The energy intensity of the U.S. economy, measured as primary energy use (in Btu) per dollar of GDP (in 2005 dollars), declines by 40 percent from 2009 to 2035 in the AEO2011 Reference case as the result of a continued shift from energy-intensive manufacturing to services, rising energy prices, and the adoption of policies that promote energy efficiency
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.Key updates that were made for the AEO2011 Reference case include:
Although the mix of investments in new power plants includes fewer coal-fired plants than other fuel technologies, a total of 21 gigawatts of coal-fired generating capacity is added from 2009 to 2035 in the AEO2011 Reference case. Coal remains the dominant energy source for electricity generation because of continued reliance on existing coal-fired 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-fired plants also affect the relative economics of coal-fired capacity, as does the continued rise in construction costs for new coal-fired power plants. Total coal-fired 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-fired 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
* Significant update of the technically recoverable U.S. shale gas resources, more than doubling the volume of shale gas resources assumed in AEO2010, and also added new shale oil resources
* Revision of the methodology for determining natural gas prices to better reflect a lessening of the influence of oil prices on natural gas prices, in part because of the increase in shale gas supply and improvements in natural gas extraction technologies
* Update of the data and assumptions for off shore oil and gas production, pushing out the start of production for a number of projects as a result of the six-month drilling moratoria, and delaying Atlantic and Pacific off shore leasing beyond 2017
* Increase of the limit for blending ethanol into gasoline for approved vehicles from 10 percent to 15 percent, as a result of the waiver granted by the U.S. Environmental Protection Agency (EPA) in October 2010
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