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National Energy Modeling System
National Energy Modeling System Overview
• NEMS is a large, regional, modularly designed, technology-rich,
energy-economy model that solves for annual equilibrium in U.S.
energy markets.
• Consists of:
– 4 domestic supply modules
• oil supply, natural gas supply and distribution, coal supply and distribution,
and renewable resource supply
– 4 demand modules
• residential, commercial, transportation, and industrial
– Electricity market module
– Petroleum market module
– Macroeconomic module
– International energy module
• Each module represents the operational and planning activities of the
appropriate economic agent (i.e., households in the residential module,
power companies and power plants in the electricity module) in that
area
Electricity Market Module
Electricity Market Module
• Linear programming model solving for the minimal cost of meeting
electricity demand subject to environmental constraints
• 13 electricity supply regions based on NERC regions and subregions
• Each year using adaptive foresight on future electricity demand and
fuel prices determines the best mix of capacity to add, retire, and
operate
• 16 new plant types are represented
• Among existing coal plants, 32 different configurations with various
combinations of SO2, NOx, particulate, and mercury control devices
are represented
• The electricity module explicitly represents the emission caps imposed
by multi-pollution statutes and determines the most economical
compliance options.
• Banking decisions are made endogenously for SO2, they are
exogenously specified for NOx, and Hg
Electricity Regions
Electricity Generation by Fuel, 1970-2025
(billion kilowatthours)
3,000 History Projections
Electricity demand
5,252
2,500
Coal
1,392
2,000
1970 2025 Natural gas
1,500
1,000
Nuclear
500 Renewables
Petroleum
0
1970 1980 1990 2001 2010 2025
Additions to Electricity Generating Capacity, 1998-2002
(gigawatts)
70
Total
60 Combined cycle
Combustion turbine
Renewables
50
Coal and other
40
30
20
10
0
1998 1999 2000 2001 2002
Projected Electricity Generation Capacity Additions by Fuel
Type, Including Combined Heat and Power, 2001-2025
(gigawatts)
100
Natural gas
Coal
80
Renewables
60
40
20
0
2001- 2006- 2011- 2016- 2021-
2005 2010 2015 2020 2025
Projected Levelized Electricity Generation Costs,
2010 and 2025 (2001 mills per kilowatthour)
75 Transmission
Variable costs, including fuel
Fixed costs
Capital costs
50
25
0
2010 2025
Coal Gas Wind Nuclear Coal Gas Wind Nuclear
combined combined
cycle cycle
Projected Electricity Generation by Fuel, 2001 and 2025
(billion kilowatthours)
3,000
2,500
2001
2,000
2025
1,500
1,000
500
0
Coal Nuclear Natural gas Renewables Oil
Projected Cumulative New Generating Capacity by Type in
Two Cases, 2001-2025 (gigawatts)
300
Turbines
250
Combined cycle
Coal
200
Renewables
150
100
50
0
Reference High demand
Projected Cumulative New Generating Capacity by
Technology Type in Three Economic Growth Cases,
300 2001-2025 (gigawatts)
Turbines
Combined cycle
250
Coal steam
Renewables
200
150
100
50
0
Low growth Reference High growth
Projected Nonhydroelectric Renewable Electricity Generation
By Energy Source, 2010, 2020, and 2025
200 (billion kilowatthours)
Geothermal
150
Solar thermal
Photovoltaic
Wind
100
Biomass
50
MSW
0
2001 2010 2020 2025
Projected Nonhydroelectric Renewable Electricity Generation
By Energy Source in Two Cases, 2025
350 (billion kilowatthours)
300 Geothermal
Solar thermal
Photovoltaic
250
200 Wind
150
100
Biomass
50
MSW
0
Reference High renewables
Projected Additions of Renewable Generating Capacity,
2001-2025 (gigawatts)
8
6
Unplanned
4 Other planned
2 State mandates
0
Biomass Geothermal Landfill Solar Wind
gas
Green Power in NEMS
• Defined as “Individual consumers voluntarily
paying a premium for specified renewables,”
NEMS does not explicitly represent green power
in any sector
• Green power markets appear to be (1) too small
and (2) generally accounted by other EIA/NEMS
measures, voiding any immediate necessity of
representing separately.
Green Power is Implicitly
Included In -
• Supplemental Adds – Supply Side, Explicit annual
forecast estimates of known new renewable
energy capacity and state RPS, mandates, etc.
• Supply Side – “Floor” grid-connected PV builds
• Demand Side – End-User (both assumed and cost
modeled) PV additions in residential and
commercial sectors
Should NEMS Model Green
Power?
• GP appears to be a very small market
• GP appears generally absorbed in other
markets already represented
• GP may have been overtaken by more
potent forces, like state RPS
• If evidence demonstrates GP independently
adding significant capacity not already
accounted, EIA would likely reconsider.
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