The Relative Failure of Renewable Energy in the United States: A Case of Technology or Something Els

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The Relative Failure of Renewable Energy in the
United States A Case of Technology or
Something Else?
Dr. Benjamin K. Sovacool Network for New Energy
Choices sovacool_at_vt.edu Dr. Richard F.
Hirsh Virginia Polytechnic Institute State
University (Virginia Tech) richard_at_vt.edu
Seminar presentation at National Renewable
Energy Laboratory Washington, DC November 9, 2006
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The promise of Renewable Energy Technologies
(RETs)

• Given a host of energy problems, renewable energy
  technologies seem to have great promise
• Climate change and externalities
• Energy insecurity
• Rising energy prices
• Dependence on foreign supplies of fuel
• Reliability and modularity

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Some RETs can be considered part of a Distributed
Generation (DG) system
California Energy Commission at
http//www.energy.ca.gov/pier/environmental/projec
t_fact_sheets/500-00-033.html
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Advantages of DG

• Since DG customers draw no/less power from grid
• Reduces congestion on network (contributor to
  2003 blackout)
• Increases energy efficiency(no line losses from
  distant transmission). Cheaper as well in some
  cases.
• Reduces need to build upgrades to transmission
  grid
• Improves security of system
• Insulates some users if a transmission line or
  central power plant is knocked out of service.

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DG experiments underway in Iraq

• Centralized system is literally under attack
• Less capacity and MWh than before war. Brookings
  Institute report, 10/06.
• People use DG technologies to provide basic power
  needs.
• Demonstrates security value of DG.

Caption from USACE In the shadow of the old
tower wreckage, a new tower is raised on the
Baghdad South to Diwaniyah transmission line.
http//www.hq.usace.army.mil/cepa/iraq/Electricity
/electricity.htm
CNN caption A man turns on his generator as
electricity shuts off again in Iraq on Friday.
http//www.cnn.com/2003/WORLD/meast/08/15/iraqi.ad
vice.ap/index.html
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Less dramatically (or more?) RETs in Africa

• Use of DG/RETs where no central system exists
• 85 of Africans live in rural communities without
  electricity.
• RETs used for pumping water, providing basic
  lighting, operation of small workshops, etc.

http//www.enviroharvest.ca/awp_3_6.htm
www.kamtexindustries.com/solar.html
Africa Wind Power 3.6. 850-1600 W
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One would think RETs would be used more.
Consider price
Levelized Cost of Electricity (LCOE) for Fossil,
Nuclear, and Renewable Technologies
Source Karmis et al 2004. Assumptions Prices
are in real (inflation adjusted) LCOE with
federal tax credits, and assume high capacity
factors. LCOE costs include fixed overnight
construction costs, variable operations and
maintenance charges, and fuel pries.

.

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Amory Lovins reached a similar conclusion


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The paradox if RETs are so wonderful, why
arent they used more?
U.S. EIA estimate of electricity consumption by
fuel source, in 2003 kWh
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One possible response Its the technology

• One answer is that the technology doesnt work,
  like going to the moon with 1950s technology.
• Complements a long line of thinking, e.g.
  electric car, Picturephone, and Challenger
  accident.
• A more sophisticated answer looks at an amalgam
  of social, political, economic, cultural, and
  technical components.

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Lets look at problem differently with the
social-science systems approach

• Systems approach doesnt focus solely on
  technical considerations
• Rather, it looks at social considerations,
  defining technological systems differently
• System seamless web of economic, educational,
  legal, administrative, and technical elements

Tom Hughes, creator of social science version of
systems approach, and Hirsh in 2000
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Perhaps surprisingly, major impediments may
relate to history and culture

• Put differently
• Hardware is easy part of the problem.
• Past success of utility system and understanding
  (or misunderstanding) has inured public to
  physically obvious RETs.
• I.e., social considerations are difficult part of
  gaining acceptance of RETs.

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First What killed DG in early 20th century?
Clues for today?

