,
average delivered coal price
2013 dollars per million Btu
History
2013
Projections
High Oil Price
High Economic Growth
Reference
Low Economic Growth
Low Oil Price
High Oil and Gas Resource
Source: EIA, Annual Energy Outlook 2015
Energy Outlook 2015
May 18, 2015

32. From April through June 2015, over 10
From April through June 2015, over 10.6 GW of coal generation capacity is scheduled to retire
Energy Outlook 2015
May 18, 2015

33. From April through October 2015, nearly 4
From April through October 2015, nearly 4.1 GW of natural gas generation capacity is under construction
Energy Outlook 2015
May 18, 2015

34. Upcoming: EIA-930—hourly survey of electricity balancing authorities
First near-real time report for EIA
Dashboard view of the U.S. power grid
Highly anticipated by EIA customers
Status: dev largely complete; awaiting OES data to continue
Launch: TBD
Energy Outlook 2015
May 18, 2015

35. Electricity generation by fuel in the AEO2015 and AEO2014 Reference cases, 2013, 2020, 2030, and 2040
electricity net generation
trillion kilowatthours
Petroleum/other
Nuclear
Coal
Renewables
Natural gas
2020
2030
2040
Source: EIA, Annual Energy Outlook 2015 and EIA, Annual Energy Outlook 2014
Energy Outlook 2015
May 18, 2015

36. Crude oil price projection is lower in the AEO2015 Reference case than in AEO2014, particularly in the near term
Brent crude oil spot price
2013 dollars per barrel
History
2013
Projections
AEO2014
AEO2015
The North Sea Brent spot price of crude oil is considerably lower in AEO2015 than it was in AEO2014 as shown here, reflecting recent market trends. In the AEO2015 Reference case, the Brent price for crude oil falls from $109/bbl in 2013 to $56/bbl in 2015 and then increases to $76/bbl in After 2018, the Brent price increases, reaching $141/bbl in 2040 ($229/bbl in nominal dollars), as growing demand leads to the development of more costly resources.
In the AEO2014 Reference case, the projected Brent price in was $144/bbl.
Source: EIA, Annual Energy Outlook 2015 Reference case and Annual Energy Outlook 2014 Reference case
Energy Outlook May 18, 2015