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The Tricky Business of Renewable Energy Forecasts and the Inconsistencies of the Practice

The world of forecasting in energy is critical because of the key decisions that depend on accurate numbers of solar panel units sold, barrels of oil produced or even greenhouse gas emissions. The public may be used to decades of relatively reliable forecasts about oil and gas markets. But with renewable energy becoming a fixture of life and no longer just an alternative approach to powering the world, a recent expose casts doubt on the accuracy of the numbers coming from what is generally a very reliable and steady source.

That source is the Energy Information Administration (EIA). The EIA has been in operation since 1977 and is the principal “agency of the U.S. Federal Statistical System” that focuses on the “collection analysis and dissemination of energy information” that is used for federal and regional policymaking. Earlier this month Rice University professor of Civil and Environmental engineering Daniel Cohan unearthed what actually didn’t require much digging for at all; EIA estimates on renewable energy are actually underestimating solar power growth outside the United States.

Some example include china where the EIA’s forecast understated last year’s solar capacity additions by a factor of 5. Or in Latin America where solar is expected to achieve  40 GW of capacity by 2021 but the EIA forecasts the region will have one-fifth that capacity by the year 2050 clearly showing a disconnect between the reality on the ground and what the future holds. The story continues in places where the future of solar is particularly strong. In Australia, a country that pays some of the highest residential energy prices anywhere in the developed world, the EIA projects a sharp downturn in the pace of installations and overall growth.  

Daniel Cohan’s investigation into these irregularities is further discussed here but overall, the EIA assumes that growth in wind and solar power will only grow at the same pace as electricity demand, and the organization discounts the predictions made for growth by local governments in the countries in question, leading to more inconsistency.

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