The 25x25 Alliance, an affiliation of US agricultural, forestry, environmental, conservation and business interests, came together in 2006 to develop a plan which they hoped would become America’s energy goal. As a result of this meeting, a national steering committee of volunteers was formed which produced a report in 2007: the 25x25 Action Plan: Charting America’s Energy Future. Its hopeful vision was that “…America’s farms, forests and ranches will provide 25% of the total energy consumed in the US, while continuing to produce safe, abundant and affordable food, feed and fiber.”
Meeting the 25x25 goal, the Action Plan said, “…will further lower the costs of renewable energy so that it is competitive with fossil fuels and lead to the development of a new array of value-added renewable products.” Rural areas could be revitalized with the development of biofuel refineries. They would:
- Create local jobs;
- Raise demand for local products;
- Create tax revenue for rural communities that could be used for schools, hospitals and other local development.
Since the release of the Action Plan, the 25x25 Alliance has broadened its message, and in September 2008, it announced new, overarching national energy plan recommendations:
- Expansion and funding of federal soil and water conservation programs to ensure the sustainable production of food, feed, fibre and fuel;
- The establishment of a mechanism to create a market for carbon
- passage of long-term renewable energy production and energy efficiency tax credits
- expansion and extension of federal loans and loan guarantees for renewable energy production.
Furthermore, the alliance advocates:
- Expansion and extension pf federal loans and loan guarantees for renewable energy production
- creation of incentives to accelerate production;
- Deployment of flex fuel and plug-in hybrid electric vehicles;
- Modernisation and improvement of access to the grid;
- Building of new transmission lines;
- Creation and expansion of pipelines, rail lines, ports, pumps and other infrastructure needed to deliver renewable fuels and feedstocks to markets.
Most important, the 25x25 Alliance is calling for increased federal research and development and deployment funding to accelerate the commercial deployment of next-generation biofuels, including solar, wind, geothermal and hydropower.
Can it be done?
A study published by the University of Tennessee for the 25x25 Alliance, entitled 25% Renewable Energy for the United States by 2025: Agricultural and Economic Impacts, found the 25x25 goal is achievable. “The projected annual impact on the nation from producing and converting feedstocks into energy would be in excess of US$700 billion in economic activity,” the study said. In addition, 5.1 million jobs would be created, mostly in rural areas.
The Tennessee study was initiated and funded by the Energy Future Coalition, a broad-based non-partisan public policy organisation.
The Tennessee study predicted that crop prices would increase. They would be US$0.71 higher for corn, US$0.48 higher for wheat and US$2.04 higher for soybeans. The production of 14.19 quads of energy from biomass and wind sources could replace the growing demand for natural gas, diesel and/or coal-generated electricity. The study asserted that feedstocks produced by fields, farms and forests could produce 86 billion gallons of ethanol and 1.2 billion gallons of biodiesel. This would decrease gasoline consumption by 59 billion gallons by 2025.
The Tennessee study also said that 25% of the 117.7 quads that the Department of Energy estimates we will consume by 2025 should be met by renewable energy sources to meet the 25x25 vision. At present, an estimated 1.87 quads are produced from biomass resources used to produce electricity and/or heat. By 2025, 12.10 quads will be produced annually from geothermal, solar PV, hydro and wind generation, the study predicted. Therefore, to meet the 25x25 goal of 29.42 quads, an additional 15.45 quads would need to come from agricultural and forestry lands.
The Energy Future Coalition also funded a report by The Rand Corporation: Impacts on U.S. Energy Expenditures and Greenhouse-Gas Emissions of Increasing Renewable-Energy Use, released in June 2008.
In a strongly worded conclusion, the Rand report said: “Increased renewables use can reduce CO2 emissions and can enhance energy security by reducing petroleum use and increasing international competition with crude-exporting countries.”
However, the report stated that these gains are only likely to be realised more cost-effectively if integrated into a diverse portfolio of energy measures that improve energy efficiency, reduce CO2 emissions and increase the availability of energy resources other than conventional petroleum.
The Rand report concluded that requirements for increased renewables use should be part of a larger policy portfolio, but should also be phased in gradually and reviewed, carefully and periodically, to assess how technology is advancing before requirements are raised further.
While the Rand researchers pointed out that pricing of renewable fuels can be used to insulate consumers from price changes, in fact this approach discourages energy efficiency and the development of other alternatives. It also increases pressure on the federal budget to subsidise higher-cost fuels.
