ICForecast Energy Outlook Projects 30GW of Unannounced Coal Unit Retirements by 2020 with CO2 Regulation
02 April 2015 - 4:30AM
Business Wire
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
the second quarter of 2015. This study highlights the 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.
“Decisions still have to be made as the energy sector awaits
final rules, adapts to international fuel markets, and looks
forward to changing demand dynamics,” said Chris MacCracken,
principal for ICF International. “Decisions on EPA’s Mercury and
Air Toxics Standards (MATS) and the Clean Power Plan this summer
should firm retirement decisions in the near term.”
Regulatory Issues: Regulatory uncertainty still rules the
day for many power generation owners. EPA is working through the
nearly four million comments received on the Clean Power Plan
proposal and will finalize the rule this summer. While the specific
standards and timing may change as a result of that feedback, the
primary questions still persist around the approaches that states
will take to achieve compliance and how the rule will fare against
legal challenges. With EPA’s MATS rule due before the U.S. Supreme
Court soon, many coal-fired generation units have both near- and
long-term regulatory uncertainty to struggle with in deciding to
control and operate or retire. ICF projects coal-fired generation
as a whole to remain fairly steady through 2025, despite the
projected retirements because of MATS and a future with CO2
regulation.
Natural Gas Market: Despite colder-than-normal weather
throughout the U.S. East Coast, natural gas prices have been
relatively low and stable this winter, with Henry Hub prices
averaging just over $3 per MMBtu from December 2014 through
February 2015. Prices have remained low in spite of high winter
demand because of continued robust growth in gas production, led as
usual by the Marcellus and Utica shale plays, which are
concentrated in Pennsylvania and Ohio. Since December 2014,
production from the Marcellus and Utica plays has risen by nearly
one billion cubic feet per day. Prices are likely to trend downward
over the next 12 to 24 months, as production growth continues to
outpace demand.
Coal Market: Coal deliveries have kept pace with demand
despite cold temperatures on the U.S. East Coast. Over the next 10
years, coal consumption is expected to remain relatively flat, but
still down 15 percent from the last five years. Coal consumption
might increase somewhat through 2020 if natural gas prices trend
into the $5.50 per MMBtu range. However, coal consumption would
then fall back to current levels as the CO2 policy comes into
play.
Renewable Market: More than six gigawatts (GW) of wind
projects are expected to become operational in 2015. These are
projects that began construction by the end of 2013, in order to be
eligible for the Production Tax Credit. Despite the loss of such
tax credits, renewable portfolio standards will continue to drive
development opportunities in regions where wind energy is otherwise
uneconomic. On the other hand, solar photovoltaics (PV)
installations continue to grow at faster rates, owing to falling
installation costs, coupled with strong federal and state
incentives. The lowering of the Investment Tax Credit in 2017 will
lead to a rush in solar PV development in 2015 and 2016.
Power Market: Low gas prices paired with impending
regulatory requirements continue to drive coal retirements, paving
the way for gas-fired generation while putting wind in the sails of
renewables. ICF projects nearly 60 GW of coal retirements from now
through the end of 2020, split between announced retirements and
model projections as a result of existing regulations and assumed
requirements on CO2. Gas-fired units are expected to build their
share of total generation at the expense of coal, reaching 38
percent share by 2030 as compared to coal’s 29 percent share. This
growth is driven by additions of nearly 150 GW of new gas-fired
capacity by 2030. New renewable capacity makes up the bulk of the
remaining additions, with approximately 70 GW added by 2030.
The ICForecast Energy Outlook addresses a number of significant
issues, including:
- Regulatory: Progress of existing
regulatory issues and their impact on power and fuel markets
- Natural Gas: Views on natural
gas demand to 2040 and how petroleum market supply/demand dynamics
impact natural gas
- Coal: Coal pricing, retirements
and regulation effects on generating markets as well as the outlook
for coal exports
- Renewable: Renewable energy and
the 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 the industry, ICF
utilizes a fully integrated assessment of wholesale power,
transmission, fuel and emissions markets in order to offer the most
complete picture of the energy industry. The report offers insight
into the key areas of emissions, gas, coal, renewable energy and
power.
For More Information
- ICForecast Energy Outlook
- ICF Energy
About ICF International
ICF International (NASDAQ:ICFI) partners with government and
commercial clients to deliver professional services and technology
solutions in the energy, environment, and infrastructure; health,
social programs, and consumer/financial; and public safety and
defense markets. The firm combines passion for its work with
industry expertise and innovative analytics to produce compelling
results throughout the entire program lifecycle, from research and
analysis through implementation and improvement. Since 1969, ICF
has been serving government at all levels, major corporations, and
multilateral institutions. More than 5,000 employees serve these
clients from more than 70 offices worldwide. ICF's website is
http://www.icfi.com.
Caution Concerning Forward-looking Statements
Statements that are not historical facts and involve known and
unknown risks and uncertainties are "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
Such statements may concern our current expectations about our
future results, plans, operations and prospects and involve certain
risks, including those related to the government contracting
industry generally; our particular business, including our
dependence on contracts with U.S. federal government agencies; and
our ability to acquire and successfully integrate businesses. These
and other factors that could cause our actual results to differ
from those indicated in forward-looking statements are included in
the "Risk Factors" section of our securities filings with the
Securities and Exchange Commission. The forward-looking statements
included herein are only made as of the date hereof, and we
specifically disclaim any obligation to update these statements in
the future.
ICF InternationalErica Eriksdotter, +1
703-934-3668erica.eriksdotter@icfi.com
ICF (NASDAQ:ICFI)
Historical Stock Chart
From Mar 2024 to Apr 2024
ICF (NASDAQ:ICFI)
Historical Stock Chart
From Apr 2023 to Apr 2024