# Inventory of Energy Technologies for Least-Cost Energy Strategy > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-21375 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** August 30, 1994 ## Text DEPARTMENT OF ENERGY Inventory of Energy Technologies for Least-Cost Energy Strategy AGENCY: Department of Energy (DOE) . ACTION: Notice of Request for Comments on Least Cost Energy Strategy Technology Assumptions. ----------------------------------------------------------------------- SUMMARY: The Energy Policy Act of 1992 requires the Secretary of Energy to prepare a least-cost energy plan a resource and technology inventory of the least-cost energy strategy. The inventory (1) provides a description of each current and anticipated primary energy input available to the U.S. economy, (2) describes the system for electricity generation and distribution, and (3) lists available and anticipated energy technologies that are sufficiently defined so as to permit measurement or estimation of their cost and effectiveness over the period from the present to the year 2015. This notice summarizes work in progress and invites public comment on the appropriate content for the energy resource and technology inventory. We are particularly interested in suggestions for expansion of the list of efficient end-use technologies expected to be available by the year 2010, and their cost and performance parameters. DATES: To guarantee consideration, comments must be received by October 15, 1994. ADDRESSES: Comments related to the technology and resource inventory should be sent in 3 copies to: Least-Cost Plan/Energy & Technology Inventory, Office of Economic Analysis and Competition, U.S. Department of Energy, PO-61, Washington, D.C. 20585 FOR FURTHER TECHNOLOGY INFORMATION CONTACT: Dr. Peter Karpoff, Office of Economic Analysis and Competition, U.S. Department of Energy, PO-61, Washington, D.C. 20585, (202) 586-4767. FOR MODELING INFORMATION CONTACT: Dr. Phillip Tseng, Office of Economic Analysis and Competition, U.S. Department of Energy, PO-61, Washington, D.C. 20585, (202) 586-3892. SUPPLEMENTARY INFORMATION: I. Background II. Content of the Energy Resource and Technology Inventory III. Alternative Least-Cost Concepts IV. Least-Cost Energy Modeling V. Next Steps I. Background Section 1602 of the Energy Policy Act of 1992 (EPAct) requires the Department to provide a Least-Cost Energy Strategy (LCES) to accompany the National Energy Policy Plan (NEPP) it submits pursuant to the legislation that established the Department. Implicitly, EPAct recognizes that the LCES and the NEPP are distinct, reflecting in part the fact that least-cost modeling exercises may fail to account for important real-world considerations that may enter into energy policy formulation. Notwithstanding this distinction, the LCES can be an important source of insights for use in developing energy policy. It can also provide important insights into other issues facing the Department, such as strategic planning, the identification of research and development priorities, long-term climate mitigation policy, and sustainable development initiatives, by identifying energy-related technologies that have the largest leverage on attainment of social objectives related to the nexus of energy and economic growth. The least-cost strategy will provide a list of policy options that, when implemented, could meet the goals and reflect the priorities outlined in Section 1602 of EPAct. The least-cost strategy will call upon available and anticipated resources and technologies to satisfy final energy demands at minimum long-run cost, subject to these goals and priorities. Section 1602(a) lists the following goals: Stabilization and eventual reduction in the generation of greenhouse gases An increase in the efficiency of the Nation's total energy use by 30 percent over 1988 levels by 2010 An increase in the percentage of energy derived from renewable resources by 75 percent over 1988 levels by the year 2005 A reduction in the nation's oil consumption from the 1990 level of approximately 40 percent of total energy use to 35 percent by the year 2005. In addition, Section 1602(d) lists the following energy production, utilization, and energy conservation priorities: Implement standards for more efficient use of fossil fuels; Increase the energy efficiency of existing technologies; Encourage technologies, including clean coal technologies, that generate lower levels of greenhouse gases; Promote the use of renewable energy resources, including solar, geothermal, and sustainable biomass, hydropower, and wind power; Affect the development and consumption of energy and energy efficiency resources and electricity through tax policy; Encourage investment in energy efficient equipment and technologies; and Encourage the development of energy technologies, such as advanced nuclear fission and nuclear fusion, that produce energy without greenhouse gases as a byproduct, and encourage the deployment of nuclear electric generating capacity. II. Content of the Energy Resources and Technology Inventory Section 1602(b) of EPAct requires an inventory of energy resources and technology. Conservation technologies, which reduce the amount of energy required to provide a given energy service, are considered as energy technologies for purposes of this inventory. As part of the inventory, known and anticipated primary energy inputs will be inventoried. These include coal, oil and gas (both domestic and imported), renewable sources (including diverse solar forms, biomass, wind and ocean energy, hydro, geothermal, and municipal waste methane), nuclear, hydrogen, and synthetic fuels and coal gases. The energy technology part of the inventory will include specific engineering applications and aggregations of applications (e.g., the automobile is a complex aggregation of individual technical elements). The technologies in the existing information base are drawn from the following areas: Energy Production Oil and gas extraction: Reservoir mapping, Tertiary recovery, Advanced drilling techniques; Oil refining and gas processing; Electricity generation: High efficiency combined cycle turbines, Pressurized Fluidized Bed Combustion; Fuel cells: Phosphoric, Molten carbonate and Solid oxide designs, and Proton Exchange membrane; Clean coal technology: Coal