The Iea consistently underestimates wind and solar power. Why?

The Iea consistently underestimates wind and solar power. Why?

The International Energy Agency was created in 1974 by countries that had just been through a bruising oil crisis (and were headed for another). Some 23 participants in the Organisation for Economic Cooperation and Development (Oecd) founded the Iea to gather and share information about energy, model future energy trends, and help mitigate the adverse impacts of (or avoid) subsequent energy crises.

Since then, Iea has become a widely respected source of energy data and analysis. Its annual World Energy Outlook (Weo) is considered the gold standard in energy modeling, producing endless media coverage and shaping the assumptions of policymakers and the investment class.

It is somewhat vexing, then, that the Iea has always been, and remains, dismally pessimistic about wind and solar energy. This pessimism has led it to underestimate wind and solar again and again, a track record of failure one might think would trouble an agency known for the quality of its modeling. But if it’s troubled, Iea hasn’t let on.

What’s more difficult to figure out is why. Why does the Iea continue to lowball renewables, even in the face of persistent critiques? There are several stories about this floating around, and none of them are entirely satisfying.

We’ll have a look at the explanations on offer, but first let’s establish our premise.

The Iea done slept on wind and solar

That the Iea has historically underestimated wind and solar is beyond dispute. The latest look at the issue comes from Energy Post editor Karel Beckman, who draws on a recent report from the Energy Watch Group (Ewg), an independent Berlin-based think tank. The report analyzes the predictive success of previous Weos.

Here’s the history of additions to electric generation capacity by renewables excluding big hydro, along with successive Weo projections:

EnergyWatchGroup_weo-vre-projections

Source: Energy Watch Group

 

As you can see, Iea keeps bumping up its projections, but never enough to catch up to reality. It’s only now getting close.

It gets even worse when you dig into the details. Here’s the bill of particulars:

– Weo 2010 projected 180 gw of installed solar PV capacity by 2024; that target was met in January 2015

– current installed pv capacity exceeds Weo 2010 projections for 2015 by threefold

– installed wind capacity in 2010 exceeded Weo 2002 and 2004 projections by 260 and 104 percent respectively

– Weo 2002 projections for wind energy in 2030 were exceeded in 2010

– other, independent analysts (like those at Bloomberg New Energy Finance and Citi) have come closer to accurately forecasting renewables. The only forecasts that match Iea’s inaccurate pessimism are those from the likes of BP, Shell, and Exxon Mobil.

 

Source: Vox

Date: October 2015

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Tags assigned to this article:
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