Pumped-storage technology allows utilities to defer the time value of energy, but project developers have struggled to make their economics work. Increased demand for ancillary services and...
Waxman-Markey RES creates land-use dilemmas.
Biomass remains the largest renewable power source after hydro power. In 2008, biomass sources produced 58 TWh of power for the grid—primarily (70 percent) from burning wood and wood waste. In both DOE-EIA and EVA studies, they find biomass should play the largest role in renewable expansion because of its lower incremental power production costs and its ability to gain full capacity credit towards power pool reliability requirements. However, biomass generators will need to compete directly for the same wood resources as other major wood consumers ( e.g., pulp and paper, construction materials, furniture, chemicals, etc.). Some concerns already have arisen as proposed biomass generating facilities are being increasingly challenged by other existing biomass users, notably the pulp and paper industry, who are concerned about rising wood demand pushing higher prices and narrowing operating margins.
In addition to inter-industry competition for biomass fiber, the biomass growers also will need to compete against renewable transportation fuel feedstock suppliers and food crops for available open land. The land needed to harvest biomass for energy production alone is a significant portion of the total U.S. inventory of Class 1, 2, 3, and 4 non-federal forested areas (see Figure 4) . The existing federal ethanol and biodiesel fuel standards also create additional competition for this same resource and consumes an additional 23 million acres or 13-percent more to grow feedstock for cellulosic ethanol for transportation fuels. If one also includes the expanding need to convert forest land into cropland to plant the additional corn to meet the ethanol standard (34 million acres need to be converted in 2020, 44.5 million acres converted in 2025) as well as meet the existing needs of the paper and forest products industry, a national renewable electricity standard (RES) creates a material risk of forest land shortages and skyrocketing wood, ethanol and food prices. Bottom line: The greater the RES, the greater its market disruption and the more severe the forest land destruction.
A rapid expansion of wind power generation also will be required to meet a national RES. This expansion will require development of wind capacity in increasingly remote areas and will require a large transmission investment to connect into the grid. In the May 2008 DOE report entitled, 20 Percent Wind by 2020 , DOE estimated that “using optimistic assumptions,” transmission investments exceeding $60 billion would be required for wind to reach a 20-percent market share. In Texas alone, the transmission investment needed to access Texas high-quality wind resources would reach $10 billion.
Outside these large transmission investments, the expanded capacity would need to be placed into areas with diminishing wind resources that will adversely affect their output performance. Only limited areas provide Class 4 winds or higher—considered the minimum needed to develop a viable wind power project (see Figure 5) .
Unfortunately, the existing studies that have evaluated expanding wind power outputs to as high as 20 percent of U.S. retail power sales have contained serious methodological flaws. These flaws have included, for example, assumptions of 33-percent capital cost reductions from