America’s Energy Future

TECHNOLOGY AND TRANSFORMATION

Committee on America’s Energy Future

NATIONAL ACADEMY OF SCIENCES

NATIONAL ACADEMY OF ENGINEERING

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

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Committee on America’s Energy Future

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. Support for this project was provided by the Department of Energy under Grant Number DEFG02-07- ER-15923 and by BP America, Dow Chemical Company Foundation, Fred Kavli and the Kavli Foun- dation, GE Energy, General Motors Corporation, Intel Corporation, and the W.M. Keck Foundation. Support was also provided by the Presidents’ Circle Communications Initiative of the National Acad- emies and by the National Academy of Sciences through the following endowed funds created to per- petually support the work of the National Research Council: Thomas Lincoln Casey Fund, Arthur L. Day Fund, W.K. Kellogg Foundation Fund, George and Cynthia Mitchell Endowment for Sustainability Science, and Frank Press Fund for Dissemination and Outreach. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations that provided support for the project. Library of Congress Cataloging-in-Publication Data America’s energy future : technology and transformation / Committee on America’s Energy Future, National Academy of Sciences, National Academy of Engineering, and National Research Council of the National Academies. p. cm. Includes bibliographical references and index. ISBN 978-0-309-11602-2 (pbk.) — ISBN 978-0-309-11603-9 (PDF) 1. Power resources—United States. 2. Energy policy—United States. 3. Energy conservation. I. National Academy of Engineering. Committee on America’s Energy Future. TJ163.25.U6A464 2009 333.790973—dc22 2009029730 Copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. Copyright 2009 by the National Academy of Sciences. All rights reserved. Printed on recycled stock Printed in the United States of America

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distin- guished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy mat- ters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal gov- ernment and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of further- ing knowledge and advising the federal government. Functioning in accordance with general poli- cies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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COMMITTEE ON AMERICA’S ENERGY FUTURE HAROLD T. SHAPIRO (Chair), Princeton University MARK S. WRIGHTON (Vice Chair), Washington University in St. Louis JOHN F. AHEARNE, Sigma Xi and Duke University ALLEN J. BARD, University of Texas at Austin JAN BEYEA, Consulting in the Public Interest WILLIAM F. BRINKMAN, Princeton University DOUGLAS M. CHAPIN, MPR Associates STEVEN CHU,1 Lawrence Berkeley National Laboratory CHRISTINE A. EHLIG-ECONOMIDES, Texas A&M University ROBERT W. FRI, Resources for the Future CHARLES H. GOODMAN, Southern Company (retired) JOHN B. HEYWOOD, Massachusetts Institute of Technology LESTER B. LAVE, Carnegie Mellon University JAMES J. MARKOWSKY, American Electric Power Service Corp. (retired) RICHARD A. MESERVE, Carnegie Institution for Science WARREN F. MILLER, JR.,Texas A&M University FRANKLIN M. (“LYNN”) ORR, JR., Stanford University LAWRENCE T. PAPAY, PQR LLC ARISTIDES A.N. PATRINOS, Synthetic Genomics, Inc. MICHAEL P. RAMAGE, ExxonMobil (retired) MAXINE L. SAVITZ, Honeywell, Inc. (retired) ROBERT H. SOCOLOW, Princeton University JAMES L. SWEENEY, Stanford University G. DAVID TILMAN, University of Minnesota, St. Paul C. MICHAEL WALTON, University of Texas at Austin Consultants PETER BIERMAYER, Lawrence Berkeley National Laboratory SAM BORGESON, Lawrence Berkeley National Laboratory ANJAN BOSE, Washington State University RICH BROWN, Lawrence Berkeley National Laboratory STEVE DUNN, Southwest Energy Efficiency Project 1Resigned from the committee on January 21, 2009. iv

