The Value of Advanced Energy Funding: Projected Effects of Proposed US Funding for Advanced Energy Technologies
Expert analysis and RFF modeling show that authorizing funding for key technologies under the Energy Act of 2020 would create significant societal benefits from 2040-2060. Combined with a clean energy standard, a majority of these benefits would come from lower consumer electric bills.
Key Takeaways
- The benefits of additional research, development, and demonstration (RD&D) for advanced energy technologies are likely to greatly exceed the costs. Additional funding like that authorized by the Energy Act of 2020 would generate projected societal benefits averaging $30 billion to $40 billion in present value per technology during 2040–2060. [1]
- Twenty-six experts in advanced nuclear, advanced geothermal, energy storage, natural gas with carbon capture and sequestration (NG-CCS), and direct air capture (DAC) projected the effects of the additional RD&D funding on the future costs of the technologies. The experts expect the additional funding to reduce the costs of the technologies by 9–30 percent in 2035, compared with the case of no additional funding.
- Average power sector benefits across the technologies are likely to exceed costs by about 7 times if there is no new national clean energy policy and by more than 10 times if there is a national clean energy standard (CES). Benefits outside the power sector may also be significant and would increase these ratios. An economy-wide analysis for DAC found benefits of 27 times the costs of the additional funding, assuming a national economy-wide emissions policy.
- Without a CES, the estimated benefits of added RD&D funding are split mainly among lower electricity bills, health benefits, and climate benefits. With a CES, the estimated benefits are mainly in the form of lower electricity bills. Average annual electricity bill savings per household for each technology are about $14 without a CES and $56 with a CES.
[1] All dollar values in this brief are in 2020 dollars.
[2] Parts of the analysis were also done for a sixth technology, multiday energy storage. See the working paper for details.
To read the full issue brief, click "Download" above. The issue brief is a summary of the working paper linked below.