• Traditional explanation
• Economies of scale from central power plants
• Higher efficiencies, more interconnection
• True, but not the entire story

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Success of Isolated Plants (DG)

• As late as 1912-17, more kWh and MW from isolated
  plants
• Even without economies of scale, isolated plants
  retained efficiencies from use of waste heat.

http//americanhistory.si.edu/powering/generate/ed
ison.htm
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Nontechnical Causes of Decline

• Dominance of electric industry by central-station
  men (i.e., Samuel Insull)
• Regulatory policies (reg. advocated by Insull)
• Example Mass. regulators prohibited sale of
  power across street unless regulated
• Pressures on manufacturer to sell equipment to
  utilities
• Unfair competition
• Utilities built steam plants at a loss to serve
  industries to eliminate competition

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Growth Stagnation of DGin early 20th century
Crossover
Source U.S. Dept. of Commerce, Historical
Statistics of the United States Colonial Times
to 1970, pt. 2 (Washington, DC US Bureau of
Commerce, 1975), pp. 821 and 825.
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Success of centralized system has made people
unaware of concerns

• Success of early system
• Cheap, reliable, and available power
• No need to think of energy

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Consider that the public lacks basic knowledge
about energy

• With so much information readily available, how
  can consumers not be knowledgeable?
• Yet
• 70 of flex-fuel vehicle owners dont know their
  car can utilize alternative fuels.
• When surveyed about ways to expand the supply of
  power, many consumers have suggested more outlets
  in homes.
• 58 of consumers cannot name a renewable source
  of electricity.

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Lack of knowledge has spawned deep-seated social
and behavioral Impediments related to

• Misunderstanding about what is needed to generate
  and distribute electricity
• Entrenched utility managerial practices that
  favor large fossil fuel plants
• Envelopes of familiarity and historical
  consciousness
• Distorted electricity markets (lack of real time
  pricing, inclusion of externalities)

.

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Paradigm is reflected in political and regulatory
hurdles

• Flawed expectations among politicians and
  regulators
• On/off production tax credits (PTCs) and unequal
  subsidies
• Lingering utility monopoly rules and barriers to
  entry, such as stranded costs and Interconnection

.

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Further obstacles arise from business and utility
practices

• Perceived higher capital costs and returns on
  investment
• Historically low costs of energy
• Difficulty in dispatching units
• Difficulty in setting standards
• monitoring
• permitting
• interconnection

.

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Conclusion 1 History is important

• History culture helps explain opposition to
  RET/DG.
• Big, centralized plants are generally
  invisibleout of sight out of mind.
• Moreover, they (and their associated
  technologies, such as transmission lines) have
  become part of the man-made landscape and are
  viewed as naturaleven as signs of progress
  earlier.

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RETs are often smaller, more visible

• By contrast, smaller, more numerous DG units
  intrude on physical and intellectual landscapes
  more obviously.
• People become VERY aware of some RETs as sources
  of power and object.
• Therefore, history of successful, largely
  invisible system and cheap energy may discourage
  visible RETs.

TVA turbines at Buffalo Mountain, TN
http//www.industcards.com/wind-usa-e.htm
Roanoke Times 16 May 06
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Conclusion 2 Nontechnical impediments may
predominate

• People are generally unaware of source of
  electricity and the need to make choices.
• Success of RETs may depend (to a large extent) on
  publics understanding (misunderstanding) of
  entire energy system.

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Conclusion 3 Public and private RD strategies
need to change

• Society needs to invest more in energy RD
• Private funding is diminishing
• Government spending is concentrated in other
  areas

U.S. Federal RD, 1955 - 2002
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Final reflections

• If nontechnical barriers are the true problem,
  the public and private sectors need to stop
  focusing exclusively on technical impediments.
• Social factors remain important elements
  determining the successful implementation of
  energy technologies.
• Education of the public (and policymakers!) may
  help reduce impediments.

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For holiday reading
Many thanks!