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Executive Summary
As a report developed by the Renewable Energy Policy Project
clearly demonstrates, a major commitment to renewable electric generation will
reduce our national security exposure, stabilize climate and provide a
multi-billion dollar investment and reindustrialization program that will lead
to new job growth in Illinois.
Analyzing the Demand for Components
The Renewable Energy Policy Project recently completed a
state-by-state analysis of the job-creating potential of renewable energy
technologies. The results of this analysis were very encouraging both for the
country as a whole and for Illinois
in particular.
A national program to develop renewable energy will benefit
the regions and states that have the best renewable resource base – solar,
wind, biomass and geothermal. It will also create a demand for billions of
dollars of components, the parts that make up the finished renewable plants.
This demand could, if accompanied by appropriate incentives, provide important
new markets for domestic manufacturers that are already manufacturing equipment
similar to the components that go into new renewable generation.
More than 75% of the potential new demand can be expected to
flow to the 20 states that have suffered the greatest job losses. A program
that supported the development of renewable energy projects while simultaneously
supporting the development of a strong, advanced component manufacturing
industry would benefit many states and regions.
The report breaks renewable generation technologies down
into their component parts and then examines where traditional industries exist
that could, if provided with appropriate incentives, become suppliers of the billions
of dollars of new parts that will be necessary.
The report analyses the renewable energy industry assuming
that the United States
moves to stabilize carbon emissions. Stabilizing emissions of carbon requires
adding 18,500 MW of new renewable projects each year for the next ten years.
The report looks at the total demand generated by this ten-year stabilization program
and tracks that demand down to the individual industries capable of
manufacturing the components. ### BACKGROUND ON REPORT ANALYSIS: There
are many ways to stabilize carbon emissions. For these reports REPP used the
“wedge” analysis developed by Pacala and Socolow. (Pacala, S. and R. Socolow,
Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with
Current Technologies, Science, 13 August 2004, Vol. 305) To stabilize carbon
emissions, the authors proposed to split the growth of carbon emissions into
seven parts or wedges and look for the set of already existing technologies
that can generate the required electricity without a wedge of carbon emissions.
An international program of stabilization based on current levels of global
emissions would make the United
States responsible for about two wedges or
two-sevenths of global carbon emissions. Since transportation and electricity
generation each provide about half the emissions, electricity generation in the
United States
would be responsible for about one wedge
The calculation of
what is required to stabilize these emissions with renewable energy is
straightforward. The base of carbon emissions now is 7 billion metric tons per
year of carbon, growing at 1.5% per year. For the first year, global growth
would be 105 million tons, and to stabilize or remove the growth each wedge
would require removing 15 million tons of carbon or 55 million tons of CO2 per
year. Coal generation emits on average 2.1 pounds of CO2 per kWh produced,
which translates to approximately 58 billion kWh generated with zero CO2
emissions to capture one wedge. To achieve these reductions would require the
addition of between 18,000 and 19,000 MW per year of wind power generation,
assuming an average capacity factor of 35%. (Biomass and geothermal resources
have much higher capacity factors and would require smaller capacity additions
to achieve the CO2 reduction.)
These reports look
at the total demand for component parts generated by a ten-year stabilization
program and tracks that demand down to the individual industries capable of
manufacturing the components. The national demand is assigned to individual
states and eventually to the county level. These Reports also look at the
likelihood that new demand on the scale necessary to stabilize carbon emissions
would lead to bottlenecks in the component supply chain. For example, climate
stabilization efforts will create an annual demand for approximately $1 billion
for wind turbine gearboxes. Currently, this industrial sector is running at
close to full capacity. Department of Commerce data shows an available, unused
capacity of roughly $15 million. In other words, any major push for renewable
installations would run into an immediate shortage of these critical
components. Looking more closely at this carbon stabilization program reveals
that there is a very great likelihood that severe bottlenecks will develop in
many critical sectors. For wind and photovoltaic components, the annual, new
demand will greatly exceed available industrial capacity for more than 50% of
the industrial sectors. All of the renewable technologies face a bottleneck in
one or more critical components.
About the Renewable Energy Policy Project: REPP conducts a variety of educational, outreach and policy
analyses to accelerate the development and market acceptance of renewable
energy. Over the past three years REPP has broken down the primary renewable
technologies, i.e. wind, photovoltaic, geothermal, and biomass, into their
major component parts. This engineering analysis was then integrated with a
climate stabilization program to determine the economic development potential
of such an effort. REPP also analyzed the effect of wind farm development on
local property values.
George Sterzinger is
the Executive Director of REPP. He has worked for more than twenty years in the
renewable energy field, and particularly in efforts to commercialize emerging
renewable technologies. He spearheaded efforts to build a biomass gasifier to
commercial scale. On behalf of the Department of Energy he conducted the
initial feasibility study of how to develop solar energy on the Nevada Nuclear
Test Site. In addition to his work at REPP, Mr. Sterzinger is working with
several companies move towards commercial cellulosic ethanol production. He can be reached at 202-293-2898, ext. 203
or gsterzinger@repp.org.
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