Why EIA’s Renewable Energy Projections Do Not Pass SUN DAY Campaign’s “Laugh Test” — And Why That Matters

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The SUN DAY Campaign refutes the latest renewable electricity generation projections from the U.S. Energy Information Administration. The projections, the Campaign says, are far too conservative, and that could adversely affect investment in solar and other renewables.

 

Today, the U.S. Energy Information Administration (EIA) released its renewable electricity generation projections as part of its Annual Energy Outlook – 2014 (AEO2014). The SUN DAY Campaign, a nonprofit research and educational outfit promoting sustainable energy, issued a press release about the projections today, saying they range from “laughable” to “too conservative.” Casting further doubt on the new report, the projections contradict previous EIA statements.

 

Why do these projections matter? Ken Bossong, Executive Director of the SUN DAY Campaign, said it well in today’s press release: “Unrealistically low forecasts provide ammunition for those arguing that investments in renewable energy are not cost-effective and that new fossil fuel and nuclear construction is necessary because renewables cannot meet the nation’s future energy needs. As such, EIA’s projections can have multiple adverse impacts on the renewable energy industry as well as on the nation’s environmental and energy future.”

 

EIA projections

 

EIA expects renewable electricity generation in the U.S. to grow by 69% from 2012 to 2040. That includes a large 140% generation increase for non-hydropower renewable energy sources.

 

This scenario is based on a “reference case.” EIA notes that for non-hydropower renewable energy sources, the projections vary widely depending on the assumptions set. Cost, policy, and general economic conditions can greatly affect power sources like solar. Therefore, EIA has set forth a number of possible scenarios in addition to the reference case.

 

According to the SUN DAY campaign, all the scenarios are too conservative.

 

In their press release, the campaign pointed out that the reference case has non-hydropower renewables at only 16% of U.S. total electricity generation in 2040, well behind the natural gas and coal shares of 35% and 32%, respectively. Two other scenarios, “Low Economic Growth” and “High Oil and Gas Resource,” come up with even lower rates.

 

The SUN DAY Campaign asserted in the press release that “these projections do not pass the laugh test.”

 

Even in EIA’s “No Sunset” and “GHG25” cases, renewables account for just 24% and 27% of total electricity generation in 2040. The SUN DAY Campaign gives these projections credit for being higher than what the EIA has offered in the past. But even these, the Campaign says, “will also almost certainly prove to be unduly conservative.”

 

Reasons why EIA projections are off

 

What is that claim based on? According to the press release, it’s based on the actual growth rates for renewable energy sources over the past decade, multiple other studies — and significantly, “even analyses from EIA itself.”

 

The Campaign’s conclusion? “It is likely that renewables will comprise a much larger share of the nation’s electrical generating supply by 2040 — perhaps two, three or more times higher than the Reference case level forecast by EIA.”

 

More details for challenging the EIA projections:

 

  • EIA’s own published data for the 11-year period January 1, 2003 – December 31, 2013 show that U.S. renewable energy generation has gone from less than 9% in 2004 to nearly 13% in 2013. With recent growth and declining costs for renewables, the SUN DAY Campaign finds it unlikely that it will take another 27 years to grow from 13% to 16%.  

  • To go from 13% in 2013 to 16% in 2040, renewables would only need to expand their current share of the electrical-generation supply by about 0.1% per year. In fact, renewables have expanded their share by an annual average of 0.4% for the past decade. Even EIA’s most recent Short-Term Energy Outlook suggests an annual expansion rate closer to 0.3%.

  • An analysis issued on April 15 by the SUN DAY Campaign suggests that if the trends reflected in EIA data from the past decade continue, renewable energy sources could increase to as much as 13.5% of net U.S. electrical generation in 2014, 14.4% in 2015, and 15.3% in 2016 — and reach or exceed 16.0% no later than 2018. Other recent analyses suggest an even faster growth rate for renewables.

  • Renewables are dominating new electrical generating capacity. According to the Federal Energy Regulatory Commission (FERC), renewables provided 47% of new electrical generating capacity in 2012 and 2013 combined. In Q1 2014, renewables accounted for 92% of new electrical generating capacity. And SNL Financial recently reported that renewables now account for over 56% of new generation capacity under development.

  • EIA has been made previous statements that contradict these new projections. For example, EIA recently reported that over the past four years, U.S. solar capacity increased by 418%, now accounting for almost 1.13% of total U.S. electric generating capacity.

  • Secretary of Energy Ernest Moniz recently said, “In the last four or five years, we have seen a doubling of wind and solar. We expect another doubling over the next several years…. we are looking by 2030 to having a very, very large fraction of our capacity in wind, solar and other renewables …  30 percent, 40 percent.”