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Renewable Energy
TECH3023: Technology & Society Spring 2013
Instructor Dr. Mark Nelson
By Dale Elliott
Submitted 04/21/2013

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This report will cover the types of renewable energy available, the progress that
has been made on each one, the amount of funds that are being invested in some of them,
and the potential of growth.
These are the types of Renewable Energy that will be covered.
Solar Energy
Wind Energy
Geothermal Energy
Hydro-power Energy
Ocean Energy
Biomass Energy
Hydrogen and Fuel Cell Energy
C:\rea\tech\solar-energy;jsessionid=B57E2849FC193AEF916ED1CC275AD962
Solar Energy
Solar Energy will be first because all the other renewable energy sources are
derived from the results of solar activity. There are 2 types of solar energy, Thermal and
Photovoltaic.
Thermal is the use of the energy that is absorbed and transferred to another
medium such as air or a liquid to be used as a heat source. An example of a passive solar
thermal system would be utilizing a south facing structure to allow the sun's radiation to
pass through glass and heat an area inside. A more complex active system utilizes
concentrated solar thermal (CST) where the sun's radiation is concentrated by mirrors and
focused on a receiver to heat a fluid and utilized to make steam to power a generator.
Photovoltaic systems utilize the sun's radiation to produce electricity. There are
150 solar manufacturers with measurable market shares in some regions. Solar markets
are significant with 16,469 solar panel manufacturers. This is by far the largest number of
viable, functioning companies in any market segment. This many companies participating
in the market mean there is enormous, ongoing investment in new technologies. The
competitive situation bodes well for market growth, with solar energy complimented by
wind and stationary fuel cells poised to become virtually the only systems that deliver
energy for the world. Global production of photovoltaic cells and modules in 2009 was
9.2 GW (gigawatts). In 2010, a tremendous growth of solar PV cell shipments increased
the solar PV cell market shipments to 16.6GW. The top ten manufacturers accounted for

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67% of this total.
Solar energy is headed toward becoming the only viable energy source,
complimented by wind and some fossil fuels and the nuclear industry in China. Solar
energy, now at less than 1% of world electrical generation, will quickly go to 92% of
what is used as a source to generate electricity. The speed of adoption of solar energy and
the penetrations will rival or exceed the speed of adoption and penetrations of cell
phones. The same factors are in play, relatively low cost local units, battery power
mobility supported, and availability to everyone at an affordable price. (Market Research
Reports.biz, 2011)
The development of solar cell technology began when a French physicist AntoineCsar Becquerel saw a voltage develop when a solid electrode in an electrolyte was
exposed to light in1839.
1894 Charles Fritts constructed what was probably the first true solar cell. He
coated a semiconductor material (selenium) with an extremely thin layer of gold. The
efficiency was only about 1%, so it couldn't be used as energy supply, but was later used
as light sensors.
1905 Albert Einstein published his paper about the photoelectric effect. There he
claimed that light consists of packets or quanta of energy, which we now call photons.
This energy varies only with its frequency (electromagnetic waves, or the color of the
light). This theory was very simple, but revolutionary, and it explained very well the
absorption of the photons regarding to the frequency of the light.
1954 Three researchers,Gerald Pearson, Daryl Chapin and Calvin Fuller, at Bell
Laboratories discovered a silicon solar cell, which was the first material to directly
convert enough sunlight into electricity to run electrical devices. The efficiency of the
silicon solar cells, which Bell Labs produced, were 4%, which later increased to 11%.
The cells were made by hand and cost $1000 per watt.
Several advancements were made to increase efficiencies from 1954- 2007.
2007 The university of Delaware achieve a 42.8% efficiency solar cell
technology.(H. Lund, R. Nilsen, O. Salomatova, D. Skre, E. Riisem, 2008)
Cu(In,Ga)Se2 (CIGS) has gained a reputation as the thin-film solar cell
technology with the highest efficiencies. Only recently the highest efficiency obtained in
a laboratory environment was 19.9% (corrected with the new solar spectrum to 20.0%).
After the market introduction of CIGS technology, it became apparent that for a real
success of this new technology another boost from cost reduction and performance

