On March 3, the Bipartisan Policy Center hosted the announced release of the U.S. Energy Information Administration’s Annual Energy Outlook (AEO) 2022. This much-anticipated report describes EIA’s unbiased view of energy markets reflected in several core scenarios performed using the National Energy Modeling System (NEMS), a complex energy model of U.S. supply and demand created and maintained by EIA. The core scenarios include a reference case and several alternative scenarios that provide insights into potential changes in energy markets resulting from a range of assumptions about future oil prices, oil and natural gas resources, macroeconomic levels, and renewable costs. The reference case this year also includes the potential effects of select provisions from the recently passed Infrastructure Investment and Jobs Act (IIJA) including the Civil Nuclear Credit Program, the Strategic Petroleum Reserve drawdown and sales, and overall increased government spending related to the Act.
The release of the AEO each year provides OnLocation with new opportunities for using the latest AEO reference case and scenarios as well as the updated NEMS model as the basis for exploring alternative energy policies and technologies for both government and private clients. The AEO scenarios and model assumptions reflect existing energy and environmental laws, the current slate of technology options, and historical trends in consumer choice and behavior. These scenarios do not predict what will happen but instead reflect what could happen if current laws and trends remain the same in the future. This provides an excellent starting point to explore the impact of new policies and technologies for our clients by changing the underlying assumptions and comparing the model results to the AEO “business as usual” scenarios. Our consultants are uniquely qualified to perform a wide range of energy and environmental scenarios including:
- Additional IIJA provisions related to CO2 capture, transport and storage;
- CO2 mitigation scenarios such as clean electricity standards or the Administration’s net zero climate goals;
- Expanded tax incentives to support clean technologies such as electric vehicles, renewables, or CO2 capture technologies;
- Efficiency standards for light- and heavy-duty vehicles;
- Restrictions on domestic oil and gas production; and many more.
For each project, OnLocation consultants work with clients to determine the best approach to meet their needs, including designing and implementing model scenarios, customizing the model with new capabilities, and presenting scenario results and insights. We also perform research and supplemental spreadsheet analyses to support these modeling services and assist our clients in solving their energy questions. To learn more, download our free Services Guide.
OnLocation has a long history with EIA and the NEMS model. Since NEMS was created, we have worked closely with EIA to provide NEMS modeling support ranging from model design and development activities to data updates to operational services. Our modeling experts have made major updates and improvements to many of the modules of NEMS, especially to the Electricity Market Module (EMM) and Liquid Fuels Market Module (LFMM). We also built new submodules for use in NEMS, including the CO2 Transport, Utilization, and Storage (CTUS) Module that builds out an optimal pipeline network for transporting and storing captured CO2 and the Renewable and Electricity Storage (REStore) Module that performs an hourly dispatch of electricity storage and variable renewable generation. See our recent blog to learn more about the REStore model’s design and implementation using the AIMMS modeling platform.
For more information about the NEMS model and integrated energy modeling, visit our website and read our NEMS blogs that provide answers to common questions about the model including its capabilities and limitations, the cost of a model run, and the time it takes to perform model scenarios.