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!
http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2014).pdf.
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!
So what you seem to be saying here is that the EIA is wrong because ... you SAY that they are wrong?
ReplyDeleteI have no idea how to evaluate how right or wrong they are. But to project linearly current advances in renewable technology and rollout is not exactly scientific. Nor is the assumption that better technologies for extracting, processing and using coal won't at the same time make it more competitive in the future.
It's a great myth in the renewable energy community to assume that technology can advance ONLY in the renewable sector, implying that at some point it can overtake the non-renewable sector. That is simply not the case. Remember that renewables like solar and wind are very old technologies themselves, and it's only now that we are making breakthroughs in them? So why might we not expect the same in coal? After all, we are seeing it happen with natural gas? Furthermore, the EIA is likely looking at how difficult an energy transition would be in terms of how fast and how much new renewable capacity can be built, how much coal and gas it depends upon to run effectively (maybe they've read Smil's work) and concluded that despite the improving cost situation for renewables, they simply don't have the ability to make up a large share of our energy sector. But they surely aren't just making stuff up.
I agree that EIA is not making things up. But when it comes to renewable energy capacity/forecasts EIA has been wrong for 10 years and always wrong in one direction--underestimating the capacity and production of renewable energy. In this case, the EIA forecast is missing the huge surge--a real tsunami of solar development--that Duetsche Bank says will install 12,000 megawatts in just 2015 and 16,000 megawatts in just 2016. EIA again is low-balling by a lot what wind will do as well. I certainly hope you are right about technical advances in coal--I support carbon capture and storage technology and a government role in accelerating that technology.
DeleteJohn, The EIA projects natural gas will keep growing and by 2040 production will be 56% higher than in 2012.
ReplyDeleteYou are in PA and you understand fracking. What are your thoughts on the future of natural gas relative to EIA projections?
Thanks, I love your blog!
Unlike the coal and renewable projections, I don't have a specific criticism of it. Of course, any projection that is 20 plus years into the future is almost certainly off and probably by a lot. Thanks for the positive feedback.
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