‹ Analysis & Projections

AEO2011 Early Release Overview

Release Date: December 16, 2011   |  Next Release Date: January 2012  |   Report Number: DOE/EIA-0383ER(2011)

Electricity Generation

Total electricity consumption, including both purchases from electric power producers and on-site generation, grows from 3,745 billion kilowatthours in 2009 to 4,880 billion kilowatthours in 2035 in the AEO2011 Reference case, increasing at an average annual rate of 1.0 percent. The growth rate in the AEO2011 Reference case is about the same as in the AEO2010 Reference case.

Figure Data
Although the mix of investments in new power plants includes fewer coal-fi red plants than other fuel technologies, a total of 21 gigawatts of coal-fi red generating capacity is added from 2009 to 2035 in the AEO2011 Reference case. Coal remains the dominant energy source for electricity generation (Figure 12) because of continued reliance on existing coal-fi red plants and the addition of some new plants in the absence of an explicit Federal policy to reduce greenhouse gas emissions. Concerns about greenhouse gas emissions continue to slow the expansion of coal-fired capacity in the AEO2011 Reference case, even under current laws and policies. Lower projected fuel prices for new natural gas-fi red plants also affect the relative economics of coal-fired capacity, as does the continued rise in construction costs for new coal-fi red power plants. Total coal-fi red generating capacity grows to 330 gigawatts in 2035 in the AEO2011 Reference case.

Compared with the AEO2010 Reference case, electricity generation from natural gas is higher in the AEO2011 Reference case, particularly over the next 10 years, during which natural gas prices are expected to remain low. New natural gas-fired plants are also much cheaper to build than new renewable or nuclear plants. In 2020, natural gas-fi red generation in AEO2011 is 29 percent higher than in AEO2010, and in 2035 it is still 17 percent higher.

Nuclear generating capacity in the AEO2011 Reference case increases from 101 gigawatts in 2009 to 111 gigawatts in 2035, with 6.3 gigawatts of new capacity (5 new plants) and the balance coming from rerated capacity. Electricity generation from nuclear power plants grows 10 percent, from 799 billion kilowatthours in 2009 to 879 billion kilowatthours in 2035, accounting for about 17 percent of total generation in 2035 (compared with 20 percent in 2009). Higher construction costs for new nuclear plants in AEO2011, along with lower projected natural gas prices, make new nuclear capacity slightly less attractive than was projected in the AEO2010 Reference case.

Increased renewable energy consumption in the electric power sector, excluding hydropower, accounts for 23 percent of the growth in electricity generation from 2009 to 2035. Generation from renewable resources grows in response to key Federal tax credits, but it is lower in the AEO2011 Reference case than in the AEO2010 Reference case because of lower natural gas prices and higher costs for new wind power plants. The drop in renewable generation relative to AEO2010 is seen primarily in lower projections for wind and biomass generation. Growth in renewables is also supported by the many State requirements for renewable generation. The share of generation coming from renewable fuels (including conventional hydro) grows from 11 percent in 2009 to 14 percent in 2035. In the AEO2011 Reference case, Federal subsidies for renewable generation are assumed to expire as enacted. Their extension could have a large impact on renewable generation.