A national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

National Renewable Energy Laboratory 

Innovation for Our Energy Future 

Evolving the Nation’s Energy 

Infrastructure: A Challenging 

System Issue for the 

Twenty-First Century 

Preprint 

B. Garrett 

To be presented at the International Conference on 

System of Systems Engineering 

San Antonio, Texas 

April 16–18, 2007 

Conference Paper 

NREL/CP-600-41404 

April 2007 

NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337 
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1
Evolving the Nation’s Energy Infrastructure: A 

Challenging System Issue for the Twenty-First Century 

Bobi A. Garrett 

Associate Director 

National Renewable Energy Laboratory 

Golden, CO 80401 

bobi_garrett@nrel.gov

Over the next several decades, a profound transformation of 

the global energy enterprise will occur driven largely by 

population growth and economic development. How this 

growing demand for energy is met poses one of the most 

complex and challenging issues of our time. The current 

national energy dialogue reflects the challenge in 

simultaneously considering the social, political, economic, 

and technical issues as the energy system is defined, 

technical targets are established, and programs and 

investments are implemented to meet those technical 

targets. 

Figure 2. Major Energy System Elements 

1 Introduction 

The Energy Information Administration forecasts that 

global demand for energy will grow more than 70% 

between the baseline year 2003 and 2030 [1]. Most of this 

growth will occur in the developing world (Figure 1), driven 

both by population growth and by the realization of 

economic development aspirations. In the U.S., concerns 

with energy security and increasingly the global 

environment will shape the evolution of the Nation’s energy 

infrastructure as it grows to accommodate an increase in 

demand of nearly 30% over the next 25 years. 

The nation’s energy system, comprising systems to extract, 

convert, deliver, and use energy (Figure 2), operates within 

a dynamic and highly interrelated context. This context is 

also comprised of systems that include among others, the 

ecological, economic, political, and social systems. The 

complexity of this ‘system of systems’ and the dynamics of 

the environment within which it operates pose challenges 

for reaching consensus on the both a concept of operations 

and specific technical targets required to create an energy 

system that is more secure, reliable, environmentally 

responsible, and supportive of a thriving economy. 

The recent battle waged in Texas that led to the decision by 

TRU Corporation to cancel its plans to construct eight of 11 

planned coal-fired power plants illustrates the complexity of 

the interactions between the physical energy system and the 

socio-political systems within which it operates. In this 

case, the debate involved trade offs between environmental 

and economic interests. Environmentalists raised concerns 

regarding air emissions that could impact the global and 

local environment and local businesses were concerned that 

a reduction in air quality could potentially trigger additional 

Federal clean air regulation that would impact their 

economic interests. On the other side of the debate were 

local communities and railroad companies that would 

benefit economically from new plant construction. In 

addition to the cancellation of coal plants, ultimately the 

approval of the acquisition of TXU by an investor group 

also required commitments to increase renewable energy, 

implement a demand reduction program, and to reduce 

mercury and CO2 emissions, among other concessions [2]. 

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

2003 2010 2015 2020 2025 2030

Year

Quadrillion Btu

Other Non-OECD

China

Other OECD

United States

Figure 1. Global Energy Consumption Projections 

2
Fully understanding the implications of energy technology 

investment options requires understanding: 

• The potential impact of technology options on the 

energy system from supply through end use, both from 

a point-of-use and a life cycle perspective. 

• The potential impacts of changes in the energy system 

on the operating environment (natural, economic, 

political, and social systems). 

• The potential impact of changes in the operating 

environment on the system requirements. 

Limiting the scope of technology evaluations to their point 

of generation or use may obscure the full impact of a 

technology decision. This can be simply illustrated by 

comparing the carbon emissions on a point-of-release basis 

with carbon emissions from an overall system perspective. 

In either case, the electric power sector is the dominant 

source of carbon emissions. However, there are major 

differences between these perspectives when looking at the 

end use sectors – buildings, industry, and transportation 

(Figure 3). 

Currently the building sector accounts for 70% of all 

electricity consumption. At the point of use, there are no 

carbon emissions associated with electricity consumption. 

