http://www.resilience.org/stories/2016-03-14/renewable-energy-growth-blows-eia-forecasts-out-of-the-water-again
[links in on-line article]
Renewable Energy Growth Blows EIA Forecasts Out of the Water, Again
Another year, another U.S. Energy Information Agency (EIA) assessment
report that makes the agencies own forecasters look foolish.
In the latest Electric Power Monthly report, which covers all twelve
months of 2015, the EIA revealed that renewable energy sources accounted
for nearly 13.5-percent of the nation’s utility-scale electrical output.
This is up by more than 2-percent over 2014. But get this: less than
three months earlier, in the “Short-Term Energy Outlook,” the agency
predicted “total renewables used in the electric power sector to
decrease by 1.8% in 2015.”
The EIA’s record for long-term forecasts is no better. In fact, it’s
consistently worse.
As Ken Bossong, Executive Director of the SUN DAY Campaign, recently
pointed out, the agency’s “Annual Energy Outlook 2012” forecast that
non-hydro renewables would provide about 250,000 thousand megawatt-hours
of electricity by 2015. The new EIA tallies put that figure at over
300,000 thousand megawatt-hours, roughly 20-percent higher than
predicted. (You could more simply state this as the 300,000 gigawatt
hours actually produced in 2015 is 20-percent higher than the 250,000
gigawatt-hours predicted, but for some reason, the EIA likes to use the
clunky “thousand megawatt-hours” factor.)
“Just a few years ago EIA had forecast that renewables might provide 15%
of the nation's electricity by 2035,” said Bossong. “It now appears that
goal could be reached within the next two years and quite possibly sooner!”
This isn’t the rare instance of the EIA getting something wrong. Rather,
it’s something of an annual tradition. Consider these examples, taken at
random (and culled from links I’ve bookmarked over the past few years
under the tag, “EIA wrong”):
“In 2009, the federal government’s Energy Information
Administration made a forecast for the next two decades: U.S. wind power
would grow modestly, reaching 44 gigawatts of generating capacity in
2030, while solar power would remain scarce, inching up to 12 GW. Just
six years later, U.S. wind capacity is already up to 66 GW, and solar
has shot up to 21 GW. There's now enough installed wind and solar to
power 25 million American homes— more than three times what the EIA
expected before President Obama took office.” Michael Grunwald in Politico
“In 2005, EIA forecast that U.S. solar power capacity would hit
about 1.2 GW in 2013. Where are we right now [in 2013]? According to
Greentech Media, the U.S. is closing in (if it already hasn’t passed)
the 10 GW mark in solar PV capacity right about now, and that’s not even
counting solar thermal power generating capacity (according to this
article, you can add another 1 GW or so of U.S. solar thermal power
capacity). In sum, EIA forecast 1.2 GW of U.S. solar power capacity in
2013; the actual figure is around 11 GW – nearly 10 times higher than
EIA forecast!” Former EIA employee Lowell Feld, in 2013.
“The report this year [2015] predicts that by 2040, the U. S. will
have added only 48 gigawatts of solar generating capacity. The Solar
Energy Industries Association (SEIA) expects that the industry will add
half of that by the end of 2016. “ Samantha Page in ThinkProgress
In an update on June 2015, the EIA projected that the cheapest
solar deployed in 2020 would cost $89 / mwh, after subsidies. That’s 8.9
cents / kwh to most of us. (This assumes that the solar Investment Tax
Credit is not extended.)…How has that forecast worked out? Well, in
Austin, Greentech Media reports that there are 1.2GW of bids for solar
plants at less than $40/mwh, or 4c/kwh. And there are bids on the table
for buildouts after the ITC goes away at similar prices. Ramez Naam
So why does this matter? That predictions about something as complex as
energy markets are always wrong shouldn't come as much of a surprise.
Yet, as Jeff Deyette, an analyst with the Union of Concerned Scientists,
told ThinkProgress about the EIA forecasts, “real policies are being
designed around these assumptions.”
This becomes particularly troubling when the assumptions consistently
favor investment in fossil fuels, and shortchange the potential of
renewables.
Steve Yetiv and Lowell Feld break it down further in an important
article for the Journal of Energy Security called, “Why Energy
Forecasting Goes Wildly Wrong.”
Why does any of this matter, and why should any of us care if
energy forecasts are off base most of the time? To the extent that
policymakers believe erroneous forecasts, they can make wildly incorrect
policy choices. For instance, if they believe that oil prices will
remain far lower in the future than is the case, their forecasts will
undermine efforts to conserve or to switch to alternatives. Why would
nations, businesses, entrepreneurs, and individual consumers take such
steps if oil prices are predicted to remain low? At a minimum, this will
be one factor working against conservation and movement away from fossil
fuels.
Crucially, these forecasts are used by governments to guide
policymaking. And this goes all the way to the top.
As Lorne Stockman notes, “The White House’s key energy policy document
cites the EIA’s oil demand forecast, and its outlook for steady oil
demand decades into the future, as the basis for the latest round of
lease sales in the Outer Continental Shelf, which includes areas in the
Atlantic Ocean offered for the first time in decades together with new
areas made available north of the Arctic Circle in the Chukchi Sea.”
Two years ago, a group of CleanTechnica readers were so alarmed by the
EIA's 2014 Annual Energy Outlook, they wrote a letter to the Secretary
of Energy suggesting that the forecasting and reporting methods and
models be overhauled.
We also feel that the EIA has made thousands of forecasts in the
past which never seem to be publicly visited again, for example in the
2010 AEO it was forecast that we would reach 0.45 GW of solar PV on the
grid by 2035, in November 2013 we reached 7.11 GW according to the FERC.
Surely, in making new predictions it would be appropriate for the
EIA to address how their models could produce a 25 year forecast which
has already been surpassed 16 times over in less than 3 years. What
changes have been made to the models to improve this terrible
forecasting record? If none, then should the renewable forecasts come
with a disclaimer that they are highly unreliable and have a history of
massive underestimation of renewable growth, surely burying them deep in
the data of the report is not an appropriate strategy.
Solar and wind trade groups are also outspoken about the need to reform
the EIA's outlooks.
“All forecasts are going to be inaccurate. What is concerning is when
you see consistent systemic bias in your projections from EIA,” said
Michael Goggin, of the American Wind Energy Association. “There seems to
be consistent bias in EIA's projections against renewable energy, and
that's a different thing from being inaccurate.”
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