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Short-Term Energy Outlook

Release Date: January 12, 2016  |  Next Release Date: February 9, 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 9.5% in 2016. Forecast hydropower generation in the electric power sector increases by 4.8% 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 levels more than 30% above normal (according to the Northwest River Forecast Center), which points to above-normal snowpack levels in the region. California also had above-average levels of 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. Production tax credit eligibility for wind generators was extended for 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 for the first 10 years of plant operation. Investment tax credits eligibility for solar generators was extended at the 30% level for plants starting construction through the end of 2019, with the value dropping each year down to 10% for plants under construction in 2022 and beyond.

EIA expects little impact 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 builds over the next several years, but these near-term effects will be less certain until states start to lay out their implementation plans.

EIA expects continued growth in utility-scale solar power generation, which is projected to average 129 gigawatthours per day (GWh/d) in 2017, an increase of 45% from the 2016 level. 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 126% (13 GW) between the end of 2014 and the end of 2016, with 4.9 GW of new capacity being built in California. Other states leading in utility-scale solar capacity additions include North Carolina and Nevada, which, combined with California, account for about two-thirds of the projected utility-scale capacity additions for 2015 and 2016.

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, which was included in the November 30 rule. Ethanol production, which averaged an estimated 964,000 b/d in 2015, is forecast to average about 970,000 b/d in both 2016 and 2017. Ethanol consumption, which averaged 910,000 b/d in 2015, is forecast to average 930,000 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 that 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 an estimated 85,000 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 also expected to increase from 28,000 b/d in 2015 to 47,000 b/d in both 2016 and 2017.

Energy-Related Carbon Dioxide Emissions

EIA estimates that emissions of CO2 declined by 1.9% in 2015. Emissions are projected to increase 0.6% in 2016 but remain flat 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 0.235 0.236
Hydropowera 2.475 2.295 2.403 2.591
Solar 0.421 0.523 0.622 0.806
Waste Biomass 0.516 0.510 0.513 0.516
Wind 1.727 1.768 2.056 2.287
Wood Biomass 2.230 2.056 1.972 1.996
Electricity Subtotalb 7.582 7.377 7.796 8.425
Biomass-based Diesel 0.198 0.219 0.302 0.310
Ethanol 1.107 1.146 1.175 1.171
Biofuels Subtotal 1.305 1.363 1.476 1.481
Otherc 0.757 0.770 0.784 0.782
Total 9.645 9.512 10.057 10.688
Carbon Dioxide Emissions by Fuel (million metric tons)
Petroleum and Other Liquid Fuels 2252 2282 2297 2314
Natural Gas 1434 1483 1507 1516
Coal 1713 1532 1525 1505
Total Fossil Fuels 5399 5298 5329 5334

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