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ADRIAN A. FAY, Massachusetts Institute of Technology SAMUEL FLEMING, Claremont Canyon Consultants MARK FRANKEL, New Buildings Institute JIM HARDING, Independent Consultant, Olympia, Washington JASON HILL, University of Minnesota, St. Paul NARAIN HINGORANI, Independent Consultant, Los Altos Hills, California MAURICIO JUSTINIANO, Energetics, Inc. JON KOOMEY, Lawrence Berkeley National Laboratory SHELDON KRAMER, Independent Consultant, Grayslake, Illinois THOMAS KREUTZ, Princeton University ERIC LARSON, Princeton University NANCY MARGOLIS, Energetics, Inc. ALAN MEIER, Lawrence Berkeley National Laboratory MIKE MESSENGER, Itron, Inc. STEVE SELKOWITZ, Lawrence Berkeley National Laboratory CHRISTOPHER WEBER, Carnegie Mellon University ROBERT WILLIAMS, Princeton University America’s Energy Future Project Director PETER D. BLAIR, Executive Director, Division on Engineering and Physical Sciences America’s Energy Future Project Manager JAMES ZUCCHETTO, Director, Board on Energy and Environmental Systems (BEES) Project Staff KEVIN D. CROWLEY (Study Director), Director, Nuclear and Radiation Studies Board (NRSB) DANA G. CAINES, Financial Manager, BEES SARAH C. CASE, Program Officer, NRSB ALAN T. CRANE, Senior Program Officer, BEES GREG EYRING, Senior Program Officer, Air Force Studies Board K. JOHN HOLMES, Senior Program Officer, BEES LaNITA JONES, Administrative Coordinator, BEES STEVEN MARCUS, Editorial Consultant THOMAS R. MENZIES, Senior Program Officer, Transportation Research Board EVONNE P.Y. TANG, Senior Program Officer, Board on Agriculture and Natural Resources MADELINE G. WOODRUFF, Senior Program Officer, BEES E. JONATHAN YANGER, Senior Program Assistant, BEES v

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Foreword E nergy, which has always played a critical role in our country’s national security, economic prosperity, and environmental quality, has over the last two years been pushed to the forefront of national attention as a result of several factors: World demand for energy has increased steadily, especially in develop- ing nations. China, for example, saw an extended period (prior to the current worldwide economic recession) of double-digit annual increases in economic growth and energy consumption. About 56 percent of the U.S. demand for oil is now met by depending on imports supplied by foreign sources, up from 40 percent in 1990. The long-term reliability of traditional sources of energy, especially oil, remains uncertain in the face of political instability and limitations on resources. Concerns are mounting about global climate change—a result, in large measure, of the fossil-fuel combustion that currently provides most of the world’s energy. The volatility of energy prices has been unprecedented, climbing in mid- 2008 to record levels and then dropping precipitously—in only a matter of months—in late 2008. Today, investments in the energy infrastructure and its needed technolo- gies are modest, many alternative energy sources are receiving insuffi- cient attention, and the nation’s energy supply and distribution systems are increasingly vulnerable to natural disasters and acts of terrorism. vii

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viii Foreword All of these factors are affected to a great degree by the policies of govern- ment, both here and abroad, but even with the most enlightened policies the over- all energy enterprise, like a massive ship, will be slow to change course. Its com- plex mix of scientific, technical, economic, social, and political elements means that the necessary transformational change in how we generate, supply, distribute, and use energy will be an immense undertaking, requiring decades to complete. To stimulate and inform a constructive national dialogue about our energy future, the National Academy of Sciences and the National Academy of Engi- neering initiated a major study in 2007, “America’s Energy Future: Technology Opportunities, Risks, and Tradeoffs.” The America’s Energy Future (AEF) project was initiated in anticipation of major legislative interest in energy policy in the U.S. Congress and, as the effort proceeded, it was endorsed by Senate Energy and Natural Resources Committee Chair Jeff Bingaman and former Ranking Member Pete Domenici. The AEF project evaluates current contributions and the likely future impacts, including estimated costs, of existing and new energy technologies. It was planned to serve as a foundation for subsequent policy studies, at the Academies and elsewhere, that will focus on energy research and development priorities, stra- tegic energy technology development, and policy analysis. The AEF project has produced a series of five reports, including this one, designed to inform key decisions as the nation begins a comprehensive examina- tion of energy policy issues this year. Numerous studies conducted by diverse orga- nizations have benefited the project, but many of those studies disagree about the potential of specific technologies, particularly those involving alternative sources of energy such as biomass, renewable resources for generation of electric power, advanced processes for generation from coal, and nuclear power. A key objec- tive of the AEF series of reports is thus to help resolve conflicting analyses and to facilitate the charting of a new direction in the nation’s energy enterprise. The AEF project, outlined in Appendix C, included a study committee and three panels that together have produced an extensive analysis of energy technol- ogy options for consideration in an ongoing national dialogue. A milestone in the project was the March 2008 “National Academies Summit on America’s Energy Future” at which principals of related recent studies provided input to the AEF study committee and helped to inform the panels’ deliberations. A report chroni- cling the event, The National Academies Summit on America’s Energy Future:

