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Key Drivers Affecting the Outlook for Renewables

This report discusses key factors influencing the growth and outlook of renewable energy in the US, including fuel mix for electricity generation, growth in electricity use, and the shift towards lower-carbon options. It also provides information on spot natural gas and coal prices.

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Key Drivers Affecting the Outlook for Renewables

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  1. Key Drivers Affecting the Outlook for Renewables For US Power & Renewable Finance Conference February 14, 2013 | New York, NY By Howard Gruenspecht Deputy Administrator

  2. In 2012, U.S. electricity generation was 69% fossil fuels, 19% nuclear, and 12% renewables January – November 2012 net generation: 3,720 billion kWh January – November 2012 non-hydro renewable net generation: 126 billion kWh Other gases 0.3% Conventional hydroelectric 6.8% Nuclear 18.8% Wind: 3.4% Natural gas 30.8% Other renewable 5.3% Solar thermal and PV: 0.1% Wood and wood-derived fuels: 0.9% Geothermal: 0.4% Coal 37.2% Other biomass: 0.5% Petroleum 0.6% Source: EIA, Electric Power Monthly, January 2013 Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  3. Renewable energy is projected to grow far more robustly than other types of energy Average annual growth rates percent per year Source: EIA, Annual Energy Outlook 2013 Early Release, International Energy Outlook 2011 (2010-2040) (2008-2035) Non-hydro renewable energy All renewable energy All other energy Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  4. Spot natural gas prices vary significantly across global markets since 2008, with many markets far below oil-related benchmarks Global spot natural gas, crude oil, and LNG prices U.S. dollars per million British thermal unit Source: Derived from Bloomberg, L.P. Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  5. The average delivered price of coal to electricity generators varies widely across U.S. regions – transport costs are a key reason 2011 Delivered coal prices, $ per million Btu $3.76 $2.39 $3.16 $2.39 N/A $1.74 $1.67 N/A $2.77 $3.18 $2.10 $1.79 $1.65 1.90 $2.58 $4.07 $1.94 $2.35 $1.96 $3.41 $2.00 $3.99 Source: EIA, Annual Energy Outlook 2013 Early Release Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  6. Growth in electricity use slows, but still increases by 28% from 2012 to 2040 Period Annual Growth 1950s 9.8 1960s 7.3 1970s 4.7 1980s 2.9 1990s 2.4 2000-2011 0.9 2012-2040 0.9 U.S. electricity use percent growth (3-year rolling average) Source: EIA, Annual Energy Outlook 2013 Early Release History 2011 Projections Structural Change in Economy - Higher prices - Standards - Improved efficiency Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  7. The fuel mix for electricity generation varies widely across U.S. regions (2011) Share of Generation by Fuel, 2011 Source: EIA, Annual Energy Outlook 2013 Early Release, based on Form EIA-923 Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  8. The U.S. electricity mix in EIA’s reference case gradually shifts to lower-carbon options, led by growth in gas and renewable generation Source: EIA, Annual Energy Outlook 2013 Early Release U.S. electricity net generation trillion kilowatthours History Projections 1993 2011 30% Natural gas 25% 16% Renewables 13% 13% 11% 19% 17% Nuclear 19% 35% 42% 53% Coal Oil and other liquids 4% 1% 1% Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  9. For more information U.S. Energy Information Administration home page | www.eia.gov Annual Energy Outlook | www.eia.gov/forecasts/aeo Short-Term Energy Outlook | www.eia.gov/forecasts/steo International Energy Outlook | www.eia.gov/forecasts/ieo Today In Energy | www.eia.gov/todayinenergy Monthly Energy Review | www.eia.gov/totalenergy/data/monthly Annual Energy Review | www.eia.gov/totalenergy/data/annual Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

  10. U.S. energy use grows slowly over projection reflecting improving energy efficiency and a slow and extended economic recovery Source: EIA, Annual Energy Outlook 2013 Early Release U.S. primary energy consumption quadrillion Btu Shares of total U.S. energy History Projections 2000 2011 28% Natural gas 24% 26% 11% 6% 8% Renewables (excluding liquid biofuels) 8% 9% 8% Nuclear 2% 1% 23% Liquid biofuels 19% 20% Coal 39% 36% 32% Oil and other liquids Howard Gruenspecht, US Power & Renewable Finance Conference February 14, 2013

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