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America’s Energy Future: Technology and Transformation - Summary Edition 2 Key Findings This chapter presents eight key findings from the AEF Committee’s detailed analysis of existing and new energy-supply and end-use technologies presented in Part 2 of this report. These findings identify options for the accelerated deployment of these technologies during the next two to three decades, and they also identify needs for supporting research, development, and demonstration. Pursuing such options would, in the committee’ s judgment, hasten the transformation of the U.S. energy system, as described in Chapter 1. By “accelerated,” the committee means deployment of technologies at a rate that would exceed the “reference scenario” deployment pace (Box 2.1) but at a less dramatic rate than an all-out or “crash” effort, which could require disruptive economic and lifestyle changes that would be challenging to initiate and sustain. By contrast, accelerated technology deployments could likely be achieved without substantial disruption, although some changes in the behavior of businesses and consumers would be needed. Moreover, many of these changes could involve new costs and higher prices for end users. The accelerated-deployment options identified in this chapter are based on the committee’ s judgments regarding two important factors: (1) the readiness of evolutionary and new technologies for commercial-scale deployment and (2) the pace at which such technologies could be deployed without the disruptions associated with a crash effort. In estimating these factors, the committee considered the maturity of a given technology together with the availability of the necessary raw materials, human resources, and manufacturing and installation capacity needed to support its production, deployment, and maintenance. In some cases, estimates of the evolution of manufacturing and installation capacity were based on the documented rates of deployments of specific technologies from the past.
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America’s Energy Future: Technology and Transformation - Summary Edition BOX 2.1 Reference Scenarios The statement of task for this study (Box 1.1) called for the development of a reference scenario “that reflects a projection of current economic, technology cost and performance, and policy parameters into the future.” The AEF Committee decided to meet this requirement by adopting the Energy Information Administration’ s (EIA ’ s) reference case for U.S. energy supply and consumption, which is the most commonly cited scenario for the U.S. energy system. It provides estimates of past, current, and future energy supply and consumption parameters by assuming that current energy policies remain unchanged and then extrapolating economic growth rates and technology-development trends into the future. In other words, the EIA reference case represents a business-as-usual and policy-neutral projection. The EIA updates this reference case annually and presents it in the agency’ s Annual Energy Outlook reports. In this study , the committee uses the 2008 update (EIA, 2008), which reflects U.S. energy supply and consumption through 2007 and future projections through 2030, as its primary reference scenario. However , in limited cases the 2009 update (EIA, 2009a) was used, and explicitly noted in this report, when it was considered to be more indicative of current conditions. The EIA ’ s Annual Energy Outlook reports can be accessed at www. eia.doe.gov/oiaf/aeo/. Selected energy supply and consumption estimates from the 2008 update are shown in the three tables that follow . TABLE 2.1.1 Reference Scenario Estimates of Electricity Consumption and Supply 2007 2020 2030 Electricity Consumption (terawatt-hours) Residential 1400 1500 1700 Commercial 1300 1700 1900 Industry 1000 1100 1000 Transportation 6 8 9 Electricity Supply (terawatt-hours) Coal 2000 2300 2800 Petroleum 48 52 56 Natural gas 680 610 500 Nuclear power 800 870 920 Renewables Conventional hydropower 260 300 300 Onshore wind 38 100 120 Offshore wind 0 0 0 Solar photovoltaic 0.08 0.52 1.0 Concentrating solar power 0.92 2.0 2.2 Geothermal 16 24 31 Biopower 12 78 83 Note: Estimates have been rounded. Source: EIA, 2008.
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America’s Energy Future: Technology and Transformation - Summary Edition TABLE 2.1.2 Reference Scenario Estimates of Natural Gas Consumption and Supply 2007 2020 2030 Natural Gas Consumption (trillion cubic feet) Residential 4.7 5.2 5.2 Commercial 3.0 3.4 3.7 Industrial 6.6 6.9 6.9 Electric power 6.8 5.9 5.0 Transportation 0.02 0.07 0.09 Natural Gas Supply (trillion cubic feet) Domestic production 19 20 19 Net imports 3.8 3.6 3.2 Note: Estimates have been rounded. Source: EIA, 2008. TABLE 2.1.3 Reference Scenario Estimates of Liquid Fuels Consumption and Supply 2007 2020 2030 Liquid Fuels Consumption (million barrels per day) Residential and commercial 1.1 1.1 1.1 Industrial 5.1 4.8 4.7 Transportation 14 16 17 Electric power 0.25 0.26 0.28 Liquid Fuels Supply (million barrels per day) Petroleum Domestic production 5.1 6.2 5.6 Net imports 10 9.8 11 Natural gas plant liquids 1.8 1.7 1.6 Net product imports 2.1 1.4 1.3 Ethanol 0.44 1.4 2 Biodiesel 0.03 0.07 0.08 Biomass-to-liquids 0 0.14 0.29 Coal-to-liquids 0 0.15 0.24 Biomass-and-coal-to-liquids Not considered Note: Estimates have been rounded. Source: EIA, 2008.
