A questionable outlook

When an organisation as conservative as the International Energy Agency (IEA) issues an annual report calling for a "major transformation of the energy system" to encourage "large-scale investment in low-carbon technology development and deployment," political and business leaders the world over sit up and take notice. With the IEA warning that "the consequences for the global climate of policy inaction are shocking," our leaders may even take action and base future strategy on the agency's 2008 World Energy Outlook report. As the IEA points out, business as usual is no longer an option.

The OECD agency, long seen as the voice of the energy establishment, has come a long way in a short time. Just a year ago, the IEA massively raised its expectations of wind energy, even if it chose to hide just how much it had changed its mind between 2006 and 2007 by expressing wind power's contribution in terms of energy production, rather than installed capacity. In this year's report, the IEA reverts to using installed capacity projections for wind. Mindful of the global financial crisis, it has lowered its reference scenario outlook to 217 GW in 2015 and 550 GW in 2030, down from an indicated 260 GW and 612 GW a year ago. If politicians take action to speed the uptake of wind power, however, the IEA believes much more can be achieved. In two alternative scenarios for faster reduction of greenhouse gas emissions, the IEA has wind power hitting 878 GW in 2030, or as much as 1155 GW if politicians pull out all the stops. Last year, its best bid for wind in 2030 was 857 GW.

So far so good. The IEA is moving in the right direction and has produced a monumental pile of facts and figures to guide policy makers. But there is a hitch. If the report is inaccurate, it risks doing far more harm than good as a basis for future energy policy -- and its accuracy is being called severely into question. A swathe of renewable energy and environmental organisations have lambasted the report for greatly underestimating the role of wind power while overestimating the potential of carbon capture and storage and nuclear energy (pages 55-58).

By 2030, says the Global Wind Energy Council, an industry association, moderate growth of wind power will bring it to 1420 GW, far more than the IEA is saying at its most optimistic; the council's advanced scenario for 2030 has wind supplying up to 24% of world electricity from 2375 GW. Greenpeace is more ambitious, saying renewables could supply half the world's demand for power by 2030 at less cost than the IEA's plans. It also points to the folly of an IEA scenario which between now and 2030 relies on the construction of one nuclear plant a month.

Within the global wind industry, robust annual forecasts by independent BTM Consult, a small Danish firm, have guided investment since 1995. In the immediate future, BTM predicts wind reaching 288 GW by 2012, while the IEA says 217 GW by 2015. By then, BTM forecasts wind capacity reaching 500 GW, presuming the growth rate drops to 15.4% from 20.7% in the five years prior to that. That is 130% higher than the IEA's reference scenario on which its entire report is built.

Expressed as energy generation, the gap between the expectations of the IEA and the wind industry is huge. BTM's ten year forecast has wind supplying 6% of world electricity by 2017. In its reference case, IEA says wind will manage 4.5% in 2030. Even the IEA's advanced scenario has wind achieving somewhere in the region of 50% less than the industry's likely growth. The indication is that the IEA believes a sharp brake will be applied to wind power market growth in the next five years or so. That is contrary to the evidence and flies in the face of most other forecasts, global financial crisis taken into consideration.

No less than frightening

Given the IEA's use of far lower growth rates for wind power than have actually been the case for the past three years; its ultra conservative view of wind power's potential until as recently as last year; 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, the thought of basing a global energy strategy on the strength of the agency's forecasts is nothing less than frightening. Yet this is what the IEA proposes its report be used for.

Politicians would be better guided by the wind industry's own forecasts. Not only have these been consistently outperformed -- an impressive indication of how responsible the forecasts are and the scale of investment in wind power -- they are also carefully broken down by world region and supported by a deep understanding of policies, market structures and economics on a country-by-country basis. That is a lot more than can be said for the IEA and its World Energy Outlook. The author of the executive summary of this year's report tells us that the share of non-hydro renewables in global power generation will be 4% in 2030, although in a breakdown in the main body of the report the figure for new renewables comes to 9%. None of the IEA's report authors apparently saw the discrepancy before publication. It is a serious oversight and suggests that the IEA's focus on renewables is still far from where it should be.

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