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measures is vital. However, saved material costs very often cannot outweigh the negative
impacts of such measures on device performance. Consequently, efficiency development
has become one of the main focuses of CIGS research today. (Philip Jackson*, Dimitrios
Hariskos, Erwin Lotter, Stefan Paetel, Roland Wuerz, Richard Menner, Wiltraud
Wischmann, Michael Powalla, 2010)
A PV Sunweb Module made by Solland Solar with a module efficiency of 16% is
#1 on SOLARPLAZA'S Top 10 World's Most Efficient Solar PV Modules (PolyCrystalline).
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Manufacturer
Solland Solar
Siliken
LDK Solar
Vikram
Wiosun
A2peak
CNPV solar
Latitude Solar
JA Solar
China Sunergy

Module Efficiency
16.00%
15.70%
15.67%
15.63%
15.54%
15.50%
15.40%
15.30%
15.29%
15.24%

Module Type
Sunweb
SLK72P6L-305
LDK-200P-24(s)
Eldora 280 (300)
E300P
P3-235-60 (250)
CNPV-300P
Latitude P6-60/6 (250)
JAP6-60-250
CSUN295-72P

There is only .76% difference in efficiency separating these modules. (Solar Plaza
Staff,2011)

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The worldwide demand for energy is steadily increasing. Demand for energy is
doubling every 15 years. The major effort is to sustain growth in the electricity supply
without causing irreversible harm to the environment. Solar energy has rapidly grown as
a clean, renewable alternative to limited fossil fuels. Recognition of the need to reduce
reliance on coal and fossil fuels is driving interest in solar energy.
The National Renewable Energy Laboratory (NREL) is the U.S. Department of
Energy's primary national laboratory for renewable energy and energy efficiency research
and development. NRELs discoveries in renewable energy have shaped our
transportation alternatives and provided options to power our homes and businesses. For
example, the cost of wind energy has declined from 40 cents per kilowatt-hour when the
lab was founded, to 69 cents today. These lower costs have helped wind energy become
the fastest growing source of new electricity in the nation. The cost of electricity from
photovoltaic (PV) panels, which convert sunlight directly into electricity, has dropped
from several dollars per kilowatt-hour to 1823 cents a kilowatt-hour. The projected cost
of ethanol made from biomass has plummeted from almost $6 per gallon to about $2,
helping spur the construction of the first cellulosic ethanol plants in the United States.

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This chart shows the progress of the different types of Photocell efficiencies since 1976.
(NREL,2013)

The calculations of PV (photovoltaic) Annual (kwh/m/day) solar radiation

exposure for a specific location can be found by entering the zip code at
http://gisatnrel.nrel.gov/PVWatts_Viewer/index.html . This information is used to help
determine the type and size of the solar system to be installed at a specific location.
Models for all of the above types of renewable energy except Hydrogen can be
downloaded for free. There is information and data that has been collected to help
determine site feasibility and costs of system installation that is structured around larger
commercial type installations. http://www.nrel.gov/analysis/jedi/download.html
State Historical Tables released in Nov 2012 shows data of 367.087 Megawatt-hours of
solar thermal and photovoltaic electricity was being produced in the US for the year of
1990 (line 1394). In 2011 it reported 1,817,696MWh (line36681). This is a 495%
increase in solar in 21 years. Electricity consumption totaled nearly 3,856,000,000 Mwh