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ix Foreword Summary of a Meeting (Washington, D.C.: The National Academies Press), was published in October 2008. The AEF project was generously supported by the W.M. Keck Foundation, Fred Kavli and the Kavli Foundation, Intel Corporation, Dow Chemical Com- pany Foundation, General Motors Corporation, GE Energy, BP America, the U.S. Department of Energy, and our own Academies. Ralph J. Cicerone, President Charles M. Vest, President National Academy of Sciences National Academy of Engineering Chair, National Research Council Vice Chair, National Research Council

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Preface T he security and sustainability of our nation’s energy system have been perennial concerns since World War II. Indeed, all postwar U.S. presidents have focused some attention on energy-supply issues, especially our grow- ing dependence on imported petroleum and the environmental impacts of fossil- fuel combustion—the latter including the direct effects of pollutant emissions on human health and, more recently, the impacts of greenhouse gases, particularly carbon dioxide (CO2), on global warming. The United States has made a great deal of progress in reducing traditional gaseous and particulate emissions (e.g., SOx, NOx) through regulatory controls and the technology improvements that have followed. But greenhouse gas emissions are only beginning to be addressed in any meaningful way. The United States also needs to lower its dependence on fragile supply chains for some energy sources, particu- larly petroleum at present and possibly natural gas in the future, and to avoid the impacts of this dependence on our nation’s economy and national security. As a result of these and other factors (described in Chapter 1), such as the nation’s increasingly vulnerable transmission and distribution systems, there has been a steadily growing consensus1 that our nation must fundamentally transform the ways in which it produces, distributes, and consumes useful energy. Given the size and complexity of the U.S. energy system and its reach into all aspects of 1See, for example: Lighting the Way: Toward a Sustainable Energy Future, published by the InterAcademy Council in 2007 (www.interacademycouncil.net/?id=12161); Ending the Energy Stalemate, published by the National Commission on Energy Policy in 2007 (www.energy commission.org/ht/d/sp/i/492/pid/492); and Facing the Hard Truths About Energy, published by the National Petroleum Council in 2007 (www.npchardtruthsreport.org). xi

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xiv Preface It is beyond the scope of this committee’s charge to opine on the priority, rel- ative to other national issues, of initiating and sustaining a national effort to trans- form our energy sector. However, I personally believe that despite the uncertainties before us, it is a truly urgent matter to begin such a transformation and, moreover, that the technology and knowledge for doing so are at hand. Indeed, the urgency for action to meet the nation’s needs in the economic, environmental, and national security arenas as they relate to energy production and use are unique in our his- tory, and delayed action could dramatically increase the challenges we face. But a timely transformation of the energy system is unlikely to happen without finally adopting a strategic energy policy to guide developments over the next decades. Long-term problems require long-term solutions, and only significant, deliberate, stable, integrated, consistent, and sustained actions will move us to a more secure and sustainable energy system. I also believe that we should not allow short-term fluctuations, either in the prices of energy supplies or in geopolitical affairs, to distract us from this criti- cal long-term effort. Creating a more sustainable and secure energy system will require leadership, courage, risk-taking, and ample support, both public and pri- vate, but in my view such investments will generate a significant stream of long- term dividends. Harold T. Shapiro, Chair Committee on America’s Energy Future

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Acknowledgments T his study could not have been done so well and on such a rapid schedule without the inspired contributions of a large number of individuals and organizations. First and foremost, I thank the committee members and staff for their dedication and hard work. These individuals brought a remark- ably diverse array of disciplines, skills, and viewpoints to the study. As a result, our deliberations were intellectually stimulating—sometimes vigorous, but always respectful—as we worked together to develop this consensus report. The committee initially organized itself into seven subgroups to facilitate information-gathering and, ultimately, the development of Chapters 4–9, which appear in Part 2 of this report: Alternative liquid transportation fuels (chaired and staffed, respectively, by Mike Ramage and Evonne Tang) Crosscutting and integration issues (Jim Sweeney and Madeline Woodruff) Electricity transmission and distribution (Jim Markowsky; Alan Crane and Sarah Case) Energy efficiency (Lester Lave; Madeline Woodruff, Greg Eyring, and Tom Menzies) Fossil-fuel energy (Lynn Orr and Greg Eyring) Nuclear energy (Dick Meserve and Sarah Case) Renewable energy (Larry Papay and K. John Holmes, assisted by Mirzayan Science and Technology Policy Graduate Fellows Amy Hee Kim, Dorothy Miller, and Stephanie Wolahan). xv

