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DOE estimated current costs at around $9,000 per kilowatt of capacity, with goals of $5,300 per kilowatt by 2000 and $1,500 per kilowatt by 2010. Capacity factors currently are reported at about 21 percent. Given that current crystalline silicon solar technologies are reported to cost about $5,000 per kilowatt and have higher capacity factors than thin-film photovoltaics, accelerated cost reductions for thin-film technologies are needed if they are to replace crystalline technologies and markedly expand U.S. and world applications. It is unlikely, however, that meeting the goals of the DOE research and development program for photovoltaic technology will result in significant penetration of overall U.S. electricity

markets.

Solar Thermal

The DOE long-term goal for dish/Stirling (concentrating) solar thermal energy systems is to achieve commercial maturity by 2010. The main objective of the DOE program in the near term is to prove the reliability of the system and increase the time of unattended operation. The dish/Stirling solar electricity technology is attractive in providing clean renewable energy, in being modular, and in potentially offering essential electric power to distributed grid-connected or off-grid applications. Applications may be most promising outside the United States, such as for village power, where solar conditions are favorable and grid-connected power is unavailable. However, the dish/Stirling technology is not commercially viable today, with test unit capital costs estimated at $10,000 to $20,000 per kilowatt. Goals for the technology include reducing capital costs to around $5,500 per kilowatt by 2000, $3,000 by 2005, and $1,600 by 2010, with capacity factors increasing from an assumed 13 percent today to 50 percent by 2000, and possible beginning penetration of U.S. green power markets.

The dish/Stirling technology faces large challenges in contributing to U.S. electricity supply before 2010. The technology remains far from published 2000 goals, making the challenge of meeting later goals all the greater. Even if all goals are met, dish/Stirling will remain more expensive than almost all fossil and renewable energy alternatives. Moreover, its cost-effective applications are likely to be restricted to small, high-cost applications in the US. Southwest. International prospects for the technology are better, and it may eventually compete successfully for essential rural electricity supply-including for both individual and small village service-against fossil fuels, wood, and other renewables, including wind and photovoltaics.

Biomass

The goal of DOE's Biomass Power Systems program is to integrate sustainable biomass feedstock production with efficient biomass power generation and establish a cost-competitive power supply and biobased products and bioenergy by 2010. This would result in 3,000 megawatts of new biomass capacity by 2010. The EIA reference case projections indicate that roughly one-third of the new capacity goal is likely to be achieved.

Electric Power Research Institute and U S. Department of Energy, Office of Energy Efficiency and Renewable Energy,
Renewable Energy Technology Characterizations, EPRI TR-109496 (December 1997), pp. 4-23-4-24.

*Electric Power Research Institute and U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy,
Renewable Energy Technology Characterizations, EPRI TR-109496 (December 1997), p. 5-57.

The CCTI budget request for fiscal year 2001 includes $48 million for the Biomass Power Systems research, development, and deployment program. There are three major technology areas in the program: (1) co-firing biomass with fossil fuels, (2) small modular biomass power systems, and (3) advanced biomass gasification. Additional program elements, which generally are supportive of and integrated with the three technologies, include thermochemical conversion research, energy crop development, and the Regional Biomass Program."

The Salix Consortium project in New York supports commercial development of willows for generating electricity. The fast-growing willows will be co-fired with coal in existing power plants. Led by Niagara Mohawk Power Corporation, the Salix Consortiums objectives are to establish willow as a commercial biomass energy crop in the Northeast and Upper Midwest (the Consortium will attempt to develop a reliable market for willow at a cost of less than $2 per million Btu by 2001) and to demonstrate and quantify the environmental and economic benefits of co-firing willow with coal in existing electric power plants. Test burns of willow have been conducted at New York State Electric and Gas Company s (NYSEG) Greenridge Station, now owned by AES Corporation of Arlington, Virginia. This plant is capable of co firing up to 5,000 tons of willow per year grown on 400 acres of land near the plant. Cofiring tests at Niagara Mohawk s Dunkirk Station are planned for 2001. Willows will be grown on 400 acres near the 600 megawatt plant. The energy input from biomass is expected to provide about 10 to 20 percent of the total energy requirement for this plant.

