Dept of Energy to Greenies: Sod Off!

The grasping rent-seekers of subsidies and mandates for wind and solar power have been sniping at the U.S. Department of Energy’s Energy Information Administration (EIA) for supposedly overestimating the costs of wind and solar power compared to coal- and gas-fired power, and underestimating the growth of wind and solar. EIA does a terrific job of data gathering and analysis, even if some of their work requires great care, such as the widely used and abused “Levelized Cost of Electricity” calculations.

So it is rather extraordinary to see the EIA report released a few days ago that essentially says to the grasping greenies—you’re all a bunch of ninnies. Being a government bureaucracy, they didn’t put it as directly as that, but if you read between the lines of officialese, that’s what they’re saying.

The report is entitled Wind and Solar Data and Projections from the U.S. Energy Information Administration: Past Performance and Ongoing Enhancements, and it makes for fun reading. (It is, in essence, the DoE giving its own Green Weenie Award.) One of the things the EIA rebuttal makes clear is how heavily—and permanently—dependent on government subsidies wind and solar are.

Enjoy some samples of EIA’s dry but devastating prose:

Several articles, papers, and comments over the past year offered critical views regarding renewable electricity data and projections prepared by the U.S. Energy Information Administration (EIA). Although particular details vary from source to source, several critiques have involved claims along the following lines:

  • EIA data do not accurately track wind and solar generation or capacity, particularly distributed solar photovoltaics (PV). 

  • EIA projections “consistently” and “significantly” underestimate additions of wind and solar capacity.
  • EIA estimates for the cost of renewable capacity such as wind and solar are out-of-date and not representative of current market costs.

To which the EIA responds: and so’s your old man. For example:

A number of critics have suggested that EIA “consistently” under-projects wind and solar capacity and generation, or even is “always underestimating –and never overestimating –future deployment of renewables.” EIA’s projections for wind and solar markets have been largely dependent on how well policies in EIA projections match with policies as actually implemented, and the projections have both under- and over-estimated market growth for renewables.

One problem with wind and solar power as that the tax breaks and subsidies are as politically intermittent and uncertain as the energy sources themselves (irony alert), and the EIA goes on to point out that when they have taken account of the renewal of the intermittent subsidies, their projections have turned out to be highly accurate:

When policies are assumed that support renewables, EIA’s projections show significantly higher penetration rates for both wind and solar than when such policies are not considered. For example, one recent critique of EIA forecasts cited the AEO2009 Reference case projection that wind generating capacity would grow to 44 gigawatts (GW) in 2030, noting that capacity had actually grown to 66 GW by the end of 2014. However, the AEO2009 Reference case, first issued in December 2008, was updated only a few months later in April 2009 to reflect the passage in February 2009 of the American Recovery and Reinvestment Act (ARRA), which extended and expanded incentives for both wind and solar. The updated projection for wind capacity in 2014 was 65.9 GW, nearly identical to the actual outcome nearly six years later. . .

The EIA report also twists the knife in the rent-seekers with this very nice passage:

In commenting on a question regarding the need for an extension of the production tax credit for wind in light of an analysis from the National Renewable Energy Laboratory (NREL) showing that wind power can expand throughout the 2022-30 CPP compliance period even if the tax credit is not renewed, the AWEA Senior VP responded that “the short answer is yes, the PTC is essential.” He also said:

“It’s true that wind is increasingly cost-competitive, but recent experience and studies such as NREL’s recent one show that development would fall significantly without the PTC.”

In some respects, these stakeholders appear to be less optimistic than EIA about the future of renewables’ absent extension of tax policy support.

Now that last sentence is funny! And it confirms what every sensible person knows: wind and solar power would fail a straight up market test. So the EIA is left having to take politics into account in making projections, rather than marketplace and energy supply realities. They do a remarkably good job of this.

Once again, the report is devastating in pointing out in understated prose, and with the chart below, that new wind power collapses every time the subsidy is allowed to expire:

The renewable electricity PTC, currently a 2.3-cent-per-kilowatthour (kWh) tax credit for the first 10 years of production for electricity generation from certain renewable resources, has been a valuable asset for the wind industry. It was first enacted in 1992 and first allowed to expire in 1999. Since 1999, the PTC has been extended eight times and, in several cases, allowed to expire before being retroactively extended, as shown in Figure A-1. This expiration and extension cycle of the PTC has led to a boom-and-bust type of response from the wind industry, as there is a rush to build out wind capacity before the expiration of the credit, followed by a relative lull in new wind capacity installations in the following year. [Emphasis added.]

PTC chart copy

As I’ve been saying for a long time, the climatistas roll out all kinds of goals and timetables for reducing hydrocarbon energy in a rapid fashion, after which I imagine that the analysts at the EIA and IEA (International Energy Agency, based in Paris) close their doors and double over with laughter. And then put out very good projections that amount to saying, “Here, kids: this is how it’s going to go down in the real world.”

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