Conservation and Solar Energy Programs

of the Department of Energy: A Critique

June 1980

NTIS order #PB80-197759
Library of Congress Catalog Card Number 80-600092

For sale by the Superintendent of Documents, U.S. Government Printing Office

Washington, D.C. 20402 Stock No. 052-003-00757-6

ii
Foreword

The Office of Technology Assessment is pleased to present this analysis of the

Conservation and Solar Energy Programs of the Department of Energy (DOE). The

study, requested by the House Committee on Science and Technology, was conducted in much the same manner as earlier OTA evaluations of the Plan and Program of the Energy Research and Development Administration, and the National

Energy PI an of 1977.

The study evaluates the progress and direction of a number of conservation

and solar energy programs, in order to provide an overview of the balance and longrange contribution of these efforts, and to discover if the programs are coherently

linked to goals set by Congress and the administration. The basis of the work was

generated by two advisory panels, assembled to achieve a balance of knowledge

and viewpoints. The panelists identified and discussed critical issues. OTA staff prepared this report based on the panel effort, and augmented by review of DOE Conservation and Solar Program Summary Documents, budget material, and discussions with DOE personnel. All responsibility for the accuracy, completeness, and objectivity of the work rests with OTA.

Director
Analysis of DOE’s Conservation and

Solar Energy Programs

Advisory Panel #1

J. Thomas Ratchford, Chairman

American Association for the Advancement

of Science

Anthony Adler

MulIer and Co,

A. J. Arker

General EIectric Valley Forge Space Center

John Bame

Shell Oil Co.

Piet Bos

EIectric Power Research Institute

Carel DeWinkeI

Wisconsin Power and Light

Kirk Marckwald

Off ice of Appropriate Technology

State of California

Henry Marvin

Brunswick Corp.

Eric Stork

Purdue University

Jack Walsh

New England Power Service Co.

Steven Weissman

California Public Utilities Commission

Benjamin Wolff

American Wind Energy Association

Advisory Panel #2

Grant P. Thompson, Chairman

The Conservation Foundation

Larry Becker

City University of New York

A. M. Clogston

Bell Telephone Laboratories

Joe Dawson

Grumman Energy Systems

Jim Harding

Friends of the Earth

Eric Hirst

Oak Ridge National Laboratory

Herbert Hunt

Eugene Water and EIectric Board

Herbert Kraemer

General Mills

Jonathan Lash

Natural Resources Defense Council

Vivian Loftness

Dubin-Bloome Associates, P.C.

Brian Pardo

American Solar King Corp.

Sandra Rennie

Center for Energy Productivity

Mellon Institute

Joanna Underwood

INFOR M

NOTE: The Advisory Panels provided advice, critique, and assistance throughout this assessment, for

which the OTA staff Is deeply gratefuI. The Advisory Panels, however, do not necessarily approve, disapprove, or endorse alI aspects of this report OTA assumes fulI responsibility for the report and the accuracy

of its content.
Conservation and Solar Energy Programs Project Staff

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Richard E. Rowberg, Energy Program Manager

Alan T. Crane, Project Director

Nancy Carson Naismith, Project Director

Charles Holland

Adm

Marian Grochowski Lisa

Robert Olson Joanne Seder

inistrative Staff

Jacobson

Contractors

Li l I i an Quigg Yvonne White

William U. Chandler Pamela Deuel

Reviewers

John Andelin, Consultant Clark Bullard, O T A

John Benemann, Consultant EiIeen Clifford, New Mexico Public Service Commission

Tom Bull, O T A Modesto Maidique, Harvard Business School

OTA Publishing Staff

John C. Holmes, Publishing Officer

Kathie S. Boss Debra M. Datcher Joanne Heming

v
Contents

Chapter Page

L

IL

Ill.

Iv.

lssue 15—Consolidation of State programs . . . . . . . . . .

3

11

11

13

15

19

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20

22

23

25

26

27

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31

32

33

34

8 0

vii
Contents—continued

List of Tables

List of Figures

Figure No. Page

1. Organization of Conservation and Solar Energy Programs at the Department of Energy 6

2. Organization of the Department of Energy 7
Chapter I

OVERVIEW
Chapter I

OVERVIEW

The Conservation and Solar Energy (C&SE)

Programs of the Department of Energy (DOE)

have had a brief but troubled history. The importance assigned to conservation and solar

energy in our national energy thinking has

never been as great as it is now. Last year the

President announced dramatic goals for solar

energy and, by implication, conservation. The

budget levels for the programs have never

been so high. Public interest and expectations

are also ever increasing with conservation and

solar investments growing rapidly. Yet disappointment and frustration with the programs

are common. A March 1975 OTA report, A n

Analysis of the ERDA Plan and Program, identified many problems that are still painfully relevant today.

This review was undertaken with the intent

of performing a constructive critique for both

Congress and DOE Some of the issues identified in this report suggest how Congress and

the Secretary of Energy can set the stage for

C&SE to become more effective. Others raise

questions over the direction some programs

have taken. Finally, some point out where programs are functioning inefficiently, and what

might be done to improve them.

This report naturally dwells on C&SE weaknesses because that is where improvements are

most Iikely, but C&SE also has strengths. There

are many highly competent, dedicated people

working there Some programs are moving forward effectively. The organizational structure

of the programs seems improved now with the

consolidation of Solar Technology and Solar

Applications While efficiency could no doubt

be improved by various modifications, an era

of stability would probably be more productive. Major reorganizations invariably produce

major jurisdictional disputes, seriously detracting from the real business of the office. DOE

wouId be better advised to concentrate on putting the right people into the existing positions

and giving programs an opportunity to settle

down.

Under the best of operating conditions, however, C&SE wiII have to overcome some major

problems. A striking conclusion of the panels

was that C&SE lacks a clear vision of where it is

going and how it will get there. Some of the programs are doing as well as might be expected,

but no coherent theme permeates the entire

office and guides the directions and paces of

the various programs. Evidently, this deficiency results from the lack of clear direction from

DOE management and the lack of a strong

analytic capability within C&SE. The Office of

Policy, Planning, and Evaluation has only 1 3

professionals. A staff of this size is entirely inadequate to perform the long-range, in-depth

studies required. C&SE needs to develop the capability to determine what it can accomplish for

the country, to make sound policy and program

decisions to reach these objectives, and to keep

the programs moving steadily toward the goals in

the face of pressures to alter course in ways not

necessarily in the national interest. The new Program Summary Documents are encouraging,

but the quality of the planning effort needs to

be higher if C&SE is to push the country forward to meet its goals. Improved analytical

capability will allow for comparisons between

conservation and solar technologies and other

approaches, such as synthetic fuels. Such comparisons are badly needed.

Another major deficiency is inadequate program evaluation. C&SE must have the capability of determining which programs have wandered off course or become irrelevant, and

which might be usefulIy expanded. Evaluation

wiII become crucial to some programs in controlling costs as they reach the demonstration

stage. Widespread implementation of these

technologies will largely depend on their costs

becoming competitive with other options. For

instance, the President’s goal for photovoltaics

is 1 Quad* in 2000. At present, a kiIowatthour

of electricity generated from photovoltaics

‘one QU{IC! equ(ilj one qu~drlll Ion (1 O‘) t3t u

3
4 ● Conservation and solar Energy programs of the Department of Energy

might cost $0,50, compared to $0.05 from conventional sources. Several studies, including

OTA’s solar assessment, make a plausible case

that photovoltaics will be competitive. If cost

reductions fall short, however, subsidies of $1

bill ion per year for every cent per kilowatthour

differential will be required to reach the 1-

Quad goal. Thus, if society has a choice between photovoltaic electricity delivered at

$0.15/kWh and electricity from other sources

delivered at $0.10/kWh, choosing the Quad of

photovoltaics will cost an extra $5 billion per

year. Program evaluation is a critical element

in keeping programs on track and in determining when goals should be revised.

Other problems that concerned the panels

were the long delays in DOE processing of C&SE

requests for hiring new staff and letting contracts.

Reports of procurements that took up to 18

months are common. This is a nearly impossible situation. Not only are important projects

delayed, but high-quality people and companies may not be wiIIing to wait so long. There is

a pervasive belief within and outside of DOE that

senior DOE management does not really care

about the C&SE programs, and that the quality of

management has been inadequate, as well as

transient. The present staff in some programs is

clearly overburdened. There is a tendency to

rely on existing contractors to do work for

which they may be unprepared. These delays

are evidently so crippling for C&SE that upper

levels of DOE management should be quite

concerned if they take solar and conservation

seriously.

The panels also noted that C&SE could improve its coordination with other Federal agencies, such as the Department of Housing and Urban Development, and other governmental levels (State, local, and foreign). Such cooperation could greatly facilitate the implementation of solar and conservation technologies. By

the same token, cooperation with private industry (both suppliers/installers and utilities) is

vita I for C&SE’s planning. All of these institutions are involved in C&SE’s implementation

and R&D programs, but not to the degree that

appears desirable.

A final general suggestion is for C&SE to

develop its own perspective in keeping with longrange planning. C&SE is the focus of a great

many expectations, but as mentioned above,

C&SE cannot simply react to pressure. Some

technologies may be worth developing in the

national interest but may presently lack a

large, well-organized constituency; for example, decentralized applications of solar energy.

It is easier to find parties with an interest in

centralized applications, but C&SE must find

an appropriate balance between the two even

whiIe cooperating with the unequal constituencies.

The panels also identified a series of issues

related to specific programs:

●

●

●

●

●

●

Wind.– Wind is a nearer term technology

than DOE appears to believe. Rapid commercialization could have a high payback,

but commercialization programs must be

designed appropriately for the different machines and applications.

Photovoltaics.— This program may not meet

its goal unless its budget is enlarged. DOE

has been slow in meeting congressional requirements for detailed plans and an advisory panel. An emerging shortage of refined

silicon may also interfere with growth.

Solar thermal.– The wide range of technologies and applications require intensive

evaluation and planning to achieve the fastest possible implementation into the energy

system.

Ocean systems. – Ocean thermal energy conversion may be very expensive to develop

and demonstrate, but a fulI plan for Federal

involvement has not been prepared to estimate the total costs. Rapid development

could entail large economic risks,

Biomass.— Management of the biomass programs shouId be tightened and the staff augmented. Several potentially attractive systems are neglected, particularly small and

muItipurpose faciIities. Large increases in

the use of alcohol fuels must be carefully

planned.

Transportation conservation. – The advancedengine program has made progress, but it is
Ch. I—Overview ● 5

not clear that even successful developments

will be the preferred choice for many applications. EIectric vehi

readily identifiable

commercialization wi

ability of improved

battery development

cIes (EV) have a more

market, but extensive

II depend on the availbatteries. At present,

takes only 20 percent

of the EV budget, which seems remarkably

low in Iight of its importance.

● Solar active and passive. — Closer cooperation

with conservation programs is needed to formu I ate

combin

and con

nomical

and cli

a least cost buildings strategy for

ing passive features, active systems,

servation measures in the most ecoway for different types of buildings

mates. Several important areas are

underemphasized, especialIy buiIding retrofits, solar district heating, solar ponds, passive product development for commercial

buildings, passive cooling, and demand analysis for solar industrial process heat.

 Buildings and community systems. — The enormous potential for saving energy and protecting people against rapidly increasing

costs means that improving the energy efficiency of buildings should be a high priority.

Research on products to improve the energy

efficiency of existing buiIdings should be in-

●

●

creased, as welI as research on neighborhood-scale technologies and the energy uses

of commercial structures. Non hardware research on institutional questions and on the

attitudes and behavior of consumers is also

necessary. This type of research, combined

with an increased attempt to commercialize

products, can help to move products into

the marketplace. The buildings program

must improve its interaction with the Office

of Solar Applications for Buildings.

Office of State and Local Programs. – Existing

State programs should be consolidated, and

DOE must find ways to provide more technical assistance to States.

Office of Industrial Programs (OIP).– In view

of the urgency of the energy situation, 0IP

should continue its emphasis on funding

near-term technologies, and should emphasize those that can save the most energy

quickly. This would select against those

projects that save little or no energy but

allow fuel-switching or assist ailing industries. Questions remain as to whether the

existing priority selection criteria best serve

national needs. Long-term, basic research

relating to process and thermodynamic principles is urgently needed.
●

Figure 1 .–Organization of Conservation and Solar Energy Programs at the Department of Energy

● Manages relationships with DOE laboratories

and field offices, especially SER1 and the RSEC’S.

● Manages C S International program~

Acting

0

0

SOURCE Department of Energy
I

r

I

I

Federal Energy

Regulatory Commission

Inspector

General

General

Counsel

Asst. Secretary

Policy and Evaluation t

I

Asst. Secretary

International Affairs t

Economic Regulatory

Administration t

Energy Information

Adm inistratlon

Office of

Hearings and Appeals

Board of

Contract Appeals

SOURCE Department of Energy

Figure 2.—Organization of the Department of Energy

Secretary

Deputy Secretary

Under Secretary

I Asst. Secretary I

Conservation and

Solar Energy

Asst. Secretary

Fossil Energy t

Asst. Secretary

Nuclear Energy

Asst. Secretary

Resource Applications

Asst. Secretary

Environment

Asst. Secretary

Defense Programs

1

Director Office of

Energy Research

1

Chief Financial

Officer

I

Director Director

Office of Equal Procurement and

Opportunity Contracts Mgt A

I Controller I
Chapter II

DEPARTMENTAL GOALS AND

PRIORITIES
Chapter II

DEPARTMENTAL GOALS AND

PRIORITIES

Some of the most basic questions and issues

raised by this critique can only be answered at

the highest levels of the Department of Energy

(DOE). During the course of the review, it became clear that the elements of meaningful

goals and priorities, and strategies to meet

those goals, were lacking. These elements are

crucial to the success of any effort, either in

Government or in the private sector, and they

are particularly important in clarifying the value of an effort undertaken to deal with a problem of enormous national and international

importance, such as the present energy situation Goals, priorities, and plans must be set

not only for programs within Conservation and

Solar Energy (C&SE) areas, but these goals

must complement or match similar goals, priorities, and plans for conventional fuels and

other new supply opt ions. Senior DOE management is responsible for this effort, the sum

of which represents our national energy policy.

Issue 1

Goals

and Plans

The ambitious goals set by the President for

solar and conservation must be kept current

and translated into specific interim objectives for the various programs.

Summar y

Goals are used in planning programs to meet

national object Ives To be relevant, solar and

conservation goaIs must be derived from the

best estimates of what is desirable and achievable This analysis requires the consideration

of factors such as the expected cost and availabiIity of other sources, economic growth,

technologicla development (and failure), and

new concepts for achieving the same end. The

Program Summary Documents (PSDs or goldbooks) present energy production goals for

solar energy based on the Domestic Policy Review (DPR), and energy-saved goals for conservation based on the the Committee on Nuclear

and Alternative Energy Systems (CONAES) scenarios. Refinements of these goals should be

expected in future versions of the gold books.

I n particular, the conservation goals must be

much more more rigorously defined, perhaps

by a DPR for conservation.

Simple Quad goals for 1990 or 2000, however, are not adequate for planning programs

It is necessary to define what actually has to

happen for the Nation to meet the goals and

what DOE role must be to ensure success. Explicit, year-by-year milestones should be provided so that Congress can determine it these

goals shouId be accepted as national policy,

appropriate the resources necessary for

meeting them, and hold the programs accountabIe for progress made. Congress ion a I pressure

may be required to ensure that DOE augments

its anaIytic capabiIity to produce i m proved

goals and plans.

Quest ions

1.

2.

3

4

5

Has DOE accepted the DPR scenarios as the

guides for the solar programs?

When wilI comprehensive conservation

goals (that wiII be useful for program planning) be developed?

