Macro-Industrial Working Group Meeting 2: Industrial updates and - PowerPoint PPT Presentation

Macro-Industrial Working Group Meeting 2: Industrial updates and Preliminary results Macro Industrial Working Group (MIWG) Industrial Team: Kelly Perl, Team Leader; Peter Gross, Susan Hicks, Paul Otis February 18, 2016 | Washington, DC Preliminary Results. Do not Disseminate. U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

AEO2016 additions for the Industrial Demand Module (IDM) • Technology choice models complete; end of 5 year effort • Benchmarking improvements – Individual industry benchmarking of tables complete – On-going effort to coordinate reporting and benchmarking with refinery model (LFMM) • Data updates • Regulation updates 2 Industrial Team, MIWG #2, February 18, 2016

Technology choice for process flow industries • Allow for technology choice within individual process flows for energy- intensive industries (e.g., anode production for primary aluminum smelting) • All submodules complete: Cement & Lime ( AEO2012 ), Aluminum ( AEO2013 ), Glass ( AEO2014 ) , Steel ( AEO2016 ), Pulp & Paper ( AEO2016 ) • Benefits of Technology choice models – Flexibility in modeling primary vs. secondary processing – Allows for an explicit industrial energy efficiency side case – Allows for technology deployment based on economics of capital and fuel costs 3 Industrial Team, MIWG #2, February 18, 2016

Data updates & regulation • Data – Economic Census (2012) for nonmanufacturing – completed – Calibration to achieve greater precision in historic data and benchmarking; will start with natural gas – Did complete 860/923 CHP data update this year for 2013 & 2014 • Regulation updates – Updated motor efficiencies to reflect latest motor efficiency standards & pump standards – Clean Power Plan: Part of AEO2016 Reference Case; IDM does not model, but responds to price changes that other modules cause 4 Industrial Team, MIWG #2, February 18, 2016

Industrial results Excludes Refining 5 Industrial Team, MIWG #2, February 18, 2016

Industrial energy consumption higher for AEO2016 reference case on higher out-year shipments Industrial Energy consumption, 2012-2040 quadrillion Btu 30 28 26 24 22 Ref2016.0214a Ref2016.0214a_nocpp 20 AEO2015 Reference Case 18 2012 2016 2020 2024 2028 2032 2036 Source: AEO2016 runs Ref2016.0214a & Ref2016.0214a_nocpp; AEO2015 Reference case 6 Industrial Team, MIWG #2, February 18, 2016

Industrial natural gas consumption higher for AEO2016 reference case; bulk chemicals largely responsible Industrial Natural Gas consumption, 2012-2040 quadrillion Btu 12 11 10 9 8 Ref2016.0214a Ref2016.0214a_nocpp 7 AEO2015 Reference Case 6 2012 2016 2020 2024 2028 2032 2036 Source: AEO2016 runs Ref2016.0214a & Ref2016.0214a_nocpp; AEO2015 Reference case 7 Industrial Team, MIWG #2, February 18, 2016

Industrial natural gas consumption and petroleum shares increase modestly; other fuel shares decrease modestly Preliminary AEO2016 Industrial Energy Consumption by Fuel quadrillion Btu 30 25 Purchased Electricity 20 Coal 15 NaturalGas 10 5 Petroleum 0 2012 2016 2020 2024 2028 2032 2036 Source: AEO2016 run Ref2016.0214a 8 Industrial Team, MIWG #2, February 18, 2016

AEO2016 CHP generation lower owing to model changes & new history CHP Generation AEO2016 v AEO2015 billion kWh 180 160 140 120 Ref2016.0214a 100 AEO2015 80 Reference Case 60 40 20 - 2012 2016 2020 2024 2028 2032 2036 Source: Ref2016.0214a; AEO2015 Reference case 9 Industrial Team, MIWG #2, February 18, 2016

AEO2016 CHP generation – renewables have higher relative share because of paper modelling changes Preliminary AEO2016 CHP Generation by Fuel billion kWh 180 160 140 120 Renewables 100 80 NaturalGas 60 40 20 Petroleum& Other Coal 0 2012 2016 2020 2024 2028 2032 2036 Source: Ref2016.0214a 10 Industrial Team, MIWG #2, February 18, 2016

