Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

NEMS Overview and Brief Description of CasesTransportation Sector CasesIn addition to the AEO2006 reference case, twostandalone cases using the Transportation DemandModule of NEMS were developed to examine theeffects of less rapid technology change and adoptionand more rapid technology change and adoption. Forthe transportation sector:• The 2005 technology case assumes that new vehiclefuel efficiencies remain constant at 2005 levelsthrough the projection horizon, unless emissionsand/or efficiency regulations require the implementationof technology that affects vehicle efficiency.For example, the new light truck corporateaverage fuel economy (CAFE) standards requirean increase in fuel economy through 2007, andincreases in heavy truck emissions standards arerequired through 2010. As a result, the technologyavailable for light truck efficiency improvement isfrozen at 2007 levels, and the technology availableto heavy trucks is frozen at 2010 levels.• In the high technology case, the characteristics oflight-duty conventional and alternative-fuel vehiclesreflect more optimistic assumptions aboutincremental improvements in fuel economy andcosts [14]. In the air travel sector, the high technologycase reflects lower costs for improved thermodynamics,advanced aerodynamics, andweight-reducing materials, providing a 25-percentimprovement in new aircraft efficiency relativeto the reference case in 2025. In the freighttruck sector, the high technology case assumesmore incremental improvement in fuel efficiencyfor engine and emissions control technologies[15]. More optimistic assumptions for fuel efficiencyimprovements are also made for the railand shipping sectors.Both cases were run with only the TransportationDemand Module rather than as fully integratedNEMS runs. Consequently, no potential macroeconomicfeedback on travel demand was captured, norwere changes in fuel prices incorporated.In addition to these standalone cases, EIA also developedan alternative CAFE case designed to examinethe potential energy impacts of proposed reforms tothe structure of CAFE standards for light trucks andincreases in light truck CAFE standards for modelyears 2008 through 2011 [16]. The alternative CAFEcase assumes that manufacturers will adhere to theproposed fleet-wide increases in light truck CAFEstandards, to 24 miles per gallon for model year 2011.Electricity Sector CasesIn addition to the reference case, four integratedcases with alternative electric power assumptionswere developed to analyze uncertainties about thefuture costs and performance of new generating technologies.Two of the cases examine alternativeassumptions for nuclear power technologies, and twoexamine alternative assumptions for fossil fuel technologies.Reference case values for technology characteristicsare determined in consultation with industryand government specialists; however, there is alwaysuncertainty surrounding newer, untested designs.The electricity cases analyze what could happen ifcosts of advanced designs are either higher or lowerthan assumed in the reference case. The cases arefully integrated to allow feedback between the potentialshifts in fuel consumption and fuel prices.Nuclear Technology Cases• The cost assumptions for the advanced nuclearcost case reflect a 20-percent reduction in the capitaland operating costs for advanced nuclear technologyin 2030, relative to the reference case. Thereference case, which assumes that some learningoccurs regardless of new orders and construction,projects a 14-percent reduction in the capital costsof nuclear power plants between 2006 and 2030.The advanced nuclear cost case assumes a 31-percent reduction between 2006 and 2030.• The nuclear vendor estimate case uses assumptionsthat are consistent with estimates from BritishNuclear Fuels Limited (Westinghouse) for themanufacture of its AP1000 advanced pressurized-waterreactor. In this case, the overnight capitalcost of a new advanced nuclear unit isassumed to be 18 percent lower initially thanassumed in the reference case and 44 percentlower in 2030. In both of the alternative nuclearcases, cost and performance characteristics for allother technologies are as assumed in the referencecase.Fossil Technology Cases• In the high fossil technology case, capital costs,heat rates, and operating costs for advanced coaland natural gas generating technologies areassumed to be 10 percent lower than referencecase levels in 2030. Because learning is assumedto occur in the reference case, costs and performancein the high case are reduced from initiallevels by more than 10 percent. Heat rates in the208 Energy Information Administration / Annual Energy Outlook 2006