Transcript No Slide Title

Evaluating Economic and
Institutional Issues and
Opportunities in Commercializing
Super Conducting Technologies
Center for Advanced Power Systems (CAPS)
Conference
July 29-30, 2001
National High Magnetic Field Lab
Tim Lynch, Ph.D..
Director
Center for Economic Forecasting and Analysis
Florida State University
Tallahassee, Florida
DEFINING THE INSTITUTIONAL
NEEDS FOR ELECTRICAL
GENERATION AND CAPS
RELATED TECHNOLOGY
URBAN USES
HIGHER DENSITY TRANSMISSION USES
HIGHER ECONOMIC PRODUCTIVITY
NEW TECHNOLOGICAL EXPANSIONS
CAPS
REDUCED ENVIRONMENTAL IMPACT`
TECHNOLOGY
SPINNOFF
INDUSTRIAL USES
ELECTRICAL / MANUFACTURE
PRODUCTION - STORAGE TRANSMISSION EXPANSIONS
TRANSPORTATION USES
STORAGE AND TRANSMISSION GAINS LEAD TO:
RAPID GAINS IN VIABILITY OF MAGLEV TECHNOLOGY
ADVANCES IN ELECTRIC CAR \ BUS
From: Electricity Technology Roadmap: 1999 Summary and Synthesis, (1999).
Value of Electrical Energy in
the US Economy Increases
•In the last decade, there has been a fourfold increase in the value of bulk power
transactions in the U.S.
•Electricity is sold in wholesale markets and
transported over increasingly larger
distances.
•Growth in bulk power transactions is
continuing while the North American
transmission system is already at full
capacity and taxed to its limits.
From: Electricity Technology Roadmap: 1999 Summary and Synthesis, (1999).
Projected Energy Needs
Percent (%)
70
60
50
Population
40
30
Electricity
Consumption
(trillion kWh)
20
10
0
1950
2000
2020
2050
Years
From: Electricity Technology Roadmap: 1999 Summary and Synthesis, (1999).
Economic Costs Due to Breakdowns
in Electric Transmission
• August 10, 1996 power outage in
California resulted in an estimated loss of
$1 billion
• Nigeria loses $1 billion annually due to
poor-quality electric services.*
• Latin American power shortages result in a
$10-15 billion annual loss*
*World Bank, 2000
Measuring the Economic
Value of Super
Conducting and Other
Advanced
Technologies to the
US Economy
The Good News from a
Technology Perspective
The transition to a more efficient
economy on both the demand and
supply sides is not about ratcheting
down the economy; rather, it is about



Investing in new technologies;
Putting America’s technological leadership
to competitive advantage; and
Developing new ways to make things, and
new ways to get where we want to go,
where we want to work, and where we want
to play.
Opportunities for Efficiency
Improvements in the U.S.
Production and Use of Electricity
•
•
•
U.S. wastes in the production of
electricity (~24 quads annually) is more
energy than is used by the entire
Japanese economy for all end uses.
According to the study, Scenarios for a
Clean Energy Future, cost effective enduse technologies might reduced
electricity consumption by ~1,000
billion kWh by 2020. This level of
savings is more than Japan now uses
for its entire economy.
For more background, and a full copy of this study,
visit the CEF website at
http://www.ornl.gov/ORNL/Energy_Eff/CEF.htm.
The Case of the Information
Economy
• Many different information and communication
technologies contribute to increasing
opportunities for energy savings and large
productivity gains in business.
• The Lawrence Berkeley National Laboratory
indicates that the Internet and all electronic
equipment only consumes 1 and 3 percent,
respectively of the nation’s electricity.
• Yet, further efficiency gains are emerging.
LCD screens consume one-half to two-thirds
less energy than CRT devices. And new server
technology may reduce the energy needed to
move data bits by one-half or more.
Conversion Rate of Primary Energy to
Electricity
Historical Trend in U.S. and
Florida Electric Grid Efficiency
34%
32%
30%
28%
26%
24%
22%
Years
20%
1950
1960
1970
1980
1990
2000
Comparing U.S. Trends in Overall
Energy Efficiency with Electric
Generating Efficiency
Logarithmic Index (1950 = 1.00)
1.50
Nation’s Overall Energy Efficiency
1.30
1.10
Electric Generating Efficiency
0.90
1950
1960
1970
1980
1990
2000
Fuel Mix Use in U.S. and
Florida
Percent (%)
60
60
50
50
40
30
20
28
25
U.S.
