The CHAIRMAN. Why would you ask the question that way to go only renewable and solar and not ask-I mean, this is about global climate change, is it not?

Mr. MEYER. Yes, it is.

The CHAIRMAN. America's Energy Choices, investing in a strong economy and a clean environment, surely that title does not assume that you reject nuclear energy, for example, going in, does it?

Mr. MEYER. No, it does not. It just says that that is not the focus of the study, that we decided to accept the DOE base case assumptions, and we did not have data upon which to do any solid economic modeling. There is not firm cost projections out there because the designs that are being talked about have not been constructed. They are basically not even on paper yet.

The CHAIRMAN. Now, for example, in your primary renewable energy supply, your climate stabilization case, you provide for a 100-fold increase in wind energy. I guess that is 10,000 percent. What was the solid economic data upon which you based

Mr. MEYER. The solid economic data was EPRI numbers which projected by the end of this decade wind technologies will be producing power at 3.5 cents a kilowatt hour for baseload purposes, which is substantially less than even the optimistic 5.5 cents or 6 cents that some in the industry have claimed we can get with new reactor designs if they get availability up to 80 percent, they get construction time down 4 years, and everything else goes right.

The CHAIRMAN. You are familiar with the fact that they do have figures out there that show that they are entirely competitive. Mr. MEYER. That what is entirely competitive?

The CHAIRMAN. Well, the AP-600, the Westinghouse AP-600, or the GE what is the number of it? You are familiar with those fig

ures.

Mr. MEYER. The figures I have seen, as I said, are in the 5.5 cent to 6 cent a kilowatt hour range if you assume everything goes right, availability goes way up from the current levels, and construction times go way down. Even at that level, they are not in the ball park long term with some of these renewable technologies or, I should say, with gas or coal, depending on assumptions.

The CHAIRMAN. Well, now let us talk about solar. You have a 219-fold increase. That is 21,000 percent increase in solar, and what is that based upon?

Mr. MEYER. That again is based on cost trends in the industry. The costs have been coming down substantially and new solar thermal technology in California has been brought on line at about 8 cents a kilowatt hour. The projections are that can be down under 6 or 5 cents by the end of the decade and the trends will continue in that direction. I think you have to compare the The CHAIRMAN. That is solar thermal.

Mr. MEYER. Solar thermal, yes.

Photovoltaics clearly is still not competitive with baseload generation, but even there the costs are dropping sharply. If you look, as Pacific Gas & Electric has, at the benefits you get from putting PV out in the distribution system, where you are getting not only energy displacement, but you are avoiding the need to build new transformers and transmission capability and substations, photo

voltaics some of the utilities in California believe are competitive even at today's prices, and those prices are coming down sharply. The CHAIRMAN. Well, at today's prices they are 30 cents a kilowatt hour.

Mr. MEYER. They are about 25 to 30 cents, yes, but they have come down substantially.

The CHAIRMAN. And they are saying that is competitive?

Mr. MEYER. They are saying for certain applications that is competitive if it is put out on the grid in a distributed fashion and it avoids the need to invest in transmission and distribution

The CHAIRMAN. Now, would you agree with the testimony which I received last week on the Energy and Water Subcommittee from the Assistant Secretary who handles these matters when he said that photovoltaic does not have the future capability in his view of ever being used for central power applications?

Mr. MEYER. I have not seen that testimony, but I would agree with him that the economics are much better if PV is used in a distributed way either out on the utility grid or even in individual homes and commercial applications.

The CHAIRMAN. We certainly all agree with that. I am a strong supporter of it in that application. But would you agree that it does not have the promise of being used for central power applications in the future?

Mr. MEYER. Again, I would have to see the testimony, but I think it does have promise in producing substantial amounts of power in the future. It is probably going to be more economic in application in a distributed sense than in a central power sense. In terms of huge arrays of PV's in the desert, that is probably not going to be competitive with distributed PV's out across the utility system.

The CHAIRMAN. Now, with respect to automobile efficiency, what did you all assume in terms of miles per gallon?

Mr. MEYER. The assumptions for our market case were automobile fuel efficiency for new cars coming on line of 40 mpg in 2000, 50 mpg in 2010, and for the environmental and climate stabilization, 43 and 54 mpg, respectively.

The CHAIRMAN. Now, did you read the National Academy of Sciences report on

Mr. MEYER. I have seen the summary of it. I have not yet had time to read the full document.

The CHAIRMAN. Would you agree with the National Academy of Sciences on their numbers? And if so, how do you get from their numbers to your numbers?

