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Introduction

PURPOSE OF WORK

In the Omnibus Appropriations Act of 2009, Congress required that the Department of Energy (DOE) fund the National Academies of Sciences, Engineering, and Medicine¹ to provide an analysis of energy development potential on DOE properties.

In response to this mandate, DOE’s Office of Legacy Management (LM) commissioned an assessment of energy resource potential for DOE lands from the National Renewable Energy Laboratory (NREL). NREL undertook an analysis of resource development potential for renewable resources, including photovoltaics (PV), concentrating solar power (CSP), wind, biomass, landfill gas (LFG), waste to energy (WTE), and geothermal. Consideration of the potential energy development of fossil fuels and uranium or thorium resources for nuclear power production was subcontracted by NREL to the Colorado School of Mines (CSM).

LM contracted with the National Academies to conduct an independent assessment of the NREL/CSM study and make findings and recommendations based on that study. The Committee on Energy Resource Potential for DOE Lands was designated to make that assessment (committee biographies are provided in Appendix A). The current report synthesizes the committee’s findings. The committee’s activities included briefings from and discussions with NREL and CSM at various stages of the latter two groups’ work. (A list of committee activities is included as Appendix B.)

NREL/CSM STUDY

Overview of Study Methodologies

The analytical methodologies used by NREL and CSM in their consideration of energy production potential, as well as the findings and conclusions of their work, were presented in the June 2016 report

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¹ Effective July 1, 2015, the institution is called the National Academies of Sciences, Engineering, and Medicine. References in this report to the National Research Council are used in a historical context and refer to activities before July 1.

Large-Scale Power Production Potential on U.S. Department of Energy Lands (Kandt et al., 2016).² This report served as the primary basis for the committee’s evaluation.

As a first step in its consideration of whether energy projects were feasible and economic, DOE identified 148 sites for study by NREL.³ From that list, they performed an initial screening on the feasibility of adding an energy project at the site. The preliminary assessment considered land ownership, available acreage, and compatibility with existing uses. Subsequently, DOE reduced the list to 55 sites for further study (Kandt et al., 2016, p. 4).⁴

In examining which renewable technologies might be possible on these sites, NREL considered only large-scale, commercially available power-generating technologies. Further, the analysis assumed that power production would be undertaken by a third party and that all of the power produced would be sold into the grid; none would be used on site.

Given these considerations, NREL undertook what it referred to as a “high-level analysis of techno-economic potential” of the renewable technologies (with the exclusion of geothermal) at all 55 sites.⁵ This potential was calculated as the levelized cost of energy (LCOE)⁶ for each technology at each site. All but one of these analyses was performed using NREL’s REopt (Renewable Energy Planning and Optimization) model to calculate LCOE. REopt was applied to photovoltaic (PV), wind, biomass, landfill gas (LFG), and waste-to-energy (WTE). For concentrating solar power, NREL’s System Advisory Model (SAM) was employed, and for geothermal, no analysis of LCOE was undertaken (Kandt et al., 2016, p. 5). Those sites that had technologies with the lowest LCOEs were identified for a further “deep dive” analysis of the market barriers and opportunities for producing power using the identified technologies.

CSM evaluated the same 55 DOE sites, of the originally identified 148, for their potential to produce oil and gas in commercial quantities. Their initial screening considered the size of the site, the likelihood that the site will be released for alternative use, and whether the site was located in a sedimentary basin. CSM also evaluated the potential of coal resource availability at these sites.

Further, CSM screened the 55 sites for the possibility of uranium or thorium resource development. Thirty-six of the sites were eliminated simply because of their distance from known resources. Of the remaining 19 sites, 5 were selected for market barriers and opportunities analysis based on several factors, including commodity rank and proximity to known resources and previous development.

Study Results and Conclusions

The NREL/CSM report concluded the following:

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² A final version of the report, reflecting editorial corrections, was given to the committee in November 2016.

³ Alicen Kandt, “DOE Large-Scale Power Production Study: May Meeting with NAS,” presentation to the Committee, May 20, 2015, Golden, Colorado.

