Executive Summary

This report is the result of a study by the National Research Council (NRC) Committee for the Programmatic Review of the Office of Power Technologies (OPT) review of the U.S. Department of Energy' s (DOE) Office of Power Technologies and its research and development (R&D) programs. The OPT, which is part of the Office of Energy Efficiency and Renewable Energy, conducts R&D programs for the production of electricity from renewable energy sources. Some of these programs are focused on photovoltaic, wind, solar thermal, geothermal, biopower, and hydroelectric energy technologies; others are focused on energy storage, electric transmission (including superconductivity), and hydrogen technologies. A recent modest initiative is focused on distributed power-generation technologies. In this study, the committee collected information and reviewed the activities of each of OPT's programs.

This Executive Summary presents the committee's recommendations for OPT as a whole and major recommendations for individual OPT programs. More detailed findings and recommendations for the individual programs can be found in Chapter 3.

OVERALL REVIEW OF THE OFFICE OF POWER TECHNOLOGIES

In order to meet both short-term and long-term energy needs, DOE must remain attentive to the constantly changing circumstances for new technologies. In the last decade or so, globalization of the economy has increased, priorities in Congress have changed, and the wholesale electric power-generation sector in many parts of the country has undergone restructuring. DOE's goal of providing options for the future energy needs of the United States requires a constant



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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs Executive Summary This report is the result of a study by the National Research Council (NRC) Committee for the Programmatic Review of the Office of Power Technologies (OPT) review of the U.S. Department of Energy' s (DOE) Office of Power Technologies and its research and development (R&D) programs. The OPT, which is part of the Office of Energy Efficiency and Renewable Energy, conducts R&D programs for the production of electricity from renewable energy sources. Some of these programs are focused on photovoltaic, wind, solar thermal, geothermal, biopower, and hydroelectric energy technologies; others are focused on energy storage, electric transmission (including superconductivity), and hydrogen technologies. A recent modest initiative is focused on distributed power-generation technologies. In this study, the committee collected information and reviewed the activities of each of OPT's programs. This Executive Summary presents the committee's recommendations for OPT as a whole and major recommendations for individual OPT programs. More detailed findings and recommendations for the individual programs can be found in Chapter 3. OVERALL REVIEW OF THE OFFICE OF POWER TECHNOLOGIES In order to meet both short-term and long-term energy needs, DOE must remain attentive to the constantly changing circumstances for new technologies. In the last decade or so, globalization of the economy has increased, priorities in Congress have changed, and the wholesale electric power-generation sector in many parts of the country has undergone restructuring. DOE's goal of providing options for the future energy needs of the United States requires a constant

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs awareness of the effects of these changes on the nation's energy future and on R&D into renewable energy technologies. The DOE was formed in the late 1970s in the wake of the oil embargo of 1973–1974, the resulting energy crisis, and sharp increases in energy prices. The focus of federal energy programs at that time was on reducing dependence on foreign supplies of oil and conserving the limited supplies of domestic oil and natural gas. These national security considerations led to a drive for energy reliability and security through increases in supply and control or reductions in demand. As the contributions of the energy sector to the U.S economy have become more apparent and the international market for U.S. energy technologies has grown, economic competitiveness has become a major goal. At the same time, environmental concerns, such as air quality and global climate change, have also emerged. R&D on renewable energy technology is now part of an overall approach to providing for clean, affordable energy, which is vital to the current and future well-being of the United States. Substantial improvements in performance and reductions in cost of renewable energy technologies have been made. In fact, most of DOE's goals and objectives for cost and technical performance for renewable energy technologies have been met or exceeded, and the advantages and disadvantages of the various technologies are now well understood. However, renewable energy technologies have not met DOE' s deployment goals. As a result, the use of renewable energy technologies in the U.S. economy is still limited. Overall, the OPT's deployment goals for renewable technologies are based on unreasonable expectations and unrealistic promises. OPT has not developed the policies or resources needed to achieve its goals in an increasingly competitive electricity market, in which electricity can be generated relatively cheaply from conventional sources, such as natural gas and coal. Significant challenges will have to be overcome for renewable energy technologies to be competitive in a market in which the traditional customer (the utility industry) for the technologies under development is rapidly disappearing and is being replaced by diverse agents building and operating their own facilities. Many experts believe that this distributed power generation will create opportunities for generating electricity in small units close to the users (e.g., at household, neighborhood, business, industry, or commercial locations). The trend toward smaller scale, more ''distributed" generation technologies presents both challenges and opportunities for renewable energy technologies. Beyond studies of distribution systems, OPT will also have to address the relationship of each technology to the changing power grid. Other reasons for the lack of success in deployment of renewable energy technologies reflect changing national priorities and the changing role of DOE. Although deployment of renewable energy technologies domestically is included in DOE's overall goals, it has not been consistently funded by Congress. The international market will also offer substantial opportunities in the next few decades, especially in countries with high electricity

