Energy Watch Group criticises unrealistic IEA scenarios

16.11.2015

The Energy Watch Group., an international network of scientists and parliamentarians, calls out the International Energy Agency for its continued underestimation of renewable energies.

The Energy Watch Group (EWG) – an international network of scientists and parliamentarians – calls out the International Energy Agency (IEA) for its continued underestimation of renewable energies over the last ten years. According to an EWG analysis, the current World Energy Outlook (WEO) published by IEA underestimates the potential of photovoltaic and wind power and simultaneously overestimates the conventional energy expansion – regardless of any fossil-fuel phase-out or surging investments in the renewable sector. In the WEO 2015, the IEA even projects a decline in the expansion of wind and solar energy. This, EWG emphasises, is not correct. The scientists call out to IEA to “finally release realistic energy projections”, so as not to hold back the expansion of renewables.

IEA projections have been wrong for 10 years

As an example for the errors in one of the outlooks, EWG names the projections for PV capacities for 2024, which IEA predicted in 2010 to be around 180 GW. This capacity had already been installed in January 2015, thus the IEA projection was way off. Similarly, the wind capacities IEA expected were also significantly lower than real capacity additions. On the contrary, the potential of coal, oil and even nuclear energy were overestimated in the World Energy Outlook. Independent experts were closer to real life developments of the energy market, while the only predictions comparatively low for the renewable energy sector’s developments as IEA’s were those of conventional energy companies such as Exxon Mobile, BP or Shell.

The current WEO is no better. So far, technologies such as PV and wind power have been growing exponentially, nevertheless, IEA projects their growth to be linear. This would mean that the annual market growth was nearly non-existent, but the actual market growth of wind energy since the year 2000 has been just below 10 % per year, while solar was even higher. Market analysts such as IHS Technology or Bloomberg New Energy Finance take this into account and forecast an annual market growth of 10 % or more for photovoltaics over the next few years.

Optimism means no growth?

In the baseline scenario of the WEO 2015, IEA goes so far as to project a shrinkage for solar PV and wind power, yielding a capacity addition for the years 2015 to 2040 which are 20 % and 40 % lower than the current levels of addition. The “optimistic” scenario assumes a growth of zero percent for both technologies. Maybe this rather pessimistic outlook might be related to IEA using outdated and therefore too high investment costs for solar PV.

"The WEO 2015 shows one cannot take the IEA seriously as a credible energy analyst any longer," President of the Energy Watch Group and former Member of the German Parliament Hans-Josef Fell said. "Despite its own warnings of limited investments in the oil business, the IEA predicts a further increase in the oil production until 2030. Meanwhile, the actually occurring rapid development of renewable energy is downplayed. This way the IEA increasingly turns into a cause of global warming."

The non-profit network EWG explains that one of the major problems with the WEO forecasts being incorrect is that these have a significant impact on the decisions of world governments regarding energy policies and investments. Forecasts influence investment decisions and a projected low growth of a technology can be used to justify the need for investments into other technologies (i.e. conventional energy sources) with the argumentation that otherwise power supply cannot be guaranteed.

"Although the IEA spreads positive messages in its WEO presentations, the actual figures show serious errors and inadequately low forecasts for sustainable energy technologies, which are the least expensive form of energy supply in a growing number of regions in the world," explained Christian Breyer, Professor for Solar Economy at the Lappeenranta University of Technology in Finland and lead author of the recent EWG study. "We need urgent help of journalists and civil society to find out the real reasons for these continuous incorrect IEA projections for solar PV and wind energy."

Are conventional energies still growing?

Although nuclear energy did not expand significantly in the last few years, the WEO projects a capacity addition of 10 nuclear reactors per year with 1 GW capacity each. Exploding costs and delays of nuclear projects make this forecast look quite unrealistic, especially in terms of financial viability.

Similarly, the WEO projections for energy from coal seem to ignore China’s increased investment into renewables instead of coal, while the forecasts of oil consumption also seems to follow a history of overestimations.

"These projections are risky and irresponsible. We are now standing at a crossroads: either high oil prices disrupt the economy, or lower prices disrupt oil companies. It is a toss-up whether the transition to a low-carbon energy supply will go smoothly or will cause major upheavals," concludes Werner Zittel, senior energy expert at Ludwig Bölkow Systemtechnik. “Even more so it must be the duty of the IEA to provide realistic signposts rather than limit itself to the business-as-usual thinking."

You can download the EWG’s analysis of the WEOs as a pdf document.

Tanja Peschel