EIA Updates Electricity Generation Reference Case – 7/5/16

The U.S. EIA recently updated its electricity generation Reference case to reflect the increased optimism about the rise of renewable energy following the unexpected extension of favorable tax credits and the likelihood of the Clean Power Plan (CPP) surviving a Supreme Court ruling sometime in the next year.

updated eia cpp

The U.S. EIA’s Annual Energy Outlook 2016 (AEO2016) Reference case projects that natural gas-fired electricity generation will exceed coal-fired electricity generation by 2022.  Renewables are expected to follow a similar path; they may overtake coal-fired generation by 2029. The shift is expected to be accelerated by the Clean Power Plan (CPP), assumed in the Reference case to have survived its court challenges.

Even without the CPP, natural gas use is expected to eclipse that of coal and renewables generation is projected to increase significantly due to Congress’s recent extension of favorable tax credit policies for renewable energy projects. The PTC and ITC for wind and solar respectively were extended in late 2015 in a rare bipartisan compromise that passed as part of the same bill that legalized exports of crude oil from the U.S.

In the final version of the CPP, states with higher intensity levels generally have greater requirements for reduction of CO2 emissions.

regional electricity gen by region

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.

The Northern Plains region should see a decline in coal generation with a corresponding rise in renewables and natural gas generation.

Other regions should rely more on natural gas-fired generation with more modest declines in their coal generation, and they all are expected to see strong gains in renewables generation.

The Northeast region and California have little coal generation and the regions are expected to register little change in their energy mix as a result of the CPP.

California sees strong growth in renewable generation by 2030 as a result of the state renewable targets.

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