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(Megawatt-hours) in 2011. (Independent Statistics & Analysis U.S. Energy Information
Administration (eia), 2012)
Wind Energy
The sun's heat also drives the winds, which is captured with wind turbines. Wind
is now cheaper than fossil fuels in producing electricity in Australia, the worlds biggest
coal exporter, according to data compiled by Bloomberg New Energy Finance. Electricity
can be supplied from a new wind farm in Australia at a cost of A$80 ($84) per megawatt
hour, compared with A$143 a megawatt hour from a new coal-fired power plant or A$116
from a new station powered by natural gas when the cost of carbon emissions is included,
according to a Bloomberg New Energy Finance report. Coal-fired power stations built in
the 1970s and 1980s can still produce power at a lower cost than that of wind, the
research shows. Relying on fossil fuels to produce electricity is getting more expensive
because of the governments price on carbon emissions imposed last year, higher
financing costs and rising natural gas prices, BNEF said. The cost of wind generation has
fallen by 10 percent since 2011 on lower equipment expenses, while the cost of solar
power has dropped by 29 percent. (James Paton, 2013)
A report was issued Feb 2012 by NREL (National Renewable Energy laboratory)
and Lawrence Berkley National laboratory looking at the Levelized Cost of Energy
(LCOE) which takes into account the tax incentives, installation costs, and operation and
maintenance costs.
Economic attractiveness of wind projects in recent past was reduced due to
increased capital cost, moves toward lower wind speed sites, and lower electricity prices.
In 2002-2003 installed capital cost was $1,300/kW, in 2009-2010 the cost went up to
$2150/kW and in 2012-2013 the cost dropped to $1600/kW . The report shows the
overall industry capacity has increased from 25% in 1999 to 30% in 2010 while shifting
towards the lower wind speed technology trend because of site limitations. the LCOE for
2012-2013 projects is estimated to be as much as ~24% and ~39% lower than the

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previous low in 2002-2003 in 8 m/s and 6 m/s (at 50 m) wind resource areas, respectively
(with the PTC/MACRS-Federal Production Tax Credit/ Depreciation). Recent declines in
turbine prices & improved technology for lower wind speeds have reduced the estimated
LCOE of wind; LCOE for projects being planned today in fixed resource areas is
estimated to be at an all-time low.
Despite these recent and impressive technological advancements, three counterveiling factors may intervene to raise LCOE:
1) If demand for wind turbines begins to catch up with supply, or if the costs of
materials and labor increase there is potential for increased pricing.
2) Severe transmission/siting limitations may cause moves towards lower wind
speed sites.
3) The potential near-term loss of federal PTC/ITC/Treasury Grant. Which is set
to expire in 2013. (NREL, Ryan Wiser, Eric Lantz, Mark Bolinger, Maureen
Hand, February 2012)
Wind energy is growing at a fast pace and there were several wind records broken
just recently: The California Independent System Operator (CAISO) reported that wind
generation on its system reached a new high of 3,934 megawatts (MW) at 12:38 am. PST
yesterday (March 4). For the full day, wind generated nearly 6 percent of the electricity
on system. There are other records set in 2013: Texas- Electric Reliability Council of
Texas (ERCOT) reported wind generated 28 percent of the electricity demand in ERCOT
area at 9,481MW February 9, 2013. Colorado- Xcel Energy -January 16 at 1 AM., when
the utility's system set a new record for wind generation of 1,960 MW. Pacific Northwestthe Bonneville Power Administration power system reported 4,402 MW of wind energy
output. ( Tom Gray,American Wind Energy Association ,2013)
Geothermal Energy

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Geothermal energy taps the Earth's internal heat for a variety of uses. It can be
used to directly heat with the hot water within the Earth. Electricity can be generated
from turbines using the hot water or steam reservoirs deep in the earth that are accessed
by drilling geothermal reservoirs located near the earth's surface. Heating and cooling can
be done utilizing Heat pumps and the shallow ground near the Earth's surface that
maintains a relatively constant temperature of 50-60F. (NREL,2012)
Geothermal is predominately along plate margins where the gradient temperature
increases significantly and is able to produce high temperatures with the least amount of
drilling.