DOE is supporting another co-firing project in partnership with Chariton Valley Resource Conservation and Development, Inc. (RC&D) in Centerville, Iowa. This project is aimed at developing switchgrass as an energy crop. The Chariton Valley Projects goal is to develop enough switchgrass to generate 35 megawatts of power by co-firing with coal at the Alliant Power Company s Ottumwa generating station. This represents 5 percent of the total capacity of the power plant, rated at 650 megawatts, and will require 200,000 tons of biomass harvested from 40,000 to 50,000 acres of switchgrass. It is anticipated that eventually as many as 500 local farmers will have the opportunity to raise and sell energy crops for power production. Modifications at the power plant to accommodate co-firing are scheduled for late 1999 through early 2000.

The DOE program for small modular systems is directed at commercializing systems providing power in the 5-kilowatt to 5-megawatt size, either gasification or direct-fired systems. They are likely to be employed in industrial applications, possibly as a retrofit of existing biomass units. Funding is to be used for feasibility studies, demonstration units, and developing full system integration, with a goal of testing 2 to 3 units. In AEO2006, EIA projects an expansion of biomass systems in the industrial sector, where biomass cogeneration capacity increases from 6.0 gigawatts in 1998 to 8.5 gigawatts in 2020.

In the Vermont project. DOE is developing a demonstration-scale biomass gasifier that will be connected to an existing power station, the McNeil generating station in Burlington, Vermont. The gasifier will consume 200 tons of wood chips per day and will generate a fuel gas which will be combusted in a boiler

"U.S. Department of Energy. Office of Energy Efficiency and Renewable Energy. Web site www.eren.doe.gov/biopower.

at the McNeil station. In the future, a gas turbine will be added to the system. The gasifier start-up and shake-down testing began in 1998 and continued through 1999. To date, the gasifler has supplied fuel for generation of 100,000 kilowatthours of electricity. Design of the gas turbine began in 1999 and installation of the gas turbine is scheduled for 2000. Following installation, long-term trials of the integrated system will begin.

The Minnesota AgriPower project is designed to demonstrate the feasibility of electric power production fueled by alfalfa stems. The Minnesota Valley Alfalfa Producers (MnVAP) is a farmers cooperative that manages this project and plans to enlist as many as 2,000 farmers to grow 680,000 tons of alfalfa annually on 180,000 acres of farmland. MnVAP will collect alfalfa grown by member farmers and separate the alfalfa leaves from the stems. The leaves will be used as a high-quality animal feed product that will be marketed by MnVAP. The stems will be utilized as a fuel for a biomass gasifier and combined-cycle gas turbine facility. The integrated gasifier and gas turbine process will be capable of generating 75 megawatts of electricity. A power purchase agreement between MnVAP and Northern States Power Company of Minneapolis, Minnesota, has been signed guaranteeing the long-term sale of electricity starting December 31, 2001. The City of Granite Falls, Minnesota, has donated 100 acres of land for the power facility. The State of Minnesota has allocated $200,000 to support alfalfa production and processing facilities. The State has also approved regulatory changes and tax exemptions worth more than $3 million per year to support the alfalfa producers role in this project. Ground was broken in 1999 and power plant construction has begun.

The EIA analysis described in Chapter 2 characterizes the biomass gasification technology incorporated in AEO2006. For this analysis. EIA accelerated 90 megawatts of mandated new biomass-fired capacity that would have entered service after 2005 to begin service earlier in order to obtain the proposed production tax credit in the CCTI. In addition, biomass generating capacity growth from 2002 through 2005 already includes 144 megawatts of new construction.

