November 24, 2006—Renewable resources could produce 25 percent of the electricity and motor vehicle fuels used in the United States by 2025 at little or no additional cost if fossil fuel prices remain high enough and the cost of producing renewable energy continues falling in accord with historical trends, according to a RAND Corporation study issued recently.
Renewable sources currently provide about 6 percent of all the energy used in the United States.
The study was conducted within the Environment, Energy, and Economic Development program of RAND, a nonprofit research organization.
RAND found that meeting the 25 percent renewable energy target for electricity and motor fuels together would not increase total national energy spending if renewable energy production costs decline by at least 20 percent between now and 2025 (which is consistent with recent experience), unless long-term oil prices fall significantly below the range currently projected by the Energy Information Administration.
Wind power, solar power and the burning of agricultural waste are all examples of renewable energy sources that can be used to produce electricity. Biomass resources like stalks from food crops, wood material, and grasses also can be turned into ethanol that can be used to power motor vehicles.
Previous studies have relied on a handful of scenarios to capture uncertainties in the US Department of Energy’s projections of future energy prices and changes in the costs of various technologies.
The RAND study examined 1,500 cases of varying energy price and technology cost conditions for renewable and nonrenewable resources.
For more information, see the RAND Web site.
