Download Thinking Differently:Developing a New Energy Economy

Thinking Differently:
Developing a New Energy Economy
Presented at GRA 2007
Douglas J. Arent
Director, Strategic Energy Analysis and Applications Center
National Renewable Energy Laboratory
Energy Solutions Are Enormously
Challenging
Energy Security
• Secure supply
• Reliability
Economic
Productivity
• Growth in
demand
• Price volatility
Vulnerability
or
Opportunity
Environmental Impact
• Land and water use
• Carbon emissions
Must address all three imperatives
How Big is the Challenge?
Source: Arvizu, NREL
Thinking Differently:
Account for Externalities
Today’s energy marketplace
does not appropriately
“value” certain public
objectives or social goods,
instead we have:
– Price volatility
– Serious environmental
impacts
– Underinvestment in energy
innovation
U.S. R&D Spending in the Energy Sector
Billions 2002$
Declining Energy R&D Investments…
Source: Daniel Kammen, Gregory Nemet Reversing the Incredible, Shrinking Energy R&D Budget http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf
Table 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml
Dollars per Barrel – 2002$
U.S. R&D Spending in the Energy Sector
Billions 2002$
Declining Energy R&D Investments…
Reflect World Oil Price Movement
Source: Daniel Kammen, Gregory Nemet Reversing the Incredible, Shrinking Energy R&D Budget http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf
Table 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml
Developing World Will Out-consume Developed
450
Global Energy Consumption
NON-OECD
400
350
QBtu
300
250
OECD
200
150
2012
100
50
0
Source: EIA
1980
Year
2030
Economic development is tightly correlated with energy consumption
GJ/capita
Effect of
Geography
GDP($K)/capita
Global Markets are Growing Rapidly
Global Growth of Wind Energy Capacity
Global PV Shipments
Getting to “Significance” Involves…
Technologies
Reducing
Risk
Mobilizing
Capital
Policies
Source: NREL
Markets
Setting the Bar Higher
• U.S. National goals
– Biofuels: reduce gasoline usage by 20% in ten
years
– Wind: 20% of total provided energy by 2030
– Solar: Be market competitive by 2015 for PV and
2020 for CSP
• Challenge goals
– 25% of nation’s energy supply from renewable
sources by 2025
– Others…
Renewable Portfolio Standards*
WA: 15%
by 2020
ME: 30%
by 2000
NH: 23.8%
WI: 10% by 2015
NY: 24%
by 2025
by 2013
MA: 4%
IL: 8%
by 2009
by 2013
RI: 16%
by 2019
CT: 10% by 2010
NJ: 22.5% by 2020
DE: 10% by 2019
MD: 7.5% by 2019
DC: 11% by 2022
PA: 8% by 2020
VA: 12% by 2022
MN: 25% by 2025+
IA: 2% by 1999
MT: 15%
by 2015
OR: 25%
by 2025
NV: 20%
by 2015
CA: 20%
by 2010
CO: 20%
by 2020
AZ: 15%
by 2025 NM: 20%
by 2020
TX: 5,880 MW
(~5.5%) by 2015
VT: 10%
by 2012
RPS
RE Goal
HI: 20% by 2020
MO: 10% by 2020
*As of June 2007
+For Xcel Energy, the requirement is 30% by 2020.
Sources: Union of Concerned Scientists and NREL
Annual Electric Generating
Capacity Additions
Electric Sector Drivers
63 GW 2002
20
18
16
Coal declines
CAAA
14
Gas increases
PIFUA changed
PURPA
CC efficiency
Low price through
deregulation
10
Gas declines
PIFUA prohibits
8
6
4
2
Coal
Natural Gas
Nuclear
2000
1990
Too cheap to meter
1980
1960
Nuclear emerges
Technology Available
1970
0
1950
GW
12
Nuclear decline
3-Mile Island (1979)
Chernobyl (1986)
Money Is Flowing Into the Sector
2006 Investment and M&A – By Sector and Asset Class
Annual VC Investment Volume – 2001-2004 Compared With 2005-2006
Source: New Energy Finance 2007
Investment and M&A
By Region and Asset Class – 2006
Figures in brackets represent total number
of deals. 2006 figure is annualized.
Source: New Energy Finance 2007
Total Estimated VC Investment by Region
2001-2006
Figures in brackets represent deals (with
disclosed value/total number of deals). 2006
figure is annualized.
Source: New Energy Finance, January 2007
Renewable Energy Cost Trends
Levelized cost of energy in constant 2005$1
Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2005.ppt)
1These graphs are reflections of historical cost trends NOT precise annual historical data. DRAFT November 2005
Technology Innovation Challenges
The Next Generation
• Wind Turbines
– Improve energy capture by 30%
– Decrease costs by 25%
• Solar Systems
– Improved performance through, new
materials, lower cost manufacturing
processes, concentration
– Nanostructures
• Biofuels
– New feedstocks
– Integrated biorefineries
Achieving the Right Balance:
Technology Investment Pathways
Source: NREL 2007
Promise of renewable energy is
profound and can be realized if we…
• Aggressively seek a global sustainable energy
economy
• Accelerate investment in technology innovation
• Commit to consistent and predictable incentives for
deployment
• Acknowledge and mitigate the carbon challenge with
the necessary policies
It is a matter of national will and leadership
Wind and Marine Energy R&D
Source: NREL 2007
Geothermal R&D
Source: NREL 2007
Photovoltaics R&D
Source: NREL 2007
Concentrating Solar Power R&D
Source: NREL 2007
Biofuels R&D
Source: NREL 2007