When wilI DOE prepare detailed plans for

the Nat ion to reach the stated goals?

How will DOE keep the goals current and

how often should they be revised?

Can the Assistant Secretary for Policy and

EvaIuation work with the Oft ice of PIanning

and AnaIysis in C&SE to produce such a pIan

w I t h their present resources and mandate?

11
72 ● Conservation and Solar Energy Programs of the Department of Energy

Background

Table 1 contains DOE’s solar goals, as announced by the President on June 23, 1979,

which were derived from the Maximum Practical Scenario of the DPR on solar energy.

The conservation goals (table 2), which have

not been endorsed directly by the President,

are stated to be at least adequate to meet the

savings suggested by the recent report of

CONAES, evidently for scenario A of that

report,

As pointed out in the CONAES study,

achieving these goals wiII require great and

sustained efforts by both the private and public sectors, This effort can be estimated only if

detailed breakdowns by specific program objectives are available. For instance, the windpower goal is 1.7 Quads in 2000. An adequately detailed plan would specify how many machines of varying sizes would be required to

produce 1.7 Quads, the industrial capacity

over time to produce and deploy them, material and capital requirements, the schedule for

technological i m prove merits and resource

mapping, and estimates of when and how nonhardware-related market barriers can be evaluated and addressed. Such a plan would delineate a clear path to the desired goals incIuding what must be done this year as part of

the overall effort Not only would such a plan

provide clear direction to the programs, but it

would also provide a means for Congress to

evaIuate programs’ progress and need for

funding relative to other programs and national objectives. The wind energy program

was chosen here as an example because it is

Table 1 .—Solar Goalsa

2000

Solar technology 1977 Base case at $32/bbl Maximum practical Technical limit

Active heating and cooling . . . . . . . . . Small 1.3 2.0 3.8 ‘- -

Passive heating and cooling . Small 0.3 1.0 1,7

Industrial and agricultural. . . . . — 1.4 2.6 3.5

Biomass . . . . . . . . . 1.8 4.4 5.4 7.0

Photovoltaic systems . . . . . . . . . . . . . — 0.2 1.0 2.5

Wind systems. . . . . . . . . ... . . . . . . — 0.9 1.7 3.0

Solar thermal power. . . . . . . . . . . . . . . — 0.2 0.4 1.5

Ocean thermal . . . . . . . . . . . . . . . . . . — — 0.1 1.0

Hydro. . . . . . ... . 4.0 4.3 4.5

High head . . . . . (2.4) (3.5) (3.5) (3.5)

Low head, ... ... . . . . (Small) (0.5) (0.8) (1 .0)

Total (Quads) . . . . . . . . . . . . . . . . . 4.2 ‘-

12.7 -18.5 28.5

a

The e;tlmates I n th IS table represent the amount of convent tonal energy than can be d Isplaced by sola; sy;te rnsj rather than tie amount o-f energy actually del Ivered by

solar systems

blncludes process heat, onslte electricity, and heating and hot Water

SOURCE “Solar Energy Domestic Policy Review, Response Memorandum, February 1979, as printed In the So/ar Eflergy Program Docurnenf, January 1980

Table 2.—Conservation Goals

U.S. energ y consumption (Quads)

Residential/

commercial Industrial Transportation Total

1975 consumption ... . 16.8 36.7 17,3 70.8 ‘

-

1990 no change path (scenario C). 23.6 69.5 26.9 120

1990 possible (scenario B). . . . . . . . . . 18.4 58.6 23.0 100

Percent savings . . . . . . . . . . . . . . . . . . 220/0 15.7% 1 4.5% 16.70/0

1990 possible (scenario A). . 14.1 43.6 16.5 74.2

Percent savings . . 40.3% 37.30/o 38.6% 38.1%

Scenario A Quad savings. . 9.5 25.9 10.4 45.8%

SOURCE Comm!ttee on~”uclear and Alternative Energy Systems, December 1979, as printed In the Energy Corrservaf/ofl Program Summary Docurneor February 1980

corrected by OTA
Ch. II—Departmenta/ Goals and Prior/ties . 13

one of the best defined, but it stiII does not

present a long-term plan of what must happen

by when and what DOE’s role must be to make

sure it happens.

The goldbooks describe a range of energy

measures, and provide suggested budgets and

timetables Unfortunately, however, the programs are not clearly I inked to the goals. On

page I I-7 of the conservation PSD it iS stated

that the “overall objective of the Federal Government's Conservation Program is to encourage the adoption by the economy of costeffective conservation measures as rapidly as

possible.“ Yet nowhere in the document can

one find a ranking of the proposals in terms of

cost effectiveness Many interesting programs

are presented, but without clear represent ation of anticipated costs, benefits, or probabi1-

ities of success. There is a substantial range of

investment between what is cost effective for

an individual and what is cost effective for the

Nation; this range holds many opportunities

for policymaking, Nor are overalI quantitative

goals of energy conservation presented; one

wouId be interested, for example, in the total

energy to be saved in the United States as a resuIt of the completion of the proposed programs The contribution of each solar project

is a I so presented without ranking, The costs

and benefits of each program are essential elements I n deciding how the whole system fits

together

Goals and plans are critical elements to the

success of C&SE, but they must be used with

caution. Goals must be kept up to date with

other energy, environmental, and societal objectives. They can be invalidated by changes in

energy demand, or the price and availability of

other fuels (either shortfalls or unexpected

surpluses such as conceivably might develop

with natural gas as the price rises). National

security considerations may make solar and

conservation implementation even more imperative than it appeared at the time the goals

were set Progress in technological development is always uncertain, especially in the

early stages, and future costs are unpredictable These factors cannot simply be cranked

into an equation that couId be solved. There is

no one best goa1, on I y estimates of what is desirable and achievable. Thus, goaIs, and the

plans for meeting them, m ust expIicitly incorporate these uncertainties and contingencies

for dealing with setbacks.

FinalIy, it also follows that plans and goals

shouId not be changed continually in response

to possibly short-term trends or premises. Program implementation can become hopelessly

unstabIe if objectives shift frequent I y. Measurable targets, and criteria for revising the

targets, shouId be set for each technology and

conservation strategy, in accordance with explicitly stated assumptions.

Issue 2

Setting

Priorities

DOE does not appear to have set priorities

among the various programs in C&SE to ensure that the total resources are being apportioned to achieve the maximum benefit.

Summar y

The impending budget constraints, as well as

normal fiscal prudence, suggest that C&SE favor those programs most Iikely to produce energy benefits. The gold books do not indicate

that priorities are being set by rigorous, comparative analysis. An analytical basis for comparing technologies and emphasizing the most

successful ones must be employed, or programs that eventualIy prove to have only minor benefits may receive a disproportionate

share of the budget. This analysis should include (in addition to Quad goals) the ultimate

energy contribution of the technology, economic factors, environmental impacts, effect

on employment, stage of development, and

other factors. Such a listing of priorities would

be an integral part of the overall plan to reach

the goals, as discussed in Issue 1. Congressional insistence on both the analysis and the analytical capability to produce it would probably

be required to ensure that a process is created

to lead to this type of effort.
14 ● Conservation and Solar Energy Programs of the Department of Energy

Question s

1.

2.

3.

4.

What priorities does DOE now accord the

various C&SE programs?

What are the criteria DOE uses to set these

priorities?

What are the procedures by which DOE will

be evaluating the programs in light of these

criteria to revise the priorities?

How will DOE use these priority rankings,

and how will they be integrated with DOE

priorities for other efforts?

Background

Setting relative priorities is a way of determining which programs are most likely to contribute substantially to national objectives,

and which therefore should be expedited. DOE

should be able to demonstrate that it is distributing its funds in such a way as to have maximum impact both in the near and long term.

Ideally, DOE would have a clear concept of

how each technology would be implemented,

and the costs and impacts of doing so. Then a

cost/benefit analysis of DOE funding could be

confidently performed for each program, and

the appropriate funding levels determined. It is

clearly premature to expect such a convincing

analysis, but some sort of cross-technology

comparison is sorely needed to maximize the

overall effectiveness of C&SE. Assigning rationally determined priorities to each technology is a way of doing this.

The goldbooks present neither a cross-technology analysis nor sufficient data to perform

one. Even comparing the Quad goals for 2000

and the program costs is impossible because

meaningful cost data (for the full periods of

the programs) are not known. Table 3 compares the DOE fiscal year 1981 budget request

with the DPR solar energy goals for 2000 or the

conservation savings expected in 1990 (see issue 1). This table is much too simplistic to use

for planning purposes. For instance, the low

ratio for industrial conservation indicates that

DOE expects private industry to do most of its

own R&D. Nevertheless, some sort of program

comparison must be done to know if DOE is

getting the maximum value for its funding in

the context of meeting overaIl goals. Table 3

also presents quaIitative estimates of the importance of several other factors.

If the budget were closely related to the

goals, a low ratio would indicate a high national energy return on DOE money. As stated

above, this table must be used with extreme

caution. Expensive long-term R&D programs,

such as photovoltaics, cannot be expected to

compare with near-term applications such as

solar heating, but their eventual contribution

could be much greater. Furthermore, the estimates for 2000 couId shift, changing the ratio

considerably. However, the table does suggest

which programs might be scrutinized for either

augmenting (low ratios] or cutting back (high

ratios).

The qualitative rankings are relative indicators of promise or problems. These preliminary rankings are illustrative only, and different orderings could be justified, Ultimate

potential refers to the maximum Quad production (or conservation) that might eventually be

expected. The indirect solar applications rank

highest because they have the most general

use. Conservation technologies are the lowest

because the potential shrinks as implementation progresses. However, it is noteworthy that

the potential for conservation before the end of

the century dwarfs that of solar. Conservation

technologies have very attractive economics

at this time; economics for the solar R&D programs are largely speculative. The stage of development refers to technological readiness

and the risk in depending on that readiness. Institutional and market barriers are the nontechnical problems that may beset new technologies, particularly if they call for radically

new producer or consumer patterns, or different ways of managing the energy flow. Both

these columns are subjective.
Ch. II—Departmental Goals and priorities ● 15

Table 3.—Comparison of the DOE Fiscal Year 1981 Budget Request With DPR Solar Energy Goals for 2000 or

Conservation Savings Expected in 1990

Fiscal year

1981 Ultimate Stage of Institutional

budget Quad goal potential develop- and market

request (2000) Ratio (Quads) Economics ment barriers

Solar

Active heating and cooling . . . . . . . . . $57.7 2 $ 30 B B A c

Passive heating and cooling . . . . . . . . 33.9 1 30 B B A c

Industrial and agricultural. . . . . . . . . . 49.0 2.6 20 B B B A

Biomass . . . . . . . . . . . . . . . . . . . . . . . . 66.7 3 6 a 20 A B A A

Photovoltaics . . . . . . . . . . . . . . . . . . . . 175.6 1.0 180 A ? c B

Wind . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.0 1.7 50 A A B c

Solar thermal (electricity) . . . . . . . . . . 117.5 0.4 290 A ? c c

Ocean . . . . . . . . . . . . . . . . . . . . . . . . . . 39.2 0.1 390 A ? c c

Conservation (1990)

Residential/commercial . . . . . . . . . . . 97.6b

9.5 10 c A A c

Industrial. . . . . . . . . . . . . . . . . . . . . . . . 58.9 25.9 2 c A B A

Transportation . . . . . . . . . . . . . . . . . . . 113.0 10.4 11 c A A B

A = favorable outlook B = Inirmedlate C = Ilmlted potential or dlfflcult problems

aExcludes the I 8 Quads already being used

bDoes not ,nclude $2025 mllllon for the Schools and l+osPltals Grant program or $19895 for the Weatherizatlon Ass[stance program The energy contribution Of these

Droarams ~resumably IS Included In the 95 Quads but the hlqh budget levels result from the actual Implementation being done by DOE. unlike the other Droarams

whl;h are Ilmtted to R&D or demonstration projects

SOURCE Office of Technology Assessment

Issue 3

Planning Programs

to Meet Goals

DOE Solar and Conservation Programs do

not appear adequate to meet the suggested

goals.

Summary

It is difficult to discern the impact of the

President’s goals on the DOE programs since

neither the PSDs nor the fiscal year 1981 budget submission relate the programs and the

goals in any detail. The solar R&D components

are generaIIy described adequately, but there

is littIe evaluative perspective to indicate

whether the programs are actualIy on track.

Commercialization plans are described more

vaguely, evidentIy refIecting DOE uncertaint y about how to address this phase. Meeting

the goals wiII require that considerably more

effort be given to implementation relative to

R&D than is now the case. In the absence of a

detailed technology implementation plan

coupled with rigorous evaluation to ensure appropriate progress, there will be a natural

tendency to continue perfecting technology

that may never be introduced to the marketplace.

Present solar programs appear inadequate

for reaching the President’s 20-percent solar

goal. In real dollar terms, the fiscal year 1981

budget request for DOE solar programs is

slightly lower now than before the President’s

goal was announced. While solar funding probably must be increased to meet the goal, increases should be justified and determined by

an improved analytical rationale to ensure that

a coherent, least cost solar strategy is developed.

Quest ions

1. Was the fiscal year 1981 budget request prepared under a plan to meet the President’s

goals? If not, should such a plan be developed ?
16 ● Conservation and Solar Energy Programs of the Department of Energy

2

3.

What procedures is DOE using to determine

i f its programs are operating at the appropriate level and efficiency?

What mechanisms does DOE have for accelerating programs shown most promising by

the research, development, and demonstrat ion and commercialization programs and

curtaiIing those considered Iess promising?

For abandoning failed initiatives? How are

these evaluations to be made?

Background

At a minimum, the development of a program strategy requires an initial assessment of:

potential contribution to goals assuming

technological and commercial success;

aIternate program approaches and identification of resources required for achieving levels of contribution for each technology path and confidence levels of attaining these contributions;

potential infrastructure or societal barriers to commercial application, and plans

for overcoming such barriers;

the optimum timing and degree of private

sector involvement i n program development;

potential environmental and socioeconomic impacts; and

methods for determining when the level

of effort shouId be reduced or eliminated,

either because commercialization has

been achieved or the strategy has failed,

The strategic plan should clearly identify

specific subprogram goaIs, the program approaches to meet them, methods of implementation, the required funding levels, contingency plans, schedules, and decision-point milestones,

Coherent, long-range solar and conservation

plans of this kind have not yet been developed

by DOE. At present, different documents produced by DOE do not even contain agreedupon estimates of the most basic parameters,

such as the number of solar systems that must

be deployed to meet the DPR goals. For example, the fiscal year 1981 budget request estimates that 14 b i I I ion ft2 of collectors must be

installed to reach the DPR goal of 2.6 Quads of

agricuIturaI and industriaI process heat, whiIe

the 1980 PSD estimates that only 5.9 biIIion ft2

wiII be required. There is Iittle evidence of inplace mechanisms for objective evaluation of

relative progress, changing assessment of uItimate potent i a 1, timing, and resource requirements.

I n addition, there appear to be no centingen-

(-y plans to effect required changes in emphasis, shouId the need be identified, Some technologicaI approaches a I most certainIy wiII f a i I

to meet short- or long-term goals If the over-al I

goaIs are to be reached, other technologies

w i I I have to be deveIoped or depIoyed more

rapidly than expected.

A major deficiency of the gold books is the

lack of evaluation of existing programs. HistoricaI achievements and resuIts to date are

not described. Each program is presented as

Virgin, without review of previous faiIures and

successes. Most ongoing programs shouId involve adjustment and correction as they proceed, as welI as evaluation to ensure that they

are still relevant to achieving the overall goaIs.

This topic iS discussed in Issue 5 .
Chapter II

MANAGEMENT AND

INSTITUTIONAL ISSUES
Chapter III

MANAGEMENT AND

INSTITUTIONAL ISSUES

This chapter discusses issues that are important for the successful operation of all programs within the Office of the Assistant Secretary for Conservation and Solar Energy (C&SE).

