Thursday, November 16, 2006

RAND Report On Renewable Energy Potential

Nov 13: A new report -- Impacts on U.S. Energy Expenditures of Increasing Renewable Energy Use -- from the a RAND Corporation indicates that renewable resources could produce 25 percent of the electricity and motor vehicle fuels used in the United States by 2025 at little or no additional cost if fossil fuel prices remain high enough and the cost of producing renewable energy continues falling in accord with historical trends. Renewable sources currently provide about 6 percent of all the energy used in the U.S.

RAND found that meeting the 25 percent renewable energy target for electricity and motor fuels together would not increase total national energy spending if renewable energy production costs decline by at least 20 percent between now and 2025 (which is consistent with recent experience), unless long-term oil prices fall significantly below the range currently projected by the Energy Information Administration. Wind power, solar power 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 that can be used to power motor vehicles.

The study evaluates the goal known as 25x'25 which refers to having 25 percent of the energy used for electricity and motor vehicle fuel in the U.S. supplied by renewable energy sources by the year 2025. The Energy Future Coalition, a nonprofit organization, asked RAND to assess the economic and other impacts of meeting the 25x'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.

Significant reductions in carbon dioxide emissions from fossil fuel combustion also can be achieved by meeting the 25x'25 goal, -- amounting to 1 billion tons of carbon dioxide in 2025, or 15 percent of projected U.S. emissions. In addition, an estimated 2.5 million barrels of oil consumption would be displaced.

Unlike previous studies that have relied on a handful of scenarios to capture uncertainties in projections of future energy prices and changes in the costs of various technologies, the RAND study examined 1,500 cases of varying energy price and technology cost conditions for renewable and nonrenewable resources. The RAND team developed a model based on the National Energy Modeling System created by the U.S. Energy Information Administration.

RAND researchers did not assess the impact of renewable energy used directly by industry in buildings currently using natural gas, in off-road vehicles used for construction and recreation, or in railroad and jet fuel. RAND researchers assumed that implementation of increased renewable energy use would be carried out at a national level in the least costly manner, versus a more piecemeal approach. Among the important uncertainties considered is the cost to ramp up use of new renewable energy technologies.

The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world.

Access a release (click here). Access the complete 93-page report which includes web addresses for many referenced sources (click here). Access a summary document (click here). Access the RAND website for additional information (click here). [*Energy]