However, when one takes into account the primary energy 

used to generate the electricity and the losses inherent in 

energy conversion, transmission and distribution, the 

buildings sector is the demand sector most responsible for 

carbon emissions. The significance of this difference is that 

demand growth in this sector drives the need for new 

supply. From a systems perspective, tradeoffs involve 

balancing investments to increase the productivity of energy 

use with those made to develop new supplies. 

Because energy is an enabler for virtually all human 

endeavors, developing robust energy solutions will require 

applying systems engineering that goes well beyond classic 

practices. Tools are need to enable examining security, 

environment, growth and economic considerations on scales 

that range from local to global, and time periods that scale 

from fractions of seconds to centuries. For example, 

technology solutions to increase the reliability of the 

electricity grid need to consider phenomena that occur in 

nanoseconds whereas the impact of technologies adopted to 

mitigate global climate will play out over centuries. 

Significant regional differences in energy use patterns, 

resources, infrastructure, public perceptions and other 

factors create the need for tailored technology solutions 

while at the same time addressing national goals. For 

example, electricity demand is expected to grow most 

rapidly in the West. Factors that are shaping how this new 

demand will be met include air quality standards, the 

availability of water, and capacity constraints in existing 

transmission and distribution infrastructure. 

 

2 A General Concept of Operations 

To meet the growing demand for energy without 

compromising security, environmental quality, or the ability 

to sustain economies, a significant transformation in the 

global energy enterprise is required over the coming 

decades. The capacity of the energy system will need to 

grow two to three fold by the end of the century. It is likely 

that a future energy system will need to include a greater 

diversity of supply, be capable of isolating and sustaining 

critical operations, and be capability of rapid repair and 

recovery to reduce concerns with security. A much more 

flexible and agile infrastructure for moving energy from 

source to use will be required to accommodate a diversity of 

resources that are geographically dispersed and the systems 

will need to be much more efficient in its use of energy in 

buildings, transportation, and industrial systems. The 

energy system will need to minimize its environmental 

footprint at the global and local levels, moving toward 

carbon-neutral technologies, minimizing its use of and 

impact on the quality of water, and minimizing and 

mitigating other emissions that affect local air, water, or 

land resources. 

0

500

1000

1500

2000

2500

Buildings

Industry

Transportation

Electric Power

Million Metric Tons CO2/Year

System Perspective Point Perspective

Figure 3. Carbon Emissions by Sector 

3 The System Engineering Challenge 

Efforts to change energy infrastructure will require public 

and private sector commitment and investment over a multidecade period. Over this period, the operating envelope 

(e.g., markets and policy) will change and technology will 

advance. This will require that the assumptions made today 

regarding the concept of operations be revisited on a regular 

basis along with the technology options for meeting those 

requirements. 

In considering the merits of various energy options, it is 

important to understand the key technical challenges that 

3
must be addressed, the timing in which the technology 

could be available, the potential for impact on the overall 

energy system if implemented at a material scale, and the 

impacts on the operating envelope. Public sector research 

and development programs use a variety of tools to assess 

the merits and consequences of alternative energy 

technologies. Among these are 

• Market equilibrium models that project the market 

penetration of technologies over time assuming 

technical targets are met. These can be used to 

evaluate the potential timing and magnitude of impacts 

of new technologies. 

• System models that evaluate the potential of individual 

components to contribute to the performance of the 

whole system. These are useful in identifying and 

targeting the areas where research could have the 

greatest impact on overall system performance. 

• Life cycle analyses that identify the potential impacts, 

particularly environmental, of options over their useful 

life, from production/construction through operation 

and ultimately dismantling and disposal. 

Increasingly, risk and uncertainty are being incorporated 

into the tools used to inform public energy research 

portfolio and policy decisions. Approaches to addressing 

risk and uncertainty include the use of expert judgment to 

identify and rank order technology and commercialization 

risks, use of scenarios to examine alternatives, and 

stochastic modeling. 

