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The Electricity Industry’s
Technology Roadmap
2004 Indiana Energy Conference
September 16, 2004
Kurt Yeager, EPRI
Transforming Society
The vast networks of electrification are
the greatest engineering achievement of
the 20th century
– U.S. National Academy of Engineering
2
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Building the Electricity
Technology Road
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4
3
2
1
3
Manage Global
Sustainability
Resolve Energy/
Environmental Conflicts
Accelerate
Productivity
Foster a Revolution
in Energy Services
Resolve Power
System Vulnerability
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Pacing Issues to be Resolved
1. Depressed financial health reinforced
by regulatory confusion
2. Lack of clear accountability and incentives
for system development & investment
3. Tension between the electricity sector &
national well-being
4. Growing vulnerability of the electricity
supply system
4
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Restructuring Trilemma
Politics
Economics
Technology
Policy
5
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What is the root cause?
6
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Average U.S. Price of Residential Electricity
Service (1984 $)
¢/kWh
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• Economies of scale
• Demand growth
18
16
14
12
10
8
6
4
2
0
1920
7
1930
1940
1950
1960
1970
1980
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
1990
2000
Average U.S. Price of Residential Electricity
Service (1984 $)
¢/kWh
20
• Economies of scale
• Demand growth
18
16
14
Corporate
“Liposuction”
12
10
8
6
• Fuel costs
• Environmental requirements
• Lack of innovation
4
2
0
1920
8
1930
1940
1950
1960
1970
1980
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
1990
2000
Cost Pressures on the Electricity Sector
12
11
Price per kWh
10
9
Downward Cost Pressures
1. Rate Freezes
2. Competition
3. Savings from M&A
4. More “Liposuction”
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Upward Cost Pressures
1. Fuel
2. Capital
3. Environmental Requirements
4. Reliability Requirements
5. Security
6. Labor
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6
5
4
3
2
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Today
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
2015
Key Issue to be Resolved
Will the bulk electricity system
evolve to become the critical
infrastructure supporting the
digital society of the 21st
century, or be left behind as an
industrial relic of the 20th
century?
10
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Electricity Sector Life-Cycle
A Fork in the Road
Formation
Consolidation/
Growth
Maturity/
Stability
Energy
Crisis
Transformation
Financial
Crisis
Decay
PUHCA
1900
11
1935
1970
2000
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2030
The Transformed Electricity Enterprise for
the 21st Century
• Digitally control the power
system
• Integrate electricity and
communications
• Transform meter into a
two-way consumer
services portal
• Integrate distributed
resources
• Enable a robust advanced
generation portfolio
12
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Value of the 21st Century Transformation
Increasing the functionality and
value of electricity through
consumer benefits that far outweigh
the cost
• Increased U.S. productivity and
GDP growth rates
• Substantially improved energy
efficiency and electricity intensity
• Accelerated reduction in carbon
emissions
• Improved power system security
and functionality
• Reduced cost of infrastructure
upgrades and expansion
13
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
What Will it Take to Achieve this Vision?
• A transformed power
supply infrastructure will
cost $15-20 billion a year for
20 years
• Broken down per
household, the cost is
equivalent to one medium
pizza each month!
• Consumers would save
$100s per year in cost of
goods and services, and
enable $1000s more in
personal income
14
Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Capital Invested as % of
Electricity Revenues
60%
50%
40%
30%
Generation
20%
Transmission
10%
Distribution
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15
20
10
20
05
20
00
20
95
19
90
19
85
19
80
19
75
19
70
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65
19
60
19
55
19
50
19
45
19
40
19
35
19
30
19
19
25
0%
“Consumers and
businesses need
reliable supplies of
energy to make our
economy run -- so I
urge you to pass
legislation to
modernize our
electricity system,…”
George Bush State of the Union
1/20/2004
16
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Inextricably Linked Global Needs
• Restore and protect the integrity of
the earth’s life-support systems
• Manage resources crucial to human
welfare
• Eliminate poverty
• Stabilize population
National Research Council, Board on Sustainable Development
17
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The Thermodynamics of History
• Human history reflects the
creation of increasingly
complex technological and
social arrangements for
capturing free energy
• Collapse sets in when entropy
can no longer be offset and
the energy returns per capita
diminish
18
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The Energy Gap
• Half the world’s
population subsists on
agrarian or lower levels
of energy access, and
• Their population density
generally exceeds the
carrying capacity of their
environment
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Policy Trilemma
Pollution
Population
Policy
Prosperity
20
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Energy Intensity Can Be Reduced Through
Electrification
Energy Intensity (MTOE/$1,000 GDP)
1.2
1.0
U.K.
0.8
0.6
U.S.
0.4
Developing
Countries
Germany
0.2
France
0
1840
Japan
1880
1920
1960
Source: Scientific American,
Sept.1990
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2000
2050
2050 Goals
The Electrified World
•> 2%/yr Global Productivity Growth
•> 1,000 kWh/yr per Person
• 30,000 Cal/Day equivalent per Person
•< 6 Billion Tons/yr of Carbon Emitted
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What Adding 10,000 GW of Global
Electrification Capacity Means
•Tripling current world capacity
•Adding 200,000 MW/yr of Infrastructure
•Investing $300 billion/yr
It is equivalent to:
•< 5 years of current world automotive
power production
•Less than 1.0% of GWP
Annual GWP Payback > 100/1
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Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.
Evolution of Primary Energy Shares
“Electrified World”
World Energy Council
100
100
Non-Commercial Energy
Biomass
Other
Solar
80
Non-Commercial Energy
80
Gas
Biomass
Other
Solar
Hydro
Gas
60
60
Nuclear
Oil
Oil
40
40
20
20
Coal
Coal
0
0
1850
1900
1950
2000
2050
-20
-40
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1850
2100
1900
1950
2000
-20
Efficiency
Savings
-40
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Efficiency
Savings
2050
2100
Electrified World versus Business-as-Usual
in 2050
2.0
1.5
Business-as-usual Projection
1.0
0.5
0.0
Electricity (%
Final Energy)
25
3rd World GDP
GWP
Primary Energy
Consumption
Carbon
Emissions
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Oil
Consumption
Carbon Intensity of World Primary Energy, 1900-2100
Carbon Intensity (tC/toe)
1.2
Carbon
Intensity of:
1.1
Wood = 1.25
Coal = 1.08
1.0
0.9
Oil = 0.84
0.8
0.7
Natural Gas = 0.64
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Hydrogen
1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100
Source: Derived from National Academy of Engineering, 1997
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=0
Key Points
1. The world is in the midst of unprecedented
population growth made possible by mankind’s
increased ability to harness energy.
2. Broader access to energy is essential to
resolving the world’s demographic “climate
change”.
3. This will require the transformation of today’s
“hunter-gatherer” global energy economy to
global electrification.
4. The electricity-based technology portfolio to
enable this transformation is feasible but lacks
the needed priority and resources.
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“Vision is
accepting the visible,
not imagining the invisible”
Thomas Edison
“Where there is no vision,
the people perish”
Proverbs 29:18
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Copyright © 2003 Electric Power Research Institute, Inc. All rights reserved.