1. 1 EIA’s Electricity Forecasting for the U.S. and the South By: Marilyn Brown, Matt Cox, Alex Smith, and Xiaojing Sun Georgia Institute of Technology July 11, 2014 This analysis was conduced for Georgia Tech’s “Future of Electric Power in the South” (FEPS) initiative.

2. 2 Progress Since our May 6 th FEPS Workshop FEPS website created: http://cepl.gatech.edu/drupal/node/75 Workshop notes were distributed and posted A 55-page white paper on “The State of Electric Power in the South” was drafted, reviewed, revised, and posted Georgia Tech’s National Energy Modeling System (GT-NEMS 2014) became fully operational in July Examined options for modeling “disruptions”

3. 3 Energy Consumption in the South Will Grow more Rapidly than the US Average HistoryProjections 2012 Projection for the South Total Energy Consumption in the South, 2005-2040 (quadrillion Btu) The average annual growth rate of total energy consumption from 2013-2040 is forecast to be 0.4% for the US, and 0.54% for the South

4. 4 The South Continues to Lag the Nation in its Reliance on Renewable Electricity History Projections 2012 Electricity generation by fuel in the South, 2005-2040 (trillion kilowatthours) Natural Gas Renewables Nuclear Coal Petroleum liquids and other

5. 5 Residential Electricity Demand Will Grow more Rapidly than the US Average HistoryProjections 2012 Projection for the South Residential Electricity Consumption in the South, 2005-2040 (billion kWh) The average annual growth rate of residential electricity consumption from 2013-2040 is forecast to be 0.67% for the US, 0.99% for the South

6. 6 BAU Tech Progress Expected to Have Little Impact on Southern Electricity Load Drivers Of US demand for space cooling services, the South is projected to consume 63%. Space cooling loads are expected to increase over time, requiring more peak generation.

7. 7 Technology Advancement has Potential to Accelerate Commercial Sector Efficiency South continues to lag US in adoption of more stringent commercial building codes Forthcoming cost advantages in categories such as lighting may help reduce commercial sector demand (e.g., SSL)

8. 8 Despite Rising Energy Consumption, Electricity Prices in the South Remain Low HistoryProjections 2012 Projection for the South Average Electricity Prices in the South, 2005-2040 (2012 cents per kilowatthour) The average annual growth rate of retail electricity prices from 2013- 2040 is forecast to be 0.51% for the US, 0.47% for the South

9. 9 Boilers and CHP Meet Proportionally More Thermal Demand in the South

10. Industrial CHP is More Important in the South, but Not Commercial CHP 10

11. CHP System Prices Decline Over Time 11 1 MW2 MW3.5 MW5.7 MW15 MW25 MW40 MW100 MW % Change, 2010-2035-60%-69%-13%-11%-12%-13%-5% Average Annual % Change-2.4%-2.7%-0.5%-0.4%-0.5% -0.2% Prices are flat after 2035

12. 12 The South Relies More on Biomass and Less on Other Renewable Resources Than the U.S. MSW/LFG Biomass Wind Solar Total generation from wind, solar and other renewables in the South (Billion kWh)

13. 13 Biomass and Wind Will Replace Hydro as the Largest Renewable Electricity Sources Renewable electricity generation in 2012, 2020, 2030 and 2040 Hydro power Wind Solar Biomass and waste Solar Will Increase Significantly Post 2030

14. Distributed Solar PV in the Commercial Sector Will Experience Declining Cost and Better Efficiency YearAverage EfficiencyEquipment Cost ($/W) Reference 20100.156.4 20150.1753.8 20200.1922.8 20250.1972.6 20300.22.5 20350.22.4 20400.22.4 SunShot Initiative Goal: 1.25$/W in 2020 EIA learning beta0.2 (13%) Literature Review22% Initial cost in 1990 ($/W)29.7 14

15. Distributed Solar PV in Residential Sector Will Face Slightly Higher Costs Than in the Commercial Sector YearAverage EfficiencyEquipment Cost ($/W) Reference 20100.157.1 20150.1754.2 20200.1923.3 20250.1973.0 20300.23.0 20350.22.9 20400.22.9 EIA learning beta0.2 (13%) Literature Review22% Initial cost in 1990 ($/W)30.9 SunShot Initiative Goal: 1.5 $/W in 2020 15

16. Power Sector Solar PV Cost Will Decline, Following a Three-Stage Learning Curve Technology Learning Number of doublingLearning Rate 10.2 50.1 5000.01 Overnight Capital Cost in 2013 ($1987/W) 2.1 Overnight Capital Cost in 2013 ($2009/W)3.9 SunShot Initiative Goal: 1 $/W in 2020 In 2013, Utility scale PV cost was ~2 $/W Source: DOE SunShot Initiative http://www.energy.gov/articles/us-utility-scale-solar-60-percent-towards-cost-competition-goal 16

17. The SERC Region Will Significantly Increase Electricity Generation from Utility Scale Solar PV Utility Scale Solar PV Generation Distributed Solar PV Generation The South would account for 12% of the utility PV generation in 2020, 34% in 2040. The South would account for 20% of the nation’s distributed PV generation in 2020, 29% in 2040. 17

18. 18 Next Steps for FEPS Examine EIA’s “side cases”: Extended policies High demand technologies Low electricity demand High nuclear $25/t-CO 2 tax Begin designing our own scenarios Second webinar in August

19. For More Information 19 Professor Marilyn A. Brown School of Public Policy Georgia Institute of Technology Atlanta, GA 30332-0345 Marilyn.Brown@pubpolicy.gatech.edu Climate and Energy Policy Lab: http://www.cepl.gatech.edu Research Assistants: Alexander Smith (Overview) asmith313@gatech.edu Matt Cox (CHP) Matt.Cox@gatech.edu Xiaojing Sun (Solar PV) xsun44@gatech.edu