Renewable resources could produce 25 percent of the electricity and motor vehicle fuels used 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 percent of all the energy used in the United States.
The study was conducted within the Environment, Energy, and Economic Development program of RAND, a nonprofit research organization.
RAND found that meeting the 25 percent 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 percent 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.
Wind power, solar power and the burning of agricultural waste are all examples of renewable energy sources that can be used to produce electricity. Biomass resources like stalks from food crops, wood material, and grasses also can be turned into ethanol that can be used to power motor vehicles.
The study evaluates the goal known as 25x'25. 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 report is titled “Impacts on U.S. Energy Expenditures of Increasing Renewable Energy Use.”
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,” said Michael Toman, director of RAND's Environment, Energy, and Economic Development program.
Significant reductions in carbon dioxide emissions from fossil fuel combustion also can be achieved by meeting the 25x'25 goal, the study found – amounting to 1 billion tons of carbon dioxide in 2025, or 15 percent of projected U.S. emissions. In addition, an estimated 2.5 million barrels of oil consumption would be displaced, according to the study.
Previous studies have relied on a handful of scenarios to capture uncertainties in the U.S. 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 U.S. 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.
The lead author of the study was Mark Bernstein, who was a RAND researcher at the time the report was prepared. Other authors are Jay Griffin and Robert Lempert of RAND.
The study was carried out within the Environment, Energy, and Economic Development program of the RAND Infrastructure, Safety and Environment Division. The division's mission is to improve the development, operation, use and protection of society's essential physical assets and natural resources, as well as to enhance the safety and security of individuals in their workplaces and community.
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