Energy Department's Annual Outlook Underscores Need for Strong Renewable Energy Policies, Touts Benefits of Fuel Economy Standards

The Department of Energy's Energy Information Administration (EIA) yesterday released its "Annual Energy Outlook 2010," which provides an
overview of the nation's current energy use and projects future energy
trends. Experts at the Union of Concerned Scientists (UCS) took a close
look at the EIA's take on renewable energy and fuel economy.

According to Steve Clemmer, research director for the Climate and
Energy Program at the Union of Concerned Scientists (UCS), "A key
takeaway in the 'Energy Outlook' is that the renewable energy industry
is expanding steadily in all parts of the country. But these modest
gains are a tiny fraction of U.S. renewable energy and job creation
potential. On the eve of the release of the Kerry-Lieberman climate
bill, it's key to note that--if done right--comprehensive federal
legislation that puts a price on pollution, spurs renewable energy
development, and drives a cleaner transportation system could unleash
that potential.."

On the fuel-economy front, Clemmer's colleague in UCS's Clean
Vehicle Program, senior federal policy analyst Brendan Bell said,
"Fuel-economy standards are like an insurance policy against high gas
prices for consumers. The new automobile standards show that we can
save consumers billions of dollars at the pump--now we need to do the
same for big rig trucks."

Energy and transportation experts at the Union of Concerned
Scientists have reviewed the report and discuss some of the highlights
below.

ELECTRICITY SECTOR HIGHLIGHTS

Renewable energy growth eclipses bills in Congress: The EIA projects
that the percentage of U.S. electricity produced by non-hydro renewable
energy sources will increase from 4 percent in 2009 to 12.3 percent in
2030, compared to last's year projection of 11 percent in 2030. This
projected growth in renewable energy is due primarily to state
renewable electricity standards and federal tax credits included in
last year's stimulus bill that are set to expire as early as next year
for some renewable energy technologies. UCS estimates
that this "business as usual" renewable development will eclipse the
amount of clean energy developed in renewable electricity standards
currently proposed in Congress. Any serious national effort to increase
renewable energy capacity and create jobs means targets must be
strengthened considerably.

All parts of the nation will see renewable energy growth: The
"Energy Outlook" projects that renewable energy technologies (excluding
hydropower) will represent 41 percent of the new electric capacity
built between 2008 and 2035. EIA projects that new renewable energy
facilities will provide three times the capacity created by new coal
plants and nearly 11 times the capacity developed with new nuclear
plants. EIA projects that renewable energy will increase in all regions
of the country, including the Southeast. That region's renewable energy
capacity is expected to increase from 4,500 megawatts (MW) in 2009 to
17,300 MW by 2030. This growth is impressive compared with today's
levels, but it still falls well short of the region's true homegrown,
clean energy potential.

Recent studies show economic benefits from increasing renewable
electricity: A number of recent studies--including those by the
Department of Energy--show that a strong national renewable electricity
standard is feasible and affordable. A 2009 UCS analysis
found that the nation could meet a 25 percent by 2025 renewable
electricity standard, generate 300,000 new jobs, and save consumers
$64.3 billion on their electric and natural gas bills.

TRANSPORTATION SECTOR HIGHLIGHTS

Fuel-economy standards protect consumers from increasing fuel
prices: The "EIA Outlook" anticipates a 35-percent increase in gasoline
prices over the next decade, from $2.49 in 2010 to $3.34 in 2020 (in
2008 dollars). Using the EIA's fuel price projections, UCS estimates
drivers will save $46 billion in 2020--even after factoring in the cost
of vehicle technology improvements.

No fuel economy standards for big rigs means truckers will pay at
the pump: New federal fuel-economy standards do not apply to big rigs
and other heavy trucks, so the increases in fuel costs for these
vehicles will not be offset. A UCS analysis found that the average
medium- and heavy-duty truck could become at least 60 percent more fuel
efficient by 2030 by instituting a range of efficiency improvements,
including low-rolling resistance tires, advanced engines, and more
aerodynamic tractor and trailer designs. Using the EIA's fuel price
data, that level of fuel efficiency would save truckers $34 billion in
2030.

Clean biofuels will struggle to meet mandates: The "Energy Outlook"
starkly illustrates the failure of the cellulosic biofuels industry to
date. This year, the EIA projects cellulosic ethanol volumes will be 97
percent lower than the 100 million gallon mandate in the Renewable
Fuels Standard (RFS). Long-term commercialization of cellulosic
biofuels lags behind RFS targets by a decade.