Overall Assessment of the Office of Power Technologies
The previous chapter focused on the individual technology programs in OPT. In this chapter, the committee presents a number of findings and recommendations based on the reviews of OPT programs, presentations to the committee, answers to questions submitted by the committee to OPT, the history of OPT, and the personal judgment and experience of committee members.
The committee is encouraged by the changes that were being implemented during this review. For example, the assistant secretary for energy efficiency and renewable energy (EERE) and the deputy assistant secretary for power technologies were reorganizing OPT to the extent allowable under governmental constraints. The reorganization included the development of a strategic plan, an attempt to capitalize on the synergies between the technology development programs, and the hiring of new people. The committee also commends and encourages the efforts of OPT to develop a constructive relationship with Congress.
Efforts are underway to improve communications between the OPT headquarters staff and management, and the staff of the National Renewable Energy Laboratory (the only national laboratory that reports directly to the Assistant Secretary for Energy Efficiency and Renewable Energy), and the other national laboratories (notably Sandia, Oak Ridge, Pacific Northwest, and Lawrence Berkeley). The national laboratories provide much of the scientific and technical expertise available to OPT, and their expertise (along with the expertise of industry and research universities) could be used by DOE headquarters in the development and execution of technical programs.
Finding. The assistant secretary for energy efficiency and renewable energy and the deputy assistant secretary for power technologies are initiating positive changes in organization, strategic planning, and new staffing.
OPT's fundamental problem is bringing technologies to the deployment stage and making a significant contribution to the U.S. electric energy supply system. For many technologies (e.g., wind, geothermal, and solar power), goals and objectives for cost and technical performance have been met; costs have declined substantially; and our understanding of the advantages and disadvantages of the technologies has improved. Nevertheless, partly because of changes in market conditions for electricity production, the deployment goals for renewable technologies have not been met. DOE argues that more R&D should be done to bring the costs down further, advance the engineering and science of enabling technologies, and to identify research that will enhance the competitiveness of these technologies. Before OPT continues with R&D, a thorough road map of each technology should be developed, along with associated cost analysis models, to show the net present value of the technology and the cost required to make the technology competitive.
Finding. Even though substantial improvements in performance and substantial reductions in cost have been made in the last two decades, DOE's deployment goals have not been met.
A number of factors during the 1990s contributed to poor strategic leadership for the DOE R&D portfolio for renewable energy technologies. Congressional efforts to balance the national budget in the 1990s have constrained discretionary funding for energy R&D. In addition, competing national needs, as well as relatively stable and even declining energy prices and no sense of crisis, have decreased public focus on energy issues. The result has been cutbacks in DOE programs and staff. Fewer new people are being brought in, the DOE workforce is aging, and many technical managers have left leading to a decline in experienced, technical leadership. In addition, available technical experts and advisors have not been used effectively. For example, personnel could have been brought from the national laboratories to fill technical advisory positions at DOE headquarters. Unfortunately, many federal work rules make it difficult for DOE to use experts from outside the department.
Attracting highly qualified technical leadership will be critical for OPT's program. Perhaps a rotation system between national laboratory personnel and federal employees could be established. Alternatively, OPT could consider ''borrowing" personnel from universities or industries for project assignments as the Defense Advanced Research Projects Agency and NSF do. Other programs, such as programs by the American Association for the Advancement of Science or the American Physics Society, could also be investigated.
The quality of leadership of the individual OPT programs is uneven. Given
the strategic thrusts of individual OPT programs and the whole portfolio of OPT activities, highly qualified personnel will be essential to the planning and analysis determining OPT and program priorities.
Finding. Not enough strategic planning and analysis have been done for renewable energy technologies.
The problem of isolated technology programs ("stovepipes") competing for limited DOE resources has been identified in a number of studies and reports over the years. The committee recognizes the value in having separate technology groups work toward their own goals and the value of competition. However, the committee believes that stronger OPT leadership and the formation of crosscutting teams could help identify synergies among the programs, which would benefit greatly from coordination, as well as a policy focus, especially in light of the significant changes that are taking place in the electric power industry. Although each program seems to have reasonably well thought out objectives, they have not been considered in the overall context of OPT or in light of the changing needs in the electric power sector. There is no strategic approach to R&D that is uniformly understood across all the OPT programs. A number of integrating themes, such as restructuring in the wholesale power market, storage technology, and international opportunities could be used as a basis for changing the focus and objectives of OPT's technology programs.
Finding. OPT programs have operated as relatively separate units with no coordination or integrated planning.