But the Rand report underlined the fact that major technological advances are required to produce the quantity of environmentally sound and economical feedstocks in order to produce the large and low-cost biomass-based energy supplies we need to reach the 25% renewable energy goal by 2025.
The Rand researchers further concluded that increasing renewables to a 25% share in energy use can significantly reduce CO2 emissions. The incremental increase in energy cost per unit of CO2 reduction varies widely depending on circumstances, reaching very high levels unless there is very substantial cost-reducing innovation in expanding renewables.
Technology R&D is a top priority
“Supplies of wind energy, biomass-produced electricity and biomass feedstock supplies all need to make substantial progress concurrently to achieve the 25% penetration level if there is to be limited impact on consumer expenditures. This should be a top priority for R&D programmes,” the Rand study said. Also, technical advances in wind power will make it possible to use lower-quality sites without a major increase in cost.
“Biomass plays a central role in expanding both renewable electricity and renewable fuels,” the report said. If cost impacts on consumers are to remain modest in 2025, concurrent and significant technology advances in renewable energy technology are required. This requires a large, inexpensive and easily converted biomass supply as well as the harvesting of various energy crops at a scale that vastly exceeds current practice.
The report also argued that land use conversions will be required if biomass production on marginal lands is limited. However, this could result in economic impacts and adverse increased greenhouse gas emissions as land is cultivated, releasing the emissions that have been sequestered in the soils as root systems decompose or that exist in underground “reservoirs”..
The Rand researchers found that under all scenarios it studied, renewable electricity would cost more than fossil-fuel alternatives and electricity prices would increase under the 25x25 requirement. Consumption would decrease as a result, but the change depends on the difference in costs between renewable and nonrenewable electricity and how consumers respond to the rising prices.
If technological advances in renewables do come about and demand adjusts to higher prices, average electricity prices could be lower than US$0.085/kWh, about 15% higher than the Energy Information Administration’s 2006 reference case of US$0.074/kWh, which the Rand study used.
If technical advances for renewables is limited and demand is not able to respond very strongly to higher prices, then the average electricity price could rise to more than US$0.10/kWh, almost 40% over EIA’s reference case of US$0.074/kWh, the researchers argued.
The Rand analysts calculated that with a 15% increase in average electricity prices, direct household expenditures would rise 9% or US$93/year. A 40% increase in the average price of electricity would increase direct expenditures by 24% or US$248/year. These increases exceed EIA’s base-case projections of US$368 billion in total electricity expenditure in 2025.
Replacing motor fuels with biofuels will be "expensive"
While these technologies appear feasible, there is great uncertainty about the way in which the future costs of converting feedstocks into biofuels and how their costs may change with capacity increases. In one supply curve under one set of parameter assumptions, the Rand analysts calculated that biodiesel and corn-based ethanol costs would range from US$2.00/ gallon to US$3.00/gallon of gasoline, equivalent to quantities up to 50 billion gallons. Cellulosic ethanol and gasoline converted from biomass using existing technologies would cost in the range of US$2.00/gallon. For biofuels using biomass from converted crop- and pastureland, costs would be US$4.00/gallon of gasoline equivalent for 50 million to 80 million gallons of gasoline equivalent.
Production of biofuels would need to expand by more than 10 times from its current levels of 0.54 quads, according to 2006 EIA estimates, as reported by Rand. Meeting a 25% requirement for biofuels would require more than seven quads of biofuel by 2025, using EIA projections of motor-vehicle demand for gasoline and diesel.
Rand found that, in the scenarios it studied, we run the risk of high expenditure impacts if available low-cost feedstocks are below 750 million tonnes of biomass per year. There is less risk if biomass feedstocks exceed that number. Estimates of available feedstocks range from 450 million to 500 million to more than one billion tonnes. The researchers estimated, using a mid-range figure for biofuel yield of 90 gallons per tonne of feedstock, that meeting this demand with ethanol would require more than 850 million tonnes of biomass feedstock.
In Rand’s view, the potential for large-scale land conversion to satisfy biomass demand is highly uncertain. While their study did not estimate the effects of land-use change on land prices and food costs, it said, on a conceptual basis, that increased demand for agricultural land for biomass feedstock would cause land and food prices to increase. It also pointed out that biofuel refineries and power plants would compete for biomass supplies.
Where’s the Money?
