April 21, 2021


Comparing the actual US grid to the one predicted 15 years ago: Demand and carbon emissions are way down, renewables far more common than expected. (JOHN TIMMER - 4/14/2021, ars Technica)

The foundation for the new work is one of the many editions of the Energy Information Agency's (EIA) Annual Energy Outlook, specifically the one from 2005. These publications take a look at the state of the US energy markets in the most recent year for which there is data and tries to project how those markets will evolve over the coming years. In 2005, that meant that projections went as far as 2025.

You can get a sense of where things were expected to go simply by looking at the cover of the report, which is graced by a picture of an oil well. To an extent, conservative projections are baked into the structure of the report; it assumes that the only policies that influence energy markets are the ones currently on the books. So even though Congress has extended the expiration date on tax credits for renewable power multiple times, the EIA always makes projections that have them expiring as scheduled at the time.

The EIA also tends to assume slow and steady technological progress rather than the sorts of changes that have led solar prices to drop by a factor of five in less than a decade. [...]

One of the biggest factors that has changed what's happened on the grid is a drop in demand compared to expectations. In its 2005 projections, the EIA had expected total demand for electricity to rise by roughly 25 percent. Instead, it stayed essentially flat. None of the main sectors--residential, commercial, or industrial--rose significantly, due to factors like increased efficiency and a shift away from heavy industry. (Remember, products like LED bulbs were expensive rarities 15 years ago.)

This had some significant effects. For example, the EIA projected a large increase in natural gas use by 2020 and got the magnitude nearly right. But in its projections, this expanded generation was expected to feed the rising demand; since that never materialized, gas displaced coal instead.

Coal also took a big hit from the rise in renewables, with wind and solar producing 13 times more than they were expected to back in 2005. Combined with hydropower and other renewable sources, that has boosted the total share of renewable generation to 79 percent higher than the EIA had projected. There are plenty of reasons for this, including the fact that tax breaks for renewables were extended several times. In the absence of a coordinated federal response to climate change, many states have crafted renewable power mandates. Finally, there's that tremendous drop in price noted above, which has made solar and wind the cheapest sources of power in many areas of the country.

Combined, those factors have produced a serious drop in carbon emissions: 40 percent since 2005, or about a third of the way toward a zero-emissions grid. Compared to the 2005 projections for this year, which had pencilled in continued heavy use of coal and rising demand, emissions are down by 52 percent--the "halfway to zero" of the report's title.

In 2005 (and for a number of years afterward), people frequently announced that reducing the carbon emissions of the grid would come at a catastrophic cost. That has turned out to be very wrong. Retail electricity prices (in 2005 constant dollars) went from 10.6 cents/kiloWatt-hour all the way up to... 10.7 cents/kW-hr. The projections had them falling slightly, so we're in worse shape than expected in this sense, but it's anything but a crippling rise in price.

In fact, because there are more customers for a similar amount of power, use per customer has gone down in the last 15 years. That means that, individually, customers' bills are a bit smaller, even if they're paying more.

And that movement has been accompanied by a huge drop in associated costs. Climate damages, estimated using the social cost of carbon, were cut by more than half, from a projected $229 billion down to only $110 billion. But the huge plunge in the use of coal, along with added pollution controls, cut down on numerous additional costs. Health costs from the pollution, expected to total over a half-trillion dollars, instead came in at $34 billion--an astonishing drop. The projected 38,000 annual premature deaths from pollution instead came in at 3,100.

If these costs are counted along with the electrical bills, the total costs of generating power were actually down by 44 percent from 2005 and less than half of what was projected for 2020.

Posted by at April 21, 2021 7:48 AM