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America’s Energy Future: Technology and Transformation - Summary Edition FINDING 1: TECHNOLOGY DEPLOYMENT OPTIONS With a sustained national commitment, the United States could obtain substantial energy efficiency improvements, new sources of energy, and reductions in greenhouse gas emissions through the accelerated deployment of existing and emerging energy-supply and end-use technologies, as described in some detail in Findings 2–5 in this chapter. Many energy efficiency and energy-supply technologies are ready for deployment now. But some emerging technologies will first require demonstration, either to prepare them for widespread commercial deployment starting about 2020 or to assess their readiness for deployment. The U.S. energy system encompasses a large and complex installed base of energy-supply and end-use technologies. Transforming this system to increase sustainability, promote economic prosperity, improve security, and reduce environmental impacts as envisioned in Chapter 1 will require sustained national efforts to change the ways in which energy is produced, distributed, and used. The good news from the AEF Committee’s assessment is that there are many practical options for obtaining energy savings, new supplies of energy, and reductions in greenhouse gas emissions through widespread and sustained deployments of existing and emerging energy-supply and end-use technologies. The most important of these options are described in Findings 2–5. The United States cannot continue to muddle along on its current course if it hopes to transform its energy system. Indeed, both the public and the private sectors will have to be mobilized to achieve the necessary deployments in the decades ahead. Moreover, there is no “silver bullet” technology that can be deployed to overcome U.S. energy challenges. Contributions will be needed from the full array of currently available and emerging technologies: Numerous energy-supply and end-use technologies—energy efficiency, certain renewable-energy sources, and transmission and distribution (T&D) technologies—which can be deployed now and at relatively rapid rates with the appropriate mix of incentives. 1 1 Such incentives might include carbon taxes, cap and trade systems for CO 2 emissions, and tax credits for investments in energy efficiency or renewable-energy sources. In addition, regulations that require increased energy efficiency in the buildings, transportation, and industrial
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America’s Energy Future: Technology and Transformation - Summary Edition Evolutionary nuclear energy technologies, already being deployed in some other countries, which are ready for deployment in the United States. However, their commercial viability in the United States will first need to be demonstrated. Some emerging technologies, such as carbon capture and storage (CCS), for which sustained programs of development and commercial-scale demonstration will be needed during the next decade to ready the most promising among them for widespread deployment starting around 2020. Expanding the deployment of coal with CCS, renewable energy, and evolutionary nuclear energy technologies may require continuing strong financial and regulatory pushes and new policy initiatives.2 But many of the technologies identified in this report will require decades-long lead times for development, demonstration, and deployment. Therefore it is imperative that these activities be started immediately even though some will be expensive and not all will be successful: some may fail, prove uneconomic, or be overtaken by better technologies. Some failures are an inevitable part of learning and development processes. Long-term success requires that we stay the course and not be distracted by the inevitable short-term disappointments. To help ensure that the potential benefits outweigh the risks, investments in new technology demonstrations must be carefully chosen so as to produce results that usefully inform the deployment decision-making process. Although it is beyond the committee’s charge to recommend policy actions, it notes that the effective transformation of the energy system will require long-term investment in new energy technologies, policies that encourage such investment, and acceptance of the inevitable disappointments that will punctuate our long-term success. sectors could play a key role both in moderating the demand for energy and stimulating related R&D. 2 In addition to the incentives listed in Footnote 1, other possible actions include expanding renewable-energy portfolio standards to promote the deployment of renewable energy and providing federal loan guarantees to promote construction of a handful of evolutionary nuclear plants. Some of these actions are already under way .