The 25x25 Alliance continues to lobby Congress for increased funding. It succeeded in getting a resolution supporting its goals inserted into the Energy Security and Independence Act signed into law by President Bush on December 19, 2007. In September 2008, it urged the US Department of Agriculture to fully fund the programmes authorised by the Food, Conservation and Energy Act of 2008. And the organisation, through its members, continues to lobby at the highest level of incoming President Obama's administration. Obama's recent plan calls for investing federal resources, including tax incentives and government contracts in developing the most promising biofuel technologies, including cellulosic ethanol, biobutenol and other new technologies that produce synthetic petroleum from sustainable feedstocks and building the infrastructure to support them. The goal will be to require at least 60 billion gallons of advanced biofuels be incorporated into our national supply by 2030.
According to the 25x25 Alliance spokesman, Ernie Shea, current federal appropriations for research, development, demonstration and commercialisation. is currently US$1 billion annually, most of it in the Department of Energy but some also in USDA. The Alliance wants to see that number doubled. Its Action Plan called for an annual expenditure of US$13 billion for its entire menu of near-term actions, and US$66 billion over the next five years.
Congress took an initial step toward funding loan guarantees in the FY 2007 continuing resolution of the 2005 Energy Policy Act, and the President’s FY 2008 budget would support up to US$4 billion in loan guarantees. Support is needed to ensure that multiple plants using different techniques and feedstocks are built, the 25x25 Alliance said.
Finally, the Alliance argues that the federal government should double its purchase of renewable electricity from current levels of 5% in fiscal years 2010 through 2012, 15% by FY 2015 through 2019; 20% in FY 2020 and 25% in FY 2025 and thereafter.
What are the Feds doing?
Andy Aden, a senior research engineer at the National Renewable Energy Laboratory in Golden, Colorado, said that the DOE has already spent over US$1 billion on awards for demonstration and commercialisation of biofuels plants. It is now concentrating on meeting the renewable fuel standard mandated by the 2007 legislation signed into law in December.
That legislation requires that the country produce 36 billion gallons of alternative renewable fuels by 2022. Cellulosic ethanol would be part of that, Aden said. To put that number in perspective, he said we currently use 140 billion gallons of gasoline. However, he said these numbers have to be adjusted for the fact that one gallon of ethanol contains less energy than a gallon of gasoline.
Aden explained that the research to develop technology for producing cellulosic ethanol is taking many pathways, with no sense of the winner or winners. Two major ongoing research pathways are both are in the pilot and demonstration plant stages. Several design projects in both pathways are being funded by public and private entities, including DOE.
The first pathway is biochemical, using enzymes and fermentation organisms, with several groups working in this area. The second pathway is thermo chemical, specifically gasification. This process is similar to integrated gasification in combined cycle mode on the electrical generation side.
Aden said the real goal of research being funded for the next three to five years is to get technology cost effective on a wide scale. The target is US$1.33/gallon for ethanol, equivalent to US$65 or US$70/barrel of oil, he said. The feeling is that if the industry can get the technology to produce cellulosic ethanol at that price, it will hit the marketplace and production will ramp up.
As for producing electricity from biomass, DOE has shifted its interest from a biopower programme to biofuels, Aden said. A small amount of R&D money is being directed to renewable electricity production, but that could improve with a new administration. He agreed that the cost of IGCC production is fairly expensive. This technology has been promised as a means of burning coal cleanly, but the costs of building these plants are not coming down quickly.
Will there will be huge breakthroughs in biomass technology? Aden said it depends on whom you ask. Some groups are doing cutting edge research, others are doing step-by-step research. But pilot projects are moving into demonstration plants, one step before commercialisation.
The biomass industry is ramping up
California’s biomass industry is coming back, according to William Carlson, a long time leader in the biomass power industry and a member of the national steering committee that wrote the 25x25 Action Plan. He attributes this resurgence to high fuel prices, the spread of renewable portfolio standards and concerns over carbon emissions and the coming emissions reductions rules, especially in the west.
The biomass power plants that had been built in California in the 1980s and early 1990s began shutting down later in that decade when fuel prices collapsed and utilities bought out the contracts. However, virtually all the plants have recently been rehabilitated larger plants are being proposed, he said.
A biomass industry is also developing in the southeastern states, especially with rural electric cooperatives which are more aggressive than investor-owned utilities in signing contracts for renewable power. Furthermore, Carlson said, the National Renewable Cooperative Organization (NRCO) was formed in summer 2008 and has attracted membership of major cooperatives, known as G&Ts – generation and transmission owners.
The NRCO will buy renewable power for its members and facilitate the sale of renewable energy credits for those who need them to comply with state renewable portfolio standards. Many of the member cooperatives are located in areas with little opportunity to develop the most popular renewables, such as wind. Therefore, being able to buy and sell renewable power and RECs with each other will allow many to comply with state and potential federal mandates.