They overlap in some cases with problems in

other portions of the Department of Energy

(DOE).

These issues are not specific to certain programs or technical areas, as are the issues discussed in chapter IV. Rather, they examine

questions of program administration (such as

evaluation, procurement, and staffing) and institutional questions, such as whether or not an

appropriate role has been defined for utilities,

for States, and for other parts of the Federal

Government regarding energy problems. By

and large, these issues must be dealt with by

the Assistant Secretary and the Deputy Assistant Secretaries, with the involvement of program managers. A number of the points discussed in this chapter have been chronic problems within DOE, and attention to these questions may a prerequisite to moving the entire

C&SE effort forward more vigorously and with

greater long-term impact.

Issue 4

Program Staffing

and Management

Development of conservation and solar energy research, development, and demonstration (RD&D) and commercialization programs has been hampered by imbalance between staff and a rapidly expanding program

level, lack of organizational stability, and

management turnover.

Summar y

The C&SE programs show a significant

growth in budget authority during a period

when organizational structure and management have changed several times. Congressional initiatives, often requiring rapid development of plans and regulations, have grown

much faster than C&SE staff. Delay in appointing an Assistant Secretary and repeated internal reorganizations have added to the strain on

the staff. As a consequence, the ability of DOE

to provide guidance for the development of solar and conservation programs has not seemed

to equal the capability or interest of industry

and citizens to move the technologies forward.

This lack of management guidance and adequate staff has caused a lack of momentum,

and has contributed to the difficulty of developing coherent long-term goals and strategies.

Question s

1.

2

3

4.

5.

6.

Are the job levels and pay classifications for

C&SE managers equal to that of their peers

in DOE?

Are the authorized positions within C&SE

adequate to handle the workload? How

many authorized positions are filled at this

time?

Why have so many authorized positions

within C&SE not been filled?

What techniques are used to evaluate staff

performance?

Why have more personnel not been assigned

to high payoff new initiatives such as the

Building Energy Performance Standards

(BEPS), which require entirely new analytical

tools and management strategies?

How many personnel positions designated

for program management have been con19
20 ● Conservation and Solar Energy Programs of the Department of Energy

7.

8.

9.

verted to staff positions to support supervisory work?

Have the conflict-of-interest regulations inhibited recruiting and retention of quality

personnel ?

How does the ratio of personnel to number

of contracts in C&SE programs compare

with other technology programs?

Does the intrinsic diversity of conservation

and solar technologies require more staff

and management resources per dollar of

hardware procurement or submarket analyses than other technologies (i. e., fossil and

nucIear)?

Background

During the 30 months since DOE was established in 1977, C&SE was without an Assistant

Secretary for about half that time, and without

an approved organizational structure for 26

months. This resulted in an inability to fully

staff the office, which continued to have a

high proportion of vacancies. At the same

time, pressures associated with quickly implementing major legislation, — Energy Policy and

Conservation Act (EPCA), Energy Conservation

and Production Act, and National Energy Conservation Policy Act (NECPA)— combined with

the need to brief a new and changing management structure, contributed to a deterioration

of morale and made it difficult to attract talented people to work in such an environment.

Under these circumstances it has been virtually impossible to develop an integrated conservation and solar strategy, with measurable

goals and evaluation programs, above the subprogram level. Without such a strategy, and a

management structure that alines program responsibility with planning and implementation

authority, conservation and solar technologies

cannot be effectively developed and commercialized.

Continuity in management could provide an

opportunity to develop both strategies and

needed program integration approaches (see

Issue 12). With a full complement of Deputy

Assistant Secretaries, program managers can

give full-time attention to program direction.

Congress can rightfully expect that the Assistant Secretary and his Deputies establish program milestones and be held accountable for

meeting them. The Assistant Secretary must be

responsible for program integration and direction, for improving the balance of staff (technical and nontechnical) in each division, and for

removing the remaining vestiges of the old

“Federal Energy Administration/Energy Research and Development Administration”

split. Each Deputy Assistant Secretary must be

responsible for actually managin g their program areas as well as helping to set goals.

Staffing levels have clearly been inadequate. Congress must keep in mind that authorizing new programs while staffing levels

remain constant wilI mean delays, inadequate

analysis and regulation development, increased use of contractors for policy development, and inabiIity to fulIy respond to the

needs of States, localities, and industry. The

apparent absence of a formal evaluation personnel process for DOE staff means that normal procedures for reviewing staff performance are not part of the standard management

responsibiIity, thus eliminating an obvious opportunity for feedback and direction.

Issue 5

Program

Evaluation

DOE has no consistent method for evaluating program performance. Such evaluation

is needed to allow adequate congressional

oversight, to measure meaningful progress

toward goals and milestones, and to assist

DOE in determining levels of effort for new

initiatives or reduction in program support.

Summar y

Despite large expenditures, many diverse

projects, and continuing requests for information on program effectiveness and impact,

DOE has not mandated or strongly encouraged

careful evaluation efforts, Lack of such efforts

adds to the impression that Iittle is being ac-
Ch. Ill—Management and Institutional Issues ● 21

complished, particularly in areas such as conservation where measurement is inherently difficult, (Taking credit for energy NOT used is a

complex business. ) I n the absence of careful

evaluation, program managers must rely on instinct in selecting new initiatives. Although

evaluation is difficult and time consuming, it is

worth both the money and the time.

Question s

1 .

2

3

4

5

How many efforts within C&SE have been

formally evaluated? How many by trained

evaluators? How many by DOE staff?

To what extent has program experience been

specifically anaIyzed and applied to succeeding or related programs?

How can DOE personnel obtain thoughtful

and objective insights into the actual impact

of the programs they administer?

What methods of evaluation are most applicable to conservation programs? Are new

methods of evaluation needed to measure

“energy saved?"

How does the DOE Office of Policy and

Evaluation assist the program offices in project evaIuation and review?

Background

Evaluation is the tool needed to answer the

variety of questions raised about programs,

The questions can be grouped into two major

categories:

● process (formative) evaluation seeks to provide prompt feedback to program managers and staff to help them modify the program to improve performance, For example, formative evaluation of the schools

and hospitaIs program might lead to a reduction in the number of forms that each

institution must complete

● Outcomes (summative) evaluation seeks to

quantify the effects of the program on client groups. These responses are of interest

both to program personnel and to policymakers. For example, a summative evaluat ion of the Residential Conservation Service (RCS) Program wouId show the effects

of the RCS Program on annual energy consumption for program participants in

comparison with changes in annual energy consumption for nonparticipants.

Both types of evaluation are important, although for somewhat different reasons.

Unfortunately, DOE is unable to answer

such questions concerning most conservation

and solar programs. To make matters worse,

very little work is now underway to provide

such information in the future.

Although evaluation is a time-consuming,

uncertain, and expensive task, it is much too

important to ignore. A reasonable budget for

data collection and program evaluation activities is probably about 5 to 10 percent of total

program funds.

Why has so little attention been devoted to

evaluation? Failure of the Department and of

Congress to expect such evaluation and consequent lack of funds, changing organization,

and program goals that make evaluation criteria uncertain, and intense day-to-day pressures on program staff all contribute.

Within the Office of Buildings and Community Systems, several behavioral research

programs — Project Payback, Low Cost/No Cost

Conservation Program in New England, use of

energy feedback devices in homes — have included careful evaluation efforts. Some States-

–particularly Michigan, Minnesota, and Tennessee— have carefully evaluated some of

their conservation programs. Thus, it can be

done.

As an example of what a careful evaluation

might include, consider RCS. The first step in

any program evaluation is to define the goals

of the program in a measurable fashion. The

RCS goals might include provision of information to residential customers on the conduct of

energy audits and other services, and ultimate

reductions in household consumption for program participants. The second step is to design

the evaluation to collect data that can be used

to answer the evaIuation questions of program

staff and management. This might include telephone surveys with program participants and

also with nonparticipants to collect demographic information, structural characteristics
22 ● Conservation and Solar Energy Programs of the Department of Energy

of their homes, their sources of energy conservation information, their reactions to RCS (if

they participated), and their estimates of what

conservation actions they recently took and

why. An additional effort might include collection of fuel bills from utilities to measure

changes in energy consumption before and

after RCS for program participants and nonparticipants. A key issue here is the need to

carefulIy separate the effects of RCS on energy

savings from the effects of other determinants.

Because any measurement technique is subject to errors, it is useful to measure program

effectiveness in several ways; here telephone

interviews are used with personnel involved in

delivering RCS services to households (e.g.,

utility staff, State energy office, contractors,

suppliers, banks),

The above example illustrates the difficulties and time required to do a careful evaluation. It is not enough to ask program participants what they did; this does not allow adjustment for what they might have done without

the program. Collecting postprogram data

from both participants and nonparticipants is

also not enough; self-selection will surely influence the prior energy use behaviors of the

two groups.

The difficulty of measuring the impact of

conservation efforts suggests that a number of

evaluation techniques be tested. Staff and

contractor evaluations will both be important.

New techniques may be needed to understand

efforts to conserve energy.

Issue 6

Relationship of

Regulatory, Incentive,

and Budget Outlay

Options

Without redefinition of conservation and

solar program goals, regulatory and incentive programs will continue to be poorly integrated with RD&D and information programs into a coherent commercialization

strategy throughout the Government.

Summar y

In the past the Office of the Assistant Secretary for C&SE has had insufficient leverage in

either planning or implementing “off-budget”

Federal policies such as gas guzzler taxes, tax

credits, auto fuel economy standards, and utility rate regulation. As a result, program progress tends to be measured by budget levels,

and off-budget policies are not fully understood as critical tools for achieving a more

broadly defined objective. Defining total program goals, and expanding the scope of program planning to include off-budget policies

and programs, may correct the current imbalance. Program plans would then be explicitly

based on comparisons of the full range of policy instruments and their relative effectiveness

in meeting program goals. Developing offbudget mechanisms requires a serious commitment of resources. This type of planning may

also assist DOE in urging other agencies (such

as the Treasury Department) to move more vigorously in implementing “off-budget” policies.

Question s

1. Which solar or conservation technologies

2

could be developed and implemented by

private industry with no Government role

other than incentives or regulations? What

fraction of the R&D budget supports these

technologies?

What amount of budget outlays could be

avoided by policies such as guzzler taxes,

technology-forcing standards, and financial

incentives that would create a market for

products? Would such policies obviate the

need for DOE to finance demonstration

projects by making it worthwhile for competing vendors to underwrite such projects?

Are such policy alternatives compared with

budget outlay options on any systematic basis? Can the cost of incentives be compared

with the cost of outlay programs?

Background

The effectiveness of off-budget conservation and solar policies, such as tax incentives

and regulations, has been frequently underestimated by DOE and its predecessor agencies,

Energy performance standards for new autos
Ch. IlI—Management and Institutional Issues ● 23

and buildings resulted from congressional initiatives. Legislation establishing these programs, and for appliance efficiency standards,

typically calIs for the most stringent standards

that are technically feasible and economically

practical. This places an extraordinary burden

on the Government to build and maintain — in

the public domain — a body of expertise nearly

as sophisticated as that developed by the industry. In the areas of building performance

and appliance efficiency combined, however,

DOE has less than 20 full-time professionals

charged with regulating tens of thousands of

producers and dealing with conservation technologies for which little information exists

(e. g., passive solar) or is proprietary (e.g., appliance efficiency). Moreover the nature of the

reguIations required by statute (minimum

standards instead of “fleet average”) requires

that they be set at a “least common denominator” level to avoid anticompetitive impacts

in industries characterized by many small producers. For them to be technology-forcing

would require introduction of a “fleet average” feature or a complementary program of

subsidies for exceeding the minimum standards by a significant amount.

Inadequate staffing of and attention to regulatory programs leads to delays (statutory

deadlines missed for BEPS, appliance labeling,

appliance standards) and to poor regulatory

analysis. Without extremely sophisticated and

credible regulatory analyses, DOE will either

be afraid to propose stringent standards, or

wiII be vulnerable in the face of industry pressure, Regulatory analysis and enforcement are

not inexpensive, Their fulI costs, however,

should be weighed against alternate approaches.

In cases where regulations must be implemented by States (e. g., RCS, BEPS) DOE technical assistance has been inadequate to ensure

program effectiveness.

With more imaginative and aggressive use of

taxes, incentives, and regulations, many of the

functions now performed by DOE budget outlay programs could be performed by manufacturers of energy-efficient equipment. Accompanying an aggressive off-budget conservation

strategy would be a complementary set of

RD&D and information programs. In cases

where the industrial RD&D capacity does not

exist, direct Federal involvement is needed.

Work that produces information whose benefits may not be fully captured by patents, or

programs that are too risky or long term for the

private sector perspective may also require

Federal outlays.

The problem is complicated by the fact that

DOE does not have authority over such options as tax incentive implementation. The Department has supported tax credits for solar

and conservation systems that would go well

beyond those released by the Treasury.

In short, DOE and Congress must give more

emphasis to changing the institutional environment to give private enterprise more incentives

to increase RD&D and commercialization efforts. A restructured DOE program would complement such efforts, and be focused on developing new technologies that are appropriate to

the changed institutional environment.

Issue 7

Procurement

Contracting

The substantial

and

delays and bureaucratic

complications that characterize the current

DOE procurement process threaten the viability of even the best conceived and most

competently planned initiatives.

Summar y

Successful programs depend as much on

timely and efficient procurement as on technical competence. DOE should emphasize speed

and responsiveness to program objectives as

well as fiscal soundness. Accountability is not

merely an auditing function. Lengthy and difficult procurements result in a variety of uniformly unfortunate impacts on conservation

and solar activities.
24 ● Conservation and Solar Energy Programs of the Department of Energy

Question s

1.

2.

3.

4.

5.

6.

How long does a “normal” DOE procurement take?

Are contracts for C&SE processed as quickly

as contracts for other offices?

How are priorities for processing determined

within the procurement off ice?

Does the procurement process damage

either smalI or large firms in particular?

Do DOE procurement processes more properly apply to the weapons and defense activities of the Department than to other areas?

Is an entirely new or separate procurement

system needed?

Background

In an organization such as DOE, technical

excellence and careful planning of the scientific, engineering, and commercialization activities depend on procurement actions that

bring the best available talent to bear on the

problem at hand. Delays in executing procurement actions seriously hamper program progress. Delays running into years, with an average procurement cycle of 14 months, destroy

the best-laid technical plans and convert potentialIy successful ventures into failures.

One effect of very long procurement is that

the system sometimes favors large firms with

established operations, high overhead rates,

and the ability to sustain themselves against

major delays. Many smalIer firms cannot retain high-quality personnel while waiting and

may be forced to release employees or shift to

other work. This is unfortunate because many

innovative ideas originate with small firms and

individuals outside the mainstream of private

sector funding, and because the diverse nature

of both conservation and solar opportunities —

there are literally dozens of solutions for many

problems— means that a wide diversity of responses is important in exploring options. (The

delay in processing actual payments, even

when a contract is in place, also weighs heavily

on small firms and individual s.)

On the other hand, large firms that offer major opportunities for cost reduction and market penetration are sometimes excluded or restricted in contract bidding because of small

business setaside policies. Such setaside policies (throughout the Government) must consider the return on Federal investment, product

performance, and innovation.

The present lengthy process encourages program managers to establish large, open-ended

management contracts with firms that can

then be called on for quick-response work, including program planning support. Many of

these firms become alter-egos of the program

offices, and people not directly employed by

the Federal Government actualIy shape policy.

(Individual employees often go from firm to

firm in order to perpetuate their relationship

with program off ices.)

