Renewable Energy:Strengthening Our Nation’s Economy

Alternative Energy Technology Innovations:The Coming Economic Boom

May 12-13, 2005Savannah, Georgia

Dr. Dan E. ArvizuDirector, National Renewable Energy Laboratory

Energy Challenges are Enormous

Economic Growth

Environmental Impact

Energy Security and Reliability

Market Restructuring

National Predicament

• Very slow renewal of existing infrastructure geared to cheap fuel

• Maintain security of:– Fuel supply– Generating capacity

• We have only today’s technology for 2025• Energy needs will grow

Cars 10 -15 yrsAircraft 20 -30 yrsWind turbines 25 yrsPower plants 40+yrsTrains 30+ yearsElectrical distribution 40+yrsHouses 70+ years

Source: Lord Ron Oxburgh, Royal Dutch Shell

RejectedEnergy

U.S. Energy Flows98

.2 Q

uadr

illio

n Bt

u Fuels61%Fuels61%

Electricity39%

Buildings40%

Industry33%

Transportation27%

62%

Technology-based Solutions:There is no one silver bullet, we need many

• Energy efficiency• Renewable energy• Non-polluting transportation fuels • Separation and capture of CO2 from fossil fuels• Next generation of nuclear fission and fusion technology• Transition to smart, resilient, distributed energy systems coupled with

pollution-free energy carriers, e.g. hydrogen and electricity

Renewable Energy Will Play a Key Role in a More Diverse and Secure

Energy Supply

Renewable Energy Costs are DecreasingLevelized cents/kWh in constant $20001

Wind

1980 1990 2000 2010 2020

PVC

OE

cen

ts/k

Wh

1980 1990 2000 2010 2020

40

30

20

10

0

100

80

60

40

20

0

BiomassGeothermal Solar thermal

1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020

CO

E c

ents

/kW

h

10

8

6

4

2

0

706050403020100

15

12

9

6

3

0

Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt)1These graphs are reflections of historical cost trends NOT precise annual historical data.Updated: October 2002

Alaska1

California2,096

Colorado229

Hawaii9

Iowa632

Kansas114

Massachusetts1

Michigan2

Minnesota615

Nebraska20

New Mexico267

New York48

North Dakota

66Oregon259

Pennsylvania129

Tennessee29

Texas1,293

Vermont6

Wisconsin53

Wyoming285

Washington244

South Dakota

44

West Virginia66

Arkansas0.1

Idaho0.2

Maine0.1

Montana2

New Hampshire0.1

Oklahoma176

Utah0.2

Illinois81

Ohio7

6770 MW as of 12/31/04 Current cost is 4 to 6¢/kWh in best regimes (unsubsidized)

Wind Energy StatusWind Capacity (MW)

Solar Energy Status

• Concentrating Solar Power– Nine parabolic

trough plants – 354 MW capacity– 12-14¢/kWh

• Photovoltaics– 340 MW capacity– Price of power

from grid connected PV systems is 20 to 30¢/kWh

PV systems at the Arizona Public Service facility in Prescott, Arizona

Biomass StatusBiopower• Grid-connected capacity

– 9700 MW direct combustion– 400 MW co-firing

• Biopower electricity prices generally range from 8-12¢/kWh

Biofuels• Biodiesel – 15 million gallons (2002)• Corn ethanol

– 81 commercial plants– 3.4 billion gallons (2004)– ~$1.22/gal

• Cellulosic ethanol*– $2.73/gal

* Not commercially available

Rated at 21 MW and providing the San Francisco Bay Area with baseload capacity, the Tracy Biomass Plant uses wood residues discarded from agricultural and industrial operations.

Factors Inhibiting Pace and Volume of Renewable Energy Market Entrance

• Capital mobilization• Lack of consistent, stable policies• Electricity pricing: valuing externalities• Further technology advances

Mobilizing Capital:Creative Business Partnership Models

• Catalyze entrepreneurs

• Enhance strategic partnering

• Attract new corporate entrants

• Invigorate private equity/venture capital

State Policies are OpeningMarkets for Renewable Energy

Renewable Electricity StandardsNevada: 15% by 2013, solar 5% of annual

Hawaii: 20% by 2020

Texas:2.7% by 2009

California: 20% by 2017

Colorado: 10% by 2015

New Mexico: 10% by 2011

Arizona: 1.1% by 2007, 60% solar

Iowa: 2% by 1999Minnesota: 19% by 2015*

Wisconsin:2.2% by 2011

New York:24% by 2013

Maine:30%by 2000

MA: 4%by 2009

CT: 10% by 2010

RI: 16%by 2019

Pennsylvania:8% by 2020

NJ: 6.5% by 2008Maryland:7.5% by 2019

18 States + D.C.

*Includes requirements adopted in 1994 and 2003 for one utility, Xcel Energy.