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs prices and in regions that do not have transmission grids. A large potential market for many of the technologies under development by OPT is in the so-called "village power" markets, which are spread across the countryside of many developing countries where access to power grids is limited or nonexistent. In this country, efforts to balance the national budget in the 1990s have constrained discretionary funds for energy R&D. Competing national needs, relatively stable, even declining, energy prices, and the absence of a sense of crisis have lessened the public focus on energy issues. As a result, DOE programs and staff have been cut back, and fewer new people are being brought in. As the DOE workforce ages and technical managers retire or leave the department, experienced, technical leadership declines. Because only a small portion (20 percent) of DOE's total budget is currently directed toward energy R&D, strategic planning of energy R&D also receives proportionately less attention from top levels of DOE management. This lack of strategic thinking has led to OPT's lack of strategic focus, OPT's programs are not well integrated or coordinated but have operated as relatively separate groups with no common policy focus. This deficiency is especially apparent in light of the significant changes in the electric power industry. The committee recognizes the value of having separate technology groups striving to meet their own goals and in fostering competition of a sort. Although the objectives of individual programs are reasonably well thought out, they have not been considered in the overall context of OPT's goals or in light of the changing needs of the electric power sector. However, the committee believes that stronger OPT leadership and the formation of crosscutting teams could help OPT identify synergies among these programs. OPT also lacks a well-defined structure for linking its technology development programs to other R&D programs, such as programs in the DOE's Office of Science and other engineering research programs in and beyond DOE. The committee is pleased to note that OPT has recently undertaken initiatives to develop a strategic focus and that DOE is in the process of analyzing the portfolio of DOE's energy R&D programs as a whole. The committee encourages OPT to survey all government and private-sector energy R&D and identify gaps that could be filled by renewable energy technologies, especially for collective or public-good benefits. OPT's strategy should also be integrated into and coordinated with DOE's overall energy R&D programs. OPT must focus on reenergizing the strategic process and bringing its programs back on course in response to the significantly changed environment. In the past, DOE could easily "stay connected" to the thinking and planning of the electric industry, which was homogeneous and "open." The emergence of a competitive supply sector with different economic drivers, technology risk profiles, and commercial strategies has dramatically changed the situation and increased the need for strategic planning by OPT. New energy suppliers have competitive and overlapping interests. DOE's challenge now is to engage these new suppliers, as well as conventional suppliers, in future energy decisions.

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs Because of the ongoing restructuring of the U.S. electric power and energy industries in general and substantial reductions in R&D expenditures, state and federal governments now have even more reason to increase their involvement in energy R&D. However, at the time of the committee's review, OPT had paid little attention to a coherent roadmapping exercise that would include technical objectives and critical barriers to be overcome, a program for achieving objectives and setting priorities, the establishment of budget requirements, or the development of contingency plans to cope with uncertain budgets. Although it appears that the individual programs have identified critical barriers to the development of individual technologies, OPT has not developed a systems analysis framework for examining the existing and emerging electric power system in detail and identifying the contribution (e.g., baseload, intermediate load, peaking, hybrid, etc.) that renewable energy technologies are most likely to make. During the committee's study, OPT had begun planning a roadmapping exercise as part of its strategic planning initiative. In conjunction with this roadmapping exercise, and along with a deeper understanding of the factors that will contribute to the successful development and deployment of various technologies, OPT will have to develop criteria to help determine research priorities and the role of the public and private sectors in developing new renewable energy technologies. These priorities can then be used for the systematic direction of federal expenditures. Full life-cycle systems assessments and comparisons would be helpful for setting these priorities. RECOMMENDATIONS FOR THE OVERALL PROGRAM Recommendation. The committee encourages and recommends that the Office of Power Technologies (OPT) continue the roadmapping exercise and strategic plan it has initiated. Both the road map and the strategic plan should be consistent with the Comprehensive National Energy Strategy developed by the U.S. Department of Energy. The OPT strategic plan should be developed in collaboration with other agencies and sectors and should be integrated with a society-wide assessment of current activities by government agencies and private industry. The road map should distinguish between (1) R&D activities that promise to provide collective or public benefits and, therefore, require public oversight and (2) complementary R&D activities that primarily promise private benefits and can be left to the private sector. The roadmapping process should include an evaluation of how the technologies under development by OPT could contribute to the evolving electric power supply system, an identification of barriers to technical and market success, estimates of costs for reaching important milestones, and clarifications of federal priorities for development under budget constraints. Based on the road map, some new programs may be developed, some