A simple but critical effect of delay is that

opportunities are simply missed. By the time

the money comes, the window is closed.

It is possible that an essential element of the

problem is that DOE procurement procedures

were designed to fit the needs of the weapons

components of the Department. Thus, DOE offices whose purpose is to catalyze private and

public sector activity and generate unusual

types of research may be unduly burdened. A

similar concern is that procedures needed for

very large contracts are imposed on smalI contracts. (Methods developed at the direction of

Congress for the Small Grants Program have

shown that change is possible. ) Care is needed

to ensure that procurement procedures are

adequately fIexible and carefulIy applied.

The protective nature of the procurement

regulations and related bureaucratic layers has

resulted in a long list of required signoffs and

clearances, almost certainly more than should

be necessary for some types of purchases.

There is a role for sole-source procurement

by DOE, because of the many firms and individuals with unique expertise and information,

and the number of unsolicited proposals.

Speeding up procurement would remove the

present incentive for program managers to request sole-source approval for the sake of

speed alone.
Ch. Ill—Management and Institutional Issues ● 25

One result of the clifficulties of procurement

has been the use of field offices and national

laboratories to manage procurement. This may

expedite the process (or not), but it results in a

real transfer of responsibility. The extent of

such delegation and its effects should be reviewed as part of an effort to improve the procurement process.

It is unclear whether existing problems can

be resolved through review and clarification,

or whether an entirely new approach, preceded by congressional debate, is necessary.

Perhaps each major division within DOE

should have a separate procurement staff, implementing procedures appropriate to the

needs of the programs. Absent such an overall

revision, the DOE leadership could perhaps

most effectively prove its commitment to conservation and solar by resolving the delays in

the procurement process.

Issue 8

Data Collection

and Analysis

DOE data acquisition, analysis, and information dissemination are inadequate to understand current energy problems, take advantage of what can be learned from current

programs, and analyze future responses to

policy options.

Summar y

There is a serious absence of usable data

regarding energy use in all sectors of the

economy. This situation is even more severe

regarding distributional data such as disaggregations of national statistics by income groups,

regions, etc. Although data is now being generated through a number of federally funded

programs, much of the data appears destined

to colIect dust rather than contribute to understanding energy needs and uses.

Question s

1.

2

3.

4.

What systematic plan have the Energy Information Administration (E IA) and C&SE

prepared to meet the numerous gaps in the

information on current and future energy

use and the buildings, vehicles, and equipment that use it?

What arrangements exist between the Department and States or other institutions to

improve the data base on regional and local

energy use? For sharing E 1A data?

What plans are there for ensuring that data

generated under current programs funded

by the Federal Government are validated,

documented, and made available within the

Department and elsewhere?

In planning data collection, how are the

preferences of the policy office, the program managers, and E 1A balanced? Must the

program office be tied to use of E 1A data?

Background

Energy data acquisition and forecasting are

central to the evaluation of energy development and commercialization programs, and to

the development of policy. DOE’s existing

data gathering, forecasting, and analysis efforts are virtually unusable for determining the

impact of its programs or of the programs of

States and local governments. One reason for

this is the extraordinarily high level of aggregation used in national energy planning, wherein

it is simply not possible to determine what the

impact is (on coal, oil, gas, nuclear use, or consumer prices) of insulating the uninsulated

homes in, for example, the State of California.

(One year ago, DOE’s model showed energy

use in California 20 percent higher than the intensely detailed “end-use” models developed

by the State.)

EIA has recently begun to collect detailed

primary data from energy users in the residential and commercial sectors. The attempt to

improve knowledge of the housing stock is

thorough, careful, and well-balanced between

survey work and validation. If E 1A continues
26 . Conservation and Solar Energy Programs of the Department of Energy

these efforts into the future, information will

then be available concerning changes over

time. At the present time, there is little understanding of the determinants of energy use, in

particular how Government conservation programs interact with market forces to improve

efficiency of energy use.

As improved data collection increases, enduse modeling of energy use (present and future) will improve policy makers’ ability to rate

the effectiveness of particular energy programs, to target important R&D areas for oil

savings (choose one option), and even to rate

the agency’s ability to deploy its own programs. DOE must work closely and cooperatively with each State to collect, analyze, and

model end uses of energy if priorities are to be

correctly set, programs are to be evaluated,

the cost effectiveness of incentives, regulations, and other policies are to be judged, and

States are to be effectively integrated in

energy planning.

For example, the Schools and Hospitals

Grant Program has funded audits generating

professional engineering analyses of proposed

capital modifications for hundreds of buildings. A careful synthesis of this raw data could

produce information vital to determining the

targets for future loan and grant programs,

estimating the impact of legislative proposals

on energy consumption, and identifying research needs. At present, there are no plans to

perform such a synthesis.

DOE should provide technical assistance to

State energy offices on the best methods of

collection of energy use data. Existing and

planned Federal conservation programs require States to collect large amounts of data

related to energy use and program effectiveness. However, the data are likely to be varied

in quality and organized differently in each

State. This will make it difficult to develop national data bases and to use these data to help

understand patterns of energy use and their determinants.

Improved data collection and analysis will

require more funding. Such an increase is necessary to underpin program efforts.

Issue 9

Basic

Research

DOE has paid insufficient attention to basic

research directed at energy conservation

and solar energy.

Summar y

One of the principal weaknesses of the DOE

conservation program has been the lack of basic and applied research designed to broaden

the conservation technology base. A strong effort in the physics and chemistry of industrial

processes is needed to assist the transition

away from fossil fuels to solar energy and electricity. Similarly, research on materials and

heat transfer needs more attention if advances

in insulation, heat recovery, and energy storage are to continue. Building energy conservation could benefit by work on airflow and the

physical conditions affecting comfort. An effort to begin a basic research program is now

being made with the establishment of an Office of Conservation Research within C&SE.

This Office should not only fund critical research efforts but bring together relevant research results from programs funded by other

Federal agencies and encourage the development of university graduate research programs

in process chemistry and physics.

Question s

1.

2.

3.

What are DOE’s long-term goals for basic research in energy conservation?

How will the Office of Conservation Research interact with the other conservation

off ices charged with near- and mid-term responsibilities? WilI there be some systematic

way of trading information and ideas?

Does the Office of Conservation Research

plan to catalog other federally funded research that may be relevant to basic research in energy conservation?
Ch. III—Management and Institutional Issues ● 27

Background

The basic research activities of DOE have

focused primarily on supply questions such as

combustion research, fusion, and fission. Little

work has been undertaken concerning the use

of energy, particularly in industrial processes.

The Nation is facing a transition in the coming

decades away from direct fossil fuels combustion as the primary energy source for industry

to direct solar and electricity. As these shifts

are made it will be very important that new

ways to use these sources are developed to

maximize economic efficiency; the direct substitution of solar and electricity as heat

sources into current thermal chemical processes may be very wastefuI and costly. Therefore, increased attention should be given to

electrochemical and photochemical processes. Examples include using electromagnetic

radiation through lasers and microwaves or

photochemistry with appropriate catalysts to

drive chemical reactions, These processes

could be useful for chemical processes, heat

treating of metals, and transformation of raw

ore to finished metals, al I of which are now

predominately driven by heat from direct combustion of fossil fuels, Similarly, electricity

may be more efficiently used as a heat source

by using induction heating or isolating particular portions of the spectrum (infrared or

ultraviolet).

More work could be done to understand the

basic properties of materials for their use as insulation, heat transfer equipment, and energy

storage devices, While programs are underway

to develop and demonstrate technologies in

most of these areas, they are principally oriented to applying existing technologies to the

problem, and devote only a small effort to basic research. Examples are the ceramics program in advanced engine research and the battery program, both of which are attempting to

develop finished products. They do not have

the resources or the charter to explore more

fundamental materials’ properties questions

related to their mission.

Other basic research opportunities in conservation include exam i nation of buiIding airflows with the goal of al lowing smalIer operating temperature ranges for heat pumps and airconditioners (and therefore higher efficiencies), examination of the effect of temperature, humidity, and air velocity on comfort,

and lighting levels and techniques, particularly

those using solar.

Many of the items mentioned above are receiving some attention in the research community. The efforts are not coordinated

toward energy use goals, however, and it is

possible that valuable results will be lost or not

attained unless a directed conservation basic

research program exists. The new Office of

Conservation Research within C&SE may be

able to provide this coordination and leadership in addition to funding new work. Efforts

should be made by the Office to make use of

relevant work sponsored by other Federal

agencies and perhaps to expand those projects

where possible. The Office should also look

into ways to encourage the reestablishment of

university graduate programs in process chemistry and physics. This could be of great assistance in supporting industry research on more

efficient and productive industrial processes.

Issue 10

Commercialization

Confusion exists regarding appropriate and

effective methods to commercialize conservation and solar technologies, both within

the Department and Congress. More careful

analysis of commercialization techniques

and better delineation of authority within

DOE are needed.

Summary

Legislative guidance to DOE includes the responsibility for research, development, and

commercialization of solar energy and conservation devices. The OTA Analysis of the ERDA

Plan and Program, completed in 1975, states

the issue, “The development of effective commercialization policies and procedures is not

adequately addressed in the ERDA plan, ” The
28 . conservation and Solar Energy Programs of the Department of Energy

new administration goals for the use of renewable energy by 2000 add to the urgency of this

problem. Commercialization connotes many

methods and approaches to both Congress and

DOE management, thus adding to the confusion. A recently established Office of Commercialization within C&SE has been charged with

the responsibility of better defining the effort.

Experience from early demonstration programs can be applied to commercialization.

Question s

1.

2.

3.

4.

Who is responsible for determining commercialization strategies for C&SE? For selecting

products or technologies to commercialize?

What does commercialization mean within

C&SE?

How does DOE decide on the relative merit

of channeling commercialization subsidies

directly to industry (via budget outlay programs) v. indirectly through tax credits, utility rates, or regulatory programs?

Has DOE carefully studied the successes

and failures of other Federal agencies in

commercialization (e. g., the U.S. Department of Agriculture)?

Are DOE commercialization efforts consistent with general principles that emerged in

the administration’s Domestic Policy Review?

Background

The R&D process leading to a commercial

product is seldom a staged, linear process. In

fact, the stages in the process are separated by

formidable gaps, often difficult to bridge even

in a monolithic organization, and not always

easy to describe as a set of sequential events.

Engineering development, for example, often

depends on many lines of research carried out

earlier which are recombined into new patterns to develop a useful device or product.

Similarly, successful commercialization depends on economic and marketing factors, and

perhaps regulatory considerations, that go far

beyond the bare existence of a useful, reliable

product. For these reasons, one should not expect Government-sponsored R&D to lead directly to successful commercialization. Those

instances where Government R&D has led to a

successful outcome have almost always been

with large systems for the military or space

where cost considerations have not been paramount or with nuclear energy for an already

organized market. The success of these systems cannot be translated easily into commercializing the diverse and numerous products

and design approaches required for the penetration of solar and conservation technologies.

This lack of applicable experience combined with a belief that the Government does

have the resources to achieve market impact

(based on successful defense and space work)

causes confusion. On the one hand, Congress

has sometimes simply expected that DOE

could somehow force new technologies to be

used. On the other hand, attempts by DOE to

deal directly with the market through supporting particular products, to support one

technology at the expense of the other, or to

undertake private sector type traditional market research and advertising, have been met

with strong resistance by both private industry

and some members of Congress. For example,

one resource important to private sector commercialization is the availabiIity of money to

use flexibly, so that unexpected market opportunities can be seized. Is existing DOE reprograming authority sufficient to meet this need?

Would Congress allow greater fIexibility?

Similarly, there is no concensus as to how

far along toward commercialization Government efforts should continue. It is clearly inappropriate and inefficient for a unit of the U.S.

Government to assume the role of entrepreneur. Even before this point, Government involvement can be counterproductive, since

Government-sponsored developments are generally made equally available to all industrial

comers. If Government activity prevents any

one company from acquiring a sufficient market share, successful commercialization may

be impossible. Government-sponsored R&D in

fields such as conservation, where the associated industry is too fragmented to carry out

these tasks for itself, may be productive. Government demonstration of technical viability,

particularly for technologies to be used by util-
Ch. IIl—Management and Institutional Issues ● 29

ities and industry, is clearly justified. A concurrent responsibility is to make the results of

such activity available to industry.

The principal questions regarding commercialization then revolve around the degree of

DOE involvement in accelerating industry activity when national goals require it. This is the

situation in the energy arena today. Steps

available beyond information dissemination

include technical and financial assistance and

market guarantees as well as a host of less

direct measures, such as removal of institutional barriers.

Effective strategies must be based on an accurate understanding of current market conditions. For example, the nature and extent of

capital investment in solar heating systems

would be a useful piece of information to people responsible for accelerating the use of

solar systems. Such research is not being done

within the Department at this time.

There is no one answer as to what approach

would be most effective or appropriate. Each

technology and each industry has its own characteristics and may play a different role in the

national energy system. Hence the commercialization efforts must be designed for the

particular situations.

An Office of Commercialization has recently been created within C&SE, with responsibility to try and identify the best commercialization strategies and methods for various technologies, for both short- and long-term needs.

It is too early to assess the effectiveness of the

Office, but its existence may indicate a stronger commitment by C&SE to come to grips with

the commercialization issue and try to develop

coherent approaches.

Experience gained through the Federal solar

heating and cooling system demonstration program and other demonstration efforts suggest

some lessons that the Department can apply in

trying to bring technologies into the market

successfulIy. Federal demonstration programs

have had very mixed results in demonstrating

the practicality of solar heating and cooling

systems. The programs have resulted in technical innovations, increased public awareness

of solar technology, and important information on system performance. However, the programs have been criticized on many grounds,

including unreliable operation of solar systems

due to poor installation and the use of unproven technologies, and unacceptable economic performance due to the use of costly

systems. Many critics believe the demonstration programs, which were mandated by Congress, have been so problem-plagued that they

have been of questionable or negative value in

demonstrating the attractiveness of solar

energy to the general public.

Much of this confusion can be clarified by

making a clear distinction between engineering field tests and public market demonstrations. Engineering field tests involve constructing systems that are considered well along in

the technical development process, allowing

them to operate with minimum interference

and adjustment in a field environment, and

monitoring their performance over time. Industry never treats engineering field tests as a

public demonstration. Rather, such tests are

done carefully, and when the technology is

judged ready, it is given a “public demonstration” in the marketplace. The same principle

should apply in Government programs.

Public exhibitions should feature only

proven, reliable, cost-effective technologies.

They should assure that equipment is certified

and installation is done correctly. Strict selection criteria should be established to assure

that a large number of builders can participate, that locations are chosen for high public

exposure, and that a few large projects do not

dominate the budget.

Demonstration programs should only be undertaken after a careful evaluation of alternative approaches. For example, information,

education, and advertising programs, the development of codes and standards to assure

consumer satisfaction, cooperative FederalState programs to identify and publicize private sector “model projects, ” and other approaches may be more cost-effective than pubIic demonstration programs for promoting consumer awareness and acceptance of solar technologies. Historically, funding for construction
30 . Conservation and Solar Energy Programs of the Department of Energy

programs has been easiest to obtain from both

the Office of Management and Budget (OMB)

and Congress, while funding for information,

education, and related programs has been a

prime target for budget cutting. The questionable results of past Federal solar demonstration programs suggest that historical patterns

need to be reassessed.

Issue 11

Non hardware

Research

DOE has given social science research an insignificant level of funding despite important

and relevant discoveries in this field, and opportunities to enhance public acceptance of

conservation and solar energy investment.

Summar y

The success of many conservation and solar

programs depends on hundreds of millions of

decisions made by millions of individuals.

