European Affairs

We have an EU-U.S. road map in place to look at all of these areas (except for nuclear power, where the degree of interest varies among EU member states) and are actively engaged in discussions on where we might cooperate.

Let me start with carbon capture-and-storage (CCS) since some people are skeptical about a technology that focuses on continuing to use the very fuel that is causing so much of the carbon dioxide build-up in the first place. But because so many countries rely heavily on coal – including China and the United States, both of which get more than half of their electric power from cheap and abundant coal resources – clean-coal use is an essential focus. It is important to face this challenge head on because it will take a long time to make changes: coal plants have lifetimes of fifty or more years.

In terms of technology, there are in fact two distinct challenges. First, how do you separate carbon and hydrogen in a coal-fired power plant in a way that is reasonably affordable? In the case of new plants, the separation can take place prior to combustion. For retrofits, which are of great interest in view of the huge park of coal-fired power plants already in place, the separation must be post-combustion. Secondly, how do you ensure that the carbon dioxide can be stored indefinitely underground or underwater so that it does not leak back into the atmosphere?

To address the first challenge, the Department of Energy plans to invest around two billion dollars on the carbon capture-and-storage components of three different power plants. A parallel program has also started to emerge in Europe and the European Commission anticipates that several CCS plants will open in the next few years. One of these plants, funded by the United Kingdom, received nine competing bids to start construction next year and could be completed as early as 2014. We understand that the Commission is going to set up an intra-net for project participants to facilitate sharing the best practices and avoiding expensive mistakes. The United States would certainly consider joining this venture.

Regarding the second challenge, we have done extensive surveys which indicate ample underground storage capacity for carbon dioxide, and we already have seven projects underway to demonstrate the long-term capacity of various sites to keep the carbon dioxide sequestered. Pending the success of such demonstration projects, the available storage will accommodate many decades of carbon dioxide emissions from coal-fired power plants and keep most of these emissions underground for centuries.

However, we do not live by coal alone: the fastest growing sources of energy are renewable. Last year, about 30 percent of the additions to electric generating capacity in the United States came from wind turbines. The turbines are the product of decades of work, in which we and many EU member states were – and continue to be – engaged, both independently and through the International Energy Agency (IEA), to understand the optimal configuration of wind farms and to design turbine blades to be cheaper, more durable and more efficient in converting wind energy to useable power. These efforts have reduced the cost of wind power to as low as three to five cents per kilowatt-hour (kWh) at favorable sites – an attractive price compared to electricity generated from natural gas. A study just completed at the Department of Energy found that it could be feasible to expand the use of wind to nearly 20 percent of our electricity supply and that the cost of coping with the intermittency issue would only be about half a cent per kWh. To achieve this goal by 2030, we will have to triple the pace of wind turbine installations to 15 gigawatts per year, an entirely achievable target.

Wind and other renewable power sources like geothermal, photovoltaic and small-scale hydro are being given a powerful push by renewable energy portfolio standards in over half of our states which together hold around 80 percent of our population. We also have a federal goal to make photovoltaics cost-effective for grid applications by 2015. Due to cost-effective applications like rooftop installations, the use of photovoltaics (PV) is expanding at a rate of 30 or 40 percent per year. Though PV systems are still quite expensive, we anticipate costs to continue to drop as the market expands, owing to the nature of mass production.

And let us not forget biofuels. Our focus is now on second-generation biofuels from non-food feedstocks (such as farm-and-forest residues and grasses) which typically reduce carbon emissions by over 80 percent compared with conventional gasoline. We currently have funded six commercial-scale bio-refineries with a combined public and private investment of $1.2 billion. If oil prices rise or stay near current levels, the production of second-generation biofuels from these plants may very well be cost-effective by the time they begin operation between 2010 and 2012.

The technology strategies for bringing down the costs of second-generation biofuels revolve around two searches: one for enzymes that can efficiently convert cellulose to starch at a low cost and another for the biochemical engineering that will make the cell walls of plants more susceptible to digestion. There is also very important innovation work being done on the resource side to improve plant yields: we are working to find better ways to resist pests and drought, maximize water uptake and nurture greater density and faster growth. Our goal is to make cellulosic biofuels from an “nth of a kind” plant cost-competitive with gasoline at a world oil price of $58 per barrel by 2012. With oil prices now more than double this level, the long-term prospects are excellent.

Let me touch briefly on another key carbon-free technology-option: nuclear power. Nuclear power generates about a fifth of all electricity in the United States and quite an important share in Europe, too. Several EU member states have joined us in the Global Nuclear Energy Partnership, which aims to expand the use of nuclear power in a proliferation-resistant way, with some countries offering to process nuclear fuel for others. We are also working with Japan, France and others to develop the next generation of nuclear power plants with enhanced safety features and a standard design. Due to the success of programs which license plant-designs prior to construction and limit the regulatory risk surrounding the first few new plants that are built, several U.S. companies have announced that they plan to start construction of new nuclear power plants for the first time in over three decades.

But as many have said, the cheapest and cleanest form of energy remains energy that never has to be produced. Energy efficient transport, buildings and industry may be the easiest way to dramatically lower carbon dioxide emissions while boosting our energy security and reducing costs.

In the transport sector, the United States lags behind Europe in vehicle fuel-efficiency because of our country’s size. But we are beginning to see signs of change. In California, there has been a four percent reduction in gasoline use in the past year, and hybrid vehicles are becoming more available and increasingly attractive to consumers. Last December, Congress acted to require a 40 percent increase in the average fuel economy of new vehicles – from 25 to 35 miles per gallon – by 2020.

Our ability to meet this challenge is hugely enhanced by the many years of work and effort at the Department of Energy to make vehicles lighter and more fuel efficient. There is also vital work being done to improve the energy and power density of batteries; therein holds the promise of plug-in hybrid vehicles or even all-electric vehicles with the kind of acceleration and range that could bring them into the mass market. And our extensive research on the challenges of fuel-cell hybrid vehicles running on hydrogen from renewable energy offers the promise of yet another type of electric-drive vehicle.

In the buildings sector, there is a wide range of efficiency standards and labels for home appliances and office equipment in both the United States and Europe. On office equipment, for example, we use the same Energy Star labeling scheme on both sides of the Atlantic. We also have a very serious research effort aimed at zero-energy buildings. The idea is to reduce the energy needs of new commercial buildings by up to 90 percent – through better insulation, windows, control systems and design – and then provide the remainder of energy through photovoltaic panels and solar hot-water systems. There are also prospects for reducing the energy use of existing buildings by up to half.

In all of these areas, there are valuable opportunities for transatlantic cooperation. Many are already pursued through multilateral agreements like the Carbon Sequestration Leadership Forum, the Global Nuclear Energy Partnership and the many International Energy Agency Implementing Agreements related to renewable energy and energy efficiency. But additional opportunities for bilateral cooperation remain, particularly in areas where we can avoid a lot of expensive mistakes by sharing information on what does and does not work as new technologies move forward.

We look forward to exploring these options with the European Commission. Together we have the technology and the drive to become less reliant on foreign sources of energy and to address the challenge of climate change.

Phyllis Yoshida is the Deputy Assistant Secretary for International Energy Cooperation at the Department of Energy. The text of her article is adapted from a talk she gave at an Energy Roundtable Conference hosted by The European Institute in Washington DC on June 12, 2008.

This article was published in European Affairs: Volume number 9, Issue number 3 in the Fall of 2008.