EIA’s April 2005 Analysis of Modeled NCEP Recommendations

Howard Gruenspecht, Deputy AdministratorEnergy Information Administration

(howard.gruenspecht@eia.doe.gov)

Presented at:National Commission on Energy Policy Workshop

September 1, 2005Washington, D.C

Background

• In December 2004, Senator Bingaman requested that EIA provide an analysis of the impacts of the NCEP policy recommendations

• EIA modeled some, but not all, of the NCEP regulatory and incentive programs and performed sensitivity analysis to consider alternative technology cost and availability scenarios

• The baseline for the analysis was the 2005 Annual Energy Outlook Reference Case, which does not include programs in the recently enacted energy bill.

Cases Considered in EIA’s Analysis

REF =AEO2005 Reference Case

CAFE = REF +NCEP CAFE program(w/ details provided by Bingaman staff)

HiTechAEO2005 HiTech Case

Cap-Trade = REF +NCEP cap and trade program for greenhouse gases

(GHGs) including safety valve

No Safety = Cap-Trade w/o safety valve

Bldg-Std = REF + building/appl standards

NCEP = All modeled policiesNCEP-HiT

HiTech + NCEP

Incent = REF + tax incentives and Deployments

• Today’s briefing focuses on shaded cases• Full report at http://www.eia.doe.gov/oiaf/servicerpt/bingaman/index.html

Covered Greenhouse Gas Emissions in Three Cases,2002-2025 (million metric tons of CO2-equivalent)

5500

6000

6500

7000

7500

8000

8500

9000

2002 2005 2010 2015 2020 2025

Cap-Trade

Reference

NCEP

Emissions Target

Emission Reductions by Category in Three Cases,2015 and 2025 (million metric tons of CO2-equivalent)

0

250

500

750

1000

2015 2025 2015 2025

Other Greenhouse Gases

Carbon Dioxide

NCEP Cap-Trade

Carbon Dioxide Reductions by Sector in Two Cases,2015 and 2025 (million metric tons carbon dioxide)

0

100

200

300

400

500

600

700

2015 2025 2015 2025

Commercial

Transportation

Residential

Electric Power

Industrial

NCEP Cap-Trade

Electricity Generation by Fuel in Three Cases, 2025(billion kilowatthours)

0

1000

2000

3000

Coal Natural Gas Nuclear Renewable

2003 Cap-Trade

Reference NCEP

Cumulative Generating Capacity Additions by TechnologyType, 2004-2025 (gigawatts)

0

20

40

60

80

100

120

ConventionalCoal

Coal IGCC Gas CombinedCycle

Nuclear Renewables

NCEP Cap-Trade

Reference

Oil Consumption in Four Cases, 2003-2025(million barrels per day)

15

20

25

30

2005 2010 2015 2020 2025

Cap-Trade Reference

NCEP

CAFE

Total Natural Gas Consumption in Three Cases,2003-2025 (quadrillion Btu)

22

24

26

28

30

32

2005 2010 2015 2020 2025

ReferenceCAP-TRADENCEP

NCEP

Reference

Cap-Trade

Total Coal Consumption in Three Cases,2003-2025 (quadrillion Btu)

22

24

26

28

30

32

2005 2010 2015 2020 2025

ReferenceCAP-TRADENCEP

Reference

Cap-Trade

NCEP

Emission Permit Prices in Three Cases, 2009-2025(2003 dollars per metric ton of CO2-equivalent)

0

10

20

30

40

2010 2015 2020 2025

Cap-TradeNCEP

No-Safety

Safety Valve Price

Electricity Prices in Three Cases, 2003, 2010, 2015, and 2025(2003 cents per kilowatthour)

0

2

4

6

8

2003 2010 2015 2025

NCEPCap-Trade

Ref

Impacts on the Consumer Price Index for Energy,2003-2025 (percent change from reference)

-1

0

1

2

3

4

5

6

2003 2010 2015 2020 2025

NCEP

Cap-Trade

Impacts on Real GDP and Consumption per Household

-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

2003 2010 2015 2020 2025

NCEP

Cap-Trade

0

100

200

300

400

500

2010 2015 2020 2025 Average

NCEP

Cap-Trade

Real GDP(percent change from reference)

Loss in Consumption per Household(2003 dollars per household)

Total Primary Energy Consumption in Four Cases,2003-2025 (quadrillion Btu)

90

100

110

120

130

140

2005 2010 2015 2020 2025

HiTech

Reference

NCEP

NCEP-HiTech

Emission Permit Prices in Two Cases, 2009-2025(2003 dollars per metric ton of CO2-equivalent)

0

1

2

3

4

5

6

7

8

9

2010 2015 2020 2025

NCEP

NCEP-HiTech

Safety Valve Price