## RAND: Renewable Resources Could Produce 25% of Total US Electricity and Fuels by 2025

##### 13 November 2006

Renewable resources could produce 25% of the combined demand for electricity and motor vehicle fuels in the United States by 2025 at little or no additional cost if fossil fuel prices remain high enough and the cost of producing renewable energy continues falling in accord with historical trends, according to a RAND Corporation study issued today.

Renewable sources currently provide about 6% of all the energy used in the United States.

RAND found that meeting the 25% renewable energy target for electricity and motor fuels together would not increase total national energy spending if renewable energy production costs decline by at least 20% between now and 2025 (which is consistent with recent experience), unless long-term oil prices fall significantly below the range currently projected by the Energy Information Administration.

The study evaluates the goal known as 25x’25 (earlier post). This refers to having 25 percent of the energy used for electricity and motor vehicle fuel in the United States supplied by renewable energy sources by the year 2025.

The Energy Future Coalition, a nonprofit organization, asked RAND to assess the economic and other impacts of meeting the 25x’25 goal. The RAND study considered technological and economic factors that would affect the costs of renewable energy as well as non-renewable fossil fuels.

When talking about the impact of increasing use of renewable energy sources in our energy future, it’s important to be clear about the assumptions being made about future energy prices and technological developments, not just for renewables but also for competing fossil energy sources.

—Michael Toman, Director of RAND’s Environment, Energy, and Economic Development Program

The study—Impacts on US Energy Expenditures of Increasing Renewable Energy Use—also found that meeting the 25x’25 goal results in significant greenhouse gas emissions reductions amounting to 1 billion tons of carbon dioxide in 2025, or 15% of projected US emissions. In addition, an estimated 2.5 million barrels of oil consumption (10% of projected consumption) would be displaced, according to the study.