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America’s Energy Future: Technology and Transformation - Summary Edition FINDING 2: ENERGY SAVINGS FROM IMPROVED EFFICIENCY The deployment of existing energy efficiency technologies is the nearest-term and lowest-cost option for moderating our nation’s demand for energy, especially over the next decade. The committee judges that the potential energy savings available from the accelerated deployment of existing energy-efficiency technologies in the buildings, transportation, and industrial sectors could more than offset the Energy Information Administration’s projected increases in U.S. energy consumption through 2030. The deployment of energy efficiency technologies3 —especially of mature technologies in the buildings, transportation, and industrial sectors—is the nearest-term and lowest-cost option for extending domestic supplies of energy. Many energy efficiency savings can be obtained almost immediately by deploying currently available technologies. In contrast, providing new energy supplies typically takes many years. Moreover, energy efficiency has broader societal benefits beyond saving energy. Society is giving more attention to the environment and other externalities as exemplified, for example, by concerns about the impacts of carbon dioxide (CO2 ) emissions on global climate change. Laws and regulations, from the Endangered Species Act to the Clean Air Interstate Rule, inevitably slow the development of new energy supplies. In contrast, efficiency involves few emissions, endangers no species, and does not destroy scenic vistas. To achieve such benefits, however, the efficiency savings must translate into actual reductions in energy consumption. This has been a particular issue in the transportation sector, where efficiency improvements that could have been used to raise vehicle fuel economy were instead offset by higher vehicle power and increased size. Efficiency savings are realized at the site of energy use—that is, at the residence, store, office, factory, or transportation vehicle. The efficiency supply curves shown later in this chapter demonstrate that many energy efficiency investments cost less than delivered electricity, natural gas, and liquid fuels; in some cases, those costs are substantially less. In the electricity sector, many efficiency investments even cost less than transmission and distribution costs, which are typically 3 As noted in Chapter 1, the committee draws a sharp distinction between energy efficiency and energy conservation. Conservation can be an important strategy for reducing energy use, but it generally does not involve technology deployment and is therefore not addressed in this report.
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America’s Energy Future: Technology and Transformation - Summary Edition 4–6¢/kWh for a residential customer and about half that for large commercial and industrial customers. Chapter 4 also shows that many energy efficiency projects with a rate of return of 10 percent or more could be undertaken by industry. Although most companies do not consider this rate of return attractive, it is nevertheless an attractive investment for society. The greatest capability for energy efficiency savings is in the buildings sector, which accounted for about 70 percent of electricity consumption in the United States in 2007 (2700 TWh out of approximately 4000 TWh in total). Improvements in the energy efficiency of residential and commercial buildings—through the accelerated deployment of efficient technologies for space heating and cooling, water heating, lighting,4 computing, and other uses—could save about 840 TWh per year by 2020 (Figure 2.1), which exceeds the EIA’s projected increase in electricity demand of about 500 TWh for residential and commercial buildings by the year 2020 ( EIA, 2008) (see Table 2.1.1 in Box 2.1). Further continuous improvements in building efficiency could save about 1300 TWh of electricity per year by 2030 (Figure 2.1), which also exceeds the EIA-projected reference scenario increase in electricity demand of about 900 TWh per year . In addition, improvements in building efficiency could save 2.4 quads of natural gas annually by 2020 and 3 quads of natural gas annually by 2030 (Figure 2.2). There are many examples of cost-effective efficiency investments that could be made in the buildings sector to save energy. For example, an approximate 80 percent increase in energy efficiency—translating to nearly a 12 percent decrease in overall electricity use in buildings—could be realized immediately by replacing incandescent lamps with compact fluorescent lamps or light-emitting diodes. Energy savings between 10 and 80 percent could be realized by replacing older models of such appliances as air conditioners, refrigerators, freezers, furnaces, and hot water heaters with the most efficient models. Such replacements would not occur as quickly as replacing lamps because it is usually cost-effective to replace appliances only when they near the end of their service lives. The same is true for motor vehicles. Buildings last decades, so the energy savings benefits of new buildings will take decades to realize. However, there are cost-effective retrofits that could be installed immediately . 4 On June 26, 2009, the Obama administration issued a final rule to increase the energy efficiency of general service fluorescent lamps and incandescent reflector lamps. The changes will take effect in 2012.
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America’s Energy Future: Technology and Transformation - Summary Edition FIGURE 2.1 Estimates of potential energy savings in commercial and residential buildings in 2020 and 2030 (relative to 2007) compared to projected delivered electricity. The commercial and residential sectors are shown separately. Current (2007) U.S. delivered electricity in the commercial and residential sectors, which is used primarily in buildings, is shown on the left, along with projections for 2020 and 2030. To estimate savings, an accelerated deployment of technologies as described in Part 2 of this report is assumed. Combining the projected growth with the potential savings results in lower electricity consumption in buildings in 2020 and 2030 than exists today . The industrial and transportation sectors are not shown. Delivered energy is defined as the energy content of the electricity and primary fuels brought to the point of use. All values have been rounded to two significant figures. Sources: Data from Energy Information Administration (2008) and Chapter 4 in Part 2 of this report. In fact, the full deployment of cost-effective5 energy efficiency technologies in buildings alone could eliminate the need to build any new electricity-generating plants in the United States—except to address regional supply imbalances, replace obsolete power-generation assets, or substitute more environmentally benign electricity sources—assuming, of course, that these efficiency savings would not be used to support greater electricity use in other sectors. 5 See the section titled “Energy Efficiency” in Chapter 3 for a definition of “cost-effective.”
