Electricity from Renewable Resources

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Electricity from Renewable Resources STATUS, PROSPECTS, AND IMPEDIMENTS America’s Energy Future Panel on Electricity from Renewable Resources

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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 panel responsible for the report were chosen for their special competences and with regard for appro- priate balance. Support for this project was provided by the Department of Energy under Grant Number DE-FG02- 07-ER-15923 and by BP America, Dow Chemical Company Foundation, Fred Kavli and the Kavli Foundation, GE Energy, General Motors Corporation, Intel Corporation, and the W.M. Keck Founda- tion. Support was also provided by the Presidents’ Circle Communications Initiative of the National Academies and by the National Academy of Sciences through the following endowed funds created to perpetually 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 Sustain- ability Science, and Frank Press Fund for Dissemination and Outreach. Any opinions, findings, conclu- sions, or recommendations expressed in this publication are those of the author(s) and do not necessar- ily reflect the views of the organizations that provided support for the project. International Standard Book Number-13: 978-0-309-13708-9 International Standard Book Number-10: 0-309-13708-X Library of Congress Control Number: 2009938602 Available in limited supply and free of charge from: Board on Energy and Environmental Systems National Research Council 500 Fifth Street, N.W. Keck W917 Washington, DC 20001 202-334-3344 Additional 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 2010 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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PANEL ON ELECTRICITY FROM RENEWABLE RESOURCES LAWRENCE T. PAPAY, NAE,1 Science Applications International Corporation (retired), Chair ALLEN J. BARD, NAS,2 University of Texas, Austin, Vice Chair RAKESH AGRAWAL, NAE, Purdue University WILLIAM CHAMEIDES, NAS, Duke University JANE H. DAVIDSON, University of Minnesota, Minneapolis J. MICHAEL DAVIS, Pacific Northwest National Laboratory KELLY R. FLETCHER, General Electric CHARLES F. GAY, Applied Materials, Inc. CHARLES H. GOODMAN, Southern Company (retired) SOSSINA M. HAILE, California Institute of Technology NATHAN S. LEWIS, California Institute of Technology KAREN L. PALMER, Resources for the Future JEFFREY M. PETERSON, New York State Energy Research and Development Authority KARL R. RABAGO, Austin Energy CARL J. WEINBERG, Pacific Gas and Electric Company (retired) KURT E. YEAGER, Galvin Electricity Initiative 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 Staff K. JOHN HOLMES, Study Director KATHERINE BITTNER, Senior Program Assistant (until July 2008) LaNITA R. JONES, Program Associate AMY HEE KIM, Christine Mirzayan Science and Technology Policy Graduate Fellow (until November 2008) DOROTHY MILLER, Christine Mirzayan Science and Technology Policy Graduate Fellow (until August 2008) JASON ORTEGO, Senior Program Assistant STEPHANIE WOLAHAN, Christine Mirzayan Science and Technology Policy Graduate Fellow (until April 2009) E. JONATHAN YANGER, Senior Program Assistant 1NAE, National Academy of Engineering. 2NAS, National Academy of Sciences. iv

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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. v

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Foreword vi 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 in 2007 a major study, “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 report on electricity from renewable resources, designed to inform key decisions as the nation begins this year a comprehensive examination of energy policy issues. Numerous studies conducted by diverse organizations 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, renew- able resources for generation of electric power, advanced processes for generation from coal, and nuclear power. A key objective 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 A, 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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Foreword vii 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 S hortly after the end of World War II, America’s electricity use rose rapidly with the introduction of labor-saving appliances and tools in the home, the electrification of manufacturing processes and assembly lines in factories, and the increased distribution of refrigerated and frozen foods into markets. This unprecedented growth averaged almost 7 percent annually on a compound basis for two decades. Helping to fuel this growth was the lower price of electricity made possible by economies of scale achieved as new plants were built. With the close of the 1960s and the start of the 1970s, a series of events changed the face of electric power economics and structure, and this process continues today. The 1970 National Environmental Policy Act (NEPA) and the creation of the U.S. Environmental Protection Agency (EPA) signaled that envi- ronmental considerations would be required for every decision regarding expan- sion, construction, and operation of electric power systems and components. In 1973 the Organization of the Petroleum Exporting Countries’ oil embargo on the United States pointed out the vulnerability of the supply of transportation and boiler fuels. On the heels of the embargo, the United States experienced sharp increases in the cost of electricity due to the increased price of fuels. As the 1980s arrived, it became far more costly to construct large baseload power plants—particularly nuclear plants—because of lengthy approval processes and, post–Three Mile Island, reevaluation and redesign of nuclear safety systems. The advent of deregulation due to legislation from 1978 onward meant that new project-financed independent power generators would look for least-cost options, which usually meant natural-gas-fired combined cycle power plants. Based on a series of studies by the White House Office of Science and Tech- nology Policy in the early 1970s, a few developers and utilities began to look into ix

