Printable Version

Testimony of David K. Garman

Assistant Secretary
Energy Efficiency and Renewable Energy
Before the Committee on Energy and Natural Resources
United States Senate
"Administration's Views on the Role that Renewable Energy Technologies Can Play in Sustainable Electricity Generation"

April 27, 2004

Mr. Chairman, Members of the Committee, I appreciate the opportunity to discuss the Administration's views on the role that renewable energy technologies can play in sustainable electricity generation.

As stated in the President's National Energy Policy, the Administration believes that renewable sources of energy can help provide for our future energy needs by harnessing abundant, naturally occurring sources of energy with less impact on the environment than conventional sources. We are committed to a research, development, demonstration and deployment program that supports that role. The Department of Energy (DOE) FY 2005 budget request for renewable technologies totals $374.8 million, a $17.3 million increase over the FY 2004 appropriation. This year's budget proposes increases in our programs for wind, hydropower, geothermal, hydrogen, and (when the impact of Congressional earmarks is taken into account), solar and biomass as well. Over the past three years we have invested nearly a billion dollars in renewable energy technologies, not including substantial cost-sharing from our private sector partners.

Advances in technology over the past 25 years have brought us great strides in lower costs, improved performance and competitiveness of renewable energy technologies. Today, electricity is being produced from the wind, the sun, the earth's heat and biomass in a variety of applications across the Nation.

The current contribution of non hydropower renewable energy resources to America's total electricity supply is relatively small (about 2.3 percent), and we expect it to remain relatively small for years to come. Nevertheless, the promise is great. For example, since 2000, nationwide installed wind turbine capacity in the United States has more than doubled. We believe that renewable power technologies are still at the stage where significant advances are likely to result from strong R&D programs. Such advances coupled with lowered manufacturing costs, increased user confidence that results from increased deployment, and appropriate market-based incentives proposed in the President's FY 2005 Budget can lead to a significant role for these technologies in serving future electricity demands.

My testimony today will discuss those renewable energy technologies in DOE's Renewable Energy Portfolio.

Wind Technologies

Wind energy is a virtually emissions free electricity generation technology that eliminates environmental concerns associated with conventional fuel cycles, such as mining or other extraction, combustion and other emissions, and waste disposal. Wind energy is also one of the most widely used and fastest growing renewable energies in the world. According to the American Wind Energy Association, worldwide installed capacity increased by 26 percent in 2003. Globally the total amount of installed wind power has grown 500 percent since 1997, from 7,636 megawatts (MW) to 39,294 MW in 2003.

Wind resources are widespread and substantial in many areas of the nation, particularly in the Midwest and West. The Department estimates that in 2003 nearly $2 billion was invested in new wind power facilities. Installed wind power capacity reached 6,374 MW by the end of 2003 with utility-scale turbines now installed in 30 states.

Improvements driven by DOE sponsored research have dramatically reduced costs. A recent study by the National Renewable Energy Laboratory showed that wind energy systems are currently capable of producing electricity for less than $0.05 per kilowatt hour (kWh) in locations with Class 4¹ wind speeds. At higher speed Class 6² wind speed sites, the cost of electricity is less than $0.04/kWh without subsidies.

While significant potential remains to tap in to high quality wind resources with today's technology, these resources are generally not in the areas where people live or where transmission is available. The Department is now focused on developing technology that can cost-competitively harvest more widely available, lower speed wind resources that are generally closer to populations and load centers. This so-called "low wind speed" technology will expand the land area where wind can be developed by a factor of 20, while reducing the average distance between the wind resources and where power is needed by a factor of five.

We are also looking at off-shore wind energy resources off the coasts and in the Great Lakes of the United States. These areas offer immense, economically viable wind energy resources that are close to major urban areas with growing demand and increasingly limited energy production and delivery options. Wind turbines located in shallow waters offshore could produce electricity for $0.07-0.08/kWh in Class 4 sites with current technology, with the potential for future cost reductions with further research.

DOE's Wind Energy program has a long term goal of $0.03/kWh for onshore systems in Class 4 sites in 2012. DOE projects that the development of technology for onshore Class 4 wind sites will result in an installed capacity level in 2025 of an estimated 59,000 MW, the largest portion of which will be represented by turbines designed specifically for use in moderate wind areas.

Geothermal Technology

Geothermal energy uses steam and hot water from the Earth to create energy. Geothermal power plants have a proven track record of performance as baseload facilities, with capacity factors and availabilities often exceeding 95 percent. Today, domestic geothermal energy production is a $1 billion a year industry that accounts for about 15 percent of all non-hydropower renewable electricity production, and about 0.35 percent of total U.S. electricity production. Geothermal's net summer capability in the U.S. has grown from about 500 MW in 1973 to over 2,200 MW today in the states of California, Nevada, Hawaii, and Utah. Other states with significant near-term potential include Alaska, Arizona, Colorado, Idaho, New Mexico, Oregon, and Washington. Recent estimates by industry of hydrothermal potential ranges from 5,000 MW with current technology to over 18,000 MW with advanced technology.

