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In 2006, the IEA identified the world’s most pressing research, development, and deployment priorities for renewable electric technologies.43 For mature, first-generation renewable technologies introduced at the end of the 19th century such as hydropower, biomass combustion, and geothermal power and heat, these needs are largely met by private industry. Public sector support, then, is most needed for “exploiting the remaining resource potential... and [overcoming] challenges related to environment and social acceptance.” For second-generation renewable technologies now entering markets due to investments in the late 1970’s and early 1980’s prompted by global oil crises, research, development, and deployment involves both the public and private sectors. These technologies—solar heating and cooling, solar PV, wind, and modern bioenergy (e.g., biomass power and heat, co-firing biofuels)—require public sector support to improve cost-effectiveness, promote market learning through larger-scale deployment, and improve engineering and power reliability for applicable technologies (e.g., wind, solar). For third-generation renewable technologies not yet commercially available, research, development, and deployment is highly dependent on public sector investment. The following technologies must overcome technological challenges and improve cost- effectiveness to reach commercial scale: CSP, ocean energy, enhanced geothermal systems (e.g. hot dry rock), and integrated bioenergy systems. Impact of Renewable Electricity Development Policies on National Objectives Energy Independence and Security Renewable electricity policy is less likely to address national security, since the United States derives most of its power supply through domestically-produced coal and natural gas. Operating independently from other countries, the U.S. electrical market in the energy technology transition will simply shift from domestic hydrocarbon-based resources to cleaner, renewable resources. Consumer tax credits for small renewable installations in homes and business, however, do promise added national security in the form of more distributed electrical networks, which offer a buffer against natural disasters, utility disruptions and other grid disturbances. Economic Impact and Feasibility Government guaranteed loans, production tax credits, and consumer tax credits will help spur investment in clean renewable electricity, small commercial investments and residential units. These three policies provide a more certain return on investment for all scales of generation, and they are necessary—at least in the short- to mid-term—to make renewable energy generation economically feasible. Once market-parity for each renewable technology is achieved, these policies can either be eliminated or continued in a fashion which directs investment to future emerging renewable technologies. Environmental Impact Without a national RPS, production tax credits, and government guaranteed loans, it’s unlikely that the market-derived mix of energy would include a significant portion of 180PDF Image | Shaping Energy Technology Transition
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