Individual industry results 11 Industrial Team, MIWG #2, February 18, 2016

Bulk chemicals energy consumption considerably higher in AEO2016; shipments higher in out years Bulk Chemicals Energy Consumption AEO2016 v AEO2015 trillion Btu 12,000 10,000 8,000 6,000 Ref2016.0214a 4,000 AEO2015 Reference Case 2,000 - 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a; AEO2015 Reference case 12 Industrial Team, MIWG #2, February 18, 2016

Bulk chemicals feedstock consumption much higher in AEO2016, especially for natural gas AEO2016 Bulk Chemicals Feedstocks AEO2015 Bulk Chemicals Feedstocs trillion Btu trillion Btu 8,000 8,000 7,000 7,000 6,000 6,000 NaturalGas 5,000 5,000 NaturalGas Naphtha & other 4,000 4,000 petrochem feedstocks Naphtha & other petrochem feedstocks 3,000 3,000 HGL HGL 2,000 2,000 1,000 1,000 - - 2012 2016 2020 2024 2028 2032 2036 2040 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a; AEO2015 Reference case 13 Industrial Team, MIWG #2, February 18, 2016

Paper shipments and accounting for recycled steam in new model explain AEO2016 vs. AEO2015 energy differences Paper Energy Intensity AEO2016 v AEO2015 Paper Energy consumption AEO2016 v AEO2015 trillion Btu trillion Btu/billion 2009 USD 2,250 13.50 13.00 2,000 12.50 12.00 11.50 1,750 Ref2016.0214a Ref2016.0214a AEO2015 11.00 AEO2015 Reference Reference Case Case 10.50 1,500 2012 2016 2020 2024 2028 2032 2036 2040 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a; AEO2015 Reference case 14 Industrial Team, MIWG #2, February 18, 2016

Paper: Renewables largest share of energy consumption; relatively higher renewable CHP for AEO2016 Paper Energy Intensity by Fuel, AEO2016 trillion Btu 2,250 2,000 Purchased Electricity 1,750 1,500 Renewables 1,250 1,000 750 500 Coal 250 NaturalGas - 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a 15 Industrial Team, MIWG #2, February 18, 2016

Iron & Steel: Lower near term shipments, stagnant blast furnace additions explain different AEO2016 energy consumption Iron & Steel Energy Consumption AEO2016 v AEO2015 trillion Btu 1,600 1,500 1,400 1,300 1,200 1,100 Ref2016.0214a 1,000 AEO2015 Reference Case 900 800 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a; AEO2015 Reference case 16 Industrial Team, MIWG #2, February 18, 2016

Iron & Steel: Capacity mothballed in early prediction years, starts coming back online in early 2020s Iron & Steel Energy Consumption by Fuel, AEO2016 trillion Btu 1,600 1,400 1,200 Purchased Electricity 1,000 Coal 800 600 400 NaturalGas 200 Petroleum - 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a 17 Industrial Team, MIWG #2, February 18, 2016

Iron & Steel: almost all growth is in electric arc furnaces BF/BOF & EAF Capacity Capacity Index 2012 Total =100 160 140 120 100 EAF 80 60 40 BF/BOF 20 - 2012 2016 2020 2024 2028 2032 2036 2040 Source: Ref2016.0214a 18 Industrial Team, MIWG #2, February 18, 2016

Iron & Steel: Direct Reduced Iron capacity adopted relatively early DRI (Direct Reduced Iron) Capacity Capacity Index 2015 Total =100 160 150 140 130 120 110 100 90 80 2015 2020 2025 2030 2035 2040 Source: Ref2016.0214a 19 Industrial Team, MIWG #2, February 18, 2016

Memo on this meeting and presentation can be found here in about a month: http://www.eia.gov/forecasts/aeo/workinggroup/macroindustrial/ 20 Industrial Team, MIWG #2, February 18, 2016

Thank you for your attention! Macro Team: Kay Smith ( 202) 586-1132 | kay.smith@eia.gov Vipin Arora (202) 586-1048 | vipin.arora@eia.gov Russell Tarver (202) 586-3991 | russell.tarver@eia.gov Elizabeth Sendich (202) 586-7145 | elizabeth.sendich@eia.gov Industrial Team: EIA-OECEAIndustrialTeam@eia.gov Kelly Perl (202) 586-1743 Peter Gross (202) 586-8822 Susan Hicks (202) 586-4388 Paul Otis (202) 586-2306 21 Industrial Team, MIWG #2, February 18, 2016