This is a schematic representation of an ideal geothermal system. (Bear Springs Blossom

Nature Conservation,2013)

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The initial cost of building a geothermal system is higher than a conventional
fossil fuel plant because of the equipment expense but it will payback fast because of no
fuel costs. (International Geothermal Association,2013) Geothermal energy supplies more
than 10,000 MW to 24 countries worldwide and now produces enough electricity to meet
the needs of 60 million people. (NREL,2011) Geothermal energy has experienced an
average growth rate of 1.2% in annual capacity installed and is distinct in that it is a
consistent supply for several years. (NREL,2012)
Hydro-power Energy
Hydro-power is the most energy efficient power generator and is the most utilized
renewable resource. Currently, hydro-power is capable of converting 90% of the
available energy into electricity. This can be compared to the most efficient fossil fuel
plants, which are only 60% efficient. The most popular method is using dams to divert
the water flow of rivers through turbine generators. The wave power of the ocean tides
can also be captured and used to run turbines to produce electricity.
The Three Gorges Dam in China located on the Yangtze River has a generating
capacity of 22,500 megawatts (MW) compared to 14,000 MW for the Itaipu Dam in
Brazil and Paraguay which is the 2nd largest. In the United States, the Grand Coulee Dam
on the Columbia River, Washington, is the largest, with a generating capacity of about
6,800 MW (5th overall worldwide). (U.S. Geological Survey's (USGS) Water Science
School,2013)

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The hydroelectric power generation for the world has more than doubled since 1971.

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(International Energy Agency,2012)

There are several advantages to Hydroelectric power:
1. Hydroelectricity is a renewable energy source as long as there is sufficient water
flow.
2.

Hydroelectricity makes it feasible to utilize other renewable sources in

combination during peak usage times.

3.

Hydroelectricity promotes guaranteed energy and price stability because it is

consistent.

4.

Hydroelectricity contributes to the storage of drinking water when dams are built.

5.

Hydroelectricity increases the stability and reliability of electricity systems.

6.

Hydroelectricity helps fight climate changes and improves the air we breathe
because of no pollutant emissions.

7.

Hydroelectricity offers a significant contribution to development by bringing an

inexpensive, reliable source of energy to the area.

8.

Hydroelectricity is a fundamental instrument for sustainable development.

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There are also some disadvantages dealing with the placement of generating stations
because of water flow availability and environmental impacts that need to be addressed.
1. Large reservoirs required for the operation of hydroelectric power stations result
in submersion of extensive areas upstream of the dams, destroying biologically
rich and productive lowland and river valley forests, marshland and grasslands.
2. Fish are killed or spawning cycles are interrupted. A new turbine is being
developed to address this: The Alden turbine should convert about 94 percent of
the waters energy into usable electricity, comparable or superior to the efficiency
of traditional turbines; the overall wildlife survival rate should be over 98 percent,
up from 80-85 percent for a traditional turbine.(Rajesh Dham, 2011)
3. Initial Cost: The biggest drawback to hydro-power is the high initial cost but this
cost can be recovered quickly due to low operating and maintenance costs. (Kelly
Lund, Marlene Friesen, 2012)