Washington D.C:11% by 2022

Western Governors’ AssociationClean and Diversified Energy Initiative

• Western U.S is rich with fossil, hydro and renewable energy resources.

• Goal of 30,000 MW of clean energy by 2015, using solar, wind, geothermal, biomass, clean coal technologies and advanced natural gas technologies.

• Goal to increase the efficiency of energy use by 20% by 2020.

• Meet the West’s generation and transmission needs over the next 25 years.

Create an Electricity Pricing Structure that Values Externalities

• Intangibles have value– Greater value if dealt with in resource

planning– Allow a broader perspective

• Hard to quantify– Has been controversial– No accepted methodology

The Future for Renewable Energy:A Technology Outlook

WindSolar

Biomass

Wind OutlookTechnology• DOE Wind Program R&D goals

– 3¢/kWh* in class 4+ wind areas onshore

– 5¢/kWh* for offshore systems• New Technology will

– Expand range of feasible sites – Reduce siting risk – Enhance system value

Policy• State-led RPS • Production Tax CreditMarket Drivers• Natural gas prices• Green purchasing * unsubsidized

Solar OutlookTechnology DOE Solar Program goals:• Photovoltaics: 6¢/kWh by

2020• Concentrating solar

power/troughs: 5¢/KWh by 2012

Policy • 1000 MW initiative• Western Governors’

Association 30,000 MW by 2020 initiative

• State RPS with solar set asides

Market Drivers• Peak power prices• Green markets

Biomass Outlook

TechnologyDOE Biomass Program goals:• 5.5¢/kWh by 2010• $1.07/gal bioethanol by 2020PolicyHouse-passed energy bill will

create a renewable fuels standard that reaches 5 billion gallons/year by 2012

Market Drivers• Future outlook for crude oil

prices• Best utilization for biomass –

fuels or electricity

Technology Roadmaps and Vision to the Future

LWST Turbines:• 3¢/kWh at 13mph• Electricity Market

2012

Offshore LWST Turbine:• 5 cents/kWh• Shallow/Deep water• Electricity Market• Higher wind Sites

2012 and Beyond

Custom Turbines:• Electricity• H2 production• Desalinate water• Storage• Multi-Market

2030 and Beyond

A Future Vision for Wind Energy Markets

2005

Bulk Power Generator

4-6¢ at 15mph

• Land Based

• Bulk Electricity

• Wind Farms

Future Potential=20% of

Electricity Market

Land Based Electricity Path Transmission Barriers

Cost & Regulatory Barriers

Land or Sea Based:• Hydrogen• Clean Water

Cost & Infrastructure Barriers

Land Based LWSTLarge-Scale

2–5 MW

Offshore Turbines5 MW and Larger

Tomorrow

Offshore Electricity Path

Advanced Applications Path

Today

Comparison of annual U.S. solar power shipments under the Baseline and Roadmap cases. Shipments in 2030 and 2050 are 2.4 and 5.5 GW for the Baseline case and 19 and 31 GW for the Roadmap case.

Future Technology Directions

• Research on crystalline silicon, thin films, and balance-of-systems components

• Higher-risk, longer-term R&D for all system components that can leapfrog beyond today’s technology

• Partnerships among industry, universities, and national laboratories

The Biorefinery:The Path Ahead

• A diverse feedstock supply that provides over 1 billion tons of biomass per year

• Equivalent of 3.5 billion barrels of crude oil per year or 55% of current U.S. petroleum demand

Technologies

Policies Markets• Conventional

energy prices• Green markets

• Incentives & mandates

• High technology• Mass production

The U.S. Department of Energy’sNational Renewable Energy Laboratorywww.nrel.gov

Golden, Colorado