4 Transportation Options 

The U.S. is currently nearly 98% dependent on petroleum 

for transporting goods and people [3]. Most of this 

petroleum is purchased from foreign sources, with the 

nation’s dependency on foreign imports slated to grow 

significantly over the coming years unless technology takes 

a different path. Continued reliance on petroleum raises 

concerns regarding the security of supply, the economic 

consequences of price volatility created by growing global 

demand and discontinuities in supply infrastructure, and it 

also comes at the cost of criteria pollutants (NOx, SOx) that 

affect local air quality and carbon emissions that affect the 

global environment. 

Both near-term and longer term options for mitigating these 

impacts are available or under development. In broad 

terms, the benefits of investing in new technologies that 

fundamentally change the way that fuels are produced or 

consumed must be weighed against investments that can 

provide more immediate mitigation of potential disruptions. 

For example, there are significant tradeoffs implied in 

selecting among the following policy decisions: 1) increase 

the capacity of the Strategic Petroleum Reserve, 2) raise 

CAFÉ standards, or 3) invest in research, development and 

demonstration efforts that will support transition to a 

hydrogen economy. Once policy vectors are established, 

the question of which technology options to pursue to 

implement those policies become at a fundamental level a 

choice between expanding the supply of alternative fuels or 

developing more efficient vehicles and transportation 

systems. Table 1 identifies some of the options available 

for fuel switching and vehicle efficiency. Clearly the 

supply and vehicle options are not independent of each 

other, nor are they independent of the electricity system. 

For example, a switch to plug-in electric vehicles would 

require developing higher density electric energy storage 

technologies along with the infrastructure to connect to the 

grid. Greater use of natural gas vehicles would require 

establishing delivery infrastructure and increasing demand 

would have an affect on the use of natural gas for electricity 

generation. 

Transportation fuel switching options include alternative 

liquid fuels derived from abundant domestic resources, 

including coal, oil shale, and biomass; electricity; or, in the 

longer term, hydrogen. For many of these, significant 

technical challenges must be addressed to meet the system 

requirements. Among these challenges are developing: 

Table 1. Transportation Petroleum Use Reduction Options 

System Options Technology Pathways 

Natural Gas 

Biofuels • Ethanol 

• Biodiesel 

Alternative 

Liquids 

• Oil Shale 

• Coal Liquids 

Electricity • Fossil 

• Renewable 

• Nuclear 

Fuel Switching 

Options 

Hydrogen • Fossil 

• Renewable 

• Nuclear 

Propulsion • High-Efficiency 

Gasoline Engines 

• High-Efficiency 

Diesel 

• Battery 

• Fuel Cells 

• Hybrids 

Vehicle 

Structure 

(Weight 

Reduction) 

• Size 

• Lightweight 

Materials and 

Structure 

Vehicle 

Efficiency 

Options 

Vehicle 

Systems 

• Auxiliary Load 

Reduction 

• Power Electronics 

4
• Effective and affordable carbon capture and 

sequestration technologies for all fossil resources, 

• Producing biofuels cost effectively from sustainable 

resources (cellulosic materials, algae), 

• Producing hydrogen and electricity from carbonneutral resources, 

• High-density, cost effective storage systems for 

electricity and hydrogen. 

The trade space among these alternative supply options 

includes, among other factors resource potential and 

location (domestic or foreign as well as proximity to 

market), time to market, cost, technical risk, environmental 

impact, materiality, and pubic acceptance. The time to 

market for oil shale or coal liquids is less than that of 

cellulosic ethanol and hydrogen. However, substantial use 

of these alternative fossil liquids before carbon 

sequestration technology is available will exacerbate the 

atmospheric carbon concentrations. On the other hand, 

accelerating the use of ethanol fuels, without advances in 

technologies to move beyond corn as the feedstock, will 

increase the competition for corn, drive up the cost, and 

impact other markets (food and feed). A major effort in 

China to develop ethanol production capacity led to that 

nation becoming the third largest producer. However, 

significant concerns with competition for water for 

growing crops for fuel versus food and the competition 

between fuel and food has required imposing limitations on 

ethanol development [4]. 