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs existing programs may be expanded, and existing programs that do not fit OPT' s priorities and guidelines may be eliminated. Recommendation. The Office of Power Technologies (OPT) should develop criteria, a rationale, and a systematic process for selecting research that should receive federal support in light of private sector and state-level activities. OPT should take advantage of the opportunity created by the restructuring of the electricity market to coordinate its activities with state-level renewable energy programs and assist them in implementing the results of OPT programs and promoting the deployment of OPT-developed technologies. Recommendation. The Office of Power Technologies (OPT) should develop a robust rationale for its portfolio of renewable energy technology projects that will lead to a sustainable, cost-effective energy supply system for domestic and international markets. OPT in general, as well as individual OPT programs, should deemphasize optimistic, short-term deployment goals as the metrics for defining success. The objectives should be the development of a sound science and engineering base, decreases in cost, improvements in technical performance, and the development of technologies that meet the needs of the marketplace. As technologies approach a level of readiness for the market, deployment strategies should be developed in cooperation with private sector agents, as appropriate, and higher policy levels in the U.S. Department of Energy. Recommendation. The Office of Power Technologies should develop a systematic process for selecting specific research and development programs. The viewpoints of stakeholders should be considered in the development of selection criteria. Recommendation. The U.S. Department of Energy should take advantage of existing government policies to promote the use of renewable energy technologies for electric power production by encouraging a public demand for "green power." Recommendation. The Office of Power Technologies should focus more on integrating its programs, identifying common needs and opportunities for research, and clarifying how the individual programs can further their objectives. Bench-marking and other planning techniques used by industry could be adapted for measuring progress and selecting priorities. The challenges posed by the restructuring of the electric power industry, the use of distributed resource technologies, the need for storage technologies for many intermittent renewable technologies, and opportunities in the international market could be the integrating themes. One mechanism for facilitating integration among the individual programs would be to establish crosscutting teams to identify enabling opportunities and critical roadblocks and/or barriers to the development of technologies.

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs Recommendation. The Office of Power Technologies (OPT) should consider changing its organization and technology thrusts in several ways. Although the Hydrogen Research Program and work on superconductivity have important ramifications for the long term (and should be supported by the federal government), they should not be evaluated in the same way as emerging energy conversion technologies, such as photovoltaics or biopower. Hydrogen has energy carrier and/or storage capabilities that have long-term potential. OPT should develop a clear strategy for supporting long-term research. Recommendation. The Office of Power Technologies should develop a clear strategy for the development of mechanical, electrical, or chemical storage technologies. Storage requirements for intermittent technologies should be considered in the context of the overall energy supply system. Today, natural gas turbines and pumped hydroelectric power can be used to provide supplemental energy. But promising "clean" energy carriers for the future (e.g., electricity and hydrogen) will require improved energy storage technologies. A breakthrough in either storage technology could strongly influence the future energy infrastructure. Recommendation. The U.S. Department of Energy should establish a dedicated office to deal with distributed power systems. Whether or not this office is located in the Office of Power Technologies (OPT), its activities should be integrated with those of OPT. Recommendation. The U.S. Department of Energy (DOE) should assess the effects of restructuring on the nation's electricity distribution system. DOE should provide support for research on distribution system behavior, operation, and control as a basis for assessing the effects of restructuring on electricity distribution systems. An understanding of these issues will be critical to the implementation of distributed generation technologies (which is the goal of OPT's programs). DOE should investigate the integration of distributed generation technologies into the evolving system. This investigation should be strategically coupled with the OPT program and with related activities in the building, transportation, and industrial sectors. Recommendation. The U.S. Department of Energy (DOE) should provide funds for the direct support of graduate students through a DOE fellowship program leading to an advanced degree related to renewable energy research and development. This would ensure that an adequate supply of scientific and energy talent is available to the emerging industry and that new and inventive ideas continue to flow into the program. Recommendation. The Office of Power Technologies (OPT) should institute a process for regular external peer reviews (at least every two years) of its proposed

