EIA projections show substantial increases in efficiency, renewable energy generation
In a reference case projection from the U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2016 (AEO2016), renewable energy generation from wind and solar sources is expected to increase by more than 400 percent by 2040.
As a result of production tax credits for renewable energy expiring or reducing in value in two years’ time, AEO2016 anticipates that investment tax credits will begin to slip in 2020, resulting in utilities and distributed generator customers accelerating their investment and production projects in order to capitalize on the credits’ full value.
The EIA projects a subsequent period of rapid expansion in renewable energy generation, with wind and solar generation jumping from 227 billion kilowatt hours to 950 billion kilowatt hours over 25 years of projected growth.
The EIA is basing its projections on the increased stringency of the Clean Power Plan, as well as the extension of tax credits and efficiency standards for appliances and vehicles, which have historically served as key drivers for boosting energy efficiency and the usage of renewable energy.
In an extended policies case, the EIA extrapolated current policies beyond their anticipated expiration, forecasting renewable energy growth at an additional 30 percent above the reference case level for a total capacity of 1,236 billion kilowatt hours by 2040.
