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ARLINGTON, Virginia, US, November 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
current projections.
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