AEEI vs. EIA: Battle of the renewable energy, energy-efficiency claims
Renewable energy and energy efficiency are competitive resources in today's marketplace that will not only be cost-effective mechanisms for compliance with EPA's Clean Power Plan (CPP) but should also be expected to grow strictly on the basis of cost. That is according to a report published today by the Advanced Energy Economy Institute (AEEI), which disputes "official projections" it says do not capture market realities and discount the growth potential of these resources and the role they can play in state CPP compliance plans.
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Credit: Molgreen/Wikimedia Commons |
Under fire are projections made by the Energy Information Administration (EIA) in its Annual Energy Outlook (AEO), which the Advanced Energy Economy Institute contends "consistently underestimate the growth rate of renewable energy," leading to "misperceptions" about the performance of these resources in the marketplace. Further, AEEI says that EIA projections fall short of actual renewable energy installations year after year, raising doubts about current projections that show little growth in wind or solar capacity stretching out to 2030. For example, the installed generating capacity of solar power is likely to double between 2014 and 2016, based on market analyses that take into account actual projects in the pipeline, but the AEO 2015 forecast shows that solar capacity does not double from its current level until 2026.
EIA projections for energy efficiency raise the same questions, as they "fail to capture the impact of efficiency investments on electricity consumption." The trend in overall electricity demand growth has been consistently downward in recent years, in parallel with the rise in spending on energy efficiency, according to AEEI, which more than tripled from 2005 to 2013; retail electricity sales have also been flat to slightly declining since 2010, even as the U.S. economy grew about 9 percent in real terms between 2010 and 2014. To the contrary, EIA's AEO 2015 projections show future electricity demand growth steady at a little less than 1 percent annually out to 2040 -- "discounting the potential that energy efficiency would continue to slow demand growth in the coming years," according to AEEI.
"Costs are dropping fast for wind and solar power, and energy efficiency is almost always the lowest cost way to meet new electricity needs," said Malcolm Woolf, senior vice president for Policy and Government Affairs for Advanced Energy Economy (AEE), a national business association. "There is every reason to believe that renewable energy and efficiency will play growing roles in electricity markets based on price alone. They can also help states reach their Clean Power Plan emission targets at low cost."
Both renewable energy and energy efficiency are competitive in electricity markets today, can be expected to grow in the future, and can play a significant role in state compliance plans for the CPP, while holding costs down, according to the AEEI report.
"There is every reason to believe that [renewable energy] and [energy efficiency] will continue to play an increasing role in our changing electric power system strictly on the basis of the economic value they provide," the report concludes. "In addition, as states consider ways to comply with EPA's Clean Power Plan between now and 2030, RE and EE measures will be competitive with other options and available to provide substantial emission reduction opportunities."
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