The U.S. Energy Information Administration (EIA) is out today with its 2016 International Energy Outlook, and there's a lot to chew on. Here are a few, initial highlights that jumped out at us.
- EIA has clean energy growing relatively rapidly, particularly compared to its previous forecasts. "Renewables are the fastest-growing source of energy for electricity generation, with average increases of 2.9%/year from 2012 to 2040. Nonhydropower renewable resources are the fastest-growing energy sources for new generation capacity in both the OECD and non-OECD regions. Nonhydropower renewables accounted for 5% of total world generation in 2012; their share in 2040 is 14% in the IEO2016 Reference case, with much of the growth coming from wind power. After renewable energy sources, natural gas and nuclear power are the next fastest-growing sources of electricity generation."
- Among clean energy sources, EIA has solar growing at the fastest rate through 2040. "Solar is the world’s fastest-growing form of renewable energy, with net solar generation increasing by an average of 8.3%/year. Of the 5.9 trillion kWh of new renewable generation added over the projection period, hydroelectric and wind each account for 1.9 trillion kWh (33%), solar energy for 859 billion kWh (15%), and other renewables (mostly biomass and waste) for 856 billion kWh (14%)."
- EIA projects clean energy matching coal-fired power generation by 2040. "At the end of the projection period, generation from renewable energy sources equals generation from coal on a worldwide basis."
- World electricity consumption grows rapidly through 2040. "World net electricity generation increases by 69% in the IEO2016 Reference case, from 21.6 trillion kilowatthours (kWh) in 2012 to 25.8 trillion kWh in 2020 and to 36.5 trillion kWh in 2040. The electric power sector remains among the most dynamic areas of growth among all energy markets. Electricity is the world’s fastest-growing form of end-use energy consumption, as it has been for many decades."
- Despite clean energy growth, EIA says fossil fuels remain king in 2040. "Even though consumption of nonfossil fuels is expected to grow faster than consumption of fossil fuels, fossil fuels still account for 78% of energy use in 2040."
- EIA has coal growing very slowly, but still not declining through 2040. "Coal is the world’s slowest-growing energy source in the IEO2016 Reference case, rising by an average 0.6%/year, from 153 quadrillion Btu in 2012 to 180 quadrillion Btu in 2040."
- EIA is very bearish on growth in electric vehicles. "Electricity remains a minor fuel for the world's transportation energy use, although its importance in passenger rail transportation remains high. The electricity share of total light-duty vehicle energy consumption grows to 1% in 2040, as new plug-in electric vehicles increasingly penetrate the total light-duty stock."
- Instead of electric vehicles, EIA sees rapid growth in natural gas for transportation. "The share of natural gas as a transportation fuel grows from 3% in 2012 to 11% in 2040...As a result of favorable fuel economics, an increasing share of natural gas is used for transportation modes of travel other than pipelines."
- EIA essentially projects climate disaster, assuming no major policy changes. "World energy-related CO2 emissions rise from 32.2 billion metric tons in 2012 to 35.6 billion metric tons in 2020 and to 43.2 billion metric tons in 2040 in the IEO2016 Reference case–an increase of 34% over the projection period."
A few caveats and considerations in reading this report. First, it's important to point out that, as David Roberts recently reminded everyone, that "EIA's modeling is just that — modeling," reflecting "the assumptions that go into it...about policy, technological innovation, and evolving costs."
Second, the above highlights are all from EIA's "reference case," which as EIA notes is simply its "business-as-usual trend estimate, given known technology and technological and demographic trends, and "assum[ing] that current laws and regulations are maintained throughout the projections." That's what EIA is required by law to do, but reporters, policymakers and the public need to keep this fact in mind when considering how they interpret the new EIA "forecasts."
Third, as DeSmogBlog wrote in March, it's become "something of an annual tradition" for EIA to put out renewable energy forecasts that "consistently...shortchange the potential of renewables." As Michael Goggin of AWEA put it last May, "There seems to be consistent bias in EIA's projections against renewable energy, and that's a different thing from being inaccurate." Definitely keep that in mind when reading this new report.
Fourth, it seems implausible that coal consumption will continue growing through 2040. In fact, according to the International Energy Agency (IEA) a few months ago, "[f]ollowing more than a decade of aggressive growth, global coal demand has stalled, with the IEA's Medium-Term Coal Market Report 2015 having "slashed its five-year estimate of global coal demand growth by more than 500 million tonnes of coal equivalent (Mtce) in recognition of the tremendous pressures facing coal markets."
Finally, EIA's latest "reference case" projections don't seem to gibe, in several key areas, with what industry analysts have been observing recently. For instance, the concept that in 24 years, electric vehicles will only make up a tiny share of the world's transportation doesn't seem to make sense at all, particularly given massive orders for the recent Tesla Model 3 electric vehicle. It also seems implausible that all clean energy sources - wind, solar, etc. - will only match coal for power generation in 2040, and not much sooner. And last but certainly not least, the concept that world CO2 emissions, which nearly every climate scientists says must be slashed "ASAP" to avoid climate disaster, will continue rising through 2040 (and beyond?), in and of itself demonstrates that the EIA "reference case" projection simply can't happen. All of which brings us back to EIA's clean energy growth projections clearly being too low, for a number of important reasons (e.g., that clean energy costs have been plummeting, and show no signs of leveling off).