WASHINGTON - Despite the challenges presented by the current global recession, the stimulus provided by the American Recovery and Reinvestment Act (ARRA) is expected to spur energy efficiency gains and greater long-term growth in renewable energy than previously expected, according to the U.S. Department of Energy’s (DOE’s) Energy Information Administration (EIA). The EIA released its Annual Energy Outlook in March, but that publication reflected the situation in November 2008, before the full effects of the recession were clear and before the passage of the ARRA. The EIA has now updated the publication to include an energy outlook without the stimulus of the ARRA and an outlook that accounts for the ARRA.

The biggest near-term impact of the ARRA is a jump in renewable power generation (excluding hydropower), exceeding 300 billion kilowatt-hours by 2012, compared to falling well short of 200 billion kilowatt-hours without the ARRA. The ARRA is projected to more than double the production of wind power in 2012, increasing wind generation from roughly 53 billion kilowatt-hours in 2008 to a projected 201 billion kilowatt-hours in 2012, while the no-stimulus case projects wind generation to only grow to 86 billion kilowatt-hours by 2012. Compared to the no-stimulus case, the ARRA is projected to increased installed wind power capacity by 67 percent by 2030, while also increasing geothermal power capacity by 16 percent and biomass power capacity by 18 percent. The ARRA also provides a huge boost for small wind turbines installed at commercial sites, causing a five-fold increase by 2016, which results in 120 megawatts of installed wind capacity. In addition, a 15 percent increase in commercial solar power installations results in 121 megawatts by 2011.

The ARRA also directs a large amount of funding toward energy efficiency improvements in homes, on military bases, and throughout the federal government. The benefits of that investment are most obvious in household heating and cooling: by 2030, energy consumption for household heating is projected to drop by 1.7 percent, while energy consumption for household cooling drops by 3.4 percent. Between now and 2030, annual household energy costs, excluding transportation, are projected to average $64 per year lower than without the ARRA. Total annual residential and commercial energy bills are projected to be $21 billion lower by 2030. The ARRA also achieves a short-term advantage for cutting greenhouse gas emissions, resulting in emissions that are 1.3 percent lower in 2013 than the no-stimulus case.

Publication date: 05/11/2009