Embattled EIA answers critics of its work on renewables

Source: Christa Marshall, E&E reporter • Posted: Wednesday, April 6, 2016

A recent federal report is stirring up debate about whether the U.S. Energy Information Administration underestimates the growth of renewable power.

In the past week, energy analysts have lit up Twitter and blogs about a March EIA analysis that defended the agency against long-standing critics. They say EIA is throwing off business and utility planning by lowballing wind and solar projections.

One peer-reviewed study earlier this year, for example, found the majority of 630 EIA projections over a 10-year period underestimated renewable generation or capacity. Others have criticized the agency for assuming high renewable costs.

However, EIA says the “information used to support the recent critiques is often selective and misleading.”

“The broad conclusions drawn from that information are therefore exaggerated … or factually incorrect,” the new analysis states.

According to EIA, there have been both under- and overestimates of renewable growth, depending on how much laws and regulations change after data modeling is conducted. “Where projected policies match realized policies for wind and distributed solar, projections have been very much in line with actual market developments,” EIA says.

The agency notes that the wind and solar industries have had their own pessimistic growth projections in the past, such as when pushing for extensions of renewable tax credits. Estimates of total solar photovoltaic capacity in recent annual energy outlooks mirror those by groups such as the Solar Energy Industries Association, according to the agency, which is part of the Department of Energy.

In one example, EIA conceded that its utility-scale wind forecasts in a December 2008 assessment were too low by a third, because they did not reflect the effect of the American Recovery and Reinvestment Act. However, the agency noted it updated the forecast five months later to reflect the policy change, with the final projections providing numbers close to the actual outcome.

The new analysis jolted energy analysts like Alex Gilbert, a co-founder of the energy research company Spark Library who authored a peer-reviewed study this year on EIA “bias.” Among other things, it found that EIA doesn’t give enough consideration to how natural gas prices influence generation.

In an interview, Gilbert welcomed EIA’s analysis as a “good sign” but said it doesn’t go far enough.

One of the reasons EIA has historically underestimated solar and wind is that the agency uses overly rosy projections for distributed biomass, he explained. But EIA largely ignored the biomass factor in its retrospective, he said.

“It was a missed opportunity,” he said.

He also disagreed with EIA’s claim that its cost modeling of solar is generally in line with industry estimates. Gilbert’s earlier study, for example, concluded that EIA forecasts for levelized costs of wind and solar are sometimes double the forecasts of the Lawrence Berkeley National Laboratory.

The tone of the report, with language about critics being misleading and inaccurate, is “somewhat disingenuous,” he added.

Similarly, clean technology entrepreneur Jigar Shah said on a Greentech Media podcast last week that EIA clearly just doesn’t “understand the drivers of renewable energy.”

He dismissed the idea that wind and solar industries have also projected low growth when it was to their favor, such as when pressing for extensions of federal tax credits. EIA should have a different standard as an “impartial” body, Shah said.

EIA said it would continue to “enhance” its modeling capabilities, such as accounting for implementation of investment tax credits. It also is developing monthly state-level estimates for small-scale solar to match existing data on utility-scale developments.

Richard Meyer, manager of policy analysis at the American Gas Association, was one of many analysts who took to Twitter to defend EIA from criticism about its renewable projections, as well as ones on electric vehicles.

“Some folks have charged EIA with being stand offish about its projections. … What I’ve seen is a relatively good faith effort from EIA to explain how their model works and their (often conservative) assumptions,” he wrote yesterday.

Gilbert added today that EIA “is very quickly moving in the right direction,” based on a review of preliminary solar cost and projection data for the 2016 annual energy outlook.