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America’s Energy Future: Technology and Transformation - Summary Edition FIGURE 2.2 Estimates of potential natural gas savings in commercial and residential buildings in 2020 and 2030 (relative to 2007) compared to delivered energy from natural gas. The commercial and residential sectors are shown separately. Current (2007) U.S. delivered energy from natural gas in the commercial and residential sectors, which is used primarily in buildings, is shown on the left, along with projections for 2020 and 2030. To estimate savings, an accelerated deployment of technologies as described in Part 2 of this report is assumed. Combining the projected growth with the potential savings results in lower natural gas consumption in buildings in 2020 and 2030 than exists today . The industrial and transportation sectors are not shown. Delivered energy is defined as the energy content of the electricity and primary fuels brought to the point of use. All values have been rounded to two significant figures. Sources: Data from Energy Information Administration (2008) and Chapter 4 in Part 2 of this report. Opportunities for achieving substantial energy savings exist in the industrial and transportation sectors as well. For example, deployment of energy efficiency technologies in industry could reduce energy use in manufacturing by 4.9–7.7 quads per year (14–22 percent) in 20206 relative to the EIA reference case projection (Figure 2.3). Most of these savings would occur in the pulp and paper, iron 6 These identified savings would provide industry with an internal rate of return on its efficiency investments of at least 10 percent or exceed the company’ s cost of capital by a risk premium. See Chapter 4 for additional discussion.
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America’s Energy Future: Technology and Transformation - Summary Edition FIGURE 2.3 Estimates of potential energy savings in the industrial sector in 2020 (relative to 2007) compared to total delivered energy in the industrial sector . Current (2007) U.S. delivered energy in the industrial sector is shown on the left, along with projections for 2020 and 2030. T o estimate savings, an accelerated deployment of technologies as described in Part 2 of this report is assumed. Combining the projected growth with the potential savings results in lower energy consumption in the industrial sector in 2020 (7.7 quads) than exists today. A more conservative scenario described in Chapter 4 could result in energy savings of 4.9 quads. The committee did not estimate savings for 2030. Delivered energy is defined as the energy content of the electricity and primary fuels brought to the point of use. All values have been rounded to two significant digits. Sources: Data from Energy Information Administration (2008) and Part 2 of this report. and steel, and cement industries. The increased use of combined heat and power in industry is estimated to contribute a large fraction of these potential savings—up to 2 quads per year in 2020. In the transportation sector, energy savings can be achieved by increasing the efficiencies with which liquid fuels (especially petroleum) are used and by shifting the energy source for part of the light-duty vehicle (LDV) fleet from petroleum to electric power. Of course, the environmental impacts of such a fuel shift are dependent on how electricity (or hydrogen, if fuel-cell vehicles are produced) is generated. Moreover , electrification of LDVs will increase the overall demand for electricity . Shifting this electricity demand to off-peak times (e.g., at night),
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America’s Energy Future: Technology and Transformation - Summary Edition through the use of demand-side technologies such as smart metering, may reduce the need for new power-plant construction and improve the utilization of current baseload power plants. Improvements in the efficiency of today’s spark-ignition and diesel engine LDVs, combined with increased use of hybrid and other advanced vehicle technologies, could reduce these vehicles’ fuel consumption beyond 2020 to below that projected by the EIA (EIA, 2008). The EIA projection, which incorporates the increased fuel-economy standards mandated by the Energy Independence and Security Act (EISA) of 2007, equates to a 30 percent reduction in average fuel consumption (and a 40 percent increase in average fuel efficiency) in new LDVs in 2020 over today’s consumption.7 Exceeding this EIA projection is possible, but only if vehicle manufacturers focus on increasing vehicle fuel economy as opposed to their historic emphasis on increasing vehicle power and size. Figure 2.4 shows projections (described in Chapter 4) that illustrate how improvements in LDV fuel efficiency beyond that projected by the “no-change” reference scenario could further reduce total fuel consumption. These efficiency improvements, which include plug-in hybrid vehicles but not (fully) battery-electric vehicles or hydrogen fuel-cell vehicles, could reduce gasoline consumption by about 1.4 million barrels per day in 2020 and 5.6 million barrels per day in 2035. Of course, these fuel-efficient vehicles will have to be acceptable to consumers. Improvements are also possible in fuel consumption for freight shipping, but projected growth in airline travel is likely to offset improvements in aviation technologies. Many energy efficiency technologies save money and energy . The cost of conserved energy (CCE) is a useful way to compare the cost of an energy efficiency technology to the cost of electricity and natural gas.8 The range of 7 The EIA (2008) reference case incorporates the EISA corporate average fuel economy (CAFE) standard of 35 miles per gallon (mpg) by 2020. The EIA reference case projects that the fuel economy of new vehicles will reach 36.6 mpg in 2030. As is noted in Chapter 1, the Obama administration recently announced a new national fuel efficiency policy that requires an average fuel economy standard of 35.5 mpg for new light-duty vehicles in 2016. 8 CCE is defined as the levelized annual cost of an energy efficiency measure—that is, the cost of a new technology, or the incremental cost for a more efficient technology compared with a less efficient one—divided by the annual energy savings in kilowatt-hours or British thermal units over the lifetime of the measure. (The levelized annual costs do not include the costs for public policies and programs aimed at stimulating adoption of energy efficiency measures.) The CCE is expressed here in cents per kilowatt-hour (¢/kWh) for electricity efficiency measures and dollars per million British thermal units ($/million Btu) for natural gas efficiency measures. The CCEs presented in this report were computed using a real discount rate of 7 percent.