However, DOE has shown little interest in examining the consumer’s “energy environmerit, ” or in learning how attitudes and motivations affect the level of energy use, and how

to best encourage people to take energy-saving

actions. Yet this research field is well-defined

and can be targeted at finding crucial aspects

of attitudes and action that most affect energy

use. DOE should expand this research to reflect its potential contribution to changing

energy use.

Question s

1. Why has the applied social science R&D

budget remained at the same level for the

past 3 years?

2. Why is DOE putting more effort into public

information than into determining what information is most effective in altering energy use patterns?

3. What plans does DOE have to coordinate its

social science research with conservation

and solar “hardware” research?

Background

The amount of control that individuals exercise over their own energy use has gone largely

unrecognized by DOE, despite the significant

contributions that an energy-conscious society

of consumers could make toward reducing energy consumption. The bulk of research conducted on energy conservation has been within

the sphere of physical sciences. The conservation social science budget has remained constant for the past 3 years, failing to keep pace

with the rapid expansion of the overalI conservation budget and gal loping infIation.

There is ample evidence that social science

research can produce meaningful and effective results, not simply in understanding people’s actions, but also in helping them make

more informed decisions. For example, in

DOE’s “No-Cost, Low-Cost” experiment carried out in New England last fall, over a milIion

residents took actions in their homes to cut

down on their energy bills. Basing the program

on prior marketing and behavioral research,

DOE prepared a brief guide outlining 12 simple steps which if adopted could cut the resident’s energy bill by 25 percent for an investment of less than $100. About 30 percent of the

residents receiving the packet (which was a

brochure and a waterflow controller) took actions because of the information. DOE estimates that for every $1 it spent on the program, New England residents will save about

$26 in energy costs, making this an unusually

cost-effective program. Knowledge gained in

previous DOE marketing experiments and advertising efforts was used to determine the

preparation of all materials and promotion for

“Low-Cost, No-Cost, ”

In research at Twin Rivers, in Princeton, N. J.,

researchers found that some families use twice

as much energy in their homes as others, even

though they live in identical homes, with many

similar traits such as family size, education level, and income. I n another project, DOE discovered that if people realize at what rate they

use energy, they will cut down on its use. Appropriate feedback to motivated people has

cut home electrical energy use by 10 percent.
Ch. Ill—Management and Institutional Issues ● 31

Research has also shown that many attitudes that might be thought to affect home energy use (such as belief in the reality of the energy crisis or optimism about a technical solution) are not related. Information of this kind is

valuable because it provides the basis for design of effective conservation campaigns.

Another valuable finding involves utility

companies’ equal monthly payment plans.

Since these plans soften the impact of large

bills, there was concern that people selecting

this form of payment might increase energy

use; a concern that was heightened because of

rapid growth of participation in equal-monthly

payment plans. Subsequent research indicated

that this type of payment plan did not foster

excessive consumption.

Well-defined and carefully conducted social

science research plays an important role in

selecting strategies for changing energy use.

More attention to this work, and use of the

results by program offices,

improve DOE effectiveness

Issue 12

Conservation and

Solar Integration

could substantially

The division of authority into “conservation”

and “solar energy” causes competition

where cooperation should exist, and may reduce the effectiveness of both programs. *

Summar y

It is essential that conservation and renewable energy be understood as a unified approach, consisting of demand reduction plus a

shift to sustainable energy. The DOE organizational structure accentuates the differences between conservation and solar, rather than finding

opportunities for cooperation. This can result in

pitting conservation against solar in the competition for limited resources, and can generate solutions that are not optimal. A particularly clear example of the need to begin to integrate these approaches lies in the buildings

area, although the need for a more integrated

approach is also evident in the areas of industrial and transportation programs.

Question s

1. Is new legislation necessary to directly inte2

grate the programs now separately defined

as conservation and solar?

What is the rationale for conducting two

separate programs, both designed at reducing fossil-fuel use in buildings, without a unified approach to solving the problem?

To what extent are buildings Iikely to change

in response to conservation measures? Will

the more efficient buildings “fit” the types

of solar systems now under consideration by

the Department?

4. How frequently and in what ways, formal

and infer-mal, do the staffs of

assigned to buildings compare

applications experience?

Background

both offices

research and

The Buildings Program, within the Office of

the Deputy Assistant Secretary for Conservation, is now organized into three areas: Architectural and Engineering Systems, Regulatory

Programs, and Applications and Incentives.

Within the Office of the Deputy Assistant Secretary for Solar Energy, the areas of Solar Active, Solar Passive, and Photovoltaic all fund

work relating to buiIding energy use. Because

of these organizational distinctions, there is Iittle integration of conservation techniques that

can radicalIy alter the configuration of a structure, and thus alter the type and cost of a solar

system. While some research will be necessary

for various technologies and should be conducted separately, application of research can

best be done by end-use category.

An approach is needed which seeks to provide the most efficient solution to the problem, instead of focusing on conservation and

solar as mutualIy exclusive technologies. Integration of conservation and solar would help
32 . Conservation and Solar Energy Programs of the Department of Energy

architects, engineers, designers, and builders

to produce the most energy-efficient solutions

by providing them with integrated energy-conscious designs. An integrated approach to

building design would focus attention on critical and relatively neglected questions like the

following: To what extent can conservation

measures improve the economics of solar systems by reducing the collector area needed for

meeting building heating requirements? What

combinations of solar systems and conservation measures are more cost effective than the

conservation measures alone? What changes

in solar design philosophy should occur as

buildings are made tighter? How does greater

thermal integrity affect the comparative costs

of backup systems and thermal storage systems? Could “superinsulation” techniques virtually eliminate the need for conventional

heating sytems in new buildings? What passive

additions are economically justified in building retrofits? Should existing homes with fireplaces generally convert to wood burning “fireplace furnaces” in areas where wood is readily

available? Is solar heating preferable to oil and

gas for minimizing air quality problems in

heavily insulated buildings? In what circumstances will solar district heating systems be

superior to solar retrofits on individual buildings?

The existing division of responsibility tends

to produce “separate but equal” solutions, discouraging designs that combine both approaches. An organization that would emphasize the most efficient problem solving could

replace the existing organization with divisions

by building type (see below). Within each program, staff would seek the most effective combination of conservation and solar techniques.

The different stages of work within each of the

four

1.

2.

3.

4.

5.

6.

7.

8.

A

programs above could be:

collection of baseline data and goal setting;

R&D in the thermodynamics by building

type;

collection of climate data on a region-byregion basis;

R&D in energy-efficient systems, materials, and components that integrate solar

with conservation;

analysis and load quantification;

R&D in institutional barriers;

evaluation of the results of the preceding

programs; and

information and education to the public

on techniques and products.

full reorganization of the solar and conservation buildings programs along the Iines suggested here may not be desirable in the immediate future. (In fact, the OTA panels were

unanimous in the view that a respite from major reorganizations is needed. ) Nevertheless, it

is desirable that DOE move over time toward

an integrated “buildings program, ” and many

cooperative steps toward that goal are feasible

in the near future. For example, solar and conservation programs could cooperate closely to

define and promote a “least cost retrofit strategy” (see Issue 31), and the passive program

could emphasize the development of designs

and prototype buildings that integrate passive

features with conservation measures and active solar systems (see Issues 32 and 33).

Issue 13

Federal Energy

Coordination

There is no indication that Federal agencies

are coordinating their energy activities in accordance with the President’s Executive

order and the June 1979 solar message to

Congress.
Ch. Ill—Management and Institutional Issues . 33

Summar y

Many Federal agencies, quasi-public corporations, and departments within agencies can

be employed in the implementation of energy

policy. Effective coordination and use of these

resources is essential in obtaining the desired

solar goals. The Energy Coordinating Committee (ECC) was formed for this purpose, but has

yet to show visible progress.

Questions

1.

2.

3.

4.

How will the effectiveness of ECC and the

Solar Subcommittee be assured?

Why has the Energy Productivity Subcommittee apparently been abandoned?

Will ECC provide Congress with a first-year

progress report detailing each agency’s actions in accordance with the President’s

June 1979 directives reported in the Message

to Congress?

How can coordination be promoted without

adding red tape and reducing DOE’s managerial effectiveness?

Background

In his June 1979 message on solar energy,

the President announced the formation of a

Standing Subcommittee on Solar Energy within ECC, which had been established by Executive order the previous year. The subcommittee was created to coordinate the solar-related

activities of over a dozen Federal agencies.

The subcommittee has no authority but reports

to ECC which in turn reports to the President.

As a cabinet-level committee, ECC has authority to resolve problems. It is not clear that ECC

is fulfilling its mandate (or even meeting),

Since ECC can play a vital role in efficiently

implementing national policy, Congress might

request progress reports and encourage ECC to

aggressively pursue its mission.

Issue 14

Assistance

to States

The Office of State and Local Programs

(S&LP) needs increased technical capability

and discretionary monies to properly assist

the States and encourage flexible and responsive efforts meeting both State and National needs.

Summar y

States are expected to be the prime movers

in implementing many national programs mandated by Congress. The wide variation in the

level of funding, staffing, and resources of

State Energy Off ices, combined with the diversity of energy use patterns, fuel sources, Iiving

patterns, and climate of the States, suggests

that effective implementation by States of national goals must be based on a flexible approach. Congress and DOE should understand

this need for flexibility and for support to the

States. S&LP needs additional capability to

provide technical assistance to States.

Background

Many of the programs that the States are

called on to implement are technical in nature.

A comparison of resources between the C&SE

offices shows that S&LP has a much smalIer

staff than the research offices; and that the

S&LP staff has fewer employees with training

in technical fields such as engineering and

economics. In the absence of technical guidance provided directly by the central office, or

regional offices, assistance could be given to

the States by contractors. However, the very
34 ● Conservation and Solar Energy Programs of the Department of Energy

large C&SE budget is dedicated almost entirely

to the State grants themselves, with very little

discretionary money for contractor support

and technical assistance. R&D offices, on the

other hand, have great discretion in how their

funds are allocated.

State programs are largely composed of

common elements, most required by Congress.

These elements include energy conservation

telephone hotlines, home energy audit programs, audit training, energy management

seminars, energy use data collection and management systems, consumer publications, and

so on.

DOE does not generally provide “models”

for these programs, which the States could

adopt, modify, or reject. This leads to great

duplication of effort. While there is an understandable and legitimate desire on the part of

the States to have materials that are uniquely

theirs, basic guidance, particularly in highly

technical areas, would be helpful. An example

is the Schools and Hospitals Program, which

contained Federal requirements concerning

training and certification of audits. A Federal

guidebook to this process would have been

helpful. Contractors must be well-chosen, and

have experience with field operations or State

and local environments. Assistance provided

by the evaluation of the Energy Extension Service in the 10 pilot States was apparently helpful to those States. The Office of Buildings and

Community Systems preparation for implementing RCS includes development of a model

audit and model audit training program. If this

effort is delivered soon and of good quality, it

wiII help the States and improve the effectiveness of the RCS program.

In providing technical assistance to States,

close cooperation is required. State energy offices are best able to say what type of technical assistance they require, and to help design

the projects. Good ideas are often too late in

arriving (see Issue 7).

It might be helpful in general if DOE Washington personnel responsible for working with

States could actually spend more time in State

energy offices, to learn first-hand the day to

day reality of a State energy office, and their

real capabilities and needs,

Issue 15

Consolidation of

State Programs

SL&P now manages three separate but similar programs that impose too much paperwork on State energy offices, and unnecessarily duplicate services. The programs

should be consolidated and streamlined, as

both DOE and Congress have proposed.

Summar y

The State Energy Conservation Program, the

Supplemental State Energy Conservation Program, and the Energy Extension Service should

be combined into a single program to facilitate

their management by the State energy offices

as well as by DOE. Goals need redefining so

that States have a single set of objectives that

elements of all programs combine to achieve.

The most effective methods of providing technical assistance to States should be identified

by the States and retained, with less appropriate approaches dropped. Precautions are

needed to ensure that consolidation does not

burden States under the guise of helping them.

Questions

1.

2.

3.

4

Has DOE carried out an evaluation of its existing State and local programs to provide

guidance for their consolidation?

What plans does DOE have to eliminate the

duplication that now exists among these

three programs?

What steps is DOE planning to ensure that

consolidation will make it easier, not more

difficult, for States to achieve energy conservation goals?

Has DOE considered conductin g a pilot

project to test the proposed consolidation in

several States before expandin g it nationwide?
Ch. III—Management and institutional Issues . 35

Background

DOE now manages three State energy conservation programs, the State Energy Conservation Program, the Supplemental State Energy Conservation Program, and the Energy Extension Service. To be eligible for grants under

the State Energy Conservation Program and

the Supplemental State Energy Conservation

Program, a State must develop plans to promote energy efficiency in buildings (both structure and components), and transportation,

with techniques to be used including coordination among Government bodies, reform of procurement regulations to promote energy efficiency, and public education. Under the Energy Extension Service, States are to develop

energy-saving programs such as self-help workshops for the public, energy audits for homeowners and smalI businesses, and energy management services for local governments.

Because many of the services provided are

similar (e.g., technical assistance, information

dissemination, building audits), there is considerable overlap. The programs are managed by

different staff at DOE, and operate on different budget cycles and different grant application deadlines. Consolidation would eliminate

much duplication and inefficiency.

Also, the grant application process needs to

be simplified. The experience of some State

and local agencies with these programs suggests that getting hold of Federal funds is a

discouraging, laborious process. This can impede creative development and efficient pursuit of programs on the State and local levels.

For example, if reporting forms are too time

consuming or redundant, groups may be sloppy in submitting them. In one case under the

Schools and Hospitals Program, for example,

an institution applying for a $300 grant must

fill out separate forms for DOE, EIA, and

OMB. These grants, for walk-through energy

audits, may welI not be worth the cost of preparing and processing them.

To the extent that State and local groups get

bogged down in applications for and administration of Federal monies and in coping with

Federal requirements, their ability to tackle

their own programs is eroded.

As DOE consolidates these State programs,

precautions are needed to avoid encumbering

the States with still more regulations and requirements, without providing them with more

resources. The Energy Management Partnership Act (EM PA) proposal could result in adding more requirements for States without providing additional funds to help the States meet

those requirements. This would make EMPA

counterproductive rather than increasing flexibility in State programing.

Testing of EMPA through a pilot program in

a few States would provide an opportunity for

Congress to evaluate and modify EMPA before

expanding it nationally. Such a test could be

similar to the pilot testing of the Energy Extension Service.

Issue 16

Role of

Utilities

Private and public utilities can play a major

role in promoting the use of conservation

and solar energy but are inhibited by Federal

disincentives.

Summar y

Although utilities are potentially effective

promoters of conservation and solar energy,

they are currently prevented from undertaking

this role by Federal law. NE CPA prohibits utilities from supplying, financing, and installing

conservation and solar energy services because of concerns over anticompetitive effects. If the restriction is removed by Congress,

DOE can encourage utility experimentation

with various approaches, and can provide

technical and economic information to assist

utiIities.

Questions

1, Should the Federal Government allow utilities to directly assist customer-owned conservation and solar investments by removing

current financing and supply restrictions?
36 ● Conservation and Solar Energy Programs of the Department of Energy

2.

3.

4.

What information is DOE providing to utilities regarding the experience of those companies now actively involved with conservation and renewable?

What steps is DOE taking to coordinate the

numerous departmental activities affecting

utiIities?

What types of demonstrations in conservation and renewable might DOE fund

through utilities?

Background

Utilities are expected to deliver energy efficiently, reliably, and at the lowest possible

cost. Their promotion of conservation measures and renewable energy sources is consistent with these goals. Utilities offer a unique delivery system that reaches nearly every commercial, residential, and industrial building in

the country; technical capabilities, consumer

services, and consumer contact; and service

area familiarity and access to money markets

that can positively affect the penetration of

solar technologies and conservation measures.