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Biomass energy
Biomass can be used to produce electricity, transportation fuels, or chemicals.
Biomass is matter usually thought of as garbage. Some of it is just stuff lying around,
such as dead trees, tree branches, yard clippings, left-over crops, wood chips, and bark
and sawdust from lumber mills. It can even include used tires and livestock manure.
Biomass is a renewable energy source not only because the energy it uses comes from the
sun, but also because biomass can re-grow over a relatively short period of time. Through
the process of photosynthesis, chlorophyll in plants captures the sun's energy by
converting carbon dioxide from the air and water from the ground into carbohydrates,
complex compounds composed of carbon, hydrogen, and oxygen. When these
carbohydrates are burned, they turn back into carbon dioxide and water and release the
energy they captured from the sun. In this way, biomass functions as a sort of natural
battery for storing solar energy. As long as biomass is produced sustainably by meeting
current needs without diminishing resources or the lands capacity to re-grow biomass
and recapture carbon, the battery will last indefinitely and provide sources of low-carbon
energy. (Union of Concerned Scientists, 2010)
BIOMASS - SOME BASIC DATA
Total mass of living matter (including moisture) - 2000 billion tons
Total mass in land plants - 1800 billion tons
Total mass in forests -1600 billion tons
Per-ca pita terrestrial biomass - 400 tons
Energy stored in terrestrial biomass 25 000 EJ
Net annual production of terrestrial biomass - 400 000 million tons
Rate of energy storage by land biomass - 3000 EJ/y (95 TW)
Total consumption of all forms of energy - 400 EJ/y (12 TW)
Biomass energy consumption - 55 EJ/y ( 1. 7 TW) ( Energy.Saving.Nu, Staff, 2000)

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In fact, biomass can be converted into a wide range of energy carriers for economic
shipping. Here are some possibilities and their volume energy density in Watt-hours per
liter:
Crude oil, bio-diesel

8800 watt-hr./liter

LNG (Bio-methane)

7216 watt-hr./liter(must be
stored at -268F)

Torrefied Wood Pellets

6500 watt-hr./liter

Coal

6500 watt-hr./liter

Ethanol

6100 watt-hr./liter

Methanol

4600 watt-hr./liter

Ammonia

3100 watt-hr./liter

Wood Pellets

2777 watt-hr./liter

Liquid Hydrogen

2600 watt-hr./liter (must be

stored at -423F)

CNG 250 bar bio-methane

2500 watt-hr./liter

Wood chips

1388 watt-hr./liter

Hydrogen

405 watt-hr./liter (150 bar)

Lithium Ion Battery

300 watt-hr./liter

In 2008 the worldwide pellet market had reached 10 million tons. About 25% of it
is already exported to other countries and the market is growing at 25-30% per year. As
equipment for upgrading energy density improves, the economics of this market will also
improve dramatically. Some power plants in Europe are running entirely on wood pellets
but the pellet's lower density means that extensive modification of the power plant are
needed. Torrefied Wood Pellets are dried in a low oxygen environment. The Torrefied
pellets can be burned without modifying the coal power plant, they can be stored,
pulverized and burned just like coal. With shipping costs halved, the economics are
compelling. (Thomas R. Blakeslee, Clearlight Foundation,2010)
Current U.S. bio fuel policy has supported rapid growth in corn ethanol, which
currently accounts for more than 90 percent of U.S. bio fuel production. (Energy
Information Administration (EIA), 2012; Congressional Research Service 2008;
Solomon, Barnes, and Halvorsen, 2007). Ethanol production has grown dramatically over

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the past decade: from almost 1.5 billion gallons in 1999 to 10.6 billion gallons in 2009.
(Renewable Fuels Association, 2013) In 2000 and 2001, biomass, largely because of
biomass power using combustion of materials such as timber industry scrap or municipal
solid waste to generate electricity, surpassed hydroelectric power as the largest U.S.
source of renewable energy. U.S. Production of fuel ethanol, made from corn grain
(starch), will surpass 2 billion gallons per year, displacing a modest but significant
amount of imported oil. (NREL/JA-810-31967, 2002)
Ethanol production has taken a toll on our water resources without reducing heattrapping emissions. Next generation cellulosic bio-fuels made from grass, wood waste,
or even garbage can reduce bio-fuels impact on water resources and reduce emissions,
but only if we make smart choices. (Union of Concerned Scientists. 2009). Over 97 % of
planted corn acres receive nitrogen fertilizer.(U.S. Department of Agriculture Economic
Research Service2010; Marc Ribaudo,Michael Livingston, James Williamson, 2012).
Nitrogen pollution is the leading cause of poor water quality in our nations streams.
Ethanol production is burdensome on water resources. In Nebraska, for example, it takes
an estimated 700 gallons of water to irrigate the corn needed to produce a single gallon of
corn ethanol; about 1,400 gal/gal is needed in California.( NATIONAL WATER
RESEARCH INSTITUTE, JERALD L. SCHNOOR, PH.D., Allen S. Henry Chair of
Engineering, University of Iowa, 2010)

