ICF International (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, has released its ICForecast Energy Outlook for 欧博娱乐 first quarter of 2015. This study highlights 欧博娱乐 near-, mid- and long-term future impacts of proposed U.S. federal environment regulations, including up-to-date analysis of U.S. Environmental Protection Agency's (EPA) rules and regulation activities; gas, coal and power market prices and coal production; and renewable energy development.
Regulatory Issues: In advance of 欧博娱乐 planned implementation date of EPA's Mercury and Air Toxics Standards (MATS) rule, ICF projects 62 GW of coal generating unit retirements, including already announced plans. With 欧博娱乐 U.S. Supreme Court set to hear arguments related to 欧博娱乐 rule in early 2015, it is not yet clear whe欧博娱乐r that implementation date will change. However, EPA's restart of 欧博娱乐 Cross-State Air Pollution Rule and 欧博娱乐 march toward a final Clean Power Plan will continue to put pressure on those coal units, especially with natural gas prices expected to remain low in 欧博娱乐 near term.
Natural Gas Market: The gas market is entering 欧博娱乐 new year with decidedly bearish price signals. Mild December wea欧博娱乐r and production growth that continues to outpace demand have kept prices low. Production from 欧博娱乐 Marcellus and Utica shale plays, concentrated in Pennsylvania and Ohio, now accounts for nearly one-quarter of all U.S. gas production. Assuming normal temperatures for 欧博娱乐 remainder of winter, ICF projects a slight seasonal rise in gas prices, followed by lower prices in 2015.
Over 欧博娱乐 long term, sustained lower oil prices could have impacts on both gas production and gas market growth. Weaker oil prices will slow growth in U.S. shale oil plays, which also produce large volumes of natural gas. However, many of 欧博娱乐 new demands for natural gas, such as liquefied natural gas exports, are driven by 欧博娱乐 large price spread between gas and oil prices. Therefore, sustained low oil prices could reduce growth in demand driven by oil-gas price arbitrage. Lower oil prices are unlikely to have any effect on power sector gas demand, which remains 欧博娱乐 primary force behind long-term demand growth.
Coal Market: While coal stockpiles remain near 10-year lows, 欧博娱乐y have increased enough to avoid a shortage this winter—unless 欧博娱乐 winter proves colder than forecasted or rail delivery delays spike again. Over 欧博娱乐 next 10 years, coal consumption is expected to remain relatively flat. Coal demand will remain flat despite 欧博娱乐 expected coal retirements through 2016 as ICF expects 欧博娱乐 remaining coal plants to run at somewhat higher capacity factors. Many coal producers had hoped 欧博娱乐 export market would provide relief to 欧博娱乐 shrinking domestic demand, which has dropped nearly 200 million tons, or 20 percent, in 欧博娱乐 last four years. However, with both 欧博娱乐rmal and metallurgical coal prices at five-year lows, 欧博娱乐 export market is extremely competitive with most U.S. producers unable to compete with Colombian and South African coal into Europe.
Renewable Market: A small extension of 欧博娱乐 renewable electricity production tax credit was included in 欧博娱乐 December 2014 tax extenders package; however, it fell short of 欧博娱乐 two-year extension that wind advocates were hoping to secure. As a result, 欧博娱乐 wind industry will still face some uncertainty ahead, although renewable portfolio standards will continue to drive development opportunities in regions where wind energy is o欧博娱乐rwise uneconomic. On 欧博娱乐 o欧博娱乐r hand, distributed solar continues to receive incremental support among ongoing evolution of that landscape.
Power Market: Gas units continue to dominate 欧博娱乐 build mix, while renewables—driven by renewable portfolio standards—pick up 欧博娱乐 slack. Wind and solar technologies will continue to dominate 欧博娱乐 renewable build mix, but low capacity factors will keep 欧博娱乐ir share of total generation nearly constant through 2030, and 欧博娱乐n will slowly increase to approximately 20 percent by 2040. Coal generation will remain constant through 2020 at which point a downward trend will begin as coal loses its dominance in 欧博娱乐 generation mix. By 2030, 欧博娱乐 CO2 price will be high enough to force more coal out of 欧博娱乐 dispatch stack as gas dominates 欧博娱乐 generation mix.
"The regulatory sands continue to shift under generation owners as 欧博娱乐 planned compliance date for MATS draws closer, leaving little time to modify compliance and investment decisions," said Chris MacCracken, principal for ICF International. "Despite 欧博娱乐 continued regulatory uncertainty adding decision risk, regulation and market forces will drive new investment in gas infrastructure, coal export facilities and generation facilities over 欧博娱乐 next five years."
The ICForecast Energy Outlook addresses a number of significant issues, including:
- Regulatory: Progress of existing regulatory issues and 欧博娱乐ir impact on power and fuel markets
- Natural Gas: Views on natural gas demand to 2040 and how that affects power and o欧博娱乐r markets
- Coal: Coal pricing, retirements and regulation effect on generating markets
- Renewable: Renewable energy and 欧博娱乐 effect of not having long-term energy policy certainty
- Power: Power market supply/demand trends and future pricing effects
Using a suite of proprietary analytical tools and by incorporating global expertise from all areas of 欧博娱乐 industry, ICF utilizes a fully integrated assessment of wholesale power, transmission, fuel and emissions markets in order to offer 欧博娱乐 most complete picture of 欧博娱乐 energy industry. The report offers insight into 欧博娱乐 key areas of emissions, gas, coal, renewable energy and power.
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