A 25% renewable future could, according to the study, reduce oil prices by 4%, natural gas prices by 6%, and coal prices by 16%. If renewable technology improves by 50% relative to nonrenewables, the maximum degree of improvement simulated by RAND, then net energy costs are nearly $30 billion lower in a 25x’25 future. Previous studies have relied on a handful of scenarios to capture uncertainties in the US Department of Energy’s projections of future energy prices and changes in the costs of various technologies. The RAND study examined 1,500 cases of varying energy price and technology cost conditions for renewable and nonrenewable resources. The RAND team developed a model based on the National Energy Modeling System created by the US Energy Information Administration. RAND researchers did not assess the impact of renewable energy used directly by industry in buildings currently using natural gas, in off-road vehicles used for construction and recreation, or in railroad and jet fuel. RAND researchers assumed that implementation of increased renewable energy use would be carried out at a national level in the least costly manner, versus a more piecemeal approach. Among the important uncertainties considered is the cost to ramp up use of new renewable energy technologies. (A hat-tip to Allen!) Resources: ### Comments This is good to hear. It shows the people and politicians what is possible....now for consensus and action. In the mean time, it remains to be seen if the Dems can get their act together on renewable resources in the next two years. Will they merely push clean coal (to the delight of WV, PA, KY, OH, IL, AL, MO, and MT) and ethanol (to the delight of NE, SD, MN, IA), or will they also push on wind (to the delight of MA, NH, ME, VT, ND, SD, MN, MT, ID, WY, CO, UT, CA, NM) and solar (to the delight of CA, NV, AZ, UT, NM, CO, TX, NE, and OK)? Will the Dems work to improve building code standards to reduce consumption? How about improving CAFE standards? Will the Dems increase the cost of operating a polluting power plant, thereby forcing a faster transition to renewables? We've heard for years that the GOP stands for Grand Oil Party, and that the Dems had an energy plan that will take Saudi Arabia out of the equation and control air pollution. Lets see if they can put their money where their mouths have been. I sure hope they do. You could go for 25% renewables as described. Push for 25% better efficiency and demand reduction. That can't be hard with the vehicles Americans drive. Double the amount of nuclear and get the rest from fossil sources. By then we should have decent batteries or hybrid units. And you are done. Put the nuke waste in Yucca mountain ( where it will end up anyway). The Finns are building a large underground nuclear waste store. It can be done. All it takes is- to quote Dr Strangelove "a little willpower". - JM Sounds easy enough. We're in 2006 and at 6%. This means just increase it by 1% per year. It won't be easy but it won't be hard either. Stormy - the Dems can't do squat diddly on contentious issues unless the can get one-fifth of Republican Senators to join them in overturning presidential vetos. Expect those to become much more frequent as George W. Bush digs in his heels. It's not in his nature to compromise anything that he perceives as a core principle - which seems to cover just about every policy of his. Mahonj - quoting Dr. Strangelove may not be the best way to persuade sceptics of the long-term safety of underground repositories such as Yucca Mountain, let alone the desirability of yet another generation of reactors that will have to be decommissioned at some point in the future. Sid, One problem, the rate of energy consumption is growing. By 2030, electric energy usage could grow ~50%. US population is likely to do the same by ~2050. From that viewpoint, the challenge to increase renewables share to 25% by 2025 is more daunting, but if achievable, even more impressive. ___On a side note, efficiency gains by existing gas/coal fired powerplants (40-60%) could make fossil energy usage decrease (w/renewables pitching in), or at least hold steady. Since cars/trucks and planes stay on the road/in the air for 15-25 yrs, perhaps a more concerted reengining (and profitable) of road/air vehicles (like Class 8 truck tractor engines, and MD-80). Yucca Mountain always seemed like refining crude to get paraffin and sticking the other products in storage, so we can complain about how much waste crude oil processing generates... But I suppose if we reprocessed we wouldn't have as much to complain about. We could also investigate transmutation and other methods of reducing the potential impact of radioactive waste at disposal sites more, but if we managed to displace fossil fuels think of how much potential revenue is lost by their owners. Around here alot of people are picking up used suvs. They are cheap and much more fuel eff then the old trucks theyused to use. Its far far better to pack up 1 big suv and hitch the boat to it then it is to pack up the fam in 2 cars and a truck and drive off. And the suv being as heavy as it is handles towing alot better.. no more stroeis about the boat trying to outrace the truck;/ Also of the people who used to own new suvs are now buying smaller cars or smaller suvs. But an important bit is the suvs are the heavy trucks are still around and will be for decades to come. After they get used by my freinds for the next decade or two its likely they will go down south and elsewhere and wind up rebuilt in some 2nd or 3rd world area.. very likely without any polution controls and with alot of dirty fuel and dirtier mods to the trucks. I know the old ford econoline van we used to have that got maybe 6 mpg most times is now in south america. I know my freinds oldold fuel guzzling behemoth wagon is down there too. Abd people quate numbers that are esitamtes based on lies about lies about hopes and propganda dreams. Never once questioning if for instance china even knows how much polution it puts out or for that matter india or africa or any of those places. Hell do we even know for sure even to within 50% margin what exactly europe or america is REALY belting out? Abd what do we have? We have contries desp[eratly trying to tech up and indust up before oio runs out and the hammer falls. We have wartorn regions fighthing over billions in oil that may or may not be there. And we now have millions of acers of land falling way for fuel plantations as far as the eye can see. America WAS only less then 25% of the problem 8 years ago. Its even less so now and sure wont be the issue once it finaly falls into the post industrial phase its flying into at full speed. Does it MATTER what americans drive today if by 2050 most americans will be too lazy and adicted to online games and tv to go anywhere? Does it matter how much we travel by air nw ifby 2050 most americans are too fat to fly? We dont need to conserve we dont need to work on better conventional cars we dont need to do any of that. We just need to unleash the infinete power of lazyness and fatness and let amercans turn into complete shut in lardbutts. You dont need to convince people big isnt better you just need to make a small car that a big fat ass can fit in and that has a cup holder large enoygh for an ultra hyper mega big gulp supreme. And sell the damn thing cheap so the fat assed game addict can spend more money on games. You dont need to force people to buy better bulbs.. you just need to make the damn bulb easyer for a fat lardass to plug in/ Have you tried to put in a 4 foot tube lately? They bloody never wana fit right! Harness lazyness to save the earth. You wana save every and fuel? Find a way to cheaply and fuel effciently dilver fast food from a nearby outlet to the home so the fat asses dont have to get in the car in the first place! Wintermane, that was profound. I hope this survey is close to accurate, but I also hope people realize how hard it is to predict something this big so (relatively) far down the road. Technology changes fast, politics change fast, etc, and there is an awful lot that we don't or can't know right now. I don't mean to sound negative, and I'm certainly not saying don't do anything, but let's just realize the severe limitations on such far-reaching estimates/predictions. But who knows, maybe it will work out this way hopefully. Or better? Its most likely that all freaking bleep will break loose and that americans will survive simple because they are too fat to starv nefore some pacthed together systems make the new world order work. The averagre american now has enough fat to provide them calories for a year and getting calories is the hardest part f getting food in a famine. As for china.. I think they are more then smart enough to grind the work they need to make china strong enough and tech enough to handle 2100 before oil runs out. India.. not a snowballs chance in hell. Europe.. too few will manage it and they will pull europe down in a massive messy fight. Africa..not a snowballs chance in hell. Middle east.. The glow from all the bombs will light up the moon. The us.. skinny)ish) for the first time ever millions of americans will sit eating completely 100% atrifcial food and comment online.. gee these soilent red pizza rolls tastse alot better if you dip them in soilent orange souce... Abyone teied the new soilent mauve from toco bell? Being a nihilist is so easy. And if it's not PO, the coming of Jesus (spanish), or the nanobot scourge, it'll be proton decay... :p The study looks like good work overall and I am pleased that they project and point out you can anticipate a significant reduction in the cost of oil because of the demand reduction caused by the alternatives. If there's a 4% reduction in the price of oil, then a 12% subsidy for the alternatives would pay for itself in this alone. Here in California, we just lost a proposition to put a lot into alternative energy because the oil companies spent$90 million convincing the public that the proposition, though it increases competition with oil, would raise the cost of gasoline, and the voters bought it. That measure also had this same target of replacing 25% with renewables. I claim the failure was that the proponents of the proposition didn't make the argument that renewables will save petroleum buyers money, which Rand now has.