The ongoing restructuring of the electric power sector in many states is resulting in deregulation and cost competition for electric power generation at the wholesale level. Many utility companies are being forced to divest themselves of their power generation assets. Independent power producers are entering the market, and the former "customer" (i.e., the utility industry) for the technologies under development by OTP is rapidly being replaced by diverse agents building and operating their own facilities for electric power production. Although the new environment is reflected in the office name, the Office of Power Technologies, the programs have not been changed.
Finding. In many regions of the country, the traditional customer, the utility industry, for the technologies under development is rapidly changing. OPT programs have not been revised accordingly.
Restructuring in the electric power industry, and the divestiture by many former utilities of their electric power production and R&D programs, have led the private sector to focus on short-term development with payback periods of less than five years. In this environment, much less attention is being paid to long-term issues and the development of new electric power technologies.
Although no one in the private sector is funding long-term R&D, additional R&D will be necessary to bring these new technologies to the marketplace, which will also require an adequate supply of engineering and scientific researchers. Therefore, the state and federal governments will have to underwrite the continuing development of renewable energy technologies. For example, as a result of deregulation, the California Energy Commission's Public Interest Energy Research Program has funds available for energy R&D for the next four years.
Finding. Restructuring of the electric power industry will mean that more of the R&D on renewable energy technologies will have to be underwritten by states and the federal government.
OPT will have to undertake a detailed analysis of the energy market to determine how well various renewable energy technologies can be used in various applications. The OPT programs have not focused on the attributes of a given technology, or hybrid system of technologies, that would enable them to succeed in the market or on the development of information to answer detailed questions (e.g., with regard to environmental impact statements, interconnection protocols, standards, etc.) that are sure to arise during deployment. Technology costs should be commensurate with the value and use of a given technology in the market.
Finding. OPT must develop a better rationale for matching program goals and resources.
Technology road maps are valuable tools for identifying R&D that can enable a vision for an industry to become a reality. The most effective road maps would be developed by industry and then translated to an R&D agenda for OPT.
At the beginning of the committee's study, OPT had not undertaken a coherent roadmapping exercise that included technical objectives and critical barriers to be overcome. A program for achieving objectives and setting priorities, budget requirements, and contingency plans for coping with uncertain budgets needs to be developed. However, the committee was encouraged and pleased to note that during its review, OPT intended to include a road map exercise as part of its newly initiated strategic plan. Although individual program areas have identified critical barriers to the development of their technologies, no systems analysis framework has been used to evaluate the existing and emerging electric power system in detail and to estimate the contribution (e.g., baseload, intermediate load, peaking, hybrid, etc.) of the renewable energy technologies. A systems analysis would reveal the critical R&D areas that require federal support.
The roadmapping process requires some assessment of the full life cycle of energy systems, including supply, processing, distribution, and end use. Therefore, roadmapping is a good way to involve the private sector in technology development and demonstration; and it also facilitates deployment (or market readiness) of the technology. The private sector is then responsible for commercializing the technology.
Finding. OPT has only recently begun to develop technology road maps.
Criteria can be used, along with a road map, for determining research priorities and the role of the public and private sectors in the development of renewable technologies. Criteria also provide a basis for allocating federal funds consistently and systematically. Government participation will be critical in the electric power sector because long-term R&D supported by the private sector has been virtually eliminated. Well developed criteria can also depoliticize debates about the role of the government in R&D.
Finding. OPT has not developed criteria or a systematic process for determining priorities for federal R&D.
The processes and decision criteria OPT uses to select R&D projects were not defined to the committee. A systematic planning process with a range of options for R&D projects might help OPT make decisions that are more acceptable to stakeholders of given technologies. The participation of stakeholders (including advocates and opponents of a given technology) in the establishment of criteria might provide a realistic perspective on the competition facing various technologies and the requirements for success.
Finding. The selection process for R&D project selection is not well defined.
It is not clear to the committee that OPT has a systematic process for balancing short-term and long-term R&D. However, the committee recognizes that OPT is in a difficult position because some projects are congressionally mandated or created by decisions made at other levels of DOE. Nevertheless, some programs (e.g., R&D on hydrogen or superconductivity) are clearly long range and are unlikely to have any impact in the next few decades. Other technologies are quite close to maturity in terms of technical performance and are either unlikely to have much of a market (e.g., large-scale solar thermal power plants) or an industrial base (e.g., hydroelectric power or hydrothermal geothermal power) that could carry the technology into the marketplace.
Crosscutting R&D (e.g., transmission and distribution, energy storage technologies, or distributed power systems) would serve OPT's needs, as well as the needs of other offices in DOE. Goals for crosscutting programs should befit their importance, and DOE should argue for strong internal DOE support, as well as for congressional support of crosscutting R&D. However, OPT does not appear to have made linkages with other government agencies that are funding relevant R&D.