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xvi Acknowledgments I thank these chairs for their able leadership, and I thank the subgroup mem- bers, staff, and fellows for their good work. I also express my gratitude to study director Kevin Crowley, who worked tirelessly to keep the entire study moving forward and to help the committee develop and articulate its key findings, which appear in Part 1 of this report. The subgroups held separate meetings to obtain presentations and to gather the information that now appears in the Part 2 chapters. On behalf of the entire committee, I thank the outside experts who participated in these meetings. They are too numerous to list in this short section but are identified in Appendix B. I also gratefully acknowledge the consultants who assisted the committee and its three sister panels (see Appendix C) with some of the analyses that were used in this report: Anup Bandivadekar, International Council on Clean Transportation Peter Biermayer, Sam Borgeson, Rich Brown, Jon Koomey, Alan Meier, and Steve Selkowitz, Lawrence Berkeley National Laboratory Anjan Bose, Washington State University Steve Dunn, Southwest Energy Efficiency Project Adrian A. Fay, Massachusetts Institute of Technology Samuel Fleming, Claremont Canyon Consultants Mark Frankel, New Buildings Institute Jim Harding, Independent Consultant Jason Hill, University of Minnesota, St. Paul Narain Hingorani, Independent Consultant Mauricio Justiniano and Nancy Margolis, Energetics, Inc. Sheldon Kramer, Independent Consultant Thomas Kreutz, Eric Larson, and Robert Williams, Princeton University Mike Messenger, Itron, Inc. Christopher Weber, Carnegie Mellon University. Finally, I thank the many other National Academies staff who helped to make this study a success. Peter Blair and Jim Zucchetto, comanagers of the America’s Energy Future Project, provided critical advice and guidance to the com- mittee throughout the project. Mirzayan Science and Technology Policy Gradu- ate Fellow Lawrence Lin and senior program associate Matt Bowen helped with the initial assembly of the massive literature that the committee used, and Matt Bowen also assisted with report review. Anderson Commonweal Intern Stephanie

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xvii Acknowledgments Oparaugo assisted with research and administrative tasks for the nuclear energy chapter. LaNita Jones and Jonathan Yanger provided critical logistical support of the committee’s work. Consultant Steve Marcus edited the report. Stephen Mautner supervised the report’s publication by the National Academies Press, Estelle Miller provided design and layout, and Susan Maurizi and Livingston Sheats took responsibility for production editing. All figures in the report were rendered by Danial James Studios of Golden, Colorado. It has been a great pleasure to work with such a talented and committed group of people. We learned a great deal from our presenters, consultants, and each other during the course of this study. It is my hope that our collective efforts have produced a report that will inform decision making and help engender wise policies and actions among our nation’s political and business leaders. Harold T. Shapiro

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Acknowledgment of Reviewers T his report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical com- ments that will assist the institution in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their participation in the review of this report: Rakesh Agrawal, Purdue University Philip W. Anderson, Princeton University R. Stephen Berry, University of Chicago Thomas Cochran, Natural Resources Defense Council Michael Corradini, University of Wisconsin, Madison Paul DeCotis, State of New York, Office of the Governor David Hawkins, Natural Resources Defense Council Robert Hirsch, Consultant Dale Jorgenson, Harvard University Ernest Moniz, Massachusetts Institute of Technology Dan Reicher, Google.org Edward Rubin, Carnegie Mellon University Christopher Somerville, University of California, Berkeley xix

