Alternative Energy/Give an overall picture of the AE field

Answer the questions:

Give an overall picture of the field.

*How was this field born and how is it evolving?

Energy History

• The sun is the origin of most renewable energy [1]
• Sunlight has historically been used for warmth and water heating
• Biomass is plant matter that has embedded energy from photosynthesis. It is burned for energy - heat, steam to run a turbine.
• Sunlight warms the earth in some areas more than others, as atmosphere warms and warm air rises, cool air moves in to fill its place creating the wind which powers wind turbines.
• Hydropower is a result of the force of gravity causing water to flow downhill. Moving water exerts its force of energy, on objects it comes in contact with, like the blades of a turbine.
• Ocean tides, the energy for tidal energy technology, is a result of the tidal forces acting on the earth from the sun and moon. [[1]]
• Renewable energy technologies harness the energy in the sunlight, wind, ocean, rivers, and plant matter, and turn it into electricity.

Technology History
Solar

• Solar furnaces were developed in the eighteenth century, which led to temperatures high enough to create steam for running an turbine to an electrical generator.[1]
• 1839 - The photovoltaic effect was discovered by Alexandre-Edmond Becquerel [1]
• 1954 - US government contracted Bell Laboratories to develop panels for the space program. First steps toward creating high efficiency panels. [1]
• 1953 - scientists at Bell Laboratories discover the photovoltaic properties of silicon, and start R&D on the first silicon solar panel [2]
• 1955 - US government contracts Bell Labs to develop panels for the space program. First steps toward creating high efficiency panels. [2]
• 1969 - Elliot Berman, a chemist, receive venture capital funds from Exxon to develop a commercially affordable solar panel and through engineering with cheap materials, drops panel prices from $200/Watt to $20/Watt. [2]

Wind

• Evidence of windmills has been found in India from 2500 years ago(Sørensen 1991)
• 1887 - James Blythe builds first electricity generating wind turbine in Scotlandhttp://en.wikipedia.org/wiki/History_of_wind_power
• 1887 - 1888 - Charles Brush builds another electricity generating wind turbine in Cleveland, Ohio. ibid.
• 1930’s - US wind turbines were used to generate electricity on farms that were not tied the electrical grid. Turbines built and produced by private companies. Ibid.
• 1970’s and 1980’s - US Government (NASA) received funding from the National Science Foundation, and later the Department of Energy to work with industry to create commercially viable wind turbines at the Lewis Research Center in Cleveland, Ohio. Ibid.
• PURPA (see policy history below) led to huge growth in the wind industry, contributing to economies of scale.

Tidal

US Policy History

• 1970 Oil Embargo raised US interest in alternative energies for energy/economic security and resource and environmental sustainability.[1]
  
• Before 1970, hydropower was the predominant alternative energy in the US.
• After 1995 hydropower production stagnated due to lack of available water.
• Hydro facilities still account for the majority of alternative energy production in the US, but there has been very little growth in hydropower capacity or production since 1995.
• Alternative energy plants such as wind, solar, biomass, geothermal, and tidal cost more than coal and natural gas power plants.
• Since the 1970's the US has used government run subsidy programs to give these technologies a competitive advantage in the US market.

US Renewable Energy Policies[3]

• The Public Utilities and Regulatory Policy Act of 1978 (PURPA) was the first US policy that gave alternative energy a competitive advantage[3]:
  • Required Utilities to buy energy from alternative energy producers
  • Paid premium prices for each kilowatt hour of electricity produced
  • Guaranteed the prices for the entirety of 20 year contracts
  • Act was ultimately unpopular because:
  1. The high prices created windfall profits for alternative energy producers
  2. PURPA contracts were paid for by the electric utility, raising the price of electricity for all consumers
• After PURPAs initial, but brief, success, there was stagnation in US alternative energy development until 1997 caused by:
  • Electric power sector restructuring
  • repeal of federal and state incentives
  • sharply lower natural gas prices - making new natural gas plants more financially appealing
• In 1997 a new era of alternative energy policies began, which has helped to grow the alternative energy sector in the US.
• The most important of these policies are:
  • Renewable Portfolio Standards (RPS)
  1. Sets state goals for renewable energy (RE) generation in a %RE of total state electricity generation by a particular year (2020 for instance)
  2. Requires all state electric utilities to reach same level of RE generation and uses tradable credit market to drive process
  3. Credits are proof that one MWh (megawatt hour) of renewable energy has been produced and fed into the electricity grid.
  4. Utilities will decide to generate RE, buy RE from another retailer or buy the tradable credits to comply with RPS policy.
  5. Compliance measured by a state regulatory office which verifies that each electric utility holds the proper # of tradable credits by the end of the year.
  6. If utility generates 200,000 MWh per year, and the RPS goal is 10%, the utility must present 20,000 credits at the end of the year to show compliance.
  • The Business Energy Investment Tax Credit (ITC)
  1. Provides a 30% tax credit for qualified renewable developments. Most importantly solar developments.
  • The Renewable Energy Production Tax Credit (PTC)
  1. Provides a $0.01 - $0.02 payment per kWh for qualified renewable technologies. Most importantly, for wind energy.
  2. Recent change allows developers to opt instead for the 30% tax credit offered by the ITC.
  • U.S. Department of the Treasury Grant Program
  1. Recent Obama Administration addition which allows ITC or PTC eligible RE developments to opt for a grant equal to the 30% ITC tax credit in year 1 of the RE project.
  • Public Benefits Funds (PBFs)
  1. State renewable energy offices collect a small surcharge on all consumer electricity bills to fund renewable energy programs for the public.
  2. PBFs can be used for public education on RE and energy efficiency, or for programs that help fund RE or energy efficiency projects

*What are the main business models?

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*What are the innovation dynamics in this field? (inputs/outputs, timing of innovation/ disruptive or incremental innovation?)

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*How does knowledge flow in this field?

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*Is this field replicating models from other fields?

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*How many companies?

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*How much money do they make or how much money do they “move” in the American economy?

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*How important is research from universities in this specific field?

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*How important is public funding in this field?

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*How important is private funding / venture capital in this field?

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*Are there any specific public policies (from agencies, federal or state policies) that give incentives for openness or enclosure?

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*What is the cost structure of the field?

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*Who are the producers, the buyers, and the users?

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*What is the structure of power from the production side and what is the structure of power in the demand side? E.g., who has the power to control production and demand? How is the control distributed?

coming soon

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