Florida
15
10
10
0
Electricity
Oil
Natural Gas
Electricity Generation in
U.S. and Florida
Percent (%)
80
80
70
66
60
50
U.S.
40
30
Florida
23 20
20
11
10
0
0
Fossil
Nuclear
Hydroel.
The Value of the Florida
Electric Industry to the
Economy & The
Potential Impact of
Deregulation
Florida’s Largest Utilities
Source: Energy Information Administration/State Electricity Profiles
Electricity Prices in Florida
$/1000 Kwh
(1978 – 2000)
$/1000 KWH
$100
Nominal Price
$80
$60
$40
Real Price
$20
Source: Florida Public Service Commission
19
99
19
96
19
93
19
90
19
87
19
84
19
81
Year
19
78
$0
Florida Revenue From Sales To
Consumers by Sector
(Thousands 1999$)
$382,866
$885,802
Residential
$4,297,425
Commercial
$7,253,310
Industrial
Other
TOTAL REVENUE: $12.8 Billion
EXISTING NUMBER OF MILES AND COST OF EXISTING
FLORIDA ELECTRIC TRANSMISSION LINES
MILES
COST
13,500
$2,500,000,000
TRANSMISSION LINE COST
13,000
$2,000,000,000
12,500
$1,500,000,000
12,000
11,500
$1,000,000,000
TRANSMISSION LINE MILES
11,000
$500,000,000
10,500
10,000
$1995
1996
1997
1998
1999
2000
2010
(EST)
NUMBER OF NEW TRANSMISSION
LINE MILES AND ACRES OF LAND
NEEDED IN FLORIDA (2000-2009)*
MILES
ACRES
600
500
8,000
7,000
NEW ACRES OF LAND REQUIRED
400
5,000
300
4,000
3,000
200
100
6,000
NUMBER OF MILES OF NEW
TRANSMISSION LINES NEEDED
1,000
-
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
-
2,000
*FLORIDA PSC, DEP, 2001
Florida Summer and Winter
Peak Demand by Year
(1999)
40,000
30,000
20,000
10,000
Summer Peak
8
2
0
0
6
0
0
4
2
0
0
2
2
2
0
0
0
0
0
8
2
9
9
6
1
9
9
4
1
1
9
9
2
9
9
1
9
9
0
0
1
Peak MW
50,000
Winter Peak
Year
Florida Energy Use By
Customer Type
(1999)
120,000
GWH
100,000
80,000
60,000
40,000
20,000
Rural & Residential
Commercial
8
2
00
6
2
00
4
2
00
2
00
0
2
2
00
8
1
99
6
1
99
4
1
99
2
99
1
1
99
0
0
Industrial
Year
Other
REMI Inputs For Ten Percent
Price Shock Analysis
DETAIL
SELECTION
COST
POLICY VARIABLE CATEGORIES
Electrical
Utilities
Sales (In
State)
Annual Fuel
Cost to
Commercial
and
Industrial
Annual Fuel
Cost to
Residential
Output BlockDetailed
Industry OutputTransportation
and Other Public UtilitiesPublic
Utilities
Wage, Price and Profit
BlockElectricity Fuel Costs
(Share)
Electrical
Utilities
Wage, Price and Profit
BlockPrices (housing and
consumer)
Household
Operation
Government
Spending
(or more
state taxes
collected)
Output BlockGovernment
Spending (amount)
State
Commercial
and Industrial
Summary of the Results of a Ten
Percent Increase in Florida
Electricity Prices
• A loss of employment of 27,740 for 2001.
This corresponds to a reduction of
approximately half-percent of Florida’s
total current employment levels.
• A decrease in GRP ($1.5 Billion) and real
disposable income ($1.6 Billion) for 2001.
. Both of these levels drop to statewide
losses of ($2.6 Billion) by 2021.
DROP IN FLORIDA EMPLOYMENT
RESULTING FROM A TEN PERCENT
INCREASE IN ELECTRICITY PRICES
(27,500)
(28,000)
(28,500)
(29,000)
(29,500)
(30,000)
(30,500)
(31,000)
20
21
20
19
20
17
20
15
20
13
20
11
20
09
20
07
(27,000)
20
05
20
01
(26,500)
20
03
(26,000)
DROP IN FLORIDA PRODUCTIVITY AND
INCOME RESULTING FROM A TEN PERCENT
INCREASE IN ELECTRIC RATES
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
$$(500,000,000)
$(1,000,000,000)
$(1,500,000,000)
FLORIDA GROSS STATE PRODUCT
$(2,000,000,000)
$(2,500,000,000)
FLORIDA DISPOSABLE INCOME
$(3,000,000,000)
Measuring the Potential
Economic Impact of
Deregulation
Summary Chart of Emissions
Results
(for Texas, Massachusetts and
Differences in 2001 Dollars)
Expected
Result
NOx Reductions
(TPY)
SO2 reductions
(TPY)
Capital Outlay
(million dollars)
Fixed O & M
(million dollars/yr)
Variable O & M
(million dollars/yr)
Texas
Mass.