gasification, Improved pulverized coal methods; Nuclear power, Advanced light water reactor designs Fusion power assessment; Biomass culture: Biomass waste utilization, Optimized biomass culture and harvest; Wind Power: Variable speed turbines, Larger capacities, Improved control circuitry; Hydrogen fuels: Direct use and electricity conversion; Other renewable sources: Ethanol technologies, Solar applications, Advanced photovoltaics, Geothermal applications, Biomass conversion to liquid fuels, MSW gas recovery. Energy Transportation, Storage and Load Management Coal slurry and petroleum pipelines: Pipeline coatings and additives; LNG transport methods: LNG handling technology, LNG transport; Electricity transmission: Transformer redesign, Voltage increases; Electricity load management: Selective signaling, Improved load forecasting, Price structure innovation; Electricity storage systems: Pumped storage, battery, flywheel, and compression systems. Energy Distribution Decentralized power generation: Efficient small stations, Fuel cells; District heating and cogeneration: District heat marketing, Hot water/steam utilities, Private power marketing, IPP arrangements. Energy Utilization Automobile efficiency: Smaller vehicles, Smaller engines, Manual transmissions, Greater adoption of sophisticated drive train features, tires and lubricants, Advanced aerodynamics, Hybrid propulsion systems, Diesel-electric motors, Regenerative braking, Electric vehicles, 2- Stroke engines; Light trucks: See autos, above Heavy trucks: Efficient tires, aerodynamic designs, Off-road vehicles; Bus efficiency: Drive train improvements, Flywheel/regenerative propulsion and braking, Demand driven dispatch, Efficient pricing and fare collection, Route planning; Aircraft and operations; Aircraft size, Curtailment of taxiing, Airport and Air Traffic Control changes, Ultra high bypass turbofan engines; Ships and barges: Improved propulsion and hull efficiency (semi- hydrofoil designs, Reduced operating speeds, Hull coatings; Pipelines: Efficient pumps, controls, and motors, Interior coatings, Additives; Highway, rail and air traffic control design: Reduce congestion by information systems and congestion tolls, Ride sharing; Building shell efficiency: Insulation, High Performance glazing and window films, Building orientation, Smart windows, Shading and ventilation Manufacturing Process efficiency: Impulse drying, Solar Process Heating, Rapid Glass Refiner/Melter, Direct Ironmaking, Chemical Welding, High Pressure Heat Exchanger, Chemical Sorbtion Heat Pump, Bioprocessing; Mining efficiency: In-situ reduction of ores, Chemical ore separation Agriculture efficiency: Wider use of no-till methods, Natural and vacuum crop drying, Organic and compost-fed culture, Hydroponics Aquaponic combined culture cycles, Cultivar variety and crop-mix changes; Retail and service efficiency: Wider adoption of efficient lighting, Efficient equipment to reduce cooling loads, Electronic interface with suppliers and customers, Direct-ship practices; Urban system efficiency: Public transport expansion, Higher Vehicle occupancy, Congestion tolls, Reduce trip demand by land use planning; Increased Appliance Efficiency: Refrigeration, laundry, dishwashers (reluctance motors), water heating, video displays, cooking appliances, lighting, heating and cooling; Reduced Heating, Cooling and Lighting loads: Shell improvements, heat exchanges, parallel hot water piping, ozone laundering, water recycling. Summaries of cost and performance parameters for specified technologies in the existing information base are available upon request. This technology information is structured in a format suitable for least-cost modeling purposes. For example, an existing electricity conversion technology, a coal combined cycle plant fueled with bituminous coal, might be described as follows (parameter values are illustrative): Bituminous Coal Combined Cycle Electricity Generation Fuel conversion efficiency.................... 41.6% Availability/Utilization...................... 60% Cost of capacity (real $)..................... $1569 MM/Gigawatt Fixed O&M cost................................ $47.4 MM/Gigawatt Variable O&M cost............................. $0.37 MM/Petajoule input Delivered fuel cost........................... $0.64 MM/Petajoule Peak availability............................. 100% Life span..................................... 40 yrs. Installed capacity (current).................. 1.0 Gw Commercial availability....................... Currently available Some technologies included in the inventory, such as the power plant example presented above, are cohesive single engineering processes. In other cases, a technology in the inventory will reflect an aggregation of engineering innovations, reflecting our inability to separately model each individual device. For example, a future vehicle technology might embody several innovations such as ultra light-weight construction, low rolling resistance tires, hybrid propulsion with automatic engine shut-off, and regenerative braking. Suggestions and comments are invited on both the addition of categories for the Energy Resource and Technology Inventory and for the nomination of specific technologies to be included. To be considered for inclusion, a technology must be sufficiently concrete that parameters for its cost, performance and applicability to the U.S. economy are discernible. Respondents are invited to suggest either single technologies or logical aggregates of technologies, as in the examples above, so long as the performance parameters can be described in terms similar to those in the example provided above. Respondents are requested to provide performance parameters in a standard format (Appendix A) for technologies that they nominate for the technology inventory, but may supplement this minimum requirement with additional information. Appendix A Standard Format for Providing Technology Information For LCES Technology Inventory Technology name and description:--------------------------------------- ---------------------------------------------------------------------- Primary Fuel:---------------------------------------------------------- Fuel conversion efficiency:-------------------------------------------- Availability/Utilization:---------------------------------------------- Cost of capacity (real$)----------------------------------------------- Fixed O&M cost--------------------------------------------------------- Variable O&M cost------------------------------------------------------ Delivered cost--------------------------------------------------------- Peak availability %---------------------------------------------------- Life span (yrs.)