The typical trade space for vehicle systems involves cost, 

performance (power), and safety while also meeting 

mandated emissions requirements and fleet average fuel 

economy standards. Emerging options that have the 

opportunity to increase vehicle efficiency include: 

advances in propulsion technologies (such as highefficiency diesels, gasoline or fuel cell hybrids, and plug in 

hybrids), lightweight materials and structures, and/or 

technologies that reduce auxiliary loads. 

The system interfaces between the vehicle and the fuel are 

extremely important considerations that become more 

complex as the number of fuels and vehicles types 

increases. System models such as ADVISOR (ADvanced 

VehIcle SimulatOR) enable simulation of conventional, 

hybrid, electric, or fuel cell vehicles over a variety of city or 

highway drive cycles to predict the vehicle performance 

(fuel economy, emissions, battery power, heat generated, 

and other measurements). These kinds of models are being 

used to help inform discussions regarding program goals 

and technical targets between the U.S. Department of 

Energy, the automotive industry, and energy companies. 

 

The timeframe in which a significant change in oil 

consumption might be seen is highly dependent on when 

technology options will be available for market 

introduction, construction lead times for fuel production 

facilities, whether existing fuel delivery and fueling 

infrastructure can be used or new infrastructure must be 

developed, and how quickly on-the-road vehicles are 

replaced with new vehicles. As the Department of Energy 

establishes its research priorities, it considers these factors 

and uses models such as the National Energy Modeling 

System (NEMS) to examine alternative scenarios of how 

these technologies might enter the market place and what 

benefit might derive from their use. 

5 Electricity Options 

U.S. electricity consumption is projected to grow 1.5% 

annually, increasing more than 40% over the next 25 years 

[3]. In addition to fuel costs, some of the key factors that 

will drive the evolution of the nation’s electricity generation 

and distribution system are expected carbon regulations, 

availability of water resources, reliability requirements, 

transmission and distribution system capacity constraints, 

and siting constraints driven by public perceptions. Table 

2 summarizes some of the electricity system supply and 

end-use technology options. 

A significant opportunity to impact the overall electricity 

system exists at the end use stage, particularly in the 

buildings sector which accounts for the most of the growth 

in electricity demand and the bulk of carbon emissions. 

Table 2. Electricity Systems Options 

System Options Technology Pathways 

Coal • Advanced 

Gasification 

• Carbon 

Sequestration 

Nuclear • Advanced Light 

Water Reactor 

• High-Temperature 

Reactor 

• Closed Fuel Cycle 

Supply 

Renewables • Wind 

• Solar 

• Geothermal 

Buildings • Building Design 

• Advanced Lighting 

• Advanced 

Appliances 

End Use 

Industry • Efficient 

Pumps/Motors 

• Advanced 

Processing 

5
Every action to increase the productivity of energy use has a 

roughly three-fold impact on the productivity of the system 

due to the avoided conversion and transmission losses 

throughout the system. 

In typical building design processes, trades are made 

between floor space and the quality of various amenities 

(windows, flooring, etc.) to design within cost constraints. 

Increasingly whole building energy design tools along with 

rating systems are helping designers and constructors 

consider energy and environmental implications throughout 

the design, construction, and commissioning process. 

A key challenge in implementing efficiency technologies to 

reach a scale that has a material impact on the system is the 

number of informed individual investment decisions that 

must be made (e.g., individual homeowners or building 

owners). Because energy costs are not reflected in the first 

cost of buildings or equipment, making knowledge of 

downstream energy costs available to the consumer at the 

point of purchase has been a key role of government along 

with developing and implementing building and equipment 

codes and standards. 

Among the research and development programs are major 

systems integration efforts such as the push toward net zero 

energy buildings. These designs would bring efficiency 

technologies together with building integrated power 

generation technologies in an operating system capable of 

providing comfort while at the same time producing as 

much energy as it consumes on annual basis. Other 

research is focused on advancing the next generation of 

components, materials, and equipment. For example, an 

accelerated research and development effort is underway to 

advance solid-state lighting (SSL). Based on breakthroughs 

in light-emitting diodes, SSL differs fundamentally from 

today's lighting technologies, driving the need for a systems 

perspective in how this new technology will integrate within 

the existing infrastructure and interact with other 

components. 