Difference
20,940
77,994
57,054
53,985
291,426
237,441
397
2,373
1,976
30
185
155
21
101
80
The Potential Market for
and Value of HTS
Technologies to the US
and Florida Economy
Recalling a Basic Economic Relationship
GDP = Investment + Personal
Consumption + Government Spending +
Net Exports
Hence, a “technology-based” energy efficiency strategy
could lead to:
(1) greater investment in energy efficient/ highly
reliable reduced emission low-carbon technologies;
(2) increased spending as a result of energy bill
savings;
(3) R&D, incentives, and market development
programs; and
(4) reduced oil imports
Therefore, an investment-led innovative high tech
investment strategy can lead to a net positive gain for the
economy
Price/Performance Ratio:
First Generation HTS Cable*
1200
$/kA-m
Price/Performance Ratio
$/kA-m
1000
US Military SMES/MotorsGenerators/Cable
Applications
800
600
Commercial SMES/MotorsGenerators/Cable Applications
400
Residential SMES/MotorsGenerators/Cable Applications
200
Source: Modification of American Superconductor Inc, 2001
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Economic Analysis of HTS
Technologies
• One recently study of HTS technology in
the electrical utilities industry was
completed by L.R. Lawrence and Craig Cox,
examine currently available HTS products
and benefits.*
• The authors attempted to quantify market
entry dates and total annual savings HTS
annual benefits, to 2020
–
–
–
–
–
Electric motors
Transformers
Generators
Underground cable
Fault current limiters and, among other variables.
The Projected Entry Dates
where HTS is Expected to Capture 50% of the
Potential Market
Equiptment Motors Transformers Generators Under
Ground
Cable
Year 50% of
Market Achieved
2016
2015
Source: Lawrence Study, 2000
2021
2013
Total Annual Benefits for Motors based
on 2.5% Annual Growth in Capacity
and Generation (Billions $)
Billions
$15
$10
$5
$0
2001
2004
2007
2010
Years
Source: Lawrence Study, 2000
2013
2016
2019
Total Annual Benefits for Transformers
based on 2.5% Annual Growth in
Capacity and Generation (Millions $)
Millions
$200
$150
$100
$50
$0
2001 2004 2007 2010 2013 2016 2019 2022
Years
Source: Lawrence Study, 2000
Source: Lawrence Study, 2000
Years
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
$350
$300
$250
$200
$150
$100
$50
$0
2001
Millions
Value of Annual Benefits of Saved
Energy from Installing HTS
Generators based on 2.5% Annual
Growth in Demand (Millions $)
Value of Annual Benefits of Saved
Energy from Installing HTS Underground
Cable based on Annual Growth in
Capacity and Generation (Millions $)
$16
$14
Millions
$12
$10
$8
$6
$4
$2
$0
2001
2004
2007
2010
Source: Lawrence Study, 2000
2013
Years
2016
2019
2022
Total Value of Annual Benefits of Saved
Energy from Installing HTS Motors,
Transformers, Generators, and Underground
Cables based on 2.5% Annual Growth in
Capacity (Billions $)
$15
$10
$5
By the end of 2010, benefits accrue totaling $1.086 Billion.
By the end of 2020, the accrued benefit is $61.2 Billion
Source: Lawrence Study, 2000
Years
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
$0
20
Billions
$20
Using Regional
Economic Models (REMI)
to Measure The
Potential Value of HTS
Technologies to the
Florida Economy
Recalling a Basic Economic Relationship
GDP = Investment + Personal Consumption
+ Government Spending + Net Exports
Hence, a “technology-based” energy efficiency strategy
could lead to:
(1) greater investment in efficient/ (environmentally
desirable choices such as HTS and low-carbon
technologies;
(2) increased spending as a result of energy bill savings;
(3) R&D, incentives, and market development
programs; and
(4) reduced emissions, energy consumption and foreign
oil imports
Therefore, an high tech investment strategy can lead to a
net positive gain for the economy
HTS Model Framework
(Basic Assumptions)
• Two scenarios were developed that simulated the
Lawrence study benefits applied to the State of Florida.