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Preface x the possible use of renewable sources of energy for electric power production. In 1978, with the passage of the Public Utility Regulatory Policies Act (PURPA), small generation units and renewable resources were given special attention. The introduction of incentives such as tax credits at the federal and state level, as well as renewables portfolio standards (RPSs), spurred the development of renewable technologies. Growth in the 1980s and early 1990s was spotty, but the succeeding decade has seen a dramatic increase in renewable projects for electric power, par- ticularly in wind and solar. Today, there is a nexus of concerns about the U.S. energy portfolio: concerns about the environment, principally arising from climate change issues; concerns about energy security, principally due to the large amounts of oil imported from volatile parts of the world; and concerns about the economy, principally because of sharp increases in the price of oil, natural gas, and basic construction com- modities. Collectively, these concerns beg the question of whether it is time for reevaluating and redesigning our electric infrastructure to extend energy efficiency to a much greater extent and use domestic, non-polluting, economically attractive energy sources. Thus, this provides the motivation for the continued but growing interest in renewable-based electric power. Such concerns, consequently, have led to greater interest in renewable elec- tric power. As part of the America’s Energy Future (AEF) project initiated by the National Academy of Sciences and the National Academy of Engineering (Appendix A), the National Research Council convened the Panel on Electricity from Renewable Resources (Appendix B) to examine all the factors that must be considered if any renewable energy resource is to become a significant contribu- tor to meeting U.S. energy needs (see Box P.1 for the full statement of task). Pre- sented in this stand-alone report, the work of this independent panel also serves as input to the larger AEF study outlined in Appendix A. This report of the panel considers resource bases, technologies, economics, environmental impacts, and deployment issues and also presents selected deploy- ment scenarios and their impacts. The major focus is the relative near term, from the present to the year 2020. The report also considers, in less detail, the mid- term between the years 2020 and 2035 and the long term beyond 2035. The goal of the report is to determine if renewable electric power technologies can make a significant (>20 percent) contribution to the total electric power needs of the United States and on what basis. It examines cost and deployment issues in detail. This report is the result of considerable time and effort contributed by the panel members. Many issues needed a fair and honest discussion, and the panel members proved capable of the task. The panel in turn appreciates the dedicated

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Preface xi BOX P.1  Task Statement for AEF Panel on Electricity from Renewable Resources This panel will examine the technical potential for electric power generation with alternative sources such as wind, solar-photovoltaic, geothermal, solar-ther- mal, hydroelectric, and other renewable resources. The panel will also consider the broader energy applications of renewables, especially low-temperature solar appli- cations that may reduce electricity demands. The panel will evaluate technologies based on their estimated times to initial commercial deployment and will provide the following information for each: • Initial deployment times <10 years: costs, performance, and impacts • 10 to 25 years: barriers, implications for costs, and R&D challenges/needs • >25 years: barriers and R&D challenges/needs, especially basic research needs. The primary focus of the study will be on the quantitative characterization of technologies with initial deployment times <10 years. The panel will focus on those renewable resources that show the most promise for initial commercial devel- opment within a decade leading to substantial impact on the U.S. energy system, as well as consider the potential use of such technologies globally. In keeping with the charge to the overall scope of the America’s Energy Future Study Committee, the panel will not recommend policy choices, but it will assess the state of develop- ment of technologies. In addition to a principal focus on renewable energy tech- nologies for power generation, the panel will address the challenges of incorpo- rating such technologies into the power grid, as well as the potential of improve- ments in the national electricity grid that could enable better and more extensive use of wind, solar-thermal, solar photovoltaics, and other renewable technologies. and committed staff of the National Research Council, including K. John Holmes, study director and senior program officer with the Board on Energy and Environ- mental Systems (BEES); Amy Hee Kim, Dorothy Miller, and Stephanie Wolahan, all Christine Mirzayan Science and Technology Policy Graduate Fellows; James Zucchetto, director of BEES; Jonathan Yanger and Jason Ortego, senior program assistants; and Peter Blair, executive director of the Division on Engineering and Physical Sciences. Richard Sweeney of Resources for the Future also contributed to the economic analysis in Chapter 4 in his role as an unpaid consultant to the panel. Lawrence T. Papay, Chair Panel on Electricity from Renewable Resources

