Major progress in technology needed for 25 percent renewable energy use to be affordable

June 24, 2008

Dramatic progress in renewable energy technology is needed if the United States desires to produce 25 percent of its electricity and motor vehicle fuel from renewable sources by 2025 without significantly increasing consumer costs, according to a RAND Corporation study issued today.

Produced by the RAND Environment, Energy and Economic Development program, the study provides a "snapshot" of the nation's potential energy expenditures if a requirement was imposed that 25 percent of electricity and motor vehicle fuels used in the United States by 2025 would come from renewable resources (a goal activists have described as "25 x '25").

The study finds that biomass resources and wind power have the greatest potential to contribute toward reaching the 25 x '25 goal.

The study replaces a report withdrawn by RAND in 2006 because of errors RAND identified in the computer model and numerical assumptions on which the findings were based. The new report finds that meeting the 25 x '25 goals would be more challenging than outlined in the earlier version of the report. RAND is a nonprofit research organization.

The Energy Future Coalition, a nonprofit environmental organization, asked RAND to assess the economic and other impacts of meeting the 25 x '25 goal. The RAND study considered technological and economic factors that would affect the costs of renewable energy as well as non-renewable fossil fuels.

The report comes as sharply higher prices for oil, concerns about energy security and growing worries about global warming have increased interest in expanding renewable energy in the United States. Substituting renewable energy for fossil fuels would reduce carbon dioxide emissions, the most prevalent greenhouse gas associated with global warming.

Currently, renewable energy provides 9.5 percent of total U.S. electricity supply, mostly hydroelectric power, and 1.6 percent of motor vehicle fuel.

"Expanding the use of renewable fuels will lower the long-term price of crude oil and reduce carbon dioxide emissions that are contributing to global warming," said lead author Michael Toman, director of the RAND Environment, Energy and Economic Development program. "However, to reap these benefits will require a major investment in improving and increasing the use of renewable energy technology."

Wind power, solar power, hydropower, and the burning of agricultural waste are all examples of renewable energy sources that can be used to produce electricity. Biomass resources like stalks from food crops, wood material and grasses also can be turned into ethanol or gasoline that can power motor vehicles.

The study finds, however, that a large, inexpensive and easily converted biomass supply is essential if it is to be used as a renewable resource and still have a limited impact on consumers' wallets. Developing such a supply would require harvesting energy crops at a scale that greatly exceeds current production.

"Without increased biomass availability, expanded renewable energy use could impose economic burdens and result in environmental setbacks due to land conversion," Toman said.

While the 25 x '25 goal would significantly reduce carbon dioxide emissions, Toman said a broader package of policy options that includes, but does not rely solely upon, increased use of renewable energy could produce equal benefits with less cost.

Among the study's other key findings:

-- Renewable energy technology will have to improve at the very significant pace envisioned by some renewable energy supporters in order to enjoy low-cost impacts.

-- Significant increases in the use of wind power are possible, but only with substantial technical advances to facilitate greater use of less-productive locations.

-- More moderate renewable energy targets – such as 15 or 20 percent – reduce expenditure impacts more than proportionately, though carbon dioxide reductions also are less significant.

-- The federal government's policy approach to pricing of renewable motor fuels will significantly affect fuel demand and society's total energy expenditures.

"In particular, passing the cost of more-expensive renewable fuels to gas pump prices will result in improved energy efficiency, though it will cost consumers more," Toman said. "Subsidizing more-expensive fuels will save people money at the pump, but only because the expense is shifted to the federal budget."

The study does not address the transition and adjustment costs associated with initiating such a significant shift from fossil fuels to renewable energy technologies.

Source: RAND Corporation

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1.7 / 5 (3) Jun 24, 2008
The government should be spending more on energy research. Bush has been speaking out of both sides of his mouth. He told everyone that the green house is real and that spending should be increased on renewable energy projects then at budget writing time he cut out all of the increases he called for. Don't believe the private sector can end the greenhouse problem fast enough to make a difference. There has to be government sponsored research to get the job done on time. A ttoo little toolate situation might wreck our economy and cause wars bigger than the Iraq conflict.
3 / 5 (1) Jun 24, 2008
This is getting serious. We need another Manhattan Project or Project Apollo to focus our national resources and resolve on solving our energy problem in a systematic and orderly way. It's not going to be cheap or easy, but it IS going to pay for itself in a very short period of time by giving us energy independence and giving our descendants a cleaner planet.

No more piecemeal solutions, no more delays. Just roll up our sleeves, bite the bullet, and DO IT. Although we're slipping fast, we're still the greatest nation on earth, and WE CAN DO THIS! All we need is leadership, will, and commitment.
2 / 5 (1) Jun 24, 2008
It's all too little, too late. It's already upon us.
We need to cease all emissions, ie not 25%, 100%, not in 2025, but now. Then we have to wait 10,000 years for the current build up to dissipate through the carbon cycle, before climate will return to normal.
not rated yet Jul 18, 2008
Biomass is pretty hopeless, except maybe for jet fuel. Plants aren't very efficient converters of solar energy and even using things like cornstalks can lead to soil problems as organics aren't put back into soils.

Most transportation needs could be met by better batteries and solar-electric generation (plus a new national grid to distribute the energy). Of course, all this assumes that we formulate a competent energy policy. It's not going to happen under Cheney-Bush or McCain. Maybe Obama if he listens to Gore.

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