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Hydrogen and Fuel Cell Energy
Hydrogen is the most abundant element on the Earth, a common element found in
all fossil fuels organic matter and water. In its pure molecular form, H2, hydrogen is a
colorless, odorless, nontoxic gas. Like oil and natural gas, hydrogen can be transported
via pipeline or shipped in containers. When burned or used to power a fuel cell, hydrogen
produces zero emissions besides water vapor. This makes it the ultimate clean fuel.
Hydrogen is the lightest gas and also the most energy-dense fuel per mass. One pound of
hydrogen holds 52,000 Btu, three times the energy of a pound of gasoline. While
hydrogen gas does not occur naturally on earth, it is easily produced in a variety of ways.
(Fuel Cell & Hydrogen Energy Association,Staff, 2013) When hydrogen is used as an
energy carrier, for example in car engines, water is the only by-product. However,
because the hydrogen gas production itself, if it is carried out by a conventional method,
consumes large amounts of energy, hydrogen gas is still not a very environmentally
friendly energy carrier. Reforming of methane or electrolysis of water are currently the
most common ways to produce hydrogen gas. However, methane gas is not renewable
and its use leads to increased carbon dioxide emissions and electrolysis consumes energy.
If hydrogen gas is produced from biomass, there is no addition of carbon dioxide
because the carbon dioxide formed in the production is the same that is absorbed from the
atmosphere by the plants being used. Bio-hydrogen gas will probably complement biogas in the future, predicts Karin Willquist, a doctoral student in Applied Microbiology at
Lund University. Researchers have studied a newly discovered bacterium that produces
twice as much hydrogen gas as the bacteria currently used. (Alternative Energy
News,2010)
Why Hydrogen Production from Renewables?
Hydrogen provides the connecting point between renewable electricity production
and transportation, stationary and portable energy needs. When the electricity from solar
photovoltaics, wind, geothermal, ocean and hydro technologies is used to produce and
store hydrogen, the renewable source becomes more valuable and can meet a variety of
needs. In transportation applications, hydrogen provides a way to convert renewable

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resources to fuel for vehicles. Renew-ably produced hydrogen for transportation fuel is
one of the most popular hydrogen economy goals, as it can be domestically produced and
emissions-free. Renewables often produce power intermittently (e.g., only when the sun
is out or the wind is blowing), so hydrogen can also increase stationary power reliability
when used as an electricity storage medium. Hydrogen, renew-ably produced during offpeak periods and stored, can provide constant power using fuel cells or engines when the
renewable source isnt available.
To have a highly effective and efficient renewable-hydrogen system, the hydrogen
should be used at choice times. At the time when renewable resources are available (e.g,
the sun is shining), and electricity is needed, the electricity should be used directly. To
meet an even higher electricity demand, energy can be supplied directly from renewable
sources as well as from the hydrogen stores. As demand decreases, extra electricity from
the renewable source can be converted and stored as hydrogen. This entire portfolio of
options is what makes renewable-hydrogen systems effective in providing flexible,
reliable energy in whichever form is needed most. There are few other options today for
electricity storage at a large scale. Batteries are not practical and too costly, and pumped
water systems and compressed air energy storage systems are only implementable in
limited geographical areas.
Though costs for some renewable technologies are higher than traditional
generation sources, technology advancements and increased market penetration are
reducing prices. Additionally, the environmental benefits help to compensate for the
higher costs. When taken as a whole, the future conjunction of hydrogen and renewable
energy technology is a promising one. Conventional electrolysis is the most common
method used to produce renewable hydrogen. Electrolysis separates water into its
constituent elements--hydrogen and oxygen--by charging water with an electrical current.
It takes about 53 kilowatt-hours to produce 1 kilogram of hydrogen assuming a 75%
efficient electrolyzer . As of June 2012, the United States safely produces and uses over 9
million tons of hydrogen per year. Standards and regulations have been set to ensure the
safe production, storage, handling, and use of hydrogen. All hydrogen components
undergo strict third-party testing for safety and structural integrity. Currently, wind