⁴ A complete list of the 55 sites may be found in Appendix A of A. Kandt, E. Elgqvist, D. Gagne, M. Hillesheim, A. Walker, J. King, J. Boak, J. Washington, and C. Sharp, 2016, Large-Scale Power Production Potential on U.S. Department of Energy Lands, Technical Report NREL/TP-7A40-64355, National Renewable Energy Laboratory, Golden, Col., June.

⁵ Geothermal potential was considered based solely on whether there was a sufficiently large hydrothermal reservoir to support a viable utility-scale power plant. As such, only seven sites were identified for further analysis of geothermal.

⁶ The levelized cost of energy is calculated as the present value of initial capital cost and ongoing operating and maintenance costs, minus any federal or state or local financial incentives, divided by the total amount of electricity produced in kilowatt-hours, over the project’s expected depreciable life.

resources were present, but of uncertain potential), and nineteen sites are located within 15 miles of a previous or present uranium site listed on the U.S. Geological Survey Mineral Resource Data System.

A market barriers and opportunities analysis methodology was developed and applied to the sites deemed most promising—via a techno-economic analysis—as illustrative examples of project development considerations and processes. In general, the top two projects with the lowest LCOE were selected for each RE technology evaluated, though for some technologies additional sites were analyzed as time and resources allowed. Nine of the seventeen projects evaluated contained one or more disqualifying criteria that would prevent development of the proposed technology at the site. The most common disqualifying factors facing the sites were, in order: site unavailability, poor project economics, and permitting restrictions.

Of the eight sites which were not excluded by disqualifying criteria, three sites merit further investigation for RE development due to their current relative economic attractiveness when compared with existing retail power rates: Los Alamos National Laboratory, Shirley Basin South, and the Bannister Kansas City Plant. These sites would be candidates for an RFI to gauge development interest, but would require additional detailed analysis of the site’s interconnection infrastructure, as well as the environmental impacts of a proposed project, prior to any RFI submittal.

Finally, given the rapidly changing nature of the market conditions and technological improvements for many of these technologies, the offtake and economic viability of the examined projects are subject to change in the future and should be periodically re-evaluated.

For fossil, uranium, and thorium resources, further analysis could examine the small number of sites that were not screened out to determine whether additional sites should be eliminated. For nuclear resources, one of the most important next steps is to perform a mineral survey at each site to determine if nuclear resources are indeed present. An inquiry with respect to 10 CFR 40 should be made to determine if mining operations can be performed at the disposal cell sites.

DOE can prepare for fossil or nuclear resource extraction development by reviewing its own process for making land available to companies interested in leasing land, so that the agency can react quickly should a resource be identified or a developer express interest in a particular DOE site. DOE may also wish to put in place a plan to review the potential of the resource at regular intervals, and might consider offering favorable leasing terms to companies proposing to test novel technology for energy development.

Various DOE sites have successfully implemented both small- and large-scale RE projects including PV at BNL and NREL, wind at Pantex, and biomass at the Savannah River Site as well as on-site mining of resources, such as the Uranium Leasing Program in Colorado. The PV project at BNL is the only known large system in the DOE complex which exports all power off site.

In order to fully evaluate the potential for large-scale project development for power export on DOE lands, NREL recommends a project development framework—such as the market barriers and opportunities analysis framework—be applied to a larger subset of sites, starting with those sites that show the highest techno-economic potential. While it was not in the scope of this report, DOE could also continue to pursue RE projects dedicated to serving on-site energy loads or to meeting research purposes. (Kandt et al., 2016, p. 113)

COMMITTEE REVIEW PROCESS

The committee met with representatives of DOE, NREL, and CSM in Washington, D.C., and at the NREL offices and at other times by conference call.

The committee focused on three aspects of the NREL/CSM study: the current state and future expectations for each of the renewables, fossil, and nuclear technologies that NREL/CSM were considering; the analytical methodologies that were employed by the organizations to conduct the analysis and support the report’s conclusions; and the soundness of the report’s conclusions and recommendations. The complete statement of task appears in Box 1-1.

This report presents the committee’s evaluation of the NREL/CSM study and considers future work in this area.

REFERENCE