EIA Outlook 2019: The ‘Extremely Conservative’ Case for Renewables Growth

The U.S. Energy Information Administration last week published the national authorities 's annual permanent energy outlook report. Top-level items focused on the slumping production of U.S. petroleum and natural gas, and also the EIA anticipates will create the U.S. a net energy exporter in 2020. In contrast, EIA's clean energy growth projections were far more modest.

The U.S. has not exported more energy than it elevates in 70 years. The change is due mostly to a huge growth in crude petroleum and natural gas production from the U.S., as well as individuals consuming less energy.

Furthermore, while the Annual Energy Outlook 2019 suggests accelerated expansion in renewable energy electricity generation in the brief term, it paints an amazing picture of the long-term expansion for renewables from the U.S. The EIA projects solar and, in particular, end growth will burn while natural gas is anticipated to continue to rise as the major source of generation from the U.S.

But energy analysts and specialists say the authorities ’s projections are overly conservative in certain places, along with the outlook doesn’t take into consideration a selection of government policy obligations around the evolution of solar and wind generation, or the anticipated uptake in electric vehicles.

“This can be a view of a planet where there aren’t any new policies at any degree and where technology fail to improve in the ways they've been advancing for decades so far,” stated Daniel Cohan, an associate professor of environmental engineering at Rice University.

“EIA supposes its mandate is to examine status quo policies and with the premise that each and every mayor, governor, EPA administrator and president from now until 2050 sits on their hands and doesn't enact policy,” Cohan explained. “That's that which they see as their own mandate. They create conservative — probably conservative — assumptions concerning how energy technology will improve over time. ”

Near-term renewables growth

Digging into the numbers, in the brief term, the EIA expects that renewable energy generation from solar and wind will be the fastest-growing origin in the U.S. over the subsequent two years.

EIA estimates that creation from utility-scale solar will rise by 17% in 2020, and by 10% in 2019. Wind will increase by 14 percent over the subsequent two years and 12% . Renewables are projected to surpass coal in overall power-sector generation over the upcoming few years.

A struggle for renewables from the EIA projections is their expansion is driven by national tax credits, which have already been permitted to lapse every few years before Congress extends themaccording to Steve Clemmer, manager of energy research and analysis together with the Union of Concerned Scientists (UCS).

“When EIA has completed their modeling over the yearsthey’ll presume anything the law is for the tax credits,&rdquo.

Clemmer explained that the report signals a realization that renewables will be a major source of U.S. energy production in the long run, but he explained a much more competitive climate policy is needed to encourage investment in renewable energy and other low-carbon technology to curtail the worst possible impacts of climate change.

Back in December 2015, Congress passed a five-year extension of the Production and Investment Tax Credit for wind and solar. The UCS advocated for Congress to continue passing philosophical extensions of their tax credits to permit renewable expansion to keep with momentum and drive down costs further.

“We've have grown appreciably, Congress has extended the tax credits a few times and that's provided a boost to renewables,” said Clemmer. “But it s created a bit of a boom-and-bust cycle. The industry has built a great deal of right out then there ' s been a lull, when the tax credits have died, then following the credits get extended, development picks up. ”

Carbon dioxide emissions

EIA projects that carbon emissions from burning coal and oil will decline from the U.S., but overall emissions will level off from an increase in natural gas.

“One reason why emissions from the energy sector are actually leveling out from the EIA's prediction is since the U.S. is building out a great deal of gas. A number of the atomic is retiring; a number of these coal is retiring; however the addition of gas and renewables is still not enough to drive down emissions,” Clemmer stated.

Though other analysts are still bullish about the long term possibility of wind generation, the EIA is not, and it projects the building of new wind farms will slow by the mid-2020s. New offshore wind capability is practically nonexistent.

“They expect that nearly no wind farms will soon probably be added when the end Production Tax Credits phase down, and that we will never make an offshore wind industry,”  Cohan explained.

This doesn’t look likely, he explained. Last year, the Interior Department started a process to permit companies to lease waters in the Pacific Ocean for large scale wind farm projects off California’s coast, and utilities and regulators need these new projects to generate energy within the next five years. Last month, New York Governor Andrew Cuomo proposed nearly quadrupling offshore wind in the nation by 2035.

Clemmer and Cohan said that EIA’s forecasts for solar expansion seem for the industry, with linear expansion over the next 3 decades.

One reason for this is the current Investment Tax Credit for solar is set at 30 per cent, but it’s not going to go away. Rather, it will creep down to some permanent 10% tax credit. “When you combine that with the cost reductions we've seen for solar panels energy, the EIA is projecting that solar is going to be cheap, and they're throwing continued deployment of solar energy,” Clemmer stated.

Electric vehicles (hardly ) see an uptick

EIA projections show only a small uptick together with conventional gas-powered cars much outselling EVs into mid century. In years past EIA has projected that electric vehicles will see use than gas-powered alternatives.

This prediction comes despite the fact that EV sales increased by 81 percent last year, driven with a massive bulge in the selling of both Tesla’s Model 3.

“It is shockingly forecast that is unrealistic that they expect there to remain a gap between the Expense of electric cars and gasoline automobiles, diesel trucks and electric trucks,” Cohan stated.  

Skewing policy arguments

Conservative projections in the EIA are not a new phenomenon, nor an expression of Trump government policies to bolster fuel sectors. But the conservative quotes do pose an issue, because the national report might skew cost estimates of chasing clean energy technology during policy debates.  

“In the face of rapid and uncertain technological changes, we need models even more as decision-support tools. However, those models must be updated to capture key changes in techno-economic forces in each sector,” Jesse Jenkins, an energy consultant and Harvard-affiliated energy specialist, wrote on Twitter.

“EIA's Annual Energy Outlook isn't used in an exploratory manner and their. . .model isn't sufficient for modeling our changing landscape, particularly in the electricity sector,” he explained.

Analysts were quick to point out the daylight involving other long-term quotes and the EIA’s projections, which don’t include commitments made by international leaders as part of their Paris climate arrangement .

The International Energy Agency, by way of instance produces two scenarios that seriously look at the Paris Agreement. Even the gas and oil businesses include such scenarios in and there’s a quick uptake of renewable energy production and electric automobiles.

&ldquoWe've seen wind and solar which the businesses have undergone significant cost reductions on the order of 60 to 75 percent over the last ten years,” Clemmer stated. “And I feel the EIA has had difficulty keeping up with these gains. ”

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