The U.S. Geological Survey estimates that already-identified hydrothermal reservoirs hotter than 150°C have a potential generating capacity of about 22,000 MWe and could produce electricity for 30 years. We further estimate that additional undiscovered hydrothermal systems may have a capacity of 72,000 - 127,000 MWe. At depths accessible with current drilling technology, virtually the entire country possesses some geothermal resources. The best areas are in the western United States where bodies of magma rise closest to the surface.

The Energy Information Administration projects geothermal installations totaling 6,800 MWe by 2025, based on the assumption that natural gas prices will remain relatively stable. Geothermal output is projected to increase from 13 billion kWh in 2002 to 47 billion in 2025. The EIA projection does not forecast new geothermal capacity occurring from the undiscovered hydrothermal resource base or the potential of non-hydrothermal resources, such as the heat energy that underlies much of the country, which may be recoverable by use of enhanced geothermal systems (EGS) technology being developed through our research and development program.

EGS technology has the potential to make a sizeable addition to the inventory of geothermal resources available for production. When that broader resource base is considered, 40,000 MW of resources could be made economic in the 2020 – 2040 timeframe. Of course, these projections also depend heavily on the ability to reduce the cost of energy using EGS technology to competitive levels.

Solar Energy Technology

Fifty years ago scientists at Bell Laboratories developed the first silicon solar cell. With efficiencies of less than six percent, these solar cells offered, for the first time, the ability to power a wide range of electrical equipment. Photovoltaic (PV) arrays convert sunlight to electricity without moving parts and without fuel wastes, air pollution, or greenhouse gasses. PV systems can be installed as either grid supply technologies or as residential or commercial scale customer-sited alternatives to retail electricity.

Today solar energy accounts for one percent of non-hydroelectric renewable electricity generation and 0.02 percent of total U.S. electricity supply. But PV technology has progressed remarkably in terms of both performance and cost in recent decades. The cost of PV-generated electricity has dropped 15 to 20 fold over the past 25 years and such systems are highly reliable. Thousands of systems are successfully operating today, serving applications that range from water pumping to residential power to remote utility power applications.

Crystalline silicon wafer technology dominates today's PV market. Direct manufacturing costs (labor and materials) for crystalline silicon module power in the United States are around $1.95 /watt. This corresponds to an installed system vendor price for grid-tied PV energy of about $0.22 per kWh over a 25-year lifetime. Crystalline silicon module reliability has greatly improved to the point where modules are now warranted for 25 years, and many will probably have a functional lifetime much longer than this.

DOE's photovoltaic program is focused on the next-generation technologies such as thin-film photovoltaic cells, leap-frog technologies such as polymers and nanostructures, and technologies to improve interconnections with the electric grid. Our research and development seeks primarily to reduce the manufacturing cost of highly reliable photovoltaic modules. DOE's research goal is to achieve grid-tied systems with lifetime energy costs around $0.06/kWh and 30 years lifetime by 2020.

Even though some thin-film modules are now commercially available, their real impact is expected to become significant during the next decade. Thin films using amorphous silicon, a growing segment of the U.S. market, have several potential advantages over crystalline silicon. They can be manufactured at lower cost, are more responsive to indoor light, and can be manufactured on flexible or low-cost substrates. Other thin film materials are expected to become increasingly important in the future.

In addition to improvements in crystalline silicon technology, other notable technical accomplishments achieved over the past decade through our research and development programs include:

The price of inverters (for changing direct current of the PV modules into alternating current suitable for the commercial power grid) is decreasing, and their reliability is steadily increasing. DOE seeks at least ten year warranted reliability.
Production of thin film modules is expected to increase sharply in CY 2004 and 2005. The environmental issues of safely retiring these modules have been successfully resolved by DOE researchers at Brookhaven National Laboratories.
The development of super-high efficiency cells, with efficiencies now nearing 38 percent under concentrated sunlight, has progressed faster than expected ten years ago, in part due to the major investment in this technology by the space PV industry in collaboration with NREL researchers.
DOE made extensive contributions to Article 690 of the National Electric Code which deals with PV safety issues. This is a major development because it helps to remove a serious impediment to wide-scale PV grid-tied deployment — the reluctance of commercial power companies to allow PV systems to be interfaced to their power lines.

In the longer term, DOE expects wide-scale deployment of very inexpensive systems made from novel specially engineered materials, e.g., quantum dot and organic material technologies. Such systems will allow not only utility scale power, but also inexpensive production of fuels such as hydrogen, or complex carbon-based fuels through synthesis using atmospheric carbon dioxide.

Concentrating solar power may also offer significant potential. DOE recently contracted for an independent study by Sargent and Lundy, a draft of which was reviewed by the National Academy of Sciences (NAS). The report found that concentrating solar power troughs could reach costs of 4.3 to .6.2 cents per kWh and solar power towers could reach 3.5 to 5.5 cents per kWh by 2020. (These cost estimates are predicated on significant R&D investments and market incentives not included in the President's FY 2005 Budget).

