Report examines future power plant composition
The Energy Information Administration’s (EIA) Annual Energy Outlook 2019 maintains most electricity generating capacity additions installed through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).
The projection calculates two measures that, combined, provide an intuitive framework for understanding the capacity expansion decisions modeled for utility-scale power plants, which are those with a capacity rating of one megawatt (MW) or greater.
The EIA said natural gas combined-cycle units are considered to be the marginal source of electricity generation through 2050, meaning the cost of electricity generation from this technology is most often the basis of comparison for new power plants.
The marginal source becomes more expensive to operate as natural gas prices rise, officials said, and the value to the grid of avoiding the cost by building new capacity increases, as seen in the general upward trend in LACE for natural gas combined-cycle and onshore wind.
Onshore wind looks to be competitive in only a few regions before the legislated phase-out of the production tax credit (PTC), the examination noted, but it becomes competitive later in the projection period as demand increases and the cost for installing wind turbines continues to decline.
EIA officials said additional information about levelized cost of electricity (LCOE), levelized avoided cost of electricity (LACE) and economic competitiveness of electricity generating technologies is available in the agency’s Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2019 report.
