U.S. Can Have Renewable Energy on Large Scale at Low Cost

Press Release // 11/13/06// contact: Joel Finkelstein or Sweta Daga, 202.882.5200

 25x’25 Cheaper than Conventional Energy Mix in Many Cases,
According to RAND Study

WASHINGTON, DC – In a finding that should affect the debate over America’s energy future, a new RAND Corporation study released today shows that increasing the use of renewable energy may lower the country’s total future energy costs relative to our current path, under the right conditions regarding energy prices and technology improvements.

"For years, skeptics have said that large-scale use of renewable energy would be technically infeasible or prohibitively expensive," said Reid Detchon, Executive Director of the Energy Future Coalition, which requested the study. "The RAND report undermines these claims. It turns out that, under a number of plausible conditions, significantly increasing our use of renewable energy in the motor fuels and electricity sectors would be both achievable and affordable. Under many scenarios, renewable energy use would cost less in total than continuing with ‘business as usual.’"

The RAND Corporation used energy demand and supply projections prepared by the U.S. Energy Information Administration (EIA) and ran 1,500 separate analyses, varying future costs and rates of technological change for both fossil fuels and renewable energy. The wide range of scenarios allowed RAND to incorporate many different perspectives on the future of renewables without trying to identify a single most likely scenario.

The results were striking. The report states: "Renewable energy is shown in the simulations to lower total energy expenditures in virtually all cases in which current energy price and technology cost trends continue."

The RAND analysis found that renewable energy could produce 25% of U.S. electric power and motor vehicle fuels by 2025 at no additional cost to the economy, as long as renewable technology continues to improve at least 20% in the next 20 years relative to fossil fuel technologies – less than half of the 45% projected by the National Renewable Energy Laboratory (NREL) – and as long as oil prices do not go significantly below EIA projections. By way of context, over the past 20 years renewable technologies on average have improved 57 percent, according to NREL.

If renewable technology improves relative to fossil fuel technology by 50% – roughly consistent with NREL projections – net energy savings would total nearly $30 billion. Meeting interim goals at lower cost on the way to 25x’25 – 10 by ’15 and 20 by ’20 – is even easier, since less would be required in terms of expansion in renewable energy resources.

"25x’25 has enormous implications for both national security and global warming," Detchon said. "RAND found that 25x’25 will cut petroleum consumption by 2.5 million barrels a day, and eliminate 1 billion tons of carbon dioxide emissions every year – all at little or no additional cost. By any definition, that’s a bargain."

25x’25 is a renewable energy initiative backed by more than 300 organizations and individuals, including most of the nation’s leading farm groups, with a common interest in making America’s energy future more secure, affordable and environmentally sustainable. This 25x’25 Alliance supports a national goal for renewable energy: 25 percent of America’s energy by 2025.

Resources: Full Report and the RAND Fact Sheet.  25x'25 also released an economic analysis on the agricultural sector: U. Tenn Study, U. Tenn Executive Summary.

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