ICF International ICFI -1.73% , a leading provider of consulting services and technology solutions to government and commercial clients, has released its Integrated Energy Outlook for the second quarter of 2011. The study highlights the near-term impacts of global economic recovery on U.S. energy markets and examines the implications of lower CO2 prices on the long-term energy outlook.
The Energy Outlook notes that the Environmental Protection Agency (EPA) has released proposals for the Clean Air Transport Rule (CATR), the Air Toxics Rule, coal combustion residuals, and cooling water intake structure standards. Although the combined impact of the rules remains uncertain, the regulations could lead to up to 40 GW of coal plant retirements in the next decade. Contrary to some projections that indicate environmental regulations will severely impact U.S. coal production, ICF projects that U.S. coal production will be maintained at more than 1 billion tons per year in the long-term despite the projected retirement of nearly 40 GWs of coal-fired electric generation in response to new environmental regulations and relatively low natural gas prices. The study also finds that increasing demand for renewable energy credits (REC) along with the loss of key federal incentives will cause REC prices in eastern states to rise sharply over the next 15 years. Similarly, California will fall short of the state's bundled interim requirements through 2016, maintaining upward pressure on delivered REC prices.
ICF's Integrated Energy Outlook addresses a number of significant issues, including:
-- How the new EPA proposed rules might impact the industry.
-- How natural gas prices will respond in the face of increased shale gas production.
-- Whether on-peak energy prices continue to recover and return to 2008 levels in the near future.
-- How rising renewable requirements will affect REC prices in regions throughout the U.S.
Using a suite of proprietary analytical tools, ICF has fully integrated assessment of wholesale power, transmission, fuel, and emissions markets in order to offer the most complete picture of the energy industry. By incorporating global expertise from all areas of the industry, the Outlook is able to provide big picture insights about these volatile energy markets, as well as market-specific projections and forecasts. For example, the Outlook shows a significant shift, driven by expected carbon controls, to renewables and natural gas, which will dramatically affect wholesale power competitive landscape.
The Outlook offers insight into the key areas of emissions, gas, coal, renewable energy, and power:
Emissions
-- How state/regional SO2 and NOx markets will evolve under EPA's new CATR.
-- How many coal units will retire and how many will spend the capital needed to comply with hazardous air pollutants maximum achievable control technology (MACT) requirements.
-- What new capacity will be built to replace retired capacity and meet growing demand.
-- How the MACT requirements will interact with pending ash and water regulations.
-- The possible directions for CO2 regulation and its potential impact on control/retire decisions.
Gas
-- How current trends in demand will shape the market.
-- How basis differentials are developing given regional supply development and pipeline projects.
-- How shale gas production will change the future of the gas market and how environmental concerns might impact this.
Coal
-- Whether eastern coal prices continue to increase.
-- Whether coal exports continue expanding, transforming the U.S. into a major player in global coal markets.
-- How environmental regulations will shift production and consumption trends.
Renewable Energy
-- How activity in California's new tradable renewable energy credit market will affect prices for bundled RECs in the state.
-- How REC prices in PJM will respond to sharp increases in renewable energy demand over the next decade.
-- Whether offshore wind will provide meaningful contributions towards meeting the New England renewable electricity requirements.
Power
-- Whether the 2010 energy price recovery will be sustained.
-- The regional outlook for on-peak spark spreads.
-- How much environmental policies affect regional price differences.
Additional projections include:
-- Emissions--Allowance prices for federal cap and trade programs (CO2, NOx, and SO2); national pollution control installations, including CCS deployment; CO2 emissions abatement by sector; domestic and international emission offset demand.
-- Gas--Regional gas production and consumption; delivered prices; basis differentials and pipeline capacity and flows.
-- Coal--Minemouth prices for nine common U.S. marker coals and three international coals; delivered prices to major power hubs; coal production by region; imports and exports; multi-sector coal consumption; coal distribution.
-- Renewable Energy--REC prices for California, aggregate REC prices for PJM and NEPOOL; renewable generating capacity additions; renewable energy supply and demand forecasts.
-- Power--Peak power prices for five major trading hubs.
For more information regarding the second quarter release of ICF's Integrated Energy Outlook, please register for our webinar, scheduled for Tuesday, July 12th: http://www.icfi.com/energywebinar .
For more information:
ICF International: http://www.icfi.com ICF Energy Overview: http://www.icfi.com/energy ICF Integrated Energy Outlook: http://www.icfi.com/energyoutlook
About ICF International
ICF International ICFI -1.73% partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment and transportation; health, education, and social programs; and homeland security and defense markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, 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 3,700 employees serve these clients worldwide. ICF's Web site is www.icfi.com.
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