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

Electricity Alternative CasesNew Nuclear Plants Are CompetitiveWhen Lower Costs Are AssumedFigure 69. Levelized electricity costs for new plantsby fuel type in two nuclear cost cases, 2015 and 2030(2004 cents per kilowatthour)108642015Incremental transmission costs2030 Variable costs, including fuelFixed costsCapital costsLower Cost Assumptions IncreaseBiomass and Geothermal CapacityFigure 70. Nonhydroelectric renewable electricitygeneration by energy source in three cases,2010 and 2030 (billion kilowatthours)400 High renewablesLow renewables300200ReferenceGeothermalSolarWind20CoalNatural gascombinedcycleNuclear:referencecaseNuclear: Nuclear:advanced vendorcost case estimate case10002010 2030BiomassMSW/LFGThe reference case assumptions for the cost andperformance characteristics of new technologies arebased on cost estimates by government and industryanalysts, allowing for uncertainties about newdesigns. Because no new nuclear plants have beenordered in this country since 1977, there is no reliableestimate of what they might cost. In recent years, variousnuclear vendors have argued that their newplants will be simpler and less costly. Two alternativenuclear cost cases address this uncertainty. Theadvanced nuclear cost case assumes capital and operatingcosts 20 percent below those in the referencecase in 2030, reflecting a 31-percent reduction inovernight capital costs from 2006 to 2030. The vendorestimate case assumes reductions relative to the referencecase of 18 percent initially and 44 percent in2030, consistent with estimates from British NuclearFuels Limited (Westinghouse) for the manufacture ofits AP1000 advanced pressurized-water reactor.Nuclear generating costs in the alternative nuclearcost cases are competitive with the generating costsfor new coal- and natural-gas-fired units toward theend of the projection period (Figure 69). (The figureshows average generating costs, assuming generationat the maximum capacity factor for each technology;the costs and relative competitiveness of the technologiescould vary by region.) In the reference case, Federaltax credits result in 6 gigawatts of new nuclearcapacity. In the advanced nuclear case 34 gigawatts ofnew nuclear capacity is added between 2004 and2030, and in the vendor estimate case 77 gigawatts ofnew nuclear capacity is added. The additional nuclearcapacity displaces primarily new coal-fired capacity.The impacts of key assumptions about the availabilityand cost of nonhydroelectric renewable energy resourcesfor electricity generation are shown in twoalternative technology cases. In the low renewablescase, the cost and performance of generators usingrenewable resources are assumed to remain unchangedthroughout the forecast. The high renewablescase assumes cost reductions of 10 percent in2030 on a site-specific basis for hydroelectric, geothermal,biomass, wind, and solar capacity.In the low renewables case, construction of newrenewable capacity is less than projected in the referencecase (Figure 70). In the high renewables case,more additions of biomass, geothermal, and windcapacity are projected through 2030 than in the referencecase, with most of the incremental capacityadded between 2020 and 2030.Biomass, available in some quantity in all U.S.regions, provides desirable baseload and intermediate-loadcapacity. In the high renewables case, thelargest increase in generation relative to the referencecase is seen for biomass, which nearly doubles in2030. Geothermal resources are limited to the West,and despite limited opportunities for expansion, generationincreases by 39 percent from 2004 to 2030.Generation from wind power, with significantexpansion in the reference case over current capacity,increases by a modest 15 percent over the referencecase in 2030, and there is little or no increase ingeneration from solar and hydropower. Even with theassumptions of reduced costs, nonhydropower renewablesaccount for less than 6 percent of total generationin 2030 in the high renewables case.84 Energy Information Administration / Annual Energy Outlook 2006