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Short-Term Energy Outlook

Release Date: February 9, 2016  |  Next Release Date: March 8, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Renewables and CO2 Emissions

Electricity and Heat Generation from Renewables

EIA expects total renewables used in the electric power sector to increase by 8.1% in 2016. Forecast hydropower generation in the electric power sector increases by 3.6% in 2016. The current El Niño cycle has mixed implications for the hydroelectric generation outlook. This winter started off wet in the Pacific Northwest, where roughly half of the nation's hydropower is generated. In December 2015, most of the Pacific Northwest saw precipitation more than 30% above normal), which points to above-normal snowpack levels in the region. California also had above-normal precipitation in December. However, drought conditions persist in much of the state.

In December 2015, Congress passed an extension and modification of federal tax credits for new wind and solar generators. This legislation extended production tax credit eligibility for wind generators to include plants starting construction through the end of 2019, with the value of the credit declining from 2.4 cents/kWh to 1.0 cent/kWh during the first 10 years of plant operation. It also extended investment tax credit eligibility for solar generators at the 30% level for plants starting construction through the end of 2019, with the value dropping each year to 10% for plants under construction in 2022 and beyond.

EIA expects little effect from these renewable electricity tax credit extensions in 2016 because most plants that will enter service in 2016 are already being developed. Impacts in 2017 depend on how many wind and solar projects are already in the development queue but not yet under construction. The U.S. Environmental Protection Agency's (EPA) approval of the Clean Power Plan in August 2015 may also affect new renewable construction over the next several years, but these near-term effects will be less certain until states lay out their implementation plans.

EIA expects continued growth in utility-scale solar power generation, which is projected to average 128 gigawatthours per day (GWh/d) in 2017, an increase of 42% from the 2016 level. Forecast utility-scale solar power averages 1.1% of total U.S. electricity generation in 2017. Although solar growth has historically been concentrated in customer-sited distributed generation installations (rooftop panels), EIA expects utility-scale solar capacity will increase by about 80% (10 GW) between the end of 2015 and the end of 2017, with 4.1 GW of new capacity being built in California. Other states leading in utility-scale solar capacity additions include Nevada, North Carolina, Texas, and Georgia, which, combined with California, account for almost 80% of the projected utility-scale capacity additions for 2016 and 2017.

Wind capacity, which starts from a significantly larger installed capacity base than solar, grew by 13% in 2015, and it is forecast to increase by 14% in 2016 and by 3% in 2017.

Liquid Biofuels

On November 30, EPA finalized a rule setting Renewable Fuel Standard (RFS) volumes for 2014 through 2016. EIA used these finalized volumes to develop the current STEO forecast and assumes the 2016 targets for 2017, except the biomass-based diesel 2017 target of 2.0 billion gallons that was included in the November 30 rule. Ethanol production averaged an estimated 965,000 b/d in 2015, and it is forecast to average close to that level in both 2016 and 2017. Ethanol consumption averaged 910,000 b/d in 2015, and it is forecast to average more than 920,000 b/d in both 2016 and 2017. This level of consumption results in the ethanol share of the total gasoline pool averaging 10.0% in both 2016 and 2017. EIA does not expect significant increases in E15 or E85 consumption over the forecast period.

EIA expects the largest effect of the proposed RFS targets will be on biodiesel consumption, which helps to meet the RFS targets for use of biomass-based diesel, advanced biofuel, and total renewable fuel. Biodiesel production averaged 84,000 b/d in 2015 and is forecast to average 107,000 b/d in 2016 and 112,000 b/d in 2017. Net imports of biomass-based diesel are expected to rise from 28,000 b/d in 2015 to 47,000 b/d in 2016 and to remain at that level in 2017.

Energy-Related Carbon Dioxide Emissions

EIA estimates that emissions of CO2 declined by 2.2% in 2015. Emissions are projected to increase by 0.5% in 2016 and by 0.5% in 2017. These forecasts are sensitive to assumptions about weather and economic growth.

U.S. Renewables & CO2 Emissions Summary
  2014 2015 2016 2017
a Conventional hydroelectric power only. Hydroelectricity generated by pumped storage is not included in renewable energy.
b Includes electricity and heat generation
c Other renewables includes biofuels production losses and co-products
U.S. Renewables Consumption (quadrillion Btu)
Geothermal 0.215 0.225 0.234 0.235
Hydropowera 2.475 2.358 2.443 2.601
Solar 0.421 0.524 0.624 0.802
Waste Biomass 0.516 0.512 0.511 0.512
Wind 1.727 1.796 2.047 2.204
Wood Biomass 2.230 2.056 1.976 1.997
Electricity Subtotalb 7.582 7.448 7.830 8.346
Biomass-based Diesel 0.198 0.215 0.302 0.310
Ethanol 1.107 1.148 1.174 1.167
Biofuels Subtotal 1.305 1.362 1.475 1.478
Otherc 0.757 0.771 0.783 0.779
Total 9.645 9.583 10.087 10.603
Carbon Dioxide Emissions by Fuel (million metric tons)
Petroleum and Other Liquid Fuels 2252 2281 2292 2305
Natural Gas 1434 1476 1504 1517
Coal 1713 1524 1512 1515
Total Fossil Fuels 5399 5280 5308 5337

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