The Energy Watch Group just released a new report about wind energy, dubbed “Wind Power in Context – A Clean Revolution in the Energy Sector.”
In it, the EWG authors made no bones about calling out other agencies whose forecasts have been off the mark. The “worst forecasts,” they say, “regularly came and still do come from the International Energy Agency (IEA).”
I imagine those are fightin’ words in the energy modeling world. A proverbial back stab among prognosticating constituents. And yet, you can’t help but agree with the EWG. The IEA, as you’ll see, in which investors may put a bit too much confidence, has been wrong on many energy issues.
In this battle of the energy acronyms, it doesn’t look like the IEA has a chance. And if we keep planning our energy decisions around misinformation, we’re bound to run into serious and damaging consequences.
The International Errrr, Ahhh? (IEA)
In the IEA’s World Energy Outlook 1998, global wind installations were expected to reach about 47 GW by 2020. In reality, we hit that target in 2004, a full 16 years earlier than the IEA prediction.
According the EWG, the IEA’s 2002 forecast predicted 104 GW of wind power by 2020. That total was reached in 2008, twelve years before the IEA said it would happen and just six years after the said it. Normally, this type of track record gets you fired.
Even the EWG couldn’t help but lay on the sarcasm when considering the IEA’s 2004 wind estimates. Here’s the exact quote:
The “best” IEA forecast on wind so far was the 2004 World Energy Outlook alternative energy approach, which was surpassed three years later in real additions by an amount of “only” 68 percent.
In another no holds barred moment, the EWG also accuses the IEA’s numbers of being “neither empirically nor theoretically based.”
Pardon the block quotes, but this stuff is simply too good to miss. Here’s what else the EWG had to say about the IEA:
This organization, whose constitutional task would be to protect consumers from price hikes and to deliver energy security, has been and is deploying misleading data on renewables for many years. As recently as 2002, IEA predicted an oil price of $29 per barrel by 2030, and in 2007 its forecast for 2030 stood at $60 per barrel. By summer 2008, we found out that a price of $50-$150 per barrel is more realistic – for 2008, let alone 2030!
In its 2008 World Energy Outlook, the agency suddenly has doubled its oil price forecast. While in 2007, it said the cost of crude would fall in the long term to less than $60 per barrel, it now predicts an average of $100 per barrel until 2015, despite a deepening recession, and rising to $120 in real terms by 2030. It concludes that the era of cheap oil is over and that the recent extreme price volatility will continue. And it acknowledges that the “risk of a supply crunch” for oil after 2010 could be “driving up oil prices – possibly to new record highs”.
But then it fails to give a structurally revised perspective of affordable renewables and their potentials for replacing fossil energy sources on a large scale and on solid economical grounds. Instead it views wind power and other new renewable energies delivering only a 4% share of global electricity by 2030. Its faith in nuclear, a technology in decline, and its great expectations of carbon capture and storage, a technology with a highly uncertain future beyond the certainty that it will be expensive, remains unbroken.
One has to ask if the ignorance and contempt of IEA toward wind power and renewables in general is done within a structure of intent. Renewables tend to look ever expensive and close to irrelevant while oil, coal and nuclear look irreplaceable in the IEA World Energy Outlook reference scenarios. Is it this message that big companies and US presidents need to fight a war for oil, subsidies and profits, disguised as a “war on terrorism?”
A Grain of Salt and a New Approach
That’s very powerful stuff. At the very least, we must take every IEA forecast and outlook with a grain of salt.
The EWG has called them out mainly on wind energy predictions, but I know of other sector where the IEA has consistently been wrong in its fortune telling for years, namely oil.
It wasn’t until July 2007 that, for the first time, the agency admitted they had doubts about oil supply keeping pace with demand. For the 30 years prior, the IEA simply predicted that supply would always rise to meet demand, which is clearly not the case. The IEA, and other forecasting agencies, have now had several come to Jesus moments about the reality of peak oil.
And while they’ve been more forthcoming about oil’s decline, renewable energy still faces serious opposition, with forecast consistently underbidding progress. Let’s be sure not to fall victim to misinformation with renewables the same way we did with oil.
To that end, Obama said just last week that “we will double the production of alternative energy in the next three years.” It’ll be part of the coming infrastructure stimulus, which plans to funnel billions into the creation of green projects and green jobs that people back to work and stimulate the economy.
That’s the kind of energy outlook we need, not those of the IEA.