277
Energy R&D Policy in a Changing Global
Environment
Charles K. Ebinger1
Vice President, International Energy Services, Nexant
Demographic Trends
Demographic Trends
Trends
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World population explosion
Rising fossil fuel consumption
Growing greenhouse gas emissions
Accelerating urbanization
Energy/environmental tradeoffs
2
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1Note that the contents present the views of their authors, not necessarily those of the
Department of Energy, RAND, or any other organization with which the authors may be affiliated.
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E-Vision 2000
E -Vision
-Visio n 2000
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What is the demographic/institutional contextof our
energy future ?
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What are the challenges to formulating an effective
R&D policy in a changing market environment?
3
Institutional Context
IIns
nsti
extt
tittutional
utional Cont
Contex
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By 2020 in the U.S., over 400,000MW (1,300plants of
300 MW) of additional capacity will be required to meet
electricity demand and replace aging units
This 400,000MW includes 73,000 MW of existing fossil
(primarily coal -fired) capacity scheduled for retirement
by 2020
Only 49,000MW of this new capacity is expected to be
coal-fired
Gas turbine combined cycle plants are predicted to
grow by 350,000MW
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279
Institutional Context (Cont.)
IIns
nsti
extt (ContAd)
tittutional
utional Cont
Contex
(Con tAd)
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Growing competitive nature of electricity market
Trading versus owning of electric ity
Transformation of wholesale/retail markets
Futures contracts
Internet trading versus owning fuelin market
dominated by price/volatility
Gas versus coal ù changing market perceptions
Distributed generation (fuel cells,
microturbines ,
diesel, and gas engines)
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Institutional Context (Cont.)
IIns
nsti
(Co ntAd)
tittutional
utional con
conttext
ext (ContAd)
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Uncertain evolution (cost and technicalaspects)of the
repowering market
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Evolution of non -utility generation market
Nuclear plant retirements/life extensions
Renewables ù cascading costs
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280
Institutional Context (Cont.)
I nt
nternet
ernet Revolution
Revol ution
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Emergence of high -powered,low cost platform capable
of transforming many utility industry processes
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Early applications havecentered on increasedtrading
operations, digitized customerservice functions, and
aggregation of retail customers in deregulated markets
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Key market growth lies in energy procurementand
supply chain management
What are the benefits of e -procurement? For
commercial concerns? For DOE?
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7
International
I nt
nternational
ernational
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Coal is not dead: it is alive and well!
India and China will account for 33% of the worldAs
primary energy growth by 2020and 97% of the worldAs
increase in coaluse
China will add an estimated 180 GW of generating
capacity ù 600 plantsof 300MW each
India will add 50 GW ù 167plants of 300 MW
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Summary
Summary
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Coal for electricity consumption will account for
almost all the growth in coal consumption worldwide
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Given the large potential export market for clean coal
technology and the proje ctedgrowth in U.S. demand,
DOEAsR&D budgetshould take this coal consumption
trend into consideration in establishing new R&D
priorities
9
E-Procurement
E-Procu
rement
E -Procurement
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Lower product prices
Falling procurementcosts
Shorter order and fulfillment cycles
Reduced inventory costs
Improved supply change management
Reduced processing and administrative costs
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282
E-Procurement (Cont.)
E-Procu
rement
E -Procurement
Su pply C ha nge Managemen t Savi ngs
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TVA
Bonneville Power Authority
Other power authorities
National laboratories
Other facilities
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R&D
R&D:
Where Do We Go Fro m Here?
U.S. DOE
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283
The Future
The Future
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R&D for R&DAs sakewill be difficult to justify politically
Natural gas pric es are rising and may change
assumptions about the costs of gas -fired generation in
absenceof additional increasesin efficiency
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The Future (Cont.)
The Future
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Solar industry outlook improving with double digit
growth ratesalbeit from a very low base
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Cost of solar panels is falling owing to declining
production costs and enhanced solar panel
productivity
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284
The Future (Cont.)
The Future
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Distributed generation: fuel cell costs projected to fall
40-50%by 2005
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HIPPSfacilities for repowering and new baseload
facilities
Second -generation greenfield HIPPSfacilities using
only coal will yield environmental and cost savings
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The Future (Cont.)
The Future
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Global warming ù will second -generation passively
safe nuclear reactors get a new look?
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Will fusion still be 30 years away?
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