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Douglas J. Arent Director, Strategic Energy Analysis and Applications Center National Renewable Energy Laboratory 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
Thinking Differently:Developing a New Energy Economy
Presented at GRA 2007
Energy Solutions Are Enormously Challenging
Must address all three imperatives
Vulnerability or
Opportunity
Vulnerability or
Opportunity
Energy SecurityEnergy SecurityEnergy SecurityEnergy Security Economic Economic ProductivityProductivityEconomic Economic ProductivityProductivity
Environmental ImpactEnvironmental ImpactEnvironmental ImpactEnvironmental Impact
• SecureSecure supply supply• ReliabilityReliability• SecureSecure supply supply• ReliabilityReliability • Growth in Growth in
demanddemand• Price volatilityPrice volatility
• Growth in Growth in demanddemand
• Price volatilityPrice volatility
• Land and water useLand and water use• Carbon emissionsCarbon emissions• Land and water useLand and water use• Carbon emissionsCarbon emissions
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
Source: Daniel Kammen, Gregory Nemet Reversing the Incredible, Shrinking Energy R&D Budget http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdfTable 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml
U.S
. R&
D S
pen
din
g in
th
e E
ner
gy
Sec
tor
Bill
ion
s 20
02$
Declining Energy R&D Investments…
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.pdfTable 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml
U.S
. R&
D S
pen
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th
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gy
Sec
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Bill
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s 20
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Do
llars per B
arrel – 2002$
0
50
100
150
200
250
300
350
400
450
1980198020302030
NON-OECDNON-OECD
20122012
OECD
Developing World Will Out-consume Developed
Global Energy Consumption
QB
tu
Year
Source: EIA
Economic development is tightly correlated with energy consumption
GJ/capita
GDP($K)/capita
Effect of Geography
Global Markets are Growing Rapidly
Global PV Shipments
Global Growth of Wind Energy Capacity
Getting to “Significance” Involves…
Policies Markets
ReducingRisk
ReducingRisk
Mobilizing Capital
Mobilizing Capital
Technologies
Source: NREL
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…
NV: 20% by 2015
HI: 20% by 2020
TX: 5,880 MW (~5.5%) by 2015
CA: 20% by 2010
CO: 20% by 2020
NM: 20% by 2020
AZ: 15% by 2025
IA: 2% by 1999
MN: 25% by 2025+
WI: 10% by 2015NY: 24% by 2013
ME: 30%by 2000
MA: 4%by 2009
CT: 10% by 2010
RI: 16%by 2019
PA: 8% by 2020
NJ: 22.5% by 2020
MD: 7.5% by 2019
*As of June 2007+For Xcel Energy, the requirement is 30% by 2020.
Sources: Union of Concerned Scientists and NREL
DC: 11% by 2022
MT: 15% by 2015
DE: 10% by 2019
IL: 8%by 2013
WA: 15%by 2020
Renewable Portfolio StandardsRenewable Portfolio Standards**
OR: 25% by 2025
NH: 23.8%by 2025
VA: 12% by 2022
VT: 10% by 2012
RPS
RE GoalMO: 10% by 2020
Electric Sector DriversAnnual Electric Generating
Capacity Additions
0
2
4
6
8
10
12
14
16
18
201
95
0
19
60
19
70
19
80
19
90
20
00
GW
Coal Natural Gas Nuclear
Nuclear emergesTechnology Available
Too cheap to meter
Gas declines PIFUA prohibits
Nuclear decline3-Mile Island (1979)Chernobyl (1986)
Gas increasesPIFUA changedPURPACC efficiencyLow price through deregulation
Coal declinesCAAA
63 GW 2002
Money Is Flowing Into the Sector
Source: New Energy Finance 2007
2006 Investment and M&A – By Sector and Asset Class
Annual VC Investment Volume – 2001-2004 Compared With 2005-2006
Investment and M&ABy Region and Asset Class – 2006
Source: New Energy Finance 2007
Figures in brackets represent total number of deals. 2006 figure is annualized.
Total Estimated VC Investment by Region2001-2006
Source: New Energy Finance, January 2007
Figures in brackets represent deals (with disclosed value/total number of deals). 2006 figure is annualized.
Renewable Energy Cost TrendsLevelized 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 ChallengesThe 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