NE CPA requires utilities to offer energy audits, to disseminate information, and to arrange for the installation and financing for

various conservation and solar energy measures, through RCS. But NE CPA also prohibits

new programs to supply, install, or finance

conservation and solar energy technologies in

residences. Only under certain conditions may

DOE, in consultation with the Federal Trade

Commission, issue a waiver of this prohibition.

The major concern leading to this prohibition was over the fear of allowing a monopoly

power to influence a competitive marketplace.

Methods are needed to ensure that utility energy marketing programs do not lead to anticompetitive effects. To the extent that these new

technologies can be developed by many openly competitive firms, utilities should not be

allowed to act in a manner that would unreasonably favor one or a few firms over others, or

limit consumer choice in any manner. The potential for competitive prices and varied technical design must be maintained. However, a

blanket prohibition on utility activities in this

area obstructs the stated national goal of the

accelerated use of conservation and renewable energy sources in cost-effective applications and limits innovation. DOE could sponsor and evaluate a variety of utility programs

designed to promoted conservation and solar

energy development in a competitive environment, while avoiding the concerns that led to

these restrictive regulations/prohibitions.

In many cases, the requisite program analysis can be accomplished at the State level. All

State regulatory commissions are required by

law to consider the potential anticompetitive

impacts of utility programs. Some States have

supplemented this requirement with additional

regulatory restrictions (see, for instance, California Public Utilities Code). States are in a

better position to tailor utility initiatives to

their own circumstances than DOE because

they have more authority and clearly have responsibility for decisions with ratepayer impacts. DOE should further scrutinize utility

programs only where the States have failed to

fulfill this responsibility.

A few utilities that had active or planned

programs to promote the use of conservation

and renewable resources by customers have recorded striking success. The Tennessee Valley

Authority (TVA) has launched an aggressive

program to place wood stoves and solar water

heaters in its service region. The TVA program

of home energy audits and interest-free financing on loans for insulation has generated a

strong consumer response. Both of these programs, and other TVA efforts, save money for

all customers through lowering demand for

electrical generation and delaying or eliminating the need for new thermal generating

plants. Pacific Power and Light, in Portland,

Oreg., has saved both capital and operating

costs through an active program of home energy audits and utility-financed retrofits.

The existence of these programs indicates

two things. First of all, it will be very much in

the economic interest of many utilities and

their customers to encourage and finance conservation and renewable energy devices. Secondly, many utilities have not acted to establish such programs, and may not do so even if

current legal restrictions are removed. Thus,
Ch. Ill—Management and Institutional Issues . 37

the Department can play an important role in

helping utilities understand the potential of

these technologies.

Another major incentive provided by utilities for deployment of solar energy and cogeneration is the potential for utility purchase of

excess power. A key to such buyback is the development of technologies that can be successfully connected to the existing utility grid.

Technical compatibility issues can best be addressed by direct contact between utility engineers and local entrepreneurs.

Price issues are partially resolved by the

recently issued regulations implementing the

Public Utilities Regulatory Policy Act. These

regulations establish mechanisms to guide

States in determining the rates at which utilities wilI purchase power from local generators

and the rates at which the utility will sell standby power. States have 1 year to implement

their own methods. Continuing Federal oversight in this process, along with information

sharing, can help launch this new effort constructively.

Issue 17

International

Markets

The requested level of funding for the solar

international program is inconsistent with

the potential importance of the international

solar market and the needs of developing

countries for solar and conservation options.

Summary

Solar exports, especially of relatively hightechnology products such as solar cells, wind

generators, electrical controls, and heat engines, could greatly benefit both U.S. industry

and developing countries where conventional

energy costs are high. Commercialization in

the United States for some products such as

photovoltaics, which evidently are susceptible

to large cost reductions with mass production,

could be accelerated by this expanded market.

A large international market also exists for

relatively low-technology products such as

low-temperature collectors for water heating

and agricultural applications. Stimulating indigenous production capacity may be more

beneficial for developing countries and could

reduce pressure on the world oil and financial

markets. DOE activity in the international

solar area appears to be increasing, as there is

now an Office of International Programs reporting directly to the Assistant Secretary for

C&SE as well as a specific line item budget.

However, the projects being managed by this

new Office do not result from a coherent U.S.

export policy and are not responsive to the urgent needs of developing countries.

Questions

1. Is an international plan being developed?

2

3.

What should be the objectives of such a

plan? What balance is appropriate between

an emphasis on maximizing opportunities

for U.S. exports and providing technical assistance for the creation of an indigenous

solar industry in developing countries with a

Iimited capacity to finance imports?

To what extent should simpler, low-temperature technologies be targeted for export

along with more high-technology options?

Should conservation technologies be integrated into the solar international program?

4. To what extent should the solar internation5

al program be restructured on the basis of

foreign policy considerations such as the

balance of payments and the economic stability of poor countries? To what extent are

such factors being considered in planning

the DOE program?

Did DOE take the DPR on innovation into

account in developing its international program?

Background

No systematic surveys have been undertaken to estimate the total size of the solar export market, but many observers are convinced that a potential market of many hundreds of millions of dollars in annual sales

could be developed in the 1980’s. Developing
38 ● Conservation and Solar Energy Programs of the Department of Energy

these markets would be highly beneficial to

the domestic solar equipment market, since

the additional overseas demand would result

in larger production runs and accelerated research. This would reduce domestic prices and

accelerate improvements made in devices sold

in the domestic market, yielding the United

States a long-term advantage, even if many developing countries began to manufacture their

own systems with U.S. technical assistance.

Developing nations may have both the

greatest need and the best conditions for many

solar technologies. As OTA’s study of the Application of Solar Technology to Today’s Energy Needs emphasizes, poor nations are likely

to be most vulnerable to energy shortages and

steep increases in energy prices. They typically

have not yet invested in an extensive network

of transmission and distribution facilities, so

that onsite solar technologies could provide

power to dispersed sites without the expense

and delay associated with building such facilities. Onsite solar equipment can be installed

in small increments, as needed, reducing the

lengthy periods of construction required for

conventional energy faciIities.

Some applications of solar energy may well

become economically attractive in developing

nations before they do so in the United States.

The cost of competing energy–when it is

available at al 1— is often high. Labor costs —

which represent a substantial fraction of the

total costs of some solar installations — are

usually quite low. And most developing countries are located in areas where sunlight is

more plentiful than in North America.

Solar energy may also prove especially attractive to many developing countries on

broader grounds of social utility. The relatively

high labor intensity of some solar technologies

can help alleviate the endemic high unemployment and underemployment that plague most

developing countries. Solar facilities can often

be constructed using materials that are locally

available. And using solar energy does not

commit developing countries to forms of energy production that they may not be able to sus

tain because of fuel shortages or the lack of secure funds for fuel costs and other operating

expenses.

The attractiveness of solar technologies for

many developing countries, the expense of

transporting bulky solar equipment, and the

limited capacity of many poor countries to

finance extensive imports suggest that many

developing countries will find solar energy an

ideal import substitution industry. The U.S. international program should find an appropriate balance between maximizing opportunities

for exports and providing technical assistance

for the creation of an indigenous solar industry

in developing countries. Since conservation

measures can often be combined effectively

with solar technologies (see Issues 12 and 33),

it may be cost effective to integrate conservation technologies into the international solar

program.

A new Office of International Programs is

described in the solar energy goldbook, though

it has not yet been officialIy organized. The initial projects for the Office, apparently inherited from other programs, are not large enough

to have significant impact either abroad or on

the domestic solar industry. The total budget

request is only $15 million ($11 million in solar

technology, $4 million in solar applications).

Of the $11 million, $9.2 million is allocated to

projects in Saudi Arabia and Italy. The largest

is a 350-kW (peak) photovoltaic system in

Saudi Arabia, to begin operation in 1981.

These projects represent neither a coherent

U.S. export policy nor a coherent policy for

providing technical assistance to developing

countries. It might be hoped that future agreements wiII involve some of the more constrained developing countries; that a more appropriate balance be found between exportoriented programs and technical assistance

programs; and that conservation technologies

be integrated into solar- technical assistance

programs.

Fruitful relations with other countries will

depend on careful planning and implementation of agreements, and coordination with
Ch. III—Management and Institutional Issues ● 3 9

other Government agencies. An overall plan

for what the Office is trying to accomplish and

how it will go about it would be extremely useful, both in directing activities and avoiding

the many pitfalls that exist in dealing with

other countries.

Issue 18

Energy Use in

Federal Buildings

DOE should consolidate existing programs

to equip Federal buildings with energy conservation and solar energy systems, and

move more aggressively to implement these

programs.

Summary

Federal buildings offer an important opportunity to test integrated conservation and solar

technologies, reduce fossil energy use, assist

market penetration and cost-reduction of

products through large-scale procurement, and

prove the commitment of the Federal Government to reducing fossil energy use. Currently

there are three separate congressionally authorized programs in this area. DOE should

couple the consolidation of these programs

with aggressive implementation, and solicit

more active interagency participation to meet

the legislative goals for Federal buildings.

Questions

1.

2.

3.

4.

How much did the Federal Government

spend on building energy use last year?

What progress has been made toward reducing the total energy use in Federal buildings?

What methods have been established to ensure uniform building audits? How much is

known regarding energy use by various

building type and climate zones?

Why has the Department failed to move vigorously to cut fossil energy use? What are

the staffing plans to coordinate this effort

this year?

5. How will the Department ensure that solu6

7

tions are optimized for each building, that

the results are shared within the Government, and explained to the public?

How does the Federal Government ensure

that components and appliances purchased

for buildings are energy efficient?

How will the present “solar” and “conservation” Federal Buildings Program be coordinated? Why are they not directed by the

same off ice?

Background

The Federal Government has an obvious opportunity to display publicly its commitment

to renewable technologies, conservation, and

more efficient fossil fuel use through energyconscious management of its own buildings. In

addition to demonstrating its credibility, Federal properties serve as a useful instrument for

testing some new technologies and demonstrating new but proven technologies (see Issue

10). The large, coordinated procurements represented by the Federal market offer the prospect for creating a market-induced, cost-lowering mechanism for such devices as solar collectors and high-efficiency furnaces.

The Federal Government accounts for about

2.6 percent of total U.S. direct energy use,

through its 490,000 buildings and related operations. While promises about reducing this

consumption are strong, there is Iittle evidence

that change is occurring. Congress has given

DOE goals for the conservation-based efforts

that include reducing energy in existing Federal buildings by 20 percent in 1985, and by 4 5

percent in new buildings (below the 1975-76

levels). These goals are easily achievable technicalIy and would clearly be cost effective, yet

little progress has been made toward achieving

them. Congress has also asked DOE to submit

a 1 O-year plan for energy conservation in al I

Federal buildings.

Separately, the Solar Federal Buildings Program is aimed at demonstrating Federal leadership through the use of solar heating and cooling in new buildings. With Iimited resources,
40 . Conservation and Solar Energy Programs of the Department of Energy

centralized program integration is essential. In

addition, one of the principal lessons of research and experience with building energy

use over the past few years is that solutions

must be carefully tailored to each building,

with consideration given to existing energy use

and cost, building function, site orientation,

and so on. The arbitrary determination that

“solar” or “conservation” is the choice for a

building retrofit reinforces the undesirable distinction that already exists between these two

complementary options. The Assistant Secretary should act to develop methods to integrate these programs, including consultation

with appropriate congressional staff.

At present no coherent data base exists regarding energy use in Federal buildings. No

program effort can be carefully crafted until

such a base is created. Many buildings will immediately emerge as candidates for simple retrofits which will quickly lower energy use. Information gained from examining the patterns

of energy use will indicate what types of effort

should go to training building managers, to

major retrofits, and to minor retrofits.

Strategies developed for an integrated Federal buildings approach might include widespread demonstration of low-cost, no-cost

techniques that could also be used in homes,

including explanations of the devices; testing

of advanced energy systems in a few carefully

selected sites; timely implementation of strong

energy standards for Federal structures; and

Government-wide monitoring of energy use by

building type. Discount rates used in determining investment for Federal buildings should be

scrutinized to determine if they correctly

assess market impacts and marginal costs.

While DOE must be the catalyst for Federal

action, all agencies must be held responsible

for their own properties, and a supportive position by OMB is critical to the success of a Government-wide effort.

DOE has not acted aggressively in the past

in implementing the Federal Energy Management Program, in spite of clear instruction

from Congress. ’ Vigorous leadership by DOE,

‘See House Government Operations Committee report, Energy

Conservation With/n the Federal Government, The Department of

Energy’s Ro/e, November 1979.

as coordinator of Federal energy conservation

and solar energy programs for all Federal agencies and facilities, is necessary to demonstrate

to the public that integration of solar and conservation techniques produces the most energy-efficient results.

Issue 19

Organizational Conflicts—

SERI, RSECs, ROs

Confusion and competition between the

several “arms” of C&SE add to the difficulty

of meeting goals.

Summary

There is considerable uncertainty and conflict regarding the appropriate roles to be

played, in both research and commercialization, by the non-Washington components of

C&SE –the Solar Energy Research Institute

(SERI), the DOE Regional Offices (ROs), the

Regional Solar Energy Centers (RSECs), and the

national laboratories. Lack of clearly defined

roles for these units, and lack of a clear understanding of their relationship to each other and

to DOE headquarters, add a needless obstacle

to effective program operation and constrain

limited resources.

Questions

1.

2.

3.

What is the exact responsibility of each of

the agencies identified above regarding research and commercialization of solar technologies and energy conservation? What is

their relationship to each other?

Is the organizational decision that places a

separate administrator (Deputy Assistant

Secretary for Field Operations and International Programs) over these agencies likely

to improve coordination and reduce compet it ion?

Is the organizational decision to place a

separate Deputy Assistant Secretary over

these agencies likely to further separate

these agencies from headquarters program

direction?
Ch. Ill—Management and Institutional Issues . 41

4.

5.

Is there a long-term strategy to combine

these agencies?

How do these agencies ensure that they assist the State energy offices rather than complicate their work?

Background

Solar and conservation activities require

much more local outreach, education, and

grassroots activity than most Federal programs. It is also clear that solar and conservation choices must be responsive to local climate and other variable characteristics, and

that many types of research and many avenues

to implementation will be needed. In response

to this conclusion and in response to the seemingly universal desire of States and localities to

locate Federal facilities in their areas,

specialized agencies have come into being.

Since the agencies have often been limited

(or understand themselves to be limited) to

either “conservation” or “solar,” their existence has contributed to the competition between these two divisions (see Issue 12). Since

the agencies wish to conduct their own projects, repetition of effort could occur, Perhaps

most critically, opportunities for cooperation

and complementarily are lost.

The 10 DOE ROs seem to operate primarily

as administrative vehicles for transmitting

various forms and applications from States to

headquarters. Consequently, most staff effort

goes into such activity. The staffs typically are

not welI informed on the programs run from

Washington, thus making it difficult for them

to deal effectively with States and citizen

groups, No meaningful technical expertise has

been made available through the ROs. Those

headquarters programs that have attempted to

decentralize management, such as the Small

Grants Program, have found that staff assigned

to their program in the RO report to the RO

Director, and their time can be redirected to

whatever tasks or programs are highest current

priority for the Regional Director. This further

reduces the incentive for programs to be decentralized, as Washington management cannot ensure the availability of staff assigned to

their program. If there is no demonstrated

need for the ROs, perhaps they should be eliminated or replaced by an office that only dispenses information produced by DOE.