Finding. OPT has not established a systematic approach to determining the balance between short-term and long-term research and development.
In presentations to the committee, OPT program managers did not address (in any substantive fashion) lessons learned from past failures. This lack of
attention may be symptomatic of the general tendency of R&D managers to highlight successes and downplay failures. Nevertheless, identifying the causes of program failures can lead to improvements.
Finding. OPT has not paid sufficient attention to lessons learned from past failures.
OPT is not likely to reach its capacity goals unless it works with state programs. The restructuring of the electric power industry has created new opportunities for the development and deployment of renewable power technologies. In many states, renewable energy portfolio standards and/or funding for public-benefit research and increased efficiency are part of the utility restructuring efforts. Funding to keep renewable energy systems in the power generation mix during the transition to a fully competitive market is available in most public-benefit programs, but this funding will be available for a limited period of time. Thus, the renewables community is facing an opportunity and a challenge.
The infusion of almost $1.6 billion through 2010 for technology development and deployment is an opportunity that will probably not recur. To have the best chance of reaching its deployment goals, OPT will have to work with the state programs. If state programs do not achieve defined goals, it will be difficult to justify continuing the investment at the state level and, perhaps, on the federal level as well. OPT is in a position to work aggressively with the state groups administering public-benefit funds to design appropriate programs. OPT may have to educate the fund administrators, who may have little or no knowledge of DOE programs. OPT will have to be flexible in working with state programs, many of which involve both technology development and commercialization. Coordination with states could also benefit companies and organizations conducting research in DOE programs by increasing the resources available for R&D.
Finding. OPT's activities are not well coordinated with state activities.
Management and staff at OPT and elsewhere in DOE have long been open to international collaboration and the use abroad of OPT-pioneered emerging technologies, particularly in developing countries. However, in many instances, those exchanges arose through the serendipity of scientific curiosity. Today, OPT is making a conscious effort to integrate R&D with the needs and desires of international and domestic markets. Globalization of OPT technologies must include addressing growing international concerns about environmental impacts and the effects of increased trade on local cultures.
As a result of coordination furthered by the President' s Office of Science and Technology Policy and the commitment of DOE top management to international activities, the essential linkages with private businesses and public agencies necessary for developing and sustaining an R&D program that can capitalize on international opportunities is being established. By participating in and cooperating with international missions, by assisting in the education and training of
potential users and scientists from aboard, and by reappraising R&D strategies in the light of these interactions, OPT management and staff can broaden and tailor their efforts to encourage the long-term acceptance, both here and abroad, of the products of OPT research.
Because an internationally focused deployment strategy involves mostly managerial and interagency activities, it must be strong enough to withstand changes in politics and governments at home and abroad. Many individual, project-based initiatives abroad are already under way. OPT must now institutionalize these efforts so that they occur on a routine basis, and the relationships and outcomes can be tracked and evaluated. Therefore, international activities should be included in OPT's strategic planning process, and outcomes should be benchmarked against the goals of those plans. If educational interactions between OPT professional staff and technically trained officials from abroad become routine, those additional responsibilities should be reflected in OPT's budgets and staffing.
Finding. The international market will offer many opportunities for renewable energy technologies in the next few decades.
OPT programs could be integrated with other DOE programs on the development of integrated systems (e.g., housing). Currently, OFT does not interact much with industry on transmission and distribution issues (a consequence largely of the almost nonexistent DOE budget for transmission and distribution). Nor has OPT developed a mechanism for linking its technology development programs to other R&D programs (e.g., programs in the DOE Office of Science, other DOE engineering research programs, and programs outside DOE).
Finding. OPT should forge stronger links with basic science and engineering research programs in DOE and elsewhere.
All of the technology programs in OPT would benefit from a detailed resource assessment that includes the quality of the resource available on a microscale, rather than on a regional level. These assessments would locate and rate particular sites for quality of opportunity for particular renewable energy technologies. At present, OPT's mapping of available resources is uneven and is funded on a piecemeal basis.
Finding. Resource assessment by OPT could be improved.
OPT could evaluate the effectiveness of policy instruments (i.e., renewable energy portfolio standard requirements, federal tax rebates, home owner tax incentives or rebates for renewable energy systems, and community incentives for small, remote distributed generation) to accelerate the development of renewable energy technologies.
Finding. The eventual deployment of renewable energy technologies may require measures by OPT to stimulate markets.
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) those 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 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 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.
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 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.