Nuclear Up, Emissions Down: The EIA Outlook

The U.S. Energy Information Administration sees incremental growth in nuclear energy capacity through 2035 in its Annual Energy Outlook 2012 (AEO 2012) reference case, which has just been released.

Nuclear generating capacity in the reference case increases from 101 gigawatts in 2011 to 112 gigawatts in 2035, with 10 gigawatts of new capacity due to 5 new plants, 7 gigawatts of uprates at existing plants and 6 gigawatts of retirements, according to the report. This is one gigawatt more than projected in the AEO 2011 reference case.

At the same time, it forecasts CO₂ emissions rising 0.2 percent per year during this period, or about 4.9 percent in total. While the rise in nuclear capacity is good news, the news about carbon emissions is a little disturbing, at least at first glance. A forecast – and there are a bunch of them, though this is the most prominent for U.S. policy makers - can be a little confusing the first time you tackle it.

That’s because, as these charts show, the Energy Outlook is not as useful in any given year as it is in aggregation. Seen as one in a series, the reports show the year-to-year variations in whatever metric you want to follow.

The Washington Post’s Brad Plumer expresses it this way:

Carbon-dioxide emissions plummeted after the financial crisis in 2008, and the EIA expects that greenhouse-gas pollution from the energy sector won’t recover back to 2005 levels anytime soon, as the chart [above] shows. The reasons? New vehicle fuel-economy standards; cheap natural gas that’s displacing dirtier coal-fired places; state-level laws that mandate renewable energy; and new environmental regulations on power plants from the EPA.

That’s about right, though EIA doesn’t use terms like “dirtier coal-fired plants” and it really doesn’t “expect” anything. The EIA, in its reference scenario, is interested only in taking account of legislation and regulation that has been passed and/or implemented, so it “expects,” if anything, that there will be no more legislation and regulation going forward and this is how things will look as a result. But of course, there will be more and that will be reflected in the 2013 forecast – and so on into the future. The EIA isn’t Nostradamus (heck, Nostradamus wasn’t all that good a Nostradamus.)

So if you look at a series of the forecasts, you can see whether some metrics are pointing upwards over time (in our case, nuclear energy capacity, of course, and renewables) and whether some are pointing downwards (carbon emissions, coal capacity). If they are – and, let me hasten to add, they indeed are – then we’re going in the right direction. How speedily we’re going in the right direction is something else again.

For example, though the report (and the above chart) shows CO₂ emissions in the electric sector growing by 0.2 percent per year from 2010 to 2035, this is less than in previous years. The AEO 2011 reference case forecasts CO₂ emissions rising by an average of 0.3 percent per year between 2010 and 2035. So the rise has been cut by a third by policy making, the activity of industry and other factors over the last year. That’s a significant number, especially in light of a recovering economy and concomitant recovering electricity market.

Are improvements in a given set of metrics moving too slowly over time or not getting us where we want to go 25 years hence? Maybe, maybe not, but if you think it is, it argues for more aggressive policies to encourage nuclear and renewable energy and discourage carbon emissions. And that’s usually the result of the EIA’s AEO. It provides information that can be used to show  - well, a number of things – that can sharpen arguments for, say, new nuclear energy capacity.

Perhaps increasing nuclear capacity will bend that carbon emission curve downward and more quickly than the 2012 forecast shows – perhaps nuclear energy can do a quicker job on that curve than its renewable cousins can do – and so on. Pick your favorite energy source, poke through a few EIA reports to see if they support your view, then go to town. It’s a gold mine for energy wonks.

The full EIA report, due in April, will include a number of scenarios that do take account of potential policy changes and what they will mean for carbon emission reduction. So consider this a sneak preview.

NEI Confronts Politifact on Clinton Statement on Nuclear Costs

Last week, David Bradish posted his take on President Clinton's statement concerning the costs of electricity generated by wind, solar and nuclear energy. After looking at the numbers, David concluded that an analysis by Politifact that rated Clinton's statement as "half-true" was flawed and needed to be updated to "mostly false."

Earlier today, John Keeley of NEI's media team I shared a copy of David's analysis with reporter Louis Jacobson and editor Martha Hamilton. If and when we get a response, we'll let you know.

Are Wind and Solar Cheaper Than Nuclear?

Last week on the Daily Show, former President Bill Clinton asserted that wind and solar are projected to be cheaper than coal in 2-5 years and that both wind and solar are cheaper than nuclear right now.

PolitiFact dug into the numbers and found that the President's statements were only half true. We took their analysis one step further and argue that the President’s statements were mostly false.

PolitiFact cites the Energy Information Administration (EIA).  EIA is a credible source for comparing levelized electricity costs for new generation technologies. PolitiFact is correct that solar is much more expensive than most all other generating technologies including nuclear. When it comes to the cost of wind, however, we think PolitiFact should take another look.

When delving into the numbers, PolitiFact only looked at one set of single-point cost estimates from EIA. In reality, though, the cost of building and operating power facilities falls in a range that depends on many factors such as financing, transmission requirements, available natural resources for renewables and performance of the operating companies.

Wind turbines, like all other technologies, have a range of costs based on many variables.  EIA shows that the upper end of wind’s cost range is more expensive than the lower end of nuclear’s cost range. On the bottom of EIA’s page, a range of costs for each technology is provided (chart below).

As shown above, the low end of nuclear’s cost range ($109.70/MWh) is lower than the high end of wind’s cost range ($115/MWh); therefore wind is not always cheaper than nuclear.

Further, the amount of wind that can be built is limited to specific places in the U.S. that receive adequate wind flow (see map below).

A substantial amount of wind cannot be built in places such as the Southeast due to a lack of natural resources. Areas with low wind resources will produce less electricity from installed turbines which in turn cause higher levelized costs.  Here are SCANA’s estimates for its region which show nuclear is cheaper than gas, coal, wind and solar (different incentives included for all):

Currently, 104 nuclear reactors (101 gigawatts) generate 20% of the country’s baseload power at low operating costs. This compares to 40 GW of wind and 1 GW of solar generating 2.2% and 0.0003% of the country’s electricity, respectively, at intermittent times.

The folks at PolitiFact should reconsider their conclusion about former President Clinton’s statements and change it from Half True to Mostly False.