SERI and RSECs reflect a strong response to

the Department’s solar constituency, as welI as

an attempt to distribute Federal funding for

solar across the country. While SE R I is beginning to consider its mandate to include the

promotion of solar and related conservation

technologies, RSECs have tended to concentrate entirely on solar. RSECs have difficulty

providing comparable levels of service to all

States, due to their geographic location, and

the role of SERl has clearly changed from the

initial concept of the principal solar research

arm of the Department to a much broader entity, with an expenditure level expected to reach

$122 million in fiscal year 1980 and over 700

employees. The level of funding for the four

RSECs was $13.5 million in fiscal year 1979,

and should be about $21.7 million in fiscal

year 1980. Authorized personnel level for

RSECs is 235.

The Energy Extension Service, now underway in al I States following a pilot program in

10 States, is primarily concerned with conservation techniques, although the legislative

mandate specifies both conservation and renewables. The Energy Extension Service programs can be expected to vary widely and be

responsive to specific State needs.

As program budgets grow and strategies become more clearly defined toward the goals of

the DPR, it will be increasingly important to

find complementary roles for these groups. A

thorough review and analysis of the actual activities conducted by each at this time, including staffing patterns and the outreach activities, plus a rigorous evaluation of effectiveness, would be helpful as a first step.
Chapter IV

PROGRAM REVIEW
Chapter IV

PROGRAM REVIEW

The program efforts of the Department of

Energy (DOE) are the vehicles for translating

legislation and administration goals into real

world actions. This chapter contains issues,

comments, and questions pertaining specifically to program operation and decisionmaking. It is not an exhaustive list, but includes

Solar Electric

The major solar technologies being developed specifically to produce electricity are

wind, photovoltaics, solar thermal power, and

ocean thermal energy conversion (OTEC).

Some hybrid systems also produce mechanical

or thermal energy or both. The contribution to

the maximum practical scenario for the year

2000 of the Domestic Policy Review (DPR)

from these technologies is 3.2 Quads.

Both wind and photovoltaics systems are

currently being sold for commercial applications on a limited basis. These two technologies account for 2.7 of the 3.2-Quad contribution for 2000. The other two solar electric technologies, solar thermal and ocean, account for

the remaining 0.5 Quad.

Direct funding for the solar electric applications program has increased from $189.7 million in fiscal year 1978 to $371.7 million in fiscal year 1980 (table 4). The DOE estimate of

$376.5 million for fiscal year 1981 indicates decreasing support for the solar electric technologies in real dollars.

Photovoltaics and solar thermal have received the majority of the funding for fiscal

Table 4.—Budget of the Solar Electric Applications

Program, Fiscal Years 1979-81 (in millions of dollars)

FY 1981

FY 1979 FY 1980 estimate

Photovoltaics . . . . . . $103.8 $147.3 $140.0

Wind . . . . . . . . . . . . . . 59.6 63.4 80.0

Solar thermal. . . . . . . 98.3 121,0 117.5

Oceans systems . . . 41.1 40.0 39.0

Total . . . . . . . . . . . . $302.8 $371.7 $376.5

SOURCE Program Summary Document, Solar Energy, FY 1981, Department of

Energy, January 1980, p 1-4

areas of immediate importance and areas that

should be considered for continuing review.

The issues are grouped by technologies (solar

electric, biomass) and by end-use function

(transportation, buildings, and industrial conservation).

Applications

years 1978-80, totaling $315.9 million and

$283.9 million respectively. For the same time

period, wind has received $158.4 million and

ocean systems $110.4 miIlion.

A major portion of the above funding is for

large projects. The most expensive project is

the 10-MW solar thermal powerplant at Barstow, Cal if., whose total estimated cost (as of

July 1979) was $108 million ($10,800/kW). The

next two most expensive projects were the

OTEC-1 test facility at a cost of $33 million

and the MOD-2 wind turbine project at a cost

of $27.3 million.

To date, the only program-specific legislation Congress has passed concerns photovoltaic energy systems. First, the Federal Photovoltaics Utilization Program (F PUP), contained

in Title V of the National Energy Conservation

Policy Act (NE CPA – Public Law 95-619), established a 3-year $98 million authorization for

the purchase of photovoltaics at Federal facilities.

Second, Congress passed the Solar Photovoltaics Energy Research, Development, and

Demonstration Act of 1978 (SPERDD– Public

Law 95-590) which had among its goals the

total cumulative production of approximately

4 million peak kW of photovoltaics and the

reduction of the average cost of installed solar

photovoltaic energy systems to $1,000 per

peak kW by 1988. The Act required DOE to

form an outside advisory panel to advise the

Secretary of DOE and to formulate a plan for

demonstrating applications and facilitating

the use of photovoltaics in other nations.

45
46 ● conservation and Solar Energy Programs of Department of Energy

Issue 20

Wind Energy

Strategy

Wind technology appears close to commercial readiness but the DOE programs don’t

reflect this near-term payoff.

Summary

The DOE Wind Program documents indicate

that: 1 ) wind energy is currently competitive in

specialized markets, and 2) wind energy systems currently being developed for use in 1983

should be cost competitive for wide-scale use.

Increased production will probably foster

more cost reductions than will improved designs, particularly for small wind machines.

However, operational plans to achieve the

1985 (and later) commercialization goals are

currently lacking.

Questions

1. How will DOE implement the commercialization plans?

2. Would DOE geographically distributed cooperative funding (or other cost-sharing type

approaches) speed deployment on a large

scale, after the current design development

programs are completed? If so, is such funding contemplated?

3. What steps are being taken to ensure the deployment of wind energy conversion systems by those Federal agencies that could

successfulIy deploy them?

4. Why has funding for implementation and

market development been zeroed out for

1981 ?

Background

DOE has estimated that if wind energy conversion systems reach a cost range of 4.6 to 5.7

cents/kWh (in 1980 dollars), markets adequate

to justify mass production will emerge. Moreover, an energy cost goal of 2.3 to 3.4 cents/

kWh (in 1980 dollars) has been established for

both small (up to 100 kW) and large (1 to 3

MW) machines. Wide-scale deployment of

wind energy conversion systems wiII be possible if these goals are met.

DOE expects the development of both

small- and large-scale wind energy conversion

systems by 1983 will meet these latter goals.

Further, DOE estimates that wind energy conversion systems costs are already sufficiently

low to support early production quantities.

The DOE estimates can be justified by recent

utiIity interest in two high-wind areas. I n

California, U.S. Wind Power is negotiating the

sale of twenty 50-kW machines; in Hawaii,

Windfarms Ltd. has contracted to supply 80

MW of wind energy to Hawaiian EIectric.

On the basis of the DOE research developments, DOE estimates that wind energy has a

potential market penetration of 0.17 Qua d

(fossil-fuel equivalents) in 1985 (0.51 Quad in

1990, 3.04 Quads in 2000). Approximately 600

large machines and .50,000 small machines

would be required to meet the 1985 goal.

Achievement of the cost goals does not ensure the attainment of the energy goals. There

are barriers between the development of wind

turbine designs and their acceptance for widespread application. Demonstration of machine

reliabiIity and at least several years of field experience in power production and operation

and maintenance will be required to instill

customer confidence. Additional uncertainties

include the availability of information on wind

data, systems, economics, and market identification. Operating experience will be necessary

to resolve these questions.

Insufficient funding may result in these

areas being inadequately addressed. DOE

must determine as soon as possible, the Federal responsibility for overcoming these barriers.
Ch. IV—Program Review . 47

Issue 21

Large v. Small

Wind Systems

The steps required

ization of large and

to achieve commercialsmall wind machines are

different and DOE programs must recognize

and accommodate these differences.

Summary

Both large and small wind machines are expected to make a substantial contribution to

the Nation’s energy supply in 2000. DOE has

formulated commercialization plans for both

small and large wind energy conversion systems. These plans indicate that the commercialization requirements and the timing may

be substantially different for small and large

machines. However, the organization and

funding of the Wind Energy Program do not indicate that the requirements of both small and

large wind machines will be adequately addressed.

Questions

1.

2.

3.

4

Has DOE adequately addressed the needs of

both large and small wind machines?

Is the large-scale wind program structured to

ensure the development of a competitive industry?

Is C&SE involved in the development of simple guidelines and methods for State Public

Utility Commissions to use in developing

fair and reasonable buy back/backup rates

pursuant to the Public Utilities Regulatory

Policies Act (PURPA)?

Should DOE fund additional utility interface

experiments with large numbers of smallscale machines on a single grid?

Background

Both large- and small-scale wind machines

must contribute to meeting the Quad goals for

wind suggested by the DPR (1.7 Quads of fossil-fuel equivalent in 2000) and of higher goals

suggested in various DOE commercialization

plans (3.04 Quads in 2000). While large machines are Iikely to contribute the major share

in 2000, smalI machines are estimated to have

the larger impact in the midterm (1990).

DOE funding for wind energy machines has

concentrated on product development. This

emphasis was necessary for large machines

and has resulted in the development of the

MOD-1 and a substantial improvement, the

MOD-2. However, for small machines, nonhardware problems currently are more important and failure to adequately consider these

problems may result in failing to meet the midterm goals.

PURPA required the Federal Energy Regulatory Commission (FERC) to establish guidelines

for backup/buyback rates for small power producers. FERC has established guidelines which

indicate that backup rates charged small power producers must be nondiscriminatory and

that buyback rates must be essentially margin

priced. Within a year State Public Utility Commissions must issue rates structures for buyback and backup rates. The outcome from

these commission hearings could have a significant, favorable effect on the economics of

wind energy. DOE has the authority to intervene in State Public UtiIity Commission hearings and can use this authority to ensure that

the electrical output from wind machines (and

other decentralized solar technologies) is sold

at the true marginal cost and that wind machines owners are provided nondiscriminatory

rates for electricity backup.

Other nonhardware areas that need more attention for small-scale machines are utility interface problems, user awareness and acceptance, market analysis, and the development of

a competitive industrial wind systems manufacturing capability and supporting infrastructure. DOE should determine its role in

these issues and the extent to which lack of

available funding has hampered the ability of

DOE to deal with them.
48 . conservation and Solar Energy Programs of the Department of Energy

Issue 22

Photovoltaic

Program Strategy

The DOE photovoltaic program may not be

adequate to meet the administration goal of

1 Quad in 2000.

Summary

The administration has announced its intention of achieving the potential for solar indicated in the DPR. This intention implies the

achievement of the maximum practical estimate of 1 Quad listed in the DPR. Congress

has expressed its support for photovoltaics

through SPERDD, FPUP, and other legislation.

In SPERDD Congress required DOE to formulate a goal-oriented plan, to establish an outside advisory panel, and to formulate an international photovoltaics plan. None of these

were completed within 1 year after the passage

of the Act. Moreover, Congress authorized $98

million for Federal purchases of photovoltaics

in fiscal years 1979-81 through FPUP. DOE has

been reluctant to request funding for this program and less than two-thirds of the monies authorized for the years 1979-81 may be spent.

Questions

1. Why has DOE been so slow in complying

with its responsibilities as required by

SPERDD? Will the recently formed advisory

panel play an important role in setting

photovoltaic priorities?

2. Why has DOE been reluctant to request authorization under FPUP? What can be done

to ensure that the Federal agencies to which

DOE has transferred FPUP dollars obligate

those dollars in a timely and judicious manner?

3. DOE is currently sponsoring research into at

least four materials (polycrystalline silicon,

cadmium sulfide, galIium arsenide, amorphous silicon) for advanced photovoltaic

cells. How does DOE decide the level of

funding for each of these materials?

4.

5.

How will other Federal agencies (e.g., the

Federal Buildings Program, the Department

of Defense construction budget, the Agricultural Extension Service) be encouraged to

utilize photovoltaic technologies where appropriate?

Congress set a goal of photovoltaics energy

systems costing $1 per peak watt (in 1978

dollars) in SPERDD. The solar array is anticipated to account for half of the cost

while the balance of system components is

anticipated to account for the other half.

While DOE has a detailed plan to attempt to

reduce the cost of the solar array, a comprehensive development plan to reduce the

cost of the balance of system components is

currently lacking. Why has DOE been slow

in formulating a plan to reduce the balance

of system costs for photovoltaic energy systems?

Background

Congressional support for photovoltaics has

been strong, yet DOE programs have not carried out this congressional interest. In 1978

Congress passed SPERDD to establish an aggressive research, development, and demonstration (RD&D) program for photovoltaics.

Research on solar cells had progressed significantly since their early use in space missions. It

was thought that an aggressive program could

speed the commercialization process from the

normal 30 or so years to perhaps only a decade. Congress set as the goals of the Act:

1. to double the production of solar photo2

voltaic energy systems each year during

the decade starting with fiscal year 1979,

measured by the peak generating capacity

of the systems produced, so as to reach a

total annual U.S. production of solar photovoltaic energy systems of approximately 2 million peak kW, and a total cumulative production of such systems of approximately 4 million peak kW by fiscal

year 1988;

to reduce the average cost of installed

solar photovoltaic energy systems to $1

per peak watt by fiscal year 1988; and
Ch. IV—Program Review ● 49

3. to stimulate the purchase by private buyers of at least 90 percent of all solar photovoltaic energy systems produced in the

United States during fiscal year 1988.

In section 4 of this Act, the DOE Secretary

was given the authority to achieve these goals.

Section 9 required DOE to form an outside advisory panel to advise the Secretary of DOE

regarding RD&D, and utilization of photovoltaics, Moreover, Congress recognized the importance of the international market in establishing a competitive photovoltaics industry.

(In many overseas areas photovoltaics may be

cost competitive even though they are not

competitive domesticalIy. ) I n section 11, of the

Act, DOE was required to consult with other

Government agencies and to formulate a plan

for demonstrating applications and facilitating

the use of photovoltaics in other nations. None

of these were completed within 1 year after the

passage of the Act.

Congress has also attempted to support the

development of the photovoltaics industry

through Federal purchases. NE CPA (part of the

National Energy Act) contains FPUP, which authorized $98 million for Federal purchases during fiscal years 1979-81. DOE has been reluctant to request money for this program. In

1980, DOE initially requested no funds, Congress eventually appropriated $10 million. Less

than two-thirds of the amount authorized may

be spent under this program.

Issue 23

Polysilicon

Shortage

A shortage of polysilicon material may develop unless DOE supports new production

facilities that would use either unproven or

outmoded technologies.

Summar y

SPERDD suggested as a goal

production of approximately

kW of photovoltaics by fiscal year 1988.

Studies (for example, DOE/JPL-1012-33) have

indicated that these goals may be unobtainable due to a shortage of polysilicon material

manufacturing capacity using current production processes. DOE-sponsored research promises to develop significantly less expensive production processes in the next few years, thus

inhibiting investments i n new faciIities using

current technology. According to the present

DOE schedule, which may be somewhat optimistic, commercial quantities from the new

processes are not expected before 1986.

Questions

1.

2.

3.

Should the Government take action to stimulate production with present processes? If

so, what type of action should be considered ?

Is there any reasonable way to speed implementation of the new lower cost process

u rider development?

Has DOE estimated the long-term (year

2000) effects of the impending shortfalI ?

Background

One of the photovoltaic program’s objectives is the development of a nationaI capabiIity to manufacture photovoltaic arrays by 1986

at a price of less than $0.70 per peak watt in

1980 dollars. Since the price of silicon material

is a Iarge proportion of the cost of s i I icon arrays, DOE has been sponsoring considerable

research into processes that would lower the

cost of silicon material. DOE has as its cost objective the development of processes for producing silicon for applications at a market

price of less than $14/kg in 1986 (in 1980

dollars). Several processes have been suggested that may lead to the achievement of approximately these cost goals The achievement

wouId be a substantial reduction in the price

of obtaining silicon from today’s conventional

process (Siemens process), which is approximately $87/kg

This anticipated abrupt price decline has

the cumulative deterred manufacturers from expanding ca4 million peak pacity using the existing expensive process that
50 ● Conservation and Solar Energy programs of the Department of Energy

may be outmoded in the next few years. Consequently, expansion of polysilicon manufacturing capacity may be limited in the next few

years until these new processes are justified.

