Clean Energy Growth Projections Soooooo Off Back in 2000

August 2nd, 2012 by Zachary Shahan

This is a matter we tend to discuss a lot in the comments section of posts (especially thanks to Bob Wallace, who often brings it up and throws in some wonderful historical examples). But I don’t recall us dedicating a full post to the matter. Well, David Roberts of Grist recently did so, and he did so excellently, of course. So, here’s his post:

[In June], Michael Noble of Fresh Energy put up a fascinating list of projections made by energy experts around 2000 or so. (I got there via Brad Plumer.) Suffice to say, the projections did not fare well. They were badly wrong, and all in the same direction — they underestimated the growth of renewable energy. It’s worth quoting the whole list:

WIND

In 2000, the International Energy Agency (IEA) published its World Energy Outlook, predicting that non-hydro renewable energy would comprise 3 percent of global energy by 2020. That benchmark was reached in 2008.

In 2000, IEA projected that there would be 30 gigawatts of wind power worldwide by 2010, but the estimate was off by a factor of 7. Wind power produced 200 gigawatts in 2010, an investment of approximately $400 billion.

In 1999, the U.S. Department of Energy estimated that total U.S. wind power capacity could reach 10 gigawatts by 2010. The country reached that amount in 2006 and quadrupled between 2006 and 2010.

In 2000, the European Wind Energy Association predicted Europe would have 50 gigawatts of wind by 2010 and boosted that estimate to 75 two years later. Actually, 84 gigawatts of wind power were feeding into the European electric grid by 2012.

In 2000, IEA estimated that China would have 2 gigawatts of wind power installed by 2010. China reached 45 gigawatts by the end of 2010. The IEA projected that China wind power in 2020 would be 3.7 gigawatts, but most projections now exceed 150 gigawatts, or 40 times more.

SOLAR

In 2000, total installed global photovoltaic solar capacity was 1.5 gigawatts, and most of it was off-the-grid, like solar on NASA satellites or on cabins in the mountains or woods.

In 2002, a top industry analyst predicted an additional 1 gigawatt annual market by 2010. The annual market in 2010 was 17 times that at 17 gigawatts.

In 1996, the World Bank estimated 0.5 gigawatts of solar photovoltaic in China by 2020, but China reached almost double that mark — 900 megawatts — by 2010.

What should we take from this?

Well, mainly that fossil-fuel energy was really cheap in 2000. Oil was about a third the price it is now, coal for electricity about half. That colored those projections. But that’s a boring lesson. Let’s speculate about some others.

Solar panels, wind turbine, & man via Shutterstock

The projections weren’t just off, they were way off. You can find similarly poor projections from the ’70s that underestimate the spread of energy efficiency and other demand-side technology solutions. (They thought they were going to need hundreds of nuclear plants. See Alexis Madrigal on this.) Similarly terrible projections were also common in the early years of cell phones.

What do cell phones, energy efficiency, and renewable energy have in common? One, they are dynamic areas of technology development and market competition, which makes straight-line projections pretty useless. And two, they are distributed, with millions of loosely networked people and organizations working on them in parallel. Distributed, human-scale technologies come in small increments. They replicate quickly, so there’s more variation and competitive selection, and thus more evolution.

Nuclear power, in contrast, comes in gigantic increments only (at least for now). There’s a limited number of people doing the R&D, a limited number of entities capable of building or financing the power plants. It’s a little easier to know the potential.

When it comes to complex, parallel, loosely linked networks, the dynamics are more fluid and nonlinear changes more likely. They’re harder to quantify and predict. And so we consistently underestimate them. Something to keep in mind when pondering what today’s projections are going to look like in 2020.

Speaking of keeping things in mind, it seems to me that when projections are consistently wrong in the same direction, it bespeaks a need to update the models and techniques used to project — or at least update our expectations.

For example: Every time there’s a new air or water regulation proposed, industry predicts a level-10 economic apocalypse. EPA counters by saying it will only be a level-5 economic apocalypse. Invariably, it’s a level-0 economic apocalypse — low costs, lots of lives saved. Yet the political class approaches each new regulation with a peculiar Zen-like no-mind, as though it is the first such argument and all perspectives are equally supported by past experience. Same with projections of energy efficiency and renewables.