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xx Acknowledgment of Reviewers James Thorp, Virginia Polytechnic Institute and State University Carl J. Weinberg, Consultant John P. Weyant, Stanford University John Wise, ExxonMobil (retired) John Wootten, Peabody Energy Kurt Yeager, Electric Power Research Institute. Although the reviewers listed above have provided many constructive com- ments and suggestions, they were not asked to endorse the conclusions or rec- ommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Elisabeth M. Drake, Massachusetts Institute of Technology, and Robert A. Frosch, Harvard University. Appointed by the National Research Council, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Contents EXECUTIVE SUMMARY 1 PART 1 7 1 CONTEXT AND CHALLENGES 9 The Current U.S. Energy System, 11 Challenges to Transforming Energy Production and Use, 25 The Role of Technology, 27 Strategy for Addressing the Study Charge, 30 Report Organization, 33 References, 34 2 KEY FINDINGS 35 Finding 1: Technology Deployment Options, 38 Finding 2: Energy Savings from Improved Efficiency, 40 Finding 3: Options for Increasing Electricity Supplies and Changing the Supply Mix, 49 Finding 4: Modernizing the Nation’s Power Grid, 60 Finding 5: Continued Dependence on Petroleum, 62 Finding 6: Reducing Greenhouse Gas Emissions, 68 Finding 7: Technology Research, Development, and Demonstration, 73 Finding 8: Barriers to Accelerated Technology Deployment, 76 References, 79 xxi

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xxii Contents 3 KEY RESULTS FROM TECHNOLOGY ASSESSMENTS 81 Energy Efficiency, 82 Alternative Transportation Fuels, 89 Renewable Energy, 94 Fossil-Fuel Energy, 102 Nuclear Energy, 109 Electricity Transmission and Distribution, 115 References, 119 Annex 3.A: Methods and Assumptions, 120 PART 2 133 4 ENERGY EFFICIENCY 135 Energy Use in the United States and the Potential for Improved Energy Efficiency, 136 Energy Efficiency in Residential and Commercial Buildings, 141 Energy Efficiency in Transportation, 155 Energy Efficiency in Industry, 175 Energy Efficiency Policies and Programs: Experience and Lessons Learned, 191 General Findings: Real Prospects for Energy Efficiency in the United States, 202 References, 202 5 ALTERNATIVE TRANSPORTATION FUELS 211 Conversion of Coal and Biomass to Liquid Fuels, 211 Feedstock Supply, 213 Conversion Technologies, 219 Costs, CO2 Emissions, and Supply, 233 Deployment of Alternative Transportation Fuels, 244 Environmental Impacts Beyond Greenhouse Gas Emissions, 248 Barriers to Deployment, 250 Technologies Ready for Deployment Beyond 2020, 252 Other Transportation-Fuel Options Ready for Deployment by 2020 and 2035, 258 References, 267

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xxiii Contents 6 RENEWABLE ENERGY 271 Current Status of Renewable Electricity, 271 Resource Base, 275 Renewable Technologies, 279 Costs, 292 Environmental Impacts, 299 Deployment Potential, 303 Deployment Scenarios, 309 Non-Electricity Renewable Energy, 318 Conclusion, 322 References, 323 7 FOSSIL-FUEL ENERGY 331 Oil, Gas, and Coal Resources, 334 Electric Power Generation with Fossil Fuels, 358 Geologic Storage of CO2, 396 Environmental Quality and Safety Issues, 403 References, 411 Annex 7.A: Fossil Fuels, 415 8 NUCLEAR ENERGY 445 Technologies, 448 Costs, 463 Potential for Future Deployment, 471 Potential Barriers, 477 Impacts, 482 Findings, 494 References, 500 Annex 8.A: Nuclear Reactor Technologies, 503 Annex 8.B: Alternative Fuel Cycle Technologies, 517 Annex 8.C: Projected Costs for Evolutionary Nuclear Plants, 526 Annex 8.D: Environmental Impacts of Nuclear Technologies, 533 Annex 8.E: Safety and Security Impacts of Nuclear Technologies, 553 References for Annexes 8.A–8.E, 558 9 ELECTRICITY TRANSMISSION AND DISTRIBUTION 563 Background, 564 A Modern Electric T&D System, 575

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xxiv Contents Key Technologies for a Modern Electric T&D System, 578 Costs of Modernization, 592 Potential Benefits of a Modern T&D System, 594 Barriers to Deploying a Modern T&D System, 599 Deploying a Modern T&D System, 602 Findings and Conclusions, 604 References, 608 Annex 9.A: Supporting Information, 611 APPENDIXES A Committee and Staff Biographies 641 B Meeting Participants 659 C America’s Energy Future Project 665 D Principal Units and Conversion Factors 669 E Select Acronyms and Abbreviations 673 Index 685