EIA's Annual Energy Outlook 2007

The Energy Information Administration just released their Reference Case from the Annual Energy Outlook 2007. Here's the press release titled "New EIA Outlook Reflects Energy Market Shift towards Nuclear, Biofuels, Coal-to-Liquids, and Accelerated Efficiency Improvements" as well as some of the highlights:

The Annual Energy Outlook 2007 (AEO2007) reference case, released today by the Energy Information Administration (EIA), reflects the evolution of energy markets in an era of high prices by projecting growth in nuclear capacity and generation, more biofuels (both ethanol and biodiesel) consumption, growth in coal-to-liquids (CTL) capacity and production, growing demand for unconventional transportation technologies, and accelerated improvements in energy efficiency throughout the economy.

Despite the projected rapid growth of biofuels and other non-hydroelectric renewable energies and the expectation of the first new orders for nuclear power plants in over 25 years, oil, coal, and natural gas are nonetheless projected to provide roughly the same 86 percent share of the total U.S. primary energy supply in 2030 as they did in 2005 absent changes in existing laws and regulations. This reflects a situation in which rapid growth in the use of biofuels and other non-hydro renewable energy sources begins from a very low current share of total energy use, the share of a growing electricity market supplied from nuclear power falls despite projected new plant builds, and hydroelectric power production, which accounts for the bulk of current renewable electricity supply, is stagnant.

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Coal is projected to play a growing role in the AEO2007 reference case, particularly for electricity generation. Coal consumption is projected to increase from 22.9 quadrillion British thermal units (quads) in 2005 to over 34 quads in 2030, with significant additions of new coal-fired generation capacity over the last decade of the projection period. The projections for coal use are particularly sensitive to the underlying assumption for the reference case analysis that current energy and environmental policies remain unchanged throughout the projection period.

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The AEO2007 reference case projects that total operable nuclear generating capacity will grow to 112.6 gigawatts in 2030, including 3 gigawatts of additional capacity uprates, and 12.5 gigawatts of new capacity stimulated in part by EPACT2005 tax credits and rising fossil fuel prices rise (Figure 1). Total nuclear generation is projected to grow from 780 billion kilowatthours in 2005 to 896 billion kilowatthours in 2030, but the nuclear share of generation falls from 20 percent in 2005 to 15 percent in 2030.

For the early release, click here. The overall projections, in my opinion, are fairly realistic. As of right now, I am guessing that about 15-20 GW of new nuclear capacity will come online between now and 2030. But that's as of right now and I bet in 5-10 years there will still be companies announcing intentions for new plants bringing projections even higher. My forecast is greater than AEO's 12.5 GW but I'll give it to them considering they've substantially improved their nuclear projections quite a bit over the past few years. Last year's AEO 2006 forecasted only 6 GW of new nuclear capacity and previous editions showed no new capacity at all.

What stands out most to me from the AEO is the huge demand for coal for electricity generation after 2020. If some of you are thinking that's a bit unrealistic you're not far off. The AEO does not take into account any carbon policies that may come into existence here in the U.S. The report is a business-as-usual projection and will account for a carbon policy as soon as it comes into existence. Until then, coal is our primary choice for new electrical capacity.

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