…EIA Distorts Energy Forecasts, Part 1…
What’s happening at the Energy Information Administration (EIA)?
Are holdovers from the last administration producing reports that undermine this administration’s energy policies?
The EIA has just issued its latest Annual Energy Outlook, AEO 2018, and it contains a plethora of misinformation.
This and the next two articles will highlight a few of the more egregious items of misinformation.
It’s a mistake for any business or political entity to rely on the EIA energy forecasts.
It should also be noted that the focus of the latest annual energy outlook is on CO2 emissions. According to the latest AEO, CO2 emissions will remain constant through the forecast period ending in 2050.
This substantiates the fact cited in Nothing to Fear that it’s impossible to cut CO2 emissions.
EIA Distorts Cost of Electricity
The EIA predicts that the cost of electricity will decline by 2050 due to the low cost of wind and solar.
If wind and solar generation increase, as forecast by EIA, the cost of electricity will increase … Not decrease.
Holdovers at the EIA have assumed that the cost of wind and solar will be lower than the cost of electricity using natural gas or coal, and this is a huge error.
In addition, the EIA forecasts that wind and solar will dominate the growth in power generation, accounting for two-thirds of the growth in power generation.
If the EIA forecast is accurate, it’s clear the cost of electricity will increase substantially.
California, New York, and the New England states, which emphasize renewables, have much higher costs for electricity than do states that rely on coal and natural gas for generating electricity.
Those facts are abundantly clear and were available to the EIA when it created this distorted report.
These facts are accentuated by the EIA forecast growth for renewables, which is predominantly for PV solar, an extremely expensive method for generating electricity.
Not only is PV Solar expensive, it requires storage, which, at a minimum, doubles the cost of electricity.
In addition, the EIA has created a new measurement, Levelized Avoided Cost of Electricity (LACE) to justify its cost estimates.
“The calculation of avoided costs is based on the marginal value of energy and capacity that would result from adding a unit of a given technology to the system as it exists or is projected to exist at a specified future date and represents the potential value available to the project owner from the project’s contribution to satisfying both energy and capacity requirements.”
LACE uses marginal cost, which ignores total costs. See, The System is Rigged.
The EIA has become an albatross left over from the Obama administration, distorting facts to promote renewables and the cutting of CO2 emissions.
Any organization that uses the EIA’s forecasts are perpetuating misinformation and promoting distortions in the economy.
It should be noted that Navigant Research has embraced the EIA information and published articles extolling the EIA forecasts.
The EIA is an excellent example of what happens when ideologues assume responsibility for a government administration that is supposed to provide accurate information to the public.
Hopefully, the Department of Energy (DOE) will take steps to eliminate the biases prevalent at the EIA.
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