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America’s Energy Future: Technology and Transformation - Summary Edition compressing CO2. Limitations of existing boilers and turbines could mean that reductions of emissions to something like those of natural gas power plants without CCS, about half that of a typical coal plant, would be more likely to be implemented than the 90 percent reduction that is technically possible. Achieving more substantial reductions in emissions will require more extensive retrofitting of existing coal plants; their replacement with new coal plants (which have higher greenhouse gas-capture efficiencies) or with some combination of renewable-energy and nuclear-energy sources; or reductions in energy use. Consequently, achieving substantial reductions in CO2 emissions from the electricity sector is likely to require a portfolio approach involving the accelerated deployment of multiple technologies: energy efficiency; renewables; coal and natural gas with CCS; and nuclear. However, the following two kinds of demonstrations must be carried out during the next decade if we are to more fully understand the range of available options: Assess the viability of CCS for sequestering CO2 from coal- and natural-gas-fired electricity generation. This will require the construction of a suite (~15–20) of retrofitted and new demonstration plants with CCS, featuring a variety of feedstocks (diverse coal types and natural gas); generation technologies (ultrasupercritical pulverized coal, oxyfuel, integrated gasification combined cycle, natural gas combined cycle); carbon capture strategies (pre- and post-combustion); and geologic storage locations (enhanced oil recovery sites, coal seams, deep saline formations). A few retrofits of existing natural gas plants and new gas plants with CCS should be included among the demonstrations to prepare for the possibility that optimistic forecasts of domestic natural gas availability and price prove correct. The commercial-scale demonstration of CCS would also enable the integration of this technology into plants that produce liquid fuels from coal and biomass. Demonstrate the commercial viability of evolutionary nuclear plants in the United States by constructing a suite of about five plants in this country during the next decade. Evolutionary plants are already in operation and are being built in some other countries, so there are no technological impediments to their construction in the United States. However, plant construction requires multi-billion-dollar investments—very large for the size of nuclear plant owner-operators in the United States. The long lead times (6–10 years) required for planning, licens-
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America’s Energy Future: Technology and Transformation - Summary Edition ing, and constructing these plants adds additional uncertainty, which can be reflected in the risk premiums for investments in first plants. The successful construction of a suite of evolutionary plants on budget and on schedule in the United States would demonstrate the commercial viability of this technology and enable its wider deployment after about 2020. This is an important option for meeting the projected national need for non-CO2-emitting electricity generation technologies. The failure to successfully demonstrate the viability of these technologies during the next decade will greatly restrict options to reduce CO2 emissions from the electricity sector. In particular, such a failure would remove the options of retrofitting and repowering existing coal and natural gas power plants with CCS, of replacing existing plants with new coal or natural gas plants with CCS units, and of deploying new nuclear plants. The failure to demonstrate the viability of these technologies could also prompt a major shift to natural gas for electricity generation; that is because gas plants can be built relatively quickly and inexpensively and their electricity prices could be more attractive than those of other low-carbon supply technologies such as renewables with energy storage. Unless optimistic forecasts of natural gas availability and price prove correct, however, such a shift could create the same kind of dependence on imports of LNG from outside North America that now exists for petroleum. Moreover, an electric power generation system dominated by natural gas plants without CCS would still emit significant quantities of CO2 compared to renewable and nuclear technologies (Figure 2.15). It will take decades to achieve deep reductions in CO2 emissions from the electricity sector. Building large quantities of new generation of any technology requires learning, licensing, permitting, and public acceptance. The urgency of getting started on these demonstrations to clarify future deployment options cannot be overstated. Reducing greenhouse gas emissions from the liquid-fuels-based transportation sector will also require a portfolio approach because these emissions occur in millions of mostly nonstationary sources. As shown in Figure 2.16, the deployments of some alternative liquid fuels—cellulosic ethanol, biomass-to-liquids with or without CCS, and biomass-and-coal-to-liquids with CCS—are estimated to have zero or negative CO2-eq emissions: that is, their production and use do not contribute to atmospheric CO2 and might even result in net removal of CO2 from the atmosphere. The other liquid-fuel options shown in Figure 2.16 have CO2-eq emissions that are roughly equal to, or exceed, CO2-eq emissions from gasoline
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America’s Energy Future: Technology and Transformation - Summary Edition FIGURE 2.16 Estimated net life-cycle CO2-equivalent (CO2-eq) emissions for production, transportation, and use of alternative liquid transportation fuels. Emissions are shown in units of tonnes of CO2 equivalent per barrel of gasoline equivalent produced from biomass, coal, or a combination of coal and biomass. For comparison, the CO2-eq emissions for gasoline are shown on the left. Negative CO2-eq emissions mean that on a net lifecycle basis, CO2 is removed from the atmosphere; for example, the negative CO2 emissions for BTL and cellulosic ethanol result from an estimate that the sequestration of biomass carbon in power-plant char or the buildup of carbon in soil and roots will exceed the emissions of carbon in biofuel production. Growing perennial crops for cellulosic fuels provides CO2 benefits because these crops store carbon in the root biomass and the associated rhizosphere, thereby increasing soil carbon sequestration. The precise value of CO2-eq emissions from CBTL depends on the ratio of biomass to coal used. Indirect landuse effects on CO2 emissions are not included. Note: BTL = biomass-to-liquid fuel; CBFT = coal-and-biomass-to-liquid fuel, Fischer Tropsch; CBMTG = coal-and-biomass-to-liquid fuel, methanol-to-gasoline; CBTL = coal-and-biomass-to-liquid fuel; CCS = carbon capture and storage; CFT = coal-to-liquid fuel, Fischer-Tropsch; CMTG = coal-to-liquid fuel, methanol-to-gasoline; CTL = coal-to-liquid fuel. Sources: Data from Chapter 5 in Part 2 of this report and from NAS-NAE-NRC (2009b).