So why aren’t projections being updated to match what’s been observed? It’s a complicated question, but at least part of the answer is that projections are not ideologically neutral. There are assumptions and value judgments obscured behind the spreadsheets. Is efficiency a cost or an investment? What externalities are counted and for how much? To what extent is political economy taken into account? What value is placed on the welfare of our descendents (i.e., what is our“discount rate”)?

There’s no way to do projections without value judgements and assumptions, of course. But it’s good to be clear about them and, when they come into friction with experience, to be willing to rethink them. Otherwise we get stuck in a status quo sustaining feedback loop, where fossil-friendly assumptions produce fossil-friendly projections which are then used to justify fossil-friendly policies and investment decisions.

For visions of a clean energy future, brothers and sisters, look not to the soothsaying of thine “experts,” but to history, and to hope. Amen.

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Tags: Clean energy forecasts, Clean energy projections, quickies, renewable energy forecasts, renewable energy projections, solar power forecasts, solar power projections

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

mds

Why is Jigar Shah so unperturbed about the possibility of Mitt Romney representing the fossil interests over solar in the White House next term?

We’re at the tipping point. It doesn’t matter. It will actually be intertaining to watch Mitt try to repeatedly kill solar and fail. How will he explain this to his wealthy fossil fuel masters? A new order is emerging.
mds

Zach,
You had it the first time: nonlinear growth (actually exponential nonlinear growth in the case of PV) is the reality, but all analysts, being human, will try to force a more linear model. Human psychology is predisposed to thinking in terms of linear changes, not exponential. (Malcolm Gladwell points out this interesting little fact in “the Tipping Point”. There’s another interesting linking of concepts there for you, since we are now at the “tipping point” for PV.)
Please don’t fall into the “it’s complicated” non-sense you have at the end. I hate that phrase. It’s used when a subject becomes inconvenient to discuss honestly because there are conflicting political views and strong biases associated with them. Look at any plot of the growth in PV panel product, or of PV installations, they are growing exponentially. All predictions of PV growth based on linear models will continue to be wrong. This is because PV is a new technology that is continuing to fall in price, while incumbent fossil fuel energy sources remain expensive. As another has pointed out here, this results in an exponentially increasing customer demand. This very much parallel to cell phones replacing land-line phones and btw opening up new markets in many other countries. IT IS THAT SIMPLE. The questions you have down and the whole “it’s complicated” thing are just noise. It is actually not complicated. You just have to be able to see that exponential growth is the reality.
Global solar PV production and installations will be over 0.5 TW annually by 2020. A huge amount compared to current annual total global human power use of 11-12 TW annually. How common are cell phones now? Bet on it!
Solar PV production/installation has been more than doubling every two years since what? …2002? I predict the pull-back in growth will be short lived, while newer PV tech companies kill-off older PV tech companies, and then the new market leaders will take off again, just like before.
>0.5 TW in 2020!
Nice article!
billtoe

When I read this article, I thought “how do you write an article like this without talking about policy”. The main reason that the IEA predictions are so far off is because they assume NO policy change in their prediction models. They do this on purpose, as in they are trying to predict what will happen with no policy changes (NOT what is actually going to happen). Guess what.. Policies have changed a lot since 2000. Duh!

In any case, I went to look at the original article and it didn’t mention policy either. HOWEVER, I noticed an update link on the original article and followed that. Guess what.. The update talks all about *policy*. People should read that as well to understand that whole picture.
- mds
  
  Maybe policy was an important factor last decade not this one. In fact USA policy continues to favor fossil fuels over solar and solar continues to grow anyway.
sola

I believe the analists regularly underestimate the demand growth response to installation prices getting cheaper.
This may be particularly true for solar PV where the prices have decreased very sharply and demand went up exponentially.
- Bob_Wallace
  
  Clearly groups like the EIA missed the call on the dropping price of solar panels.
  
  Everyone did.
- mds
  
  Bob and Sola,
  I respectfully suggest you are both wrong. The accelerated drop in solar prices is a recent effect. The exponential increase in PV panel production and analyst underestimates were already a regular occurrence. This is important when considering the generally predicted slow down in the rate of PV growth over this decade. I predict a quick return to the same high rates of growth we had last decade. …this time in spite of most government policies. We are at the economic tipping point and that means…
http://www.facebook.com/jeff.king.14224 Jeff King

This article brings me hope that the 2020 predictions are under valuing what is possible and that we may see huge leaps in solar, wind, and other renewable energy sources
Dimitar Mirchev

Excellent article!

One should look at the yearly forecast made by DOE and IEA and compare them with the actual data.