The Future of Fuels: Toward
the Next Decade of Energy
Policy for Renewables.
Douglas J. Arent
Executive Director
RFF 60th Anniversary
November 2012
1
Net Annual Capacity Additions GW
World Outlook: Power Generation
WEO, 2012
2
US Outlook: Natural gas, wind and other renewables account for
the vast majority of capacity additions from 2010 to 2035
Capacity additions 2010 to 2035
2010 capacity
Hydropower*
101 (10%)
Other
renewables
16 (2%)
Hydropower* Nuclear
9 (4%) Coal
3 (1%)
11 (5%)
Nuclear
101 (10%)
Coal
313 (30%)
1,036
gigawatts
Wind
39 (4%)
Natural gas
350 (34%)
End-use coal
6 (2%)
Other renewables
34 (14%)
Wind
30 (13%)
End-use coal
4 (0.4%)
Other fossil
111 (11%)
Other fossil
1 (0.4%)
235
gigawatts
Natural gas
142 (60%)
* Includes pumped storage
Source: EIA, Annual Energy Outlook 2012
3
Alternative Scenarios: Non-hydro renewable sources
grow 3-4x, with economic growth, or with a price on CO2
non-hydropower renewable generation
billion kilowatthours
2025
2035
Wind
Biomass
Solar
Geothermal
Coal Economic Gas
Cost Growth Price
Coal Economic Gas
Cost Growth Price
Municipal
waste
Source: EIA, Annual Energy Outlook 2012
4
Other Policy Options: Clean Electricity Standard
6,000
CES High-EUR
5,000
Annual Electricity Generation (TWh)
Annual Electricity Generation (TWh)
5,000
6,000
CES High-EUR, No-CCS
4,000
3,000
2,000
1,000
CES Low-EUR
Offshore Wind
5,000
Annual Electricity Generation (TWh)
6,000
4,000
3,000
2,000
1,000
Onshore Wind
PV
CSP
4,000
Other RE
Hydropower
NG-CCS
3,000
NG-CT
NG-CC
Oil/Gas Steam
2,000
Coal-CCS
Coal-New
Coal-Existing
1,000
Nuclear
Demand
0
2010
•
•
•
2020
2030
2040
2050
0
2010
2020
2030
2040
2050
0
2010
2020
2030
2040
2050
A CES generally leads to greater NG power generation in the near-term followed by
reliance on RE (and to a lesser degree, CCS and nuclear) in the long-term
Under a CES, 2050 RE power generation is significant even with high EUR and CCS
deployment: 38% wind, 9% solar, 7% hydro, 3% other RE
New nuclear capacity expansion is more limited under cost assumptions used
5
Renewable Electricity Futures Study
100%
Wind
% of Total Generated Electricity
90%
PV
80%
70%
CSP
60%
Hydropower
50%
Geothermal
40%
RE-ITI scenarios
Biomass
30%
20%
Natural Gas
10%
Coal
0%
90% RE
80% RE
70% RE
60% RE
50% RE
40% RE
30% RE
Baseline
Nuclear
Variable
Generation
Percent RE
80% RETs meets ―resource adequacy‖
reliability criteria and hourly supply
and demand
Renewable Electricity Futures Study (2012)
6
Emerging Energy Policy Dynamics
7
Some Observations…
• Globally
– 118 Countries with supportive policy environments
– Continued Growth: 2-4x by 2035
• Fulfilling Announced Commitments – G20, Durban, SE4All…
• Policy Stability Critical
• Addressing Climate Change directly or through ―2nd Best‖
Policies
8
U.S. Policy Landscape
 Internationally:
 Work within WTO, Trade Agreements, etc to recognize and
leverage global learning into local deployment and local jobs. E.g.,
 21St Century Power Partnership under Clean Energy Ministerial
 Domestically:
 Near Term: Transitional Fiscal Policies & Access to New Financial
Structures
 MLPP Act, REITs, PTC/ITC
 Policy Actions that Mindfully Address the Interdependencies and
Critical Nature of Energy:; e.g.,
 Synergies with Natural Gas over medium to long term—e.g. CES +
NSPS
 Innovation: Energy Systems Integration & Technology Advancements
 Modernization: Resilient, Efficient and ―Smart‖ Infrastructure
 State Policies will continue to play strong role: RPS, FITs, Carbon,
Leasing, Net Metering, etc
9