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America’s Energy Future: Technology and Transformation - Summary Edition produced with petroleum. As noted under Finding 5, however, alternative liquid fuels can only substitute for a portion of petroleum use. Moreover, geologic storage of CO2 from coal-to-liquid fuel and coal-and-biomass-to-liquid fuel production would have to be demonstrated to be safe and commercially viable by 2015 for these fuels to be produced in quantity starting around 2020. Further reductions in greenhouse gas emissions from the transportation sector will have to be achieved through greater vehicle efficiency and, if greenhouse gas emissions from the electricity sector can be reduced, through electrification of the LDV fleet (as discussed under Finding 5). However, substantial reductions in emissions via these pathways are not likely to occur until late in the 2020–2035 period or beyond. As is the case for liquid fuel supply, the widespread deployment of electric or hydrogen fuel-cell vehicles between 2035 and 2050 holds some hope for more substantial long-term reductions in greenhouse gas emissions in the transportation sector, again depending on how the electricity and hydrogen are generated. As noted previously, the National Research Council (2008) estimated the potential reduction in petroleum use in 2050 from the deployment of hydrogen fuel-cell LDVs under the best-case scenario to be about 70 percent below the projected petroleum consumption of a fleet of comparable gasoline-fueled vehicles. FINDING 7: TECHNOLOGY RESEARCH, DEVELOPMENT, AND DEMONSTRATION To enable accelerated deployments of new energy technologies starting around 2020, and to ensure that innovative ideas continue to be explored, the public and private sectors will need to perform extensive research, development, and demonstration over the next decade. Given the spectrum of uncertainties involved in the creation and deployment of new technologies, together with the differing technological needs and circumstances across the nation, a portfolio that supports a broad range of initiatives from basic research through demonstration will likely be more effective than targeted efforts to identify and select technology winners and losers. As discussed in some detail in Part 2 of this report, the next decade offers opportunities to gain knowledge and early operating experience that in turn could enable widespread deployments of new energy-supply technologies beginning around 2020. These technology-development opportunities include:
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America’s Energy Future: Technology and Transformation - Summary Edition The full range of energy efficiency technologies in the buildings, transportation, and industrial sectors. Coal and natural gas with CCS (see Finding 6 and Chapter 7 for details). Evolutionary nuclear power (see Finding 6 and Chapter 8). Integrated gasification combined cycle, ultrasupercritical pulverized coal, and oxyfuel plants to improve the efficiency and performance of coal-generated electricity, pursued in coordination with research, development, and demonstrations on advanced materials and CCS technologies (see Chapter 7). Thermochemical conversion of coal and coal-and-biomass mixtures to liquid fuels, integrated with CCS, at commercial scale. If decisions to proceed with such demonstrations are made soon, and if CCS is shown to be safe and viable by about 2015, these technologies could be commercially deployable within a decade under favorable economic conditions (see Chapter 5). Research and development on cellulosic-conversion methods, followed by demonstration of cellulosic ethanol production at commercial scale, to achieve proof of principle and prepare this technology for widespread deployment (see Chapter 5). Advanced LDVs, including plug-in hybrids and battery-electric and fuel-cell vehicles. Demonstrations of on-the-road vehicles are critical to getting real-world data on performance and service lives (see Chapter 4). R&D will help to ensure the success of future new-technology deployments and especially to ensure that the technology pipeline remains full in the decades ahead. Significant investments in R&D over the next decade, by the public and the private sector alike, will be required for bringing some of the technologies described in this report to the point that they are cost-effective and ready for widespread deployment. The needed areas of R&D include: Advanced biosciences—genomics, molecular biology, and genetics—to develop biotechnologies for converting biomass to lipid, higher-alcohol, and hydrocarbon fuels that can be integrated directly into existing transportation infrastructures. Advanced technologies for producing alternative liquid fuels from renewable resources—such as fuel production from CO2 feedstocks
