Nov 22, 2006 Refocus Weekly
Switching the U.S. economy to
run on renewable energies could save money and reduce
pollution, with visible benefits within a decade,
says a national think tank.
If prices for fossil fuels remain high and the
cost of producing renewables continues to drop in
line with historical trends, the U.S. could source
25% of its electricity from green power and 25%
of its transportation fuels from green fuels by
2025 at little or no additional cost, concludes
the Rand Corporation in 'Impacts on U.S. Energy
Expenditures of Increasing Renewable Energy Use.'
The report was commissioned by the Energy Future
Coalition of Washington.
Currently, 6% of energy in the U.S. comes from renewables;
if hydropower is excluded, the share drops to 3%.
The study evaluates the '25x25' goal, which
refers to sourcing 25% of green power and green
fuels by 2025, and the data was modelled 1,500 times
to assess the probability of different outcomes
based on different assumptions on the pace of technological
change and prices. It does not consider the impact
of green heat technologies for space conditioning.
"The debate on use of renewable energy has
largely centered on the tensions between some seeing
renewables as socially desirable and others seeing
them as economic losers," it explains. "Even
advocates for renewable energy based on environmental
benefits have had to acknowledge that solar power,
wind power, geothermal energy, and biomass fuels
have been too expensive to compete economically
with non-renewable fossil fuels on a broad scale."
The scepticism about the cost of renewables is "anchored
both in a long history of government energy programs
that sought and failed to make alternative energy
sources commercially competitive and in the negative
views of the cost and reliability of renewables
left over from poor experiences with renewables
in the late 1970s and early 1980s," it continues.
Market adoption has proved elusive in the U.S. and
"surprisingly little systematic analysis"
has been done of the possible long-term impact on
total energy expenditures of expanding renewables
consumption or the key drivers of expenditure impacts.
"Higher oil and and natural gas prices, if
sustained, make renewable energy more competitive
today than it was during much of the last quarter-century,
when energy prices were lower than their peaks in
the 1970s," the report notes. "The simulation
analysis helps to identify the circumstances under
which the specified renewable energy target raises
or lowers total energy expenditures."
Renewables lower total energy expenditures in "virtually
all cases in which current energy price and technology
cost trends continue," and expanded use of
renewables "could be achieved at acceptable
costs," it concludes. "Shifting to renewables
had adverse impacts on total energy expenditures
in cases when fossil fuel prices are lower than
current forecasted projections; costs of renewable
energy technologies increase or decline less than
historical trends as renewables use scales up, and
non-renewable technology costs drop relative to
the cost of renewables, the reverse of what has
tended to occur as renewable technologies improve."
If renewable energy technologies continue to improve
at historic rates, and are 20% less expensive to
install by 2025, energy expenditures might be 0.5%
higher or lower than the non-renewables case, "essentially
breaking even." The most extreme of the 1,500
scenarios produced by Rand show a 6% change in energy
expenditures (US$75 billion in 2025) if the costs
of renewables rise 30% over the next 20 years while
natural gas, oil, and coal prices fell 50% from