Unlike transportation, electricity systems rely on a wider 

variety of primary energy resources, including coal, natural 

gas, nuclear, and a variety of renewable resources including 

hydro. In broad outline, the options and key technical 

challenges associated with the major electricity supply 

options include: 

• Carbon-based fuels: Use of coal or biomass to 

produce heat for power generation will require 

effective and affordable carbon capture and 

sequestration technologies, near zero-emission 

combustion technologies, and advanced gasification. 

Growth in natural gas demand will require the 

infrastructure to support expanded imports of 

liquefied natural gas (LNG) will required addressing 

security issues and public perceptions regarding siting 

of LNG terminals. 

• Nuclear generation: Advancing the nuclear options 

will requires addressing long-term storage of nuclear 

waste, developing proliferation resistant nuclear 

technology, closing the fuel cycle, and overcoming 

public perceptions to enable siting. 

• Renewable generation: Using wind or solar for power 

production requires further development to improve 

the performance and reduce the cost of the 

technologies, system integration and control efforts to 

integrate the technologies with the grid or with the 

load, and ultimately impacting electricity production 

at scale will require developing cost-effective storage 

technologies. 

To ensure reliable delivery of electricity to consumers, new 

technology must be introduced to modernize the aging and 

capacity constrained transmission and distribution system. 

At a general level, system options include central generation 

and delivery of electricity via T&D lines, community-scale 

generation supported by micro-grids that can be connected 

to or islanded from the grid, and onsite generation 

connected to the load and operating in a grid-connected or 

standalone manner. Most likely, all three of these will be 

used within the future energy system making it necessary for 

the grid to be flexible and agile in terms of how it 

accommodates different operating paradigms. 

Research and development to support higher reliability, 

efficient transmission and distribution of electricity is 

addressing: 

• Next generation T&D components, such as energy 

storage, high-temperature superconductivity, power 

electronics. 

• System management tools such as real-time 

visualization, computational modeling, and monitoring 

technologies. 

• Responsive load and integration technologies such as 

distributed generation interconnection technologies, 

micro-grids, sensors and real-time controls. 

6 Conclusions 

The scope and complexity of the energy system and its 

relationship to the dynamic and evolving envelope in which 

it will operate poses one of the most challenging and 

interesting systems engineering issues of the twenty-first 

century. Understanding the dynamics of the overall energy 

system and the tradeoffs associated with different 

technology options is critical to making informed policy and 

investment decisions. The transformation of energy 

infrastructure will occur over a multi-decade period during 

which time the operating envelope will change and 

advances in new technology will be made. The assumptions 

made today regarding the concept of operations will need to 

6
be revisited on a regular basis and technology options 

reassessed to meet changing requirements. 

References 

[1] Energy Information Administration. U.S. Department 

of Energy. “International Energy Outlook 2006”. June 

2006. 

[2] Platts. Global Power Report. March 1, 2007. The 

McGraw-Hill Companies. 

[3] Energy Information Administration. U.S Department 

of Energy. “Annual Energy Outlook 2007 with Projections 

to 2030 (Early Release)”. December 2006. 

[4] “Biofuels may not be the Ultimate Energy Panacea as 

Water Resources become Scare,” Business Report (On 

Line). February 11, 2007. 

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Evolving the Nation’s Energy Infrastructure: A Challenging System 

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14. ABSTRACT (Maximum 200 Words)

Over the next several decades, a profound transformation of the global energy enterprise will occur driven largely by 

population growth and economic development. How this growing demand for energy is met poses one of the most 

complex and challenging issues of our time. The current national energy dialogue reflects the challenge in 

simultaneously considering the social, political, economic, and technical issues as the energy system is defined, 

technical targets are established, and programs and investments are implemented to meet those technical targets. 

This paper examines the general concepts and options for meeting this challenge. 

15. SUBJECT TERMS

NREL; Bobi Garrett; Institute of Electrical and Electronics Engineers; energy systems; infrastructure; global demand; 

system of systems; system engineering; transportation; energy security; electricity; system management 

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