The White House release a report yesterday heralding the All of the Above energy policy. Entitled “The All-Of-The-Above Energy Strategy as a Path to Sustainable Economic Growth,” the document seeks to bask in expanded US oil and natural gas production while asserting that policies for energy efficiency and renewable energy are setting the stage for sustainability into the future.
Weirdly, while spending many pages detailing how the Energy Information Agency (EIA) failed to predict accurately fossil fuel trends, the report’s authors failed to highlight that the real-world performance of renewable energy (notably wind and solar) has greatly outperformed baseline forecasts. With the President’s call for more solar energy, highlighting that renewables have been doing so well (in price reductions and speed of market penetration) would seem something strongly support of Administration objectives rather than for something to be ignored in a 42-page White House report.
Amid its 42 pages, there is one element that has already received much attention: a set of graphics highlighting how poor the Energy Information Administration (EIA) forecasting has been on fossil fuel (natural gas and oil) production and US oil demand. The graphic on net imports is one example (see here, here and here for more) of ‘getting it wrong’. The combination of reduced domestic demand and increased production combined for this dramatic reduction in net imports. The shifts from 2006 are from a mix of policy decisions, technological advances, business developments, economic conditions, and societal change.
- Policy decisions have been driving improved efficiency (automobile fuel efficiency standards, building efficiency to reduce oil heating, etc …) along with enabling increased oil production.
- Technological improvements in oil extraction (fracking) have increased production while efficiency measures have driven down demand. Efficiency measures are well beyond ‘just’ improved auto fuel efficiency, but also include increased leveraging of information technology to find more efficient routing of transportation (everything from routing UPS trucks to GPS helping individuals avoid traffic) and to even reduce transit requirements.
- Business developments fosteringlower demand include the above mentioned efficient management to increased internet sales to …
- Poor economic performance drove down demand while continued high global (and US) fuel prices favor conservation, efficiency and substitution.
- Societal shifts include increase social interactions over the internet (gaming,
otherwise) lowering social driving and delayed/reduced securing of drivers’ licenses.
Thus, there are many reasons for the EIA forecasts to have been off by so much. Truly, energy forecasting is a difficult business (excellent discussion here). Going back decades, such ‘errors’ in forecasting would emerge across the board — with a fluctuating from what might be conceived of as over optimistic to overly pessimistic forecasts. Thus, the material in the White House report as to reality not conforming to forecasting when it comes to fossil fuel production and demand is not at all surprising.
What is absent, however, from the White House report’s extensive discussion of forecasting is a discussion of renewable energy. While there have been problems in EIA forecasting when it comes to fossil fuels, a reasonable evaluation of renewable energy forecasting might term it a ‘horrific’ record. Here is material from a 2013 discussion by Lowell Feld, a former EIA employee, EIA Renewable Energy Forecast Isn’t Just Wrong, It’s Wildly, Laughably Too Low:
In 2005, EIA forecast that U.S. solar power capacity would hit about 1.2 GW in 2013. Where are we right now? 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!
For additional perspective, as of the end of March 2014, the United States has 14.8 GW of installed solar capacity. “The U.S. installed 1,330 MWdc of solar PV in Q1 2014″ and put over 500 megawatts of concentrating solar power into production.
In 2005, EIA forecast that U.S. wind power capacity would reach about 9 gigawatts (GW) in 2013. Where, in fact, are we right now? According to theAmerican Wind Energy Association (AWEA), installed U.S. wind power capacity at the end of 2012 was 60 GW. Quick math: EIA’s forecast of 9 GW compared to an actual 60 GW? That’s off by a factor of nearly 7!
We could go on and on with this, but you get the picture: EIA has basically ZERO ability to forecast long-term energy trends even close to correctly.Let me emphasize: it’s not that EIA is off by a just a bit; they’re off by orders of magnitude.In that context, let’s look at their latest long-term “forecasts” for renewable energy.
According to Table A16 (“Renewable energy generating capacity and generation”) in EIA’s latest long-term forecast, the agency expects wind power generation capacity to increase from 59 GW in 2012 to 76 GW in 2020 and 85 GW in 2040. That may seem like a lot, but it’s only an increase of 26 GW over the next 27 years or so. To put it another way, that’s about 1 GW of additional wind power per year through 2040, or total growth of just 44% during those 27 years. Put it this way: EIA must know something that billionaire investor Warren Buffett, who just ordered more than 1 GW of wind turbines (at a cost of $1 billion) doesn’t know. I’d also note that U.S. wind power generating capacity grew 33-fold over the past 15 years (from 1.78 GW in 1997 to 59 GW in 2012). Just between 2007 and 2012, U.S. wind power generating capacity grew nearly four-fold (from 16 GW to 59 GW). Yet we’re supposed to believe that U.S. wind power generating capacity will grow by only 44% over the next 27 years? If you believe that…well, I’ve got a nice, brand-spanking-new coal-fired power plant to sell you! LOL
As for U.S. solar power (including solar PV and solar thermal), EIA forecasts that it will reach about 66 GW in 2040, compared to about 10 GW in 2012. That seems like impressive growth (a 6-fold increase over the next 27 years), except when you consider that solar has grown from just 0.35 GW in 1997 — a 28 fold increase over the past 15 years. I’d also point to the latest Greentech Media short-term forecast for U.S. solar PV installation, which indicates a rapid acceleration in solar PV additions over the next few years (4+ GW in 2013, 5.5 GW in 2014, nearly 8 GW in 2015, and over 9 GW in 2016). That growth alone adds up to nearly 27 GW of solar, just by 2016, with the growth curve accelerating upwards.
Again, the United States is already at nearly 15 GW of solar. And, if the first quarter solar pv installations (without even the concentrating solar projects) continue on pace through the year (even though it is on a rapid acceleration path), the United States will see about 5.4 gigawatts of PV installations or over 30% more than what Greentech predicted just 18 months ago.
Earlier this year, a group of CleanTechnica readers worked together to prepare/send a serious letter to Ernest Moniz, Secretary of Energy, about this. The (well worth reading) letter’s url title horrible EIA forecasts:
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.
PV Solar installations stop in 2016 and do not resume for 12 years and even then at a rate significantly below current rates.
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.
Again, energy forecasting is a difficult business.
The White House is right — EIA got it wrong (for lots of reasons) when it came to forecasting polluting energy’s future path.
However, EIA has been (very consistently) getting it wrong to a much greater extent and in a consistently negative way when it comes to valuing energy efficiency and renewable energy (EE/RE).
If the White House report were truly about a “sustainable economic growth,” then the EE/RE problems merited highlighting and serious discussion as well.
This is a rich field of research. For those interested, here are a few valuable resources for learning more about the issues of US energy forecasting.
- Roger H. Bezdek1 and Robert M. Wendling, A Half Century of Long-Range Energy Forecasts: Errors Made, Lessons Learned, and Implications for Forecasting (pdf), 2012
- Steve Yetic and Lowell Feld, Why Energy Forecasting Goes Wildly Wrong, 2013
- Energy Information Administration Annual Energy Outlook Retrospective Review.