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turbines are shut down on windy days when electricity generation outpaces demand. By
simply installing electrolyzers, that surplus power could be put to use generating
hydrogen.(Fuel Cell & Hydrogen Energy Association,Staff, 2013)

Barriers and Solutions to Hydrogen Production

There are challenges to setting up mainstream electrolyzer use for hydrogen
production, primarily high capital costs and the cost of electricity. For example, PV
electricity today costs approximately $.30/kw-hr, perhaps ten times what is needed to
make electrolysis cost competitive, and the cost of electrolyzers themselves must be
significantly reduced and renewable electrolysis systems must be optimized to enable
large-scale implementation. However, all these barriers are being addressed aggressively
by government and industry, and it is worth considering whether the benefits warrant
greater investment today.
Factors that limit widespread use of renewable technologies include inherent
variability and seasonal energy production. One solution is renewable electrolysis. The
hydrogen produced from renewable electrolysis can be used in fuel cells or internal
combustion engines to produce electricity during peak demand or low power production.
This stored hydrogen can also be used as transportation fuel. (NREL, Kevin Harrison,
Chris Aincough, 2012)
Tax Incentives
The federal government provided substantially larger subsidies to fossil fuels than
to renewables. Subsidies to fossil fuels, a mature, developed industry that has enjoyed
government support for many years, totaled approximately $72 billion over the study
period, representing a direct cost to taxpayers. Subsidies for renewable fuels, a relatively
young and developing industry, totaled $29 billion over the same period. (Environmental
Law Institute, 2013) In recognition of the fact that tax-based policy incentives are not
particularly effective when tax burdens are shrinking or non-existent, Congress included
several provisions in The American Recovery and Reinvestment Act of 2009 (ARRA
2009) designed to make federal incentives for renewable power technologies more
useful. Among these provisions is one that allows projects eligible to receive the

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production tax credit (the PTC) to instead elect the investment tax credit (the ITC).
Another provision enables ITC-eligible projects (which now include most PTC-eligible
renewable power projects) to instead receive, for a limited time only, a cash grant of
equivalent value. These two provisions (among others) could have a significant impact on
how renewable power projects are financed over the next few years. (NREL,2009) The
Federal Production Tax Credit(PTC) As authorized by the Energy Policy Act of 1992 and
amended over time, Section 45 of the Internal Revenue Code provides a 10-year,
inflation-adjusted production tax credit for power generated by certain types of renewable
energy projects, including wind, closed- and open-loop biomass, geothermal, landfill gas,
municipal solid waste, qualified hydro-power, and marine and hydro-kinetic facilities.
For wind, closed-loop biomass, and geothermal power, the inflation adjusted credit stood
at $21/MWh in 2008; the other eligible technologies receive half of the PTCs value (i.e.,
$10/MWh in 2008). Currently, wind projects placed in service before the end of 2012 will
be eligible to receive the 10-year PTC, while the other renewable technologies have an
additional year to come online (i.e., until the end of 2013).
Various rules and regulations surround the use of the PTC. For example, to qualify
for the PTC, the power must be sold to an unrelated party. Furthermore, certain
limitations exist on the use of the PTC in combination with other public sector incentives,
including grants, tax-exempt bonds, subsidized energy financing, and other federal tax
credits. (NREL,2009)
The Federal Income Tax Credit (ITC)
Section 48 of the Internal Revenue Code provides an ITC for certain types of
commercial energy projects, including solar, fuel cells, and small wind projects (all of
which are eligible for a credit equal to 30% of the projects qualifying costs), as well as
geothermal, micro turbines, and combined heat and power projects (all of which are
eligible for a credit equal to 10% of the projects qualifying costs). The ITC for fuel cells
and micro-turbines is subject to a dollar cap, while the other technologies are not

