The Department of Energy’s Energy Information Administration (EIA) is about to release it’s annual energy outlook (AEO). AEO2021 provides forecasting about the U.S. energy and carbon emissions future in light of COVID19 impacts. Regrettably, as with so much of EIA’s forecasting, there is one thing with know with certainty before reading more than the promotional release statement: EIA is WRONG!
Now, first off, perfectly accurate forecasting really isn’t the relevant target but instead a reasonable objective is forecasting that helps decision-makers (of all natures and levels) understand factors influencing future developments and how they might shape or drive them. To a certain extent, EIA’s work has been useful in this fashion. Useful with, however, serious caveats. Through a rigorously consistent pessimism about future clean energy market penetration (always slower and smaller than what has actually occurred) and about prices (too slow decline, too high price), EIA has been telling decision-makers ‘don’t count on renewables to be economically viable competitors to fossil fuels for many years/decades to come (if ever). E.g., EIA’s highly pessimistic forecasting actually has been having (based on analytical discussions with government, private industry, and other strategic planners and decision-makers) a negative impact on the potential future deployment and price declines of renewable energy options. One might say: an effort to create a self-fulfilling prophecy?
In any event, as to AEO2021, what do we know is simply “wrong” based just on the announcement of its release?
- The baseline scenario has U.S. emissions increasing from 2035 through 2050. This will not happen.
- AEO2021 forecasts renewable energy to be 60 percent of the additions to the power (electricity) sector through 2050. This seriously understates what will occur.
- Note: EIA forecasts wind and solar to be 70 percent of capacity additions to the grid in 2021. As renewables, with every passing day, gain price advantages over polluting energy sources, it is laughable to forecast that the share of renewables in new electricity generation will decline over time.
- Coal remains a meaningful portion of the U.S. power sector indefinitely. This will not be the case … likely with phase out of existing coal power plants essentially complete by 2035.
As has been discussed ad infinitum, there are many reasons for bad forecasting from EIA (and others) — some quite understandable and legitimate even as correctable and addressable. It is frustrating, however, to yet again be looking to open an EIA product with the accurate framing being “EIA is wrong”.
Notes
There is much good work out there related to faulty EIA (and IEA and …) forecasting. I would strongly recommend looking to Ramez Naam’s substantive and impassioned analyses, for example his May 2020 Solar’s Future is Insanely Cheap. Ramez cites and links to many others (such as Auke Hoekstra) who have been fighting for better forecasting from the world’s energy analytical institutions.
Related posts here include:
- During #ClimateWeek, @EIAgov doubles down on forecasting climate catastrophe
- New EIA forecast subtitled: We are EFFed …
- Buried in @WhiteHouse staff report: Energy Information Administration planning for a 6C future
- Department of Energy’s “Annual Outlook 2015” is out: what do we know w/out reading it?
- .@WhiteHouse makes clear that @EIAgov does lousy fossil fuel forecasting, ignores that its #Solar and #Wind forecasting even worse
- When it comes to renewable energy forecasting, Japan’s forecasting follows world lead
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