Biomass

Biomass represents an abundant, domestic and renewable source of energy that has significant potential to increase domestic energy supplies. Biomass is used to generate electricity through the direct combustion of wood, municipal solid waste, and other organic materials, cofiring with coal in high efficiency boilers, or combustion of biomass that has been converted chemically into fuel oil.

Biomass power is a proven electricity generating option that today accounts for about 70 percent of nonhydroelectric renewable electricity generation and 1.6 percent of total U.S. energy supply, or about 9,733 MW in 2002 of installed capacity. This includes about 5,886 MW of forest product and agricultural residues, 3,308 MW of generating capacity from municipal solid waste, and 539 MW of other capacity such as landfill gas. The majority of electricity production from biomass is used as base load power in the existing electrical distribution system. EIA projects that electricity output from biomass combustion will increase from 37 billion kWh in 2002 (1.0 percent of generation) to 81 billion kWh in 2025 (1.3 percent of generation).

More than 200 companies outside the wood products and food industries generate power in the United States from biomass. Where power producers have access to very low cost biomass supplies, the choice to use biomass in the fuel mix enhances their competitiveness in the marketplace. This is particularly true in the near term for power companies choosing to co-fire biomass with coal to save fuel costs and earn emissions credits. An increasing number of power marketers are starting to offer environmentally friendly electricity in response to consumer demand and regulatory requirements.

The Department estimates that the total available domestic biomass, beyond current uses for food, feed, and forest products, is between 500-600 million dry tons per year. Within the continental U.S., we can literally grow and put to use hundreds of millions of tons of additional plant matter per year on a sustainable basis. These biomass resources represent about 3-5 quadrillion Btus (quads) of delivered energy or as much as 5-6 percent of total U.S. energy consumption. In terms of fuels and power, that translates into 60 billion gallons of fuel ethanol or 160 gigawatts of electricity. This is enough energy to meet 30 percent of U.S. demand for gasoline or service 16 million households with power.

The current focus of our biomass program is the simultaneous production of liquid fuels, products, and power in a so-called "biorefinery." Simultaneous production of products, fuels, and electricity enables the selection of the highest value outputs while providing synergies that can lower production costs. Successful development of these technologies could provide important jobs and income for rural America through the sustainable production of biomass feedstocks for biorefineries that produce power, fuels, chemicals and other valuable products.

The EERE Portfolio of Technologies

The overall EERE portfolio provides a combination of multiple renewable energy technologies—solar, wind, biomass, geothermal, and others—together with research and development of energy efficiency technologies. Such a diverse portfolio offers benefits that extend beyond those of the individual technologies described above, and we believe it is important that EERE's research, development, demonstration, and deployment activities continue as a balanced portfolio.

A diverse and balanced portfolio offers several benefits:

near, mid, and long term research activities and associated deployment opportunities are included, ranging from low-wind speed turbines to quantum-dot photovoltaics.
degrees of risk are balanced within technology areas—such as research on several types of thin-film photovoltaics technologies along with high-risk work on advanced concepts—as well as across technologies.
synergies are identified and built between technologies. For example, geothermal, biomass, hydropower, wind, and solar offer power in different regions of the country according to the available resources, at different times of the day and year, and in ways that can complement each other, filling in where another resource is not available. Further, the natural gas saved by producing power using wind turbines, for example, will be available for conversion to hydrogen.

The current portfolio will take us far toward a clean energy future, as we continue to fund innovative ideas. For example, our Future Generation photovolatics solicitation in 1998 funded 18 competitively awarded projects out of 72 proposals from 1999 to 2002. In addition to contributing to our program goals, these activities helped to build our national capacity for innovation, as each project was with a different university.

Conclusion

Renewable energy technologies hold tremendous promise in moving the Nation toward sustained, low-emission electricity supply. Government-sponsored research and development efforts over recent decades have been very successful in helping to lower the costs and improve the reliability of renewable energy technologies, and more can be achieved with robust research and development in the future.

The Administration believes that, in the context of a comprehensive energy strategy, more is needed for renewables to gain market share and contribute to our energy independence and environmental objectives. That is why the President's FY 2005 Budget includes energy tax proposals devoted to increasing efficiency and renewable energy, such as extending and modifying the tax credit for producing electricity from biomass and wind, providing tax credits for energy produced from landfill gas, residential solar energy systems, and investment in combined heat and power; and extending the ethanol tax exemption.

Another important factor is that these renewable sources of generation must be able to integrate into our existing distribution system. The tools that form the necessary interface between distributed energy systems and the grid need to be less expensive, faster, more reliable and more compact. And as pointed out in the National Energy Policy, renewables don't fit into traditional regulatory categories and are often subjected to competing regulatory requirements. The lack of uniform interconnection protocols and regulatory treatment is another area where developers of small renewable energy projects have to negotiate interconnection agreements on a site-by-site basis.

That completes my statement, Mr. Chairman. I would be happy to respond to questions the Members of the Committee may have.

References

¹Class 4 sites are locations with average annual wind speeds of 13 miles per hour, measured at a height of ten meters.

²Class 6 sites are higher wind speed sites, with average annual speeds of 15 miles per hour.