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs and ongoing projects and programs, as well as its overall goals. As part of the review process, OPT should publicly report how it responds to recommendations from external reviews. Recommendation. Every Office of Power Technologies program should evaluate its resource assessment needs and should fund them accordingly. Resource assessments should be made in cooperation with the appropriate state agencies. RECOMMENDATIONS FOR INDIVIDUAL PROGRAMS In this section, key recommendations for individual OPT programs are summarized. Detailed reviews of the individual programs appear in Chapter 3, which also contains a wider variety of findings and recommendations for each program. Biopower Program DOE should look into establishing a center of excellence for bioenergy to bridge internal gaps in the Office of Energy Efficiency and Renewable Energy and create a strategic partnership with the U.S. Department of Agriculture for the development of crops and biobased products. This center should also be responsible for coordinating basic research activities in bioengineering by the Office of Science and the National Science Foundation and biosequestration activities by the Office of Fossil Energy. DOE should highlight the role of waste feedstocks in the current and future biopower market, educating stakeholders about environmental and market advantages. Education will be critical to the early success of biopower. Recently, bioenergy has become a major initiative of the Clinton administration, and OPT should position itself to play an active role in this initiative. Hydrogen Research Program The Hydrogen Research Program should be reoriented with a longer-term perspective and a stronger emphasis on the production of hydrogen from renewable resources (i.e., photolysis, biomass, and biological processes), the coupling of electrolysis with renewable energy generation, and distributed storage. OPT's Hydrogen Research Program should be coordinated with other elements in DOE, such as the Office of Transportation Technology, the Office of Fossil Energy, and the Office of Science that also are involved in hydrogen and hydrogen-related research. Hydropower Program To promote the preservation of existing hydropower capacity, as well for future development, hydropower conversion technologies that have higher

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs efficiencies and that cause less damage to fish populations will be necessary. OPT should develop more environmentally sustainable, low-head, hydraulic-energy conversion systems for use in run-of-river and tidal basins. The initial focus should be on integrated technology and resource assessment to quantify the potential of low-head resources. The program should also explore new engineering concepts. Geothermal Energy Technologies Program DOE should reactivate its programs for the development of advanced concepts for the long term. The first priority of these programs should be high-grade enhanced geothermal systems; the second priority should be lower grade, hot dry rock, and geopressured systems. DOE should then support field demonstrations of enhanced geothermal systems technology. Although several new sites have been proposed for these demonstrations, such as Clear Lake, California, and Roosevelt Hot Springs, Utah, OPT should also consider sites in lower grade areas to demonstrate the benefits of reservoir concepts to different conditions. OPT should increase its R&D on reservoir diagnostics and modeling, especially on methods of detecting and enhancing in situ permeability. Concentrating Solar Power Program OPT should limit or halt its R&D on power-tower and power-trough technologies because further refinements to these concepts will not further their deployment. OPT should assess the market prospects for solar dish/engine technologies to determine whether continued R&D is warranted. Solar Photovoltaics Program The top priority of the Solar Photovoltaics Program should be the development of sound manufacturing technologies for thin-film modules. Much more attention must be paid to moving this technology from the laboratory through integrated pilot-scale experiments to commercial-scale design. This will require much more engineering expertise. Most laboratory-scale experiments could, with very slight modifications, provide critical information for eventual commercial-scale design. The program should make a concerted effort to integrate fundamental research and basic engineering research. Wind Energy Program The Wind Energy Program' s research on advanced wind turbine technology should focus on turbulent flow studies, durable materials to extend turbine life, blade efficiency, and higher efficiency operation in lower quality wind regimes.

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Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs The development of advanced controls and improved gearboxes appear to be well within the capabilities of industry. OPT should investigate the potential of the global wind energy market because overseas markets could be essential for a struggling U.S. industry. Special requirements in these markets may include power system integration and a demonstrated ability to operate under many different environmental conditions. Distributed Resources DOE should develop a technology road map for distributed power-generation technologies to define the role of, and program goals for, distributed power systems in restructured electricity markets. DOE could then define the potential benefits of expanded markets for distributed power technologies and provide an analysis for policy decisions on distributed power markets. DOE should facilitate the development of commercial, institutional, and regulatory standards to open national markets to distributed power technologies. Local variations in standards, ranging from building codes and environmental permits to utility practices and tariffs, will require national coordination. DOE should increase its efforts to develop interconnection standards and national energy strategies to address institutional and operating barriers to the deployment of new technologies. Crosscutting Issues Assessing the effects of, and responding to, the changes in the electricity sector require global resource assessments and the identification of alternative markets. Wind, geothermal, and biomass power technologies are all faced by transmission barriers—especially rules for independent system operations. The success of intermittent renewable energy technologies (e.g., wind, photovoltaics) will depend on energy storage technologies. As renewable energy technologies mature toward market viability, these and similar issues should be included in OPT's technology development programs. A strong commitment to the integration of renewable energy technologies into the broader energy economy through crosscutting functions could improve the chances of real-world success for all renewable energy technologies.