Impacts on U.S. energy expenditures and greenhouse-gas emissions of increasing renewable-energy use : technical report

"How could producing 25 percent of U.S. electricity and motor-vehicle transportation fuels from renewables by the year 2025 affect U.S. consumer energy expenditures and CO[subscript 2] emissions? This report finds that reaching 25 percent renewables with limited impact on expenditures requires significant progress in renewable-energy technologies and biomass production. Without substantial innovation in these areas, expenditures could increase considerably."--Jacket Preface......Page 4 Contents......Page 6 Figures......Page 8 Tables......Page 10 Summary......Page 12 Acknowledgments......Page 16 Abbreviations......Page 18 Background......Page 20 Approach......Page 21 Organization of This Report......Page 23 Overview of the Electricity and Fuel Market Models......Page 24 Step 3: Substitute Renewable Fuels for Fossil Fuel......Page 25 Motor Transportation–Fuel Model......Page 26 Electricity Model......Page 31 Biomass Feedstock Supply......Page 35 Elasticities of Energy Demands and Primary Energy Supplies......Page 36 Uncertainty Analysis......Page 38 Concluding Remarks......Page 39 CHAPTER THREE- Key Findings......Page 42 Electricity......Page 43 Fuels......Page 47 Policy Mechanisms for Implementing the Policy Requirements Have Important Effects on Consumer Behavior and Expenditures......Page 51 Meeting 25 Percent Requirements with Relatively Low Expenditure Impacts Requires Significant Progress in Renewable Technologies......Page 52 “Only Moderate Wind Progress, Higher-Cost Biomass, Somewhat Limited Consumer Response” Characterize Many Outcomes with Higher Electricity Expenditure Change......Page 54 “Responsive Fuel Demand, Reasonably Cheap Biomass, and Significant Progress in Biofuel Technologies” Characterize a Great Many Outcomes with Low Motor-Fuel Expenditure Change......Page 56 Potential Impacts of Biomass Scarcity Can Be Especially Significant......Page 57 Policy Requirements Can Reduce CO2 Emissions Significantly, but Incremental Energy Costs per Emission Reduction Vary Widely and May Be High......Page 60 Lower-Level Renewables Requirements Reduce Expenditure Changes......Page 63 Energy Security and Energy Prices......Page 64 What Happens If Future Oil Prices Are Well Above Reference Levels?......Page 65 CHAPTER FOUR- Concluding Remarks......Page 68 References......Page 70 The penetration of renewable energy into the marketplace has been small, held back principally by their higher cost relative to fossil energy. RAND assessed the potential impacts on U.S. consumer energy expenditures and national CO2 emissions of producing 25 percent of U.S. electric power and motor-vehicle transportation fuels from renewable resources by the year 2025. The baseline for the comparisons was expenditures and CO2 emissions in 2025 as drawn from the reference-case tables of the Energy Information Administration's 2006 Annual Energy Outlook. The report shows that increasing renewables use can reduce CO2 emissions and enhance energy security by lowering the cost of imported petroleum. However, a large, inexpensive, easily converted biomass supply is necessary for significantly increased renewable-energy use to have a relatively low impact on consumer energy expenditures. Rapid progress also is needed in the technologies converting biomass feedstock into transportation fuels, and producing power at marginal wind sites. Without progress in these areas, the renewable-energy requirement could substantially increase consumer energy expenditures. Technical advances in provision of economically and environmentally sound biomass energy and wind power generation at lower-quality sites should be top priorities for increasing affordable supplies of renewable energy. The report replaces an earlier version withdrawn in 2006 to correct errors in modeling discovered by RAND post-publication