• One model simulated the 2.54% growth rate and the other
model represented the 1.4% growth rate in demand for
the electrical industry.
• Additional assumptions used for both REMI models
included for HTS technologies: a decrease in the price of
electricity of 0.9%/year in the commercial and industrial
sectors (from the Lawrence study), and a decrease in
household consumer expenditure price index of 0.03%
(household savings/household consumption).
• The HTS technologies are assumed to save the U.S $18.24
Billion per year in presently envisioned equipment (10%
market penetration is assumed within the first five years,
and 50% market penetration is assumed after five years.
These assumptions are incorporated into the $18.24
Billion annual benefits).
REMI Inputs for HTS
Technologies Analysis
COST
POLICY VARIABLE CATEGORIES
DETAIL
SELECTION
Electrical
Utilities
Sales (In
State)
Output BlockIndustry
OutputSales Public Utilities
Sales Share
(Electrical
Utilities)
Annual
Fuel Cost
to
Commercial and
Industrial
Prices
(housing
and
consumer)
Wage, Price and Profit
BlockElectricity Fuel Costs (Share)
Commercial and
Industrial
Wage, Price and Profit BlockPrices
(housing and consumer) CEPI
All personal
household
consumption
expenditures
Results of Growth in Economic
Productivity from Use of HTS
Technologies in the State of
Florida*
Implementing HTS technologies across the Florida
commercial, industrial and residential sectors
would result in:
At the 2.5% growth rate initial new net employment
increase of 9,889, for 2001
– This new net employment continue to decrease
through the forecasted years, ending with an
additional thousand employed in 2021.
• At the 1.4% growth rate additional employment of
8,557 jobs for 2001 and 300 by 2021 would result.
*This analysis assumed both a 2.5% and 1.4% future
annual growth rate of demand for electricity in
Florida.
Source: CEFA/FSU
Results of Growth in Economic
Productivity from Use of HTS
Technologies in the State of Florida
(Continued)
•GRP for both models for the State of
Florida would be approximately $500
million for 2001 and decline incrementally
throughout the forecast period.
•Likewise, the real disposable income for
both models would be approximately $300
million for 2001, and decline
incrementally throughout the forecasted
period.
HTS Technologies Have the Potential to
Provide Significant Future Additional
Benefits to the State of Florida.
The higher efficiency of electric generation,
transmission, distribution and utilization
results in reduced emissions of:
•Localized pollutants
•Long distance transport pollutants
•Greenhouse gas emissions and
•Associated environmental and
Socio economic effects
Examples of How Air
Pollution Environmental
Economic Impacts Are
Modeled in Regulatory
Settings
Applying the Damage Function Approach
Emissions and Resource Use
(e.g., Changes in SO2, NOX
Emissions)
Changes in Well-Being or Damages
(measured by willingness to pay)
Dose-Response
Function
Impact
Changes in Environmental Quality
(e.g., Changes in PM2.5, Ozone, . . .
.)
Environmental and Social Impacts
(e.g., on human health, visibility, materials)
Concentration
Aggregation of Impacts Across
Effects, Individuals, and Time
Hagler Bailly
Section Name
50
$50 Billion in Health Benefits
from Title IV SO2 Reductions
Annual Health Benefits of A Multipollutant Strategy’s Fine Particle
Reductions in 2010
• 10,600 cases of premature mortality
avoided
• 5,400 new cases of chronic bronchitis
avoided
• 3,100 cardiovascular and respiratory
hospital admissions avoided
• 2,000 asthma emergency room visits
avoided
• 17,600 cases of acute bronchitis avoided
• 8.5 million respiratory symptom days
avoided
• 1.5 million work-loss days avoided
Monetary Value of Selected
Health Events (in 1997$)
•
•
•
•
•
•
•
Mortality
Chronic Bronchitis
Hospital Admission
Emergency Room Visit
Respiratory Symptoms
Acute Bronchitis
Work Loss Day
$5.4 million
$319,000
$10,600 to $13,600
$280
$7 to $47 per day
$55
$102
Florida Economic Impacts from
Achieving the U.S. Global
Warming Solutions Would
Result
in the following:
• Reduce carbon emissions by 36
percent in 2010 (back to 1990 levels)
• Increased annual savings,
$300/household by 2010
• An additional 27,000 jobs would be
created in Florida by 2010
Source: The Impacts in Florida of a U.S. Climate Change Strategy, by Tellus Institute