The Energy Information Administration is out with its preliminary 2014 Annual Report that features numerous projections about America's energy future through 2040. It's a fun read but be careful!
Be especially careful about the EIA's market share projections for coal-fired and renewable energy electricity. The EIA projects that coal generation's market share will modestly decline over the next 27 years from 39% in 2013 to 34% in 2035 and 32% in 2040.
As a point of comparison, remember that coal's market share fell from 48% to 37% from 2008 to 2012.
Also, the EIA forecasts that renewable energy's market share will increase minutely from 12% in 2012 to 16% in 2040. Yet, renewable energy will provide about 14% of the nation's electricity this year. And so, the EIA projection would be right if renewable energy's market share increases just another 2 percentage points in the next 27 years.
To summarize, according to the EIA, coal will lose just 5 percentage points of market share from 2013 to 2035, and renewable energy will gain just 2 percentage points of market share from 2013 to 2014. I think not!
While both almost are certainly wrong, the renewable energy forecast is close to silly. It fails to reflect the astonishing solar tsunami that is already building the equivalent of more than one nuclear plant per year and soon will be equal to 2 to 4 new nuclear plants annually. Wind too will more than double almost certainly over the next 25 years.
Why are wind and solar skyrocketing? Federal and state policies are favorable. But both wind and solar now are economically competitive in large areas of the country, and their prices are still falling, while fossil fuel prices are volatile, with the price of natural gas likely to rise in the short, medium, and long terms.
As for EIA's coal market share projection, the EIA likely underestimates coal's loss of market share over the next 27 years. Why? In part, because the EIA gets so wrong the increase in renewable energy generation, and because the EIA underestimates the economic pressures on coal generation in competitive generation markets.
Both EIA's renewable energy and coal market share projections are wrong, very wrong, but the EIA's renewable energy forecast is most wrong of all!