Thermochemical conversion programs are a set of longer term research projects. One is for research on gas cleanup options for both large and small gasification systems, a multi-year laboratory program that would support testing at the Thermochemical User Facility of the National Renewable Energy Laboratory. Another project is focused on minimizing problems from the high alkali metal content of many biomass fuels, which can lead to fouling and slagging in boilers and furnaces. The research results are linked to the co-firing performance measures. A third project will evaluate the impact of restructuring in the electricity generation industry on technology development by modeling effects on NO, emissions and assessing the need for incentives. Finally, some funding will be used for the purchase of analytical equipment as part of the laboratory program.

The feedstock development program overlaps with other Biomass Power Systems programs in that feedstocks are an important part of the economics of biomass utilization. NEMS incorporates biomass resources by way of supply curves, which could be affected by the success of the programs; however, with energy crops not currently projected to be available on a large scale before 2010, no effects would be seen until that time.

The CCTI budget request for fiscal year 2001 includes $48 mill research, development, and deployment program. There are

program: (1) co-firing biomass with fossil fuels, (2) small ment of wind power technology, with advanced biomass gasification. Additional program elementents per kilowatthour (unsubsidized) integrated with the three technologies, include thermos electricity needs by 2020.85 Wind development, and the Regional Biomass Program.

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OCE characterizations of future wind costs. warthour for 2000 in "good" (class 4) wind Scents is estimated only for "excellent" (class dass 4 goal by nearly 20 percent 8 years in well below published expectations. The current almost certainly not below, but markedly above. assume capital costs of about $750 per kilowatt. actual wind facility costs, excluding substation and consistent with DOE estimates of about 6.4 cents

ave the osts to tax-paying entities-those eligible for the slow-cast, tax-exempt municipal financing, which the CC tax credit." Cost estimates assuming investor sms per kilowatthour.

ining market interest and to be poised for additional investment and ates and abroad. It is likely, however, that costs will decline more slowly 25 cents per kilowatthour by 2002.

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2 Geothermal Energy Program is to work with industry to establish geothermal as anable environmentally sound, economical source of energy with a levelized cost less perk.lowatthour in good steam resources. A new initiative, GeoPowering the West, seeks tonal regional, State, and local efforts to supply at least 10 percent of electricity needs of the 120.000 megawatts of geothermal power installed by 2020. The proposed research and tient program is directed at various approaches to reducing the overall costs of delivering power onsumers The program has four main elements: reservoir technology, exploration, drilling Ecology and energy conversion.

The reservoir technology program element is aimed at improving the understanding of reservoirs and exploring means to improve performance by techniques such as water reinjection. The expected result would be to extend field life so as to establish a more sustainable resource. EIA currently assumes some plant retirements in its projection as a result of enthalpy decline, and this program activity could reduce or possibly eliminate such retirements.

Exploration research is aimed at reducing the number of nonproductive wells drilled, through research an improved seismic methods. At present, the characterization of geothermal fields through seismic strategies remains a high-risk activity, leading to the need for more expensive exploratory drilling.

The drilling technology program will complete the testing of high-performance drill bits and other drilling technologies. The effort is aimed at reducing drilling costs, which can constitute up to half the capital costs of a geothermal power unit, with a goal of improvement from exponential cost increases with well depth to linear increases with well depth.

The energy conversion program has two principal elements. The first would initiate a cost-shared project to construct and test a Kalina-cycle power plant, which would be more efficient and could expand the low-temperature resource base. The second would continue research and development on small-scale modular power plants, which could help maintain grid voltages and match loads and could also support

mini-grids in remote applications.

Opportunities for U.S. geothermal development are limited to the Western states, where current capacity totals less than 3,000 megawatts. The AEO2006 reference case projects 3,750 megawatts by 2020 and notes that in some instances geothermal power may be competitive by 2020 with costs at or below the 3.5-cent goal anticipated by the proposal. However, because there are few very low-cost sites available, it is unlikely that geothermal could provide a very large fraction of the proposed amount below the 3.5-cent goal by 2020. Even in the AEO2000 high renewables case, in which capital costs for

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