It is still unclear how new federal and state regulations, taxes, and environmental goals will ultimately affect energy supply, pricing, and decarbonization efforts. At PowerIntel we understand the way to manage risk is to develop model scenarios that encompass the range of future market conditions that are curated by industry experts and updated frequently. Three potential scenarios PowerIntel currently uses to forecast the environmental and economic impact of proposed projects are:
Scenario 1 – Low Regulation
This first scenario incorporates a view of a future with low regulatory hurdles for new thermal resources in the face of growing concerns around reliability. This scenario projects moderate data center and other load growth. Low Regulation reflects a high-cost outlook for natural gas at Henry Hub assuming continued investment in U.S. LNG exports and increased U.S. demand for natural gas. Overnight cost of new generation follows a high-cost outlook for clean technologies to represent potential tariffs on imports. In this case, the Inflation Reduction Act tax credits phase out in the mid 2030’s regardless of the status of U.S. emissions reduction goals, reflecting an unsupportive administration and renewed focus on reliability supported by conventional generation resources.
Scenario 2 – Equilibrium
PowerIntel’s best guess of the future power system is a mix of load growth, continued clean resource investment, and new natural gas resources to support reliability. This scenario considers moderate data center and other load growth. The Equilibrium scenario reflects a moderate cost outlook for natural gas at Henry Hub assuming continued investment in U.S. LNG exports. Overnight cost of new generation is expected to follow a moderate price trajectory and Inflation Reduction Act tax credits will be extended across the modeling horizon assuming the U.S. does not meet emission reduction goals.
Scenario 3 – Infrastructure Expansion
This scenario reflects PowerIntel’s view of a future where states aim to achieve their clean energy goals while meeting demands for high levels of load growth from data centers and other electrification. The Infrastructure Expansion scenario reflects a low-cost outlook for natural gas at Henry Hub assuming minor investment in U.S. LNG exports and decreased U.S. demand for natural gas due to decarbonization efforts. Overnight cost of new generation is expected to follow a moderate price trajectory and Inflation Reduction Act tax credits will be extended across the modeling horizon assuming the U.S. does not meet emission reduction goals.
Energy and environmental regulations and resulting market scenarios can change rapidly due to deregulation, distributed generation, electrification, AI, public policy, corporate decarbonization efforts, and more. PowerIntel’s SaaS data service for Power Industry stakeholders provides mid-to-long-term forecasts designed to be used by developers, owner-operators, energy buyers, sellers and investors to manage risk by using frequently updated forecast scenarios that encompass the range of anticipated market conditions.