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Douglas J. Arent Director, Strategic Energy Analysis and Applications Center

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. Economic Productivity. Secure supply

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Douglas J. Arent Director, Strategic Energy Analysis and Applications Center

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  1. Thinking Differently:Developing a New Energy EconomyPresented at GRA 2007 Douglas J. Arent Director, Strategic Energy Analysis and Applications Center National Renewable Energy Laboratory

  2. Energy Solutions Are Enormously Challenging Energy Security Economic Productivity • Secure supply • Reliability • Growth in demand • Price volatility Vulnerability or Opportunity Environmental Impact • Land and water use • Carbon emissions Must address all three imperatives

  3. How Big is the Challenge? Source: Arvizu, NREL

  4. 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

  5. Declining Energy R&D Investments… U.S. R&D Spending in the Energy Sector Billions 2002$ 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 Bookhttp://cta.ornl.gov/data/chapter10.shtml

  6. Declining Energy R&D Investments… Reflect World Oil Price Movement U.S. R&D Spending in the Energy Sector Billions 2002$ Dollars per Barrel – 2002$ 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 Bookhttp://cta.ornl.gov/data/chapter10.shtml

  7. Developing World Will Out-consume Developed Global Energy Consumption NON-OECD QBtu OECD 2012 2030 Year 1980 Source: EIA

  8. Economic development is tightly correlated with energy consumption GJ/capita Effect of Geography GDP($K)/capita

  9. Global Markets are Growing Rapidly Global Growth of Wind Energy Capacity Global PV Shipments

  10. Getting to “Significance” Involves… Technologies Reducing Risk Mobilizing Capital Markets Policies Source: NREL

  11. 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…

  12. Renewable Portfolio Standards* WA: 15% by 2020 ME: 30% by 2000 VT: 10% by 2012 MN: 25% by 2025+ IA: 2% by 1999 NH: 23.8% by 2025 WI: 10% by 2015 NY: 24% by 2013 MT: 15% by 2015 MA: 4% by 2009 IL: 8% by 2013 OR: 25% by 2025 RI: 16% by 2019 CT: 10% by 2010 NV: 20% by 2015 NJ: 22.5% by 2020 CO: 20% by 2020 DE: 10% by 2019 MD: 7.5% by 2019 DC: 11% by 2022 AZ: 15% by 2025 CA: 20% by 2010 PA: 8% by 2020 NM: 20% by 2020 VA: 12% by 2022 TX: 5,880 MW (~5.5%) by 2015 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

  13. Electric Sector Drivers 63 GW 2002 Coal declines CAAA Gas increases PIFUA changed PURPA CC efficiency Low price through deregulation Gas declines PIFUA prohibits Nuclear emerges Technology Available Too cheapto meter Nuclear decline 3-Mile Island (1979) Chernobyl (1986)

  14. 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

  15. Investment and M&ABy Region and Asset Class – 2006 Figures in brackets represent total number of deals. 2006 figure is annualized. Source: New Energy Finance 2007

  16. Total Estimated VC Investment by Region2001-2006 Figures in brackets represent deals (with disclosed value/total number of deals). 2006 figure is annualized. Source: New Energy Finance, January 2007

  17. 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

  18. 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

  19. Achieving the Right Balance:Technology Investment Pathways Source: NREL 2007

  20. 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

  21. Wind and Marine Energy R&D Source: NREL 2007

  22. Geothermal R&D Source: NREL 2007

  23. Photovoltaics R&D Source: NREL 2007

  24. Concentrating Solar Power R&D Source: NREL 2007

  25. Biofuels R&D Source: NREL 2007

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