Mr. MEYER. I would have some serious questions about that. I have actually just been reviewing a document from John DeCicco at ACEEE, who I should say was one of the principal analysts in America's Energy Choices on the transportation sector. Again, I will make copies of this available to you if you would like. It was presented to the government/industry meeting last week in Washington, April 30, and he critiques the NAS report for incomplete technology assessment, misleading product cycle assumptions, biased and inappropriate economic assumptions, fallacious consumer acceptance arguments, uncritical and unbalanced use of suspect data, and neglect of credits and other regulatory factors.

The CHAIRMAN. Other than that, do you think it is a good report?

[Laughter.]

Mr. MEYER. Other than that, it is a great study. Other than that, it is fine. But I think there are serious questions whether the NAS report did really test the full range of potential there and even some of the economic as I said, I would be happy to provide that to you for the record.

The CHAIRMAN. Would you be inclined to agree with that criticism or not?

Mr. MEYER. From reviewing his document, I have would be inclined to agree that there are substantial omissions and flaws in the NAS study. Again, as I have said, I have not personally reviewed the full document myself, the full study.

The CHAIRMAN. In your proposal on the climate stabilization case, you show a 44 percent increase in hydro, and I must tell you that our experience has been here on the committee that any increase in hydro, any, is highly, highly controversial. As a matter of fact, as part of our bill, we initially had with 5 megawatts or less, we were going to turn that over to the States for licensing because we thought they could do it less expensively and more efficiently, and that was met with a solid wall of opposition, so strong that we said hydro is not that big a deal in this country.

Do you really think you could have a 44 percent in hydro under any environmentally conscious scenario?

Mr. MEYER. Yes. The increase in hydro is primarily from repowering and expansion of existing dams. There are some new sites that are used, but we put pretty strict limits on the hydro. There is tremendous hydro potential that we did not choose to tap in this study because of those environmental constraints that we are very aware of.

The CHAIRMAN. So much of this repowering-I can tell you they want to repower downward so that you can have better flows for the fish and wildlife, and I am inclined to agree with them on that. I just do not see how you get a 44 percent increase.

Now, do you have any view of how much the carbon tax would be?

Mr. MEYER. How much the carbon tax would be?

The CHAIRMAN. How much the carbon tax would be in order to get to the climate stabilization case?

Mr. MEYER. In our climate stabilization scenario, we used a carbon tax of about $25 a ton as a guide against which to use new technologies, particularly in the electric power sector to dispiace primarily coal.

The CHAIRMAN. And $25 a ton would-what does that come out to in terms of kilowatt hours?

Mr. MEYER. Per kilowatt hour?

The CHAIRMAN. Yes. I am trying to think about what would be the bill for the average American consumer.

Mr. MEYER. I can get you those numbers. I am not sure they are in here right now.

It translates into about $2.60 per million Btu for cual increase OPT about

The CHAIRMAN. How much would it rane nationwide for the Treasury?

Mr. MEYER. A $25 a ton tax applied across the board would raise about $140 billion a year.

The CHAIRMAN. $140 billion?

Mr. MEYER. Yes.

This is carbon, not CO2 I should point out. It is equivalent to about an $80 tax in carbon dioxide. This is per ton of carbon.

The CHAIRMAN. It is about $140 billion, though.

Mr. MEYER. Yes. It is equivalent to about $92 per ton of carbon, $25 per ton of CO2. Excuse me.

The CHAIRMAN. Senator Wallop?

Senator WALLOP. Thank you, Mr. Chairman.

Mr. Meyer, are you a meteorologist?

Mr. MEYER. No, I am not.

Senator WALLOP. Are you an economist?

Mr. MEYER. My training was in economics and political science at Yale. Yes.

Senator WALLOP. So, as a concerned scientist, you are a political scientist?

Mr. MEYER. And economist, yes.

Senator WALLOP. Well, we had four meteorologists in here of varying views amongst themselves, so varying in fact that the only common denominator amongst them was the uncertainty of the science regarding this issue of global climate change.

When you are talking about climate stabilization, how do you distinguish between natural change and that caused by man?

Mr. MEYER. What we were saying is basically what is needed to achieve the kind of reductions in CO2 emissions since we were looking specifically at that greenhouse gas, what is needed in reductions in emissions of that to stabilize concentrations based on the IPCC's analysis of stabilization.

Senator WALLOP. The Schlesinger/Jiang 1991 article in Nature magazine using the mid-range estimate by the IPCC, said that deferring a reduction of CO2 by 10 years-I mean, deferring a reduction, not reducing it, deferring it-would change the 2100 year, 21st century, temperature rise by less than a tenth of a degree Centigrade. Their point is that maybe waiting on good science would not be too radical.

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