This failure to expand manufacturing capacity

may make the goals implied by SPERDD and

the DPR unobtainable.

Issue 24

Solar Thermal

Power Strategy

The solar thermal demonstration strategy

must be carefully planned and justified.

Summary

The technologies and applications of solar

thermal systems are unusually diverse. DOE

has evidently shifted from an emphasis on

large-scale, central receiver power systems to a

broader approach including smaller scale and

distributed receiver systems. it is not yet clear

which technology or scale wiII be most advantageous. Detailed evaluation of the initial markets and planning of the most efficient demonstration programs to prove the feasibility of

these applications wiII be required to avoid unnecessarily large expenditures. Some elements

of this planning are evident in the DOE documents, but alternative strategies should be

considered. For instance, unexpectedly high

costs for components of the 10-MWe Barstow

central receiver demonstration plant have

evidently forced a reduction in the performance of the plant. If analysis shows that central

receivers can still be viable competitors, DOE

should investigate the possibility of moving

immediately to assisting utility repowering

demonstrations.

Questions

1. When will cost comparisons of central and

distributed receiver systems be available?

Which is likely to have a larger near-term

market ?

2

3

Has DOE adequately analyzed the market

for small- and large-scale solar thermal systems? If smalI central receiver systems prove

successful, will private industry invest in

large ones without further demonstrations

by DOE?

How much has the expected performance of

Barstow been reduced from a year ago? How

will this affect its value as a demonstration?

How will this experience affect ultimate cost

projections?

Background

Solar thermal power technology concentrates the Sun’s heat to heat water or some

other fluid to produce electricity or provide

steam for industrial and agricultural processes.

These systems can be utilized in either centralized or dispersed applications and can be sized

to suit specific needs.

Central receiver solar thermal powerplants

have been a major focus of the solar thermal

program. Although the plants can be as small

as 1 MWe, DOE has estimated the optimal size

for certain bulk electrical production application in the 100- to 300-MWe range. DOE has

initiated the construction of a 10-MWe demonstration plant at Barstow, Cal if., to demonstrate the feasibility of central receiver solar

thermal plants. Barstow is the largest and most

expensive solar thermal project, so it has been

subjected to many audits and assessments,

which have caused delays and cost increases.

Nevertheless, costs for construction and operation of the plant still need careful monitoring,

particularly in the present phase of construction.

Larger pilot plants will cost considerabl y

more, These demonstrations are particuIarly

vulnerable to cost overruns because of the Iimited size of the manufacturing runs and conservatism on the part of the designers, who

may have inadequate data to assure optimal

performance (part of the reason for the demonstrations). if such overruns do develop, DOE

can:

● seek additionaI funds to buiId the plant as

designed;
Ch. IV—Program Review ● 51

●

●

●

eliminate the demonstration and concentrate on distributed systems that may not

require large-scale demonstrations, delaying the implementation of centralized systems;

delay other projects and transfer their

funds to the centralized demonstration

plant; or

reduce the size or performance of the

demonstration, thus reducing its value to

the program leading to large centralized

facilities.

DOE-sponsored studies indicate that there is

a near-term market to repower (convert) existing gas- and oil-fired utility plants in the

Southwest. Repowering is the addition of solar

power collectors to an existing powerplant, not

to increase total power but to decrease the use

of fossil fuels. DOE should consider the feasibility of reducing or eliminating funding of

demonstration plants if major cost overruns

occur and substituting them with a larger

amount of repowering projects. In these projects, cost sharing with utilities is available, and

utilities will have strong incentives to help control costs.

Distributed receivers collect the Sun’s energy at each concentrator rather than at a central power tower. Since each unit (parabolic

troughs, bowls, and dishes) is virtually identical to the others, scaleup is simple and large

demonstrations might be unnecessary. Direct

cost comparisons are not yet conclusive. However, a specific experiment to compare directly

the costs and advantages of central v. distributed receiver systems is under construction by

the International Energy Agency at Almeria,

Spain (U.S. support comprises approximately

20 percent of the project). Both a central and a

distributed receiver system are being built at

the same site. Results from this facility should

be used to test the validity of the DOE emphasis on central receiver systems.

An important and potentially large application for solar thermal power will be cogeneration applications (using steam for both electrical generation and heat generation) and applications in industrial processes heat markets.

Detailed analysis by DOE of the amount of

each type of solar thermal power (distributed

or central) that may best suit these markets is

currently lacking. Distributed systems may be

best for many industrial process heat and cogeneration applications and may offer more

near-term applications. DOE should also accelerate the removal of barriers that tend to discourage cogeneration (see Issue 37).

Issue 25

OTEC

Strategy

A comprehensive plan for the development

and implementation of OTEC has not been

prepared. Without such a plan, the total program cost–which will be high–cannot be accurately estimated.

Summary

The DOE program documents indicate that

a crucial point in the OTEC Program occurs in

fiscal year 1982 with the decision to proceed

on the construction of the first 10- to 40-MW

pilot plant. Congress is considering legislation

to expedite this schedule. An affirmative decision will necessitate a substantial increase in

the level of OTEC funding. The Congressional

Budget Office (CBO) estimates that a single

plant of this size will cost $300 million. The full

development program may require several

such plants and several larger demonstration

plants. If this decision does not consider the

total costs and technological uncertainties

based on a comprehensive development plan,

then DOE will risk entering an undefined program where potential costs may be far above

those now envisioned. Further, criteria measuring interim success or failure must be established so that the program can be revised up or

down in accordance with explicitly determined

estimates of the risks and benefits of proceeding at any given pace, The Federal involvement and investment must be balanced

against the potential benefits to ensure that
52 . Conservation and Solar Energy Programs of the Department of Energy

Federal funds are effectively spent. DOE has

evidently not performed such a detailed analysis.

Questions

1.

2.

3.

4.

Why has DOE failed to estimate the total

cost and involvement required to bring

OTEC to commercialization? What legal, environmental, insurabiIity, and other noncost

questions must be resolved?

What is the DOE pilot-plant strategy? How

many pilot plants and their sizes wiII be required in the DOE commercialization plan?

What is the purpose of each plant? What

goals will be accomplished by the first OTEC

pilot plant and what goals wiII remain?

When will DOE complete a detailed resource assessment of the potential for

OTEC?

Has DOE analyzed the potential for other

forms of solar energy (wind, photovoltaics,

solar thermal, biomass, and geothermal) in

the potential markets for OTEC?

Background

OTEC is a concept for using the temperature

difference that exists between warm water at

the surface of oceans and cold waters in the

deep oceans to release stored energy to power

a turbine. This concept could provide an important source of energy for the generation of

electricity or power for manufacturing energyintensive products such as ammonia and aluminum. The main Federal research goal in

OTEC is the construction of a new type of

baseload powerplant. Thus, unlike the other

solar technologies of solar thermal, wind, and

photovoltaics, OTEC could continuously produce electric power without the necessity of

storage.

No scientific breakthroughs are needed to

build an OTEC plant but the technology is not

in routine use. The technical problems are by

no means minor, and the satisfactory solutions

to the critical engineering problems will require long-term laboratory and at-sea testing,

(OTA completed an assessment of these technical problems in May 1978, and updated that

review in April 1980).

The DOE program documents, including the

Multiyear Plan, are incomplete as to the total

Federal cost and involvement that will be required to bring OTEC to commercialization.

CBO estimated that a commercialization plan

suggested by congressional legislation (S-1830

and HR-5796) would cost $1 billion by 1986

alone. DOE program documents indicate that

a 1-MW test facility (OTEC-1) will be deployed

in 1980, and that a crucial decision to begin

construction of a 10- to 40-MW pilot plant wilI

be made in fiscal year 1982. However, the program documents do not indicate the number

of additional pilot or demonstration plants

(and their sizes) that will be needed before

Federal involvement iS ended.

A comprehensive development plan for

OTEC is necessary in order to estimate the

total Federal cost and involvement. This development plan should have a well-defined pilotplant strategy delineating the goals that will be

accomplished for each pilot plant. Criteria to

determine the interim success or failure of the

program must also be established.

The Federal investment in OTEC must be

balanced against its relative value. Currently,

even under its present level of funding of $40

mill ion per year, OTEC has the lowest ratio of

energy payoff compared to the present budget

level as shown in Issue 2. An accelerated program could, if successful, produce much more

than 0.1 Quad in 2000, but a commitment to

such a program now wouId entaiI much higher

(but as yet undetermined) expenditures with

uncertain prospects for producing a viable

economic power source.

The worldwide potential for OTEC is clearly

very great if the technology proves economic,

Application to the U.S. market is not so clear

since most of the U.S. coast has only moderate

temperature differentials. DOE has identified

islands (especially Hawaii and Puerto Rico) as

being the initial candidates since their present

energy costs are high and they are near attractive OTEC sites. This is a reasonable first approximation, but by the time OTEC is commercially available, other options may be more attractive. For instance, Hawaii has large geothermal and wind resources. Even coal will be
Ch. IV—Program Review ● 53

a competitor for severaI decades since ocean

shipment is quite inexpensive. The United

States already ships large quantities of coal to

Japan and South America. OTEC may in fact

prove to be the least costly of these options,

but DOE has not completed either an adequate resource assessment or a detailed market survey to determine where OTEC is likely

to be the preferred alternative, and any cost

projections are highly specuIative untiI larger

plants are actually buiIt and tested.

Alternative strategies to building subsequent pilot plants should be considered, Proposed OTEC designs use standard heat-engine

cycIes which are typical of those used in alI

powerplants when the heat from burning fuel

is converted into electrical power. OTEC is designed to create useful power from the temperature difference between the surface and

depths of the ocean; this difference is not

much greater than that discarded as unusable

in some conventional power plants. Heat exchangers, which are designed for that purpose,

could be tested in a less expensive manner in

the bottoming cycle at nuclear powerplants.

Other countries have expressed interest in

OTEC and in cooperative agreements (among

these countries is Japan). There is a uniquely

attractive site at Abidjan, in the Ivory Coast, in

which the French are already actively interested. Exploitation of this opportunity could

provide invaluable construction and operating

experience at minimal risk. These cooperative

agreements should be explored to lower the

Federal costs of RD&D for OTEC systems. The

possible delay in implementing cooperative

agreements should be balanced against the

reduction in Federal investment.

Biomass

Biomass currently provides approximately

1 5 Quads (2 percent) of U.S. energy requirements each year. The goal of the DOE Biomass

Energy Systems (13 ES) Program is to provide an

additional 0.5 to 1.5 Quads/yr before 1985,

through the direct combustion and conversion

of biomass to gaseous and alcohol fuels; an additional 6 Quads/yr before 2000, through improved biochemical and thermochemical conversion technologies; and a total of 8 to 10

Quads/yr after 2000. The goals are more ambitious than those of

1.

The BES Program

the DPR discussed in Issue

s the largest and most visible biomass program in the Federal Government, and has the responsibility for integrating

and coordinating national efforts The major

emphasis of the program has been on the direct combustion and gasification of wood, and

the production of ethanol from crops, crop

residues, and wood, To a lesser extent, DOE efforts are directed toward onfarm anaerobic

processes from a variety of feedstocks.

The program is structured according to the

kinds of R&D activities needed at different

stages of technology development. For nearterm technologies (expected to enter the marketplace by 1985), activities focus on achieving process improvements and demonstrating

commercial-scale applications. Mid-term technologies (1 985-2000) are supported by laboratory-scale investigations, studies of process

economics, and development of engineering

models. Longer term technologies are supported primarily by applied research. The actual elements of BES are: 1) technology support (commercialization expected before

1985); 2) production systems (after 1985); 3)

conversion technology (after 1985); 4) research

and exploratory development; 5) administrative support and other. Table 5 shows the BES

Program budget for fiscal years 1979-81. I n

fiscal year 1978, the total program budget

(then called Fuels From Biomass) was $20.2

miIlion.

The Solar Energy Research, Development,

and Demonstration Act of 1974 (Public Law
54 ● Conservation and Solar Energy Programs of the Department of Energy

Table 5.—Biomass Energy Systems Program Budget, Fiscal Years 1979-81

(in thousands of dollars)

FY 1979 FY 1980 FY 1981 FY 1981

Biomass energy systems appropriation appropriation base request

Technology support:

Operating expenses. . . . . . . . . . . . . $16,406 $16,000 $16,000 $19,500

Construction. . . . . . . . . . . . . . . . . . . 0 0 0 2,500

Subtotal. . . . . . . . . . . . . . . . . . . . . 16,406 16,000 16,000 22,000

Product ion systems:

Operating expenses. . . . . . . . . . . . . 5,085 5,700 5,700 11,600

Conversion technology:

Operating expenses. . . . . . . . . . . . . 14,695 22,500 22,500 9,500

Construction. . . . . . . . . . . . . . . . . . . 0 2,000 2,000 2,000

Subtotal. . . . . . . . . . . . . . . . . . . . . 14,695 24,500 24,500 11,500

Research and exploratory

development:

Operating expenses. . . . . . . . . . . . . 4,713 7,800 7,800 13,650

Capital equipment . . . . . . . . . . . . . . 500 500 500 750

Subtotal. . . . . . . . . . . . . . . . . . . . . 5,213 8,300 8,300 14,40 0

Support and other:

Operating expenses. . . . . . . . . . . . . 1,001 1,500 1,500 3,500

Total:

Operating expenses. . . . . . . . . . . . . 41,900 53,500 53,500 57,750

Capital equipment . . . . . . . . . . . . . . 500 500 500 750

Construction. . . . . . . . . . . . . . . . . . . 0 2,000 2,000 4,500

Total biomass. . . . . . . . . . . . . . . . . . . . . $42,400 $56,000 $56,000 $63,000

SOURCE Congress/ona/ Budgef Request, FY 1981, ;oI 2, Department of Energy, January 1980, p 48

93-473) is the principal law which authorized

broad-based research programs for all solar

energy, including “products of photosynthetic

processes.” The law also directed that RD&D

be initiated on “the conversion of cellulose

and other organic materials (including wastes)

to useful energy or fuels. ” Furthermore, this

Act directed DOE to carry out research on incentives to commercialize these solar technologies.

The 96th Congress is considering several

bills to accelerate biomass production through

increased research and financial incentives for

biomass energy facilities. In particular, S.932

contains several features aimed at fostering

synthetic fuels production from wood and agriculture. The enactment of S.932 would likely

affect subsequent DOE program development.

Issue 26

DOE Support for

Biomass Energy Systems

Despite the recognized potential of biomass

as an energy source, DOE support for biomass programs has lagged well behind that

for other solar technologies.

Summary

Although the DPR recognized biomass as

the single most important solar technology in

terms of its potential future energy contribution, DOE funding and staffing levels are still

well below those for solar thermal, wind, photovoltaics, and active heating and cooling programs. The biomass program’s growth is due in
Ch. IV—Program Review ● 55

large part to repeated congressional budget increases. Furthermore, DOE’s biomass programs have consistently been understaffed. It

appears that sufficient personnel slots have

been budgeted and mandated by Congress, but

some have yet to be filled. This has hampered

the program’s effectiveness. The lack of coordination between DOE and the U.S. Department of Agriculture (USDA) has also hindered

bioenergy development although there is reason to believe this is improving. The passage of

S.932 into law would require substantial reevaluation of the relative roles of the two

agencies.

Questions

1.

2.

3.

Has DOE analyzed funding and staffing levels needed for the various biomass projects

in order to achieve its goals?

The DPR “maximum practical” estimate of

about 5.4 Quads by 2000 is about the same

as OTA’s projected level assuming only a

continuation of present subsidies and moderate energy price increases. WilI DOE accept the more ambitious BES goals?

What have been the benefits of the transfer

of funds to USDA for biomass R