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currently capped. In general, the ITC is currently available to qualified projects that are
placed in service prior to the end of 2016, though the geothermal credit has no expiration
date, and the solar credit will (unless otherwise extended) revert to 10%, rather than
expiring altogether, at the end of 2016.
The ITC is realized in the year in which the project begins commercial operations,
but vests linearly over a 5-year period. Thus, if the project owner sells the project before
the end of its fifth year of operations, the unvested portion of the credit will be recaptured
by the IRS. (NREL,2009)
Most existing homes & new construction qualify. Both principal residences and
second homes qualify. Rentals and swimming pools do not qualify. (International Energy
Agency,2012)

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Summary:
The total energy supply doubled from 1971 to 2010.
(International Energy Agency,2012)

World supply projections are going to go up from 13,000 Million tons of Energy in 2010
to 14,870 Million tons of Energy or 16,961 Million tons of Energy by 2035 depending on
which policy scenario is used.
U.S. renewable energy consumption grew by 6 percent, from 7.600 quadrillion
Btu in 2009 to 8.090 quadrillion Btu in 2010. The relative share of renewable energy to
total energy consumption has grown to 8 percent in 2010.

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Total renewable energy consumption rose by 490 trillion Btu in 2010. Each of the
renewable fuels, except hydroelectric power, contributed to this growth. Consumption of
hydroelectric power fell by 130 trillion Btu. Biomass consumption grew by 382 trillion
Btu (primarily due to increased ethanol consumption), accounting for the bulk of the
increase in total renewable energy consumption. Wind energy consumption had the
second largest increase, up by 202 trillion Btu. Smaller increases occurred in the
consumption of solar energy and geothermal energy, amounting to 28 trillion Btu and 8
trillion Btu, respectively. Although solar energy contributed relatively little in terms of
the absolute increase in total renewable energy consumption in 2010, solar energy use
exhibited the highest rate of growth of all the renewable fuel categories.

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Of the major renewable fuel categories, biomass accounted for over half (53
percent) of US total renewable energy consumption in 2010, while hydroelectric power
accounted for nearly a third (31 percent). Wind was the source of 11 percent of total
renewable energy consumption, and solar and geothermal combined contributed 5
percent.
All end-use sectors exhibited increases in consumption of total renewable energy
in 2010, but the electric power sector consumed the largest share. Electric power sector
consumption accounted for about 50 percent of total renewable energy consumption,
followed by the industrial sector, which accounted for 28 percent. Although hydroelectric
power remains the dominant source of renewable energy consumption in the electric
power sector, its market share has gradually declined over the last five years due to the
precipitous increase in wind generation capacity coupled with relatively stagnant growth
in hydroelectric generation capacity. (EIA, 2012)

Subsidies to renewables will need to be maintained long enough to get each of the
renewable resources competitive with fossil fuel technologies. In 2011 renewables (less
Hydro-power) received $88 billion. Solar PV received $25 Billion, wind $21 billion, and
bio-energy $15 billion were the top 3. Subsidies are expected to grow to $185 Billion in
2020 and reach $240 billion by 2035. (International Energy Agency, 2012)

25
All the renewables are expected to increase during the period 2010-2035 while
reducing fossil fuel emissions, SO2, NOx, CO2 emissions. (International Energy
Agency, 2012) Renewable energy has only began to scratch the surface of our energy use,
but with the subsidies putting investors in the position to be profitable it is sure to gain
momentum across the globe.

26

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