I think they've sacrificed important points for objective simplicity though. I can't see how the price of coal would be driven way down, because there is plenty of coal and cartels are illegal in the US, and two decades is plenty time for long-term supply elasticity adjustments. Oil is a different matter; it is controlled by OPEC and they will raise it to milk the market to the max according to demand elasticity.

Also, the most important elasticity feedback mechanism is when the US leads and spreads renewables technology, reducing demand (growth) from other countries, increasing the demand elasticity for petroleum and moderating everybody's price for petroleum. Ironically, this is the biggest threat to the profitability of alternative fuel investments and are why they need public support. Otherwise petroleum comes down to meet renewable on a strict price basis and renewable can't make the return to cover its risk. Then renewable is self-sacrificing in capping the price of oil. It shouldn't be sacrificed any more than our soldiers for the oil status quo. This problem is why renewables development has been dragging all these years, and that has to change.

The problem here is that by 2025, 25% of the energy will just be that amount that has been added since today.
There will be NO decrease in any CO2 emissions. But don't worry, CO2 accounts for less than 1% of the greenhouse gases. 98% of the greenhouse gases is water vapor, and that ain't going nowhere. Global warming is one big scam by the renewables industry to force this country to
pay thru the nose for its energy. It's funny to watch the sheep running thru their hoops. Hasn't been anything this amusing since these same climatologist "scientists" with their phoney baloney models were predicting a new ice age back during the 1980's. When will the fools learn that climatology is one step removed from astrology. Hey, if 80% of this country's brains thinks we've been visited by aliens, they're believe ANYTHING. ANYTHING. And some people dispute studies that show Americans to be the least intelligent on the planet.
Now they've elected a political party that pushes
conspiracies as a means of understanding patently transparent operations, such as the price of crude.
46% believe the President can set the worldwide price of crude!!!!! Now why do those other 8 billion people let him do that? HOW does he do that? They also, incredibly, believe that he is impotent in all other
areas!!! Schizophrenia lives.

Wintermane: You have identified the solution -- Fat people, liposuction, biodiesel. Problem solved.

Seriously, high oil prices out of OPEC and every other oil producing nation and state that wants their share, will only hasten alternative development. Even the fight against California's tax cost the oil companies, and thus the oil consumer.

I am glad to see this type of study, although I don't think the predictions are even close to reality. Technology, and the world are changing far too fast to predict anything that far in the future.

If one third of the Americans are so fat, big and overfed, could BFP2G (Big, Fat People 2 Grid), with 100 million people driven generators, supply the 25% extra energy required and the essential physical exercise at the same time?

This could be a win win win solution:

1) free clean electrical power
2) less obese people and health care
3) energy savings and GHG reduction.

It could be better than watching TV and eating triple oversized burgers & chips.

Smaller PHEVs and BEVs could become a practical solution for many more.

PS: As obesity occurs in the same families, one people driven generator could be shared by 2 to 4 members, thus tripling the efficiency.

Put the nuke waste in Yucca mountain ( where it will end up anyway).

I seriously doubt it. Yucca Mountain will drag on, consuming billions, until finally everyone will notice that the spent fuel it was supposed to hold has all been sealed away in nice shielded dry casks, so why move any of it?

Once in dry casks, the stuff doesn't really have to be dealt with until it decays so much it becomes a proliferation hazard. That will take centuries. By then, shoot it off to the moon on the next hourly cargo flight.