------------------------------------------------------- Installed capacity (current)------------------------------------------- Year of Comm'l. Availability:------------------------------------------ Maximum capacity potential: in initial year of availability-------------------------------------- 5 years after initial availability----------------------------------- III. Least-Cost Concepts The term ``least-cost'' is open to various interpretations. Depending on how the term is defined, a wide variety of energy strategies might be categorized as meeting a least-cost criterion. It is our intent to explore strategies consistent with a variety of ``least-cost'' concepts reflecting alternative treatments of issues including, but not limited to, private versus social cost minimization, environmental impacts, and the role of non-modeled attributes and institutional factors. Private and Social Cost Minimization It is widely accepted that private and social costs may fail to coincide unless all markets are perfectly competitive. Energy-related markets provide many instances where the assumption of competition may be called into question. For example, pricing in electricity markets, which are generally subject to economic regulation at the state level, are based on average, not marginal, costs. Least-cost decisions based on the prices actually paid by electricity users may differ from least- cost decisions based on marginal costs. Capital markets provide another example of possible departures from perfect competition. Capital costs may differ significantly from the social opportunity cost of investment, and vary widely across and within groups of decisionmakers. Projects that minimize costs using social discount rates may fail to do so at discount rates reflecting the opportunity cost of capital faced by decisionmakers in the market. DOE plans to consider a wide range of cases that reflect the differences between social and private cost minimization, and consider how each affects least-cost choices. Environmental Impacts Environmental impacts can also enter into the definition of a ``least cost'' energy strategy. For example, in a case where two technologies that differ widely in energy efficiency can be used to provide the same energy service, purchasers will often ignore the social costs of environmental impacts that may be associated with higher levels of energy use. Theory and regulatory practice in some states suggests that this issue can be addressed by incorporating a ``shadow price'' for environmental impacts in the least-cost objective function. The least-cost strategy will consider alternative approaches to addressing the impact of recognizing environmental costs on least- cost choices. Role of Non-Modeled Attributes and Institutional Factors No model can adequately capture the full detail of all influences on energy-related decisions. For example, decisions regarding personal transportation technologies may involve issues such as safety, performance, and room, as well as tradeoffs between acquisition cost and fuel cost. Institutional factors, such as the divorce between ownership and tenancy in many commercial buildings, can also have an important influence on energy-related decisions. Ignoring the range of attributes that enter into consumer decisions or institutional factors could lead to ``apples to oranges'' cost comparisons that do not compare alternative approaches to providing the same service. On the other hand, adoption of a pure ``revealed preference'' approach, in which the fact that a particular technology is used in the market is prima facie evidence of its least-cost nature, is both tautological and inconsistent with the spirit of the least-cost strategy exercise. Given the unsuitability of the two extremes, we intend to explore a range of intermediate cases. The public is invited to comment on these issues, as well as others that may bear on the interpretation or definition of the ``least-cost'' concept. IV. Least-Cost Modeling The methods selected for developing the least cost energy plan include use of the optimization model known as MARKAL-MACRO described in ``MARKAL-MACRO: A linked model for energy-economy analysis,'' BNL- 47161, Brookhaven National Laboratory, February 1992. Copies of this report are available by request from the Office of Economic Analysis and Competition (202) 586-4767. MARKAL-MACRO links the MARKAL model that is used to determine least-cost provision of fixed end-use energy service demands with the substitution opportunities between energy services and other productive inputs in MACRO. MARKAL is an optimization model that minimizes the cost of providing its target level of energy services drawing on the available set technology and resources. Information from the energy resource and technology inventory is directly reflected in the MARKAL data structure, so that changes in the parameters for technologies already represented or the inclusion of new technologies may significantly influence the modeling results. In MACRO the inputs of capital, labor and energy services are substitutes for each other under an assumption of diminishing marginal returns. With the link between MARKAL and MACRO, rising energy costs can change the composition of energy supply, of energy technologies and of energy investments (through MARKAL), and may also change the balance among energy services, labor and capital input decisions, and affect future output levels (via the MACRO link). IV. Next Steps The LCES report required by Section 1602 of EPAct is scheduled for completion in early 1995. It will be available to the public for review and comment prior to its submission to Congress. Issued in Washington, D.C., on August 23, 1994. Abraham E. Haspel, Deputy Assistant Secretary for Economic and Environmental Policy, Office of Policy. [FR Doc. 94-21375 Filed 8-29-94; 8:45 am] BILLING CODE 6450-01-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-21375. Public record. Not legal advice.