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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 Report Review Committee of the National Research Council (NRC). The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its 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 com- ments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: Douglas M. Chapin, MPR Associates, Paul DeCotis, State of New York, Sam Fleming, Consultant, Clark Gellings, Electric Power Research Institute, Roy Gordon, Harvard University, Narain Hingorani, Consultant, Robert Hirsch, Management Information Services, Inc., Lester B. Lave, Carnegie Mellon University, Timothy Mount, Cornell University, Pedro Pizzaro, Southern California Edison, Norman R. Scott, Cornell University, Terrance Surles, Hawaii Natural Energy Institute, and Jefferson Tester, Massachusetts Institute of Technology. xiii

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Acknowledgment of Reviewers xiv Although the reviewers listed above have provided many constructive com- ments and suggestions, they were not asked to endorse the conclusions or recom- mendations, 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 NRC, 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 panel and the institution.

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Contents SUMMARY 1 1 INTRODUCTION 15 Background, 16 Current Status of Renewable Electricity Generation, 27 Reference Case Projection of Future Renewable Electricity Generation in the United States, 35 Issues of Scale, 39 Approach and Scope of This Report, 41 References, 42 2 RESOURCE BASE 45 2007 Baseline Values, 45 Wind Power, 46 Solar Power, 47 Geothermal Power, 51 Hydropower, 56 Biopower, 59 Findings, 62 References, 63 3 RENEWABLE ELECTRICITY GENERATION TECHNOLOGIES 67 Wind Power, 68 Solar Photovoltaic Power, 77 Concentrating Solar Power, 86 xv

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Contents xvi Geothermal Power, 92 Hydropower, 98 Biopower, 104 Enhancing Technologies for Electricity System Operation, 111 Findings, 125 References, 127 4 ECONOMICS OF RENEWABLE ELECTRICITY 133 The Value of Renewables, 134 Costs and Economics of Renewable Electricity, 137 Policies and Practices That Affect the Economics of Renewable Electricity Generation, 147 Estimates of Current Costs, 160 Costs in 2020, 172 Analysis of 2020 Cost Projections, 174 Findings, 178 References, 181 Annex, 186 5 ENVIRONMENTAL IMPACTS OF RENEWABLE ELECTRICITY GENERATION 195 Large-Scale Impacts from Life-Cycle Assessment, 195 Local Environmental Impacts—Siting and Permitting, 219 Findings, 227 References, 228 Annex, 234 6 DEPLOYMENT OF RENEWABLE ELECTRIC ENERGY 241 Deployment Capacity Considerations, 243 Renewable Electricity Integration, 258 Renewable Energy Markets, 265 Deployment Risk and Related Issues, 271 Findings, 283 References, 286 7 SCENARIOS 291 Objectives for Scenarios, 292 Examples of High-Penetration Scenarios, 293 Scenarios Coupling Renewables to Energy Markets Through Carbon Policies, 311 Findings, 319 References, 323

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Contents xvii Appendixes A America’s Energy Future Project 329 B Panel Biographical Information 335 C Presentations to the Panel 343 D Description of State Renewables Portfolio Standards 345 E Attributes of Life-Cycle Assessment 357 F Atmospheric Emissions from Fossil-Fuel and Nuclear 361 Electricity Generation

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