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America’s Energy Future: Technology and Transformation - Summary Edition (e.g., algae biofuels). Such fuels are needed to expand options for reducing petroleum use. Advanced technologies for the production of biomass that provides sustainable yields, minimizes competition with food and feed crops, and offers substantial greenhouse-gas-reduction benefits. Advanced PV materials and manufacturing methods to improve efficiencies and to lower costs. The deployed efficiency of current PV materials is greater than 10 percent, which is much higher than the field efficiency of plants for biomass. Although biomass is a compact form of chemical energy storage, its production requires a great deal of land and energy and it has to be harvested and processed to make electricity or liquid fuels, whereas the electricity from PV cells can be used directly. Advanced batteries and fuel cells for LDVs. Advanced large-scale storage for wind energy and electrical-load management. Enhanced geothermal power. Advanced technologies for extracting petroleum from shale and for harvesting natural gas from hydrates. Alternative fuel cycles that would allow for greater utilization of the energy content of nuclear fuel and the minimization of very-long-lived radioactive waste from nuclear power generation. Further exploration of geoengineering options. R&D in other scientific fields that are not addressed in this report will likely provide important support for the development and deployment of new energy-supply and end-use technologies. For example, researchers’ efforts to better understand the interactions between patterns of energy use and climate systems—including, for example, the ecology of microbial systems—could support the development of more effective means to capture, store, and recycle CO2 from energy production. Additionally, social science research on how households and businesses make decisions could lead to more effective measures to encourage energy efficiency. Finally, attractive technology options will likely emerge from innovation pathways that are essentially unforeseen today—some examples are cited in Part 2 of this report—underscoring the need for a continuing focus on and investments in basic research. Some breakthrough technologies are probably not even on the present horizon; in fact, they may not become apparent until the final time period
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America’s Energy Future: Technology and Transformation - Summary Edition considered in this report (2035–2050) or later. However, it is very likely that some of the potential breakthrough technologies that are indeed visible on today’s horizon—for example, superconducting materials, second- and third-generation PV technologies, and advanced batteries—may begin to develop and have an important influence on technology trends during the first two time periods (2008–2020 and 2020–2035) considered in this study. Achieving such breakthroughs will require sustained federal support for basic scientific research, both in the physical and in the biological sciences, and private-sector “venture-backed” support for early-stage energy R&D. The Department of Energy (DOE) has been the primary catalyst for basic energy research in the United States, primarily through its Office of Science. There are substantial opportunities in the years ahead for this office to increase the support of such activities and to ensure their coordination by partnering with the DOE’s energy offices and with other basic-research agencies such as the National Science Foundation. FINDING 8: BARRIERS TO ACCELERATED TECHNOLOGY DEPLOYMENT A number of current barriers are likely to delay or even prevent the accelerated deployment of the energy-supply and end-use technologies described in this report. Policy and regulatory actions, as well as other incentives, will be required to overcome these barriers. The assessments provided in the forgoing sections reflect the AEF Committee’s judgments about the potential contribution of new energy technologies if the accelerated-deployment options identified in this report are actively pursued. However, a number of potential barriers could influence these options and, in turn, affect the actual scale and pace of the implementation of the technologies. Some of the barriers are purely market driven: technologies must be clearly attractive to potential investors, purchasers, and users. They must also provide improvements, relative to existing technologies, in terms of performance, convenience, and cost attributes; of course, they must also meet relevant performance standards and regulations. In the course of this study, the AEF Committee identified several policy and regulatory barriers to the deployment of the energy-supply and end-use technologies that were examined. Some of these barriers have already been identified in
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America’s Energy Future: Technology and Transformation - Summary Edition this chapter, and additional ones are described in Part 2. But because the following barriers crosscut many of the technologies examined in this report, the committee considers them to be impediments to future deployment success: Lack of private-sector investments for technology deployment, ranging from relatively low-cost energy efficiency devices to capital-intensive facilities, because of uncertainties about a technology’s return on investment, its viability and cost-effectiveness, the future costs of fuels, and other raw-material and construction costs. The mobilization of trillions of dollars of new capital between now and 2050 will be needed to transform our nation’s energy system, but such capital may be difficult to obtain from the private sector if the noted uncertainties are not attenuated. The current economic downturn further complicates matters: the limited availability of resources, especially capital, and the reduction in energy demand may be additional barriers to new-technology deployment. The low turnover rate of the energy system’s capital-intensive infrastructure, which makes rapid change difficult. Failure to take advantage of windows of opportunity to deploy new technologies as infrastructure turns over could lock in older technologies for decades, and this difficulty is compounded by the long lead times for deploying new technologies, especially capital-intensive technologies. Thus, there is a premium on modifying or retrofitting existing infrastructure and on pushing new technologies to be ready for deployment when assets reach the end of their service lives. There are some technology “lock-ins,” however, that might not allow for future modification or improvements. Examples include new coal plants that cannot be easily retrofitted with CCS19 and new buildings that are not designed to use energy efficiently over their lifetimes. Resource and supply barriers to technology deployment. They range, for example, from the limited availability of industrial capacity and skilled personnel for deploying the technologies to the availability of the biomass needed to expand the domestic production of liquid fuels. 19 This problem is not restricted to the United States alone. It will be an especially critical issue in countries, such as China, that are building new coal plants at very high rates.
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America’s Energy Future: Technology and Transformation - Summary Edition Some of these barriers can be overcome with the right market and regulatory signals. Uncertainties arising from the nature and timing of public policies and regulations related to carbon controls. There is no authoritative guidance on best available technologies for CCS that could be used to guide deployment. Such guidance might be similar to New Source Performance Standards developed under the Clean Air Act for criteria pollutants. The initial rates of deployment of reduced-carbon technologies (energy efficiency, renewable-energy sources, nuclear energy, and coal with CCS) can be accelerated by such guidelines, by a better alignment of incentives, and by some selected direct public investments. Coupling the commercial deployment of energy-supply technologies with key supporting technologies. Examples include CCS both for electric-power generation and the production of transportation fuels; adequate dispatchable energy supplies or storage20 for advanced and expanded transmission and distribution systems; and advanced batteries for plug-in hybrid and battery-electric vehicles. Successful demonstration of the key supporting technologies will clearly be required, but so too will a better alignment of incentives and the resolution of a number of economic, legal, and policy questions. The regional ownership and regulation of the transmission and distribution systems in the United States make it difficult to implement nationwide modernizations. Although there are exceptions in some regions, the current regulatory system is not designed to adopt available and future innovations in the national transmission system because of fractured jurisdictions at the local, regional, and national levels, as well as an institutional culture that emphasizes quantity of service over reliability, quality, efficiency, and security. Additionally, the methods for assessing returns on private investment in the transmission system are unclear because, owing to the dispersed nature of electricity transmission, reliability and societal benefits extend beyond a single region. The lack of energy efficiency standards for many products means that in many cases individual consumers must take the initiative to acquire 20 Dispatchable energy storage is a set of technologies for storing or producing electricity that can be deployed quickly (dispatched) into the grid when other power sources become unavailable. These technologies are described in Chapter 9.
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America’s Energy Future: Technology and Transformation - Summary Edition information about the costs and benefits of available energy efficiency technologies. Most consumers are unwilling or ill equipped to do so (see Box 2.2). Overcoming these barriers will require a judicious mix of policies, regulations, and market incentives. A full analysis of the barriers, as well as of the means to overcome them, is beyond the scope of this AEF Phase I study. The National Academies will address many of these issues, however, in the project’s Phase II. REFERENCES Brown, R., S. Borgeson, J. Koomey, and P. Bremayer. 2008. U.S. Building-Sector Energy Efficiency Potential. Berkeley, Calif.: Lawrence Berkeley National Laboratory. EIA (Energy Information Administration). 2008. Annual Energy Outlook 2008. DOE/EIA-0383(2008). Washington, D.C.: U.S. Department of Energy, Energy Information Administration. EIA. 2009a. Annual Energy Outlook 2009. DOE/EIA-0383(2009). Washington, D.C.: U.S. Department of Energy, Energy Information Administration. EIA. 2009b. Annual Energy Review 2008. DOE/EIA-0384(2008). Washington, D.C.: U.S. Department of Energy, Energy Information Administration. NAS-NAE-NRC (National Academy of Sciences-National Academy of Engineering-National Research Council). 2009a. Electricity from Renewable Resources: Status, Prospects, and Impediments. Washington, D.C.: The National Academies Press. NAS-NAE-NRC. 2009b. Liquid Transportation Fuels from Coal and Biomass: Technological Status, Costs, and Environmental Impacts. Washington, D.C.: The National Academies Press. National Research Council. 2008. Transitions to Alternative Transportation Technologies—A Focus on Hydrogen. Washington, D.C.: The National Academies Press.
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