Yucca Mountain always seemed like refining crude to get paraffin and sticking the other products in storage, so we can complain about how much waste crude oil processing generates... But I suppose if we reprocessed we wouldn't have as much to complain about.

The analogy is inept, since nuclear reprocessing is grossly uneconomical. The plutonium you get out not only costs more than the uranium it displaces, so does the cost of fabricating that plutonium into fuel elements. So, the value of these 'other products' is actually negative, and treating it as waste is perfectly valid.

WOW, this site used to be interesting, educational and a lot of fun until the wackos found it. Too bad.

Harvey, there are generators that people can attach to their stationary bikes at home that will provide the electricity to TVs and other small appliances. I'm surprised that no gyms have begun attaching generators to their treadmills and other cardio equipment. The stored energy could provide all the light and most other electricity uses in the gym. It would cost alot at first, but I'd venture a guess that a busy gym could easily make back that money and save $in the long term. Renewables do have good promise to hit 25%, but it's convincing people that it's necessary that's the problem. Emmissions and save the earth talk aside, diversifying energy production to include renewables is nothing but good once it becomes economically feasible. Getting off dependence of OPEC oil for example. You want to talk about something with potential to wreck the economy- you talk about petroleum. The next few years aren't going to be pretty as the prices just keep going up and up. Renewables, like algae produced biodiesel are a way to protect the US and world economy from total destabilization as a result of petroleum scarcity in OPEC countries. Wintermane: nice to see someone who's more of a complainer about fat people than I am. 98% of people who are overweight it's their own fault. Yes, our lifestyles are the cause. Drive thru fast food, eating crap instead of fruits and veggies, driving 1/4 mile instead of walking. My kids will hate me when I deny them a gaming system, but they'll thank me years later. But that's another topic. The revitalization of downtown areas that is sweeping across much of the US could be a great thing to help hinder this sprawled out laziness, therefore trimming down on people driving everywhere. You just don't see alot of fat people in places like NYC, where walking everywhere is common. The attempts by many cities to create higher density could help trim some waistlines. The analogy is inept, since nuclear reprocessing is grossly uneconomical. The plutonium you get out not only costs more than the uranium it displaces, so does the cost of fabricating that plutonium into fuel elements. So, the value of these 'other products' is actually negative, and treating it as waste is perfectly valid. I suppose it is relatively uneconomical, but so is sequestering carbon, or emissions systems. The point is to increase the cost because the intangible benefits to health and climate stability are probably worthwhile even if they aren't strictly quantifiable. Imo it's better to be safe than sorry, even if our track record doesn't reflect this... Besides, is Uranium really so expensive on the market that reprocessing is cost effective in Europe? Besides, is Uranium really so expensive on the market that reprocessing is cost effective in Europe? Absolutely not. That was my point. Reprocessing doesn't begin to pay for itself until the price of uranium rises to where from$300/lb to over $700/lb (by some estimates). It's currently around$50/lb. on the spot market, and it's estimated that U could be extracted from the oceans for around $150/lb. I suppose it is relatively uneconomical, but so is sequestering carbon, or emissions systems. And if the alternative to reprocessing were to dump the waste into the environment, that analogy would be apt. But the alternative is to sequester the spent fuel, unreprocessed, in casks or underground. The cask option doesn't even preclude reprocessing in the future; it allows you to delay until it might actually make sense to do it, and save money in the meantime. Wintermane, Here's your solution: 1) Subsidize diet pills 2) ban game sales game over. Heh I AM a fat game player I dont hate fat people its a natural side effectof the times. When peoplesense doom and gloom they naturaly pork up in prep for a famine and that doom and gloom has been building for decades now. Its not something epople understand today but being able to be fat has saved alot more lives then it has taken. Absolutely not. That was my point. Reprocessing doesn't begin to pay for itself until the price of uranium rises to where from$300/lb to over $700/lb (by some estimates). It's currently around$50/lb. on the spot market, and it's estimated that U could be extracted from the oceans for around \$150/lb.

But that's where it gets weird, because other forms of power generation have externalities that aren't accounted for. Comparing nuclear fuel to itself according to economic cost doesn't seem kosher when other industries aren't playing by the same rules but influence the same economic system, so to speak. How would reprocessed fissile fuel compare to fossil fuels if their waste stream was accounted for in the cost? I have no clue about the estimates, and am interested in where they came from (pretty please ;), but does the cost of additional storage and retrieval (Is Yucca Mountain going to incorporate this?) still result in an economic net gain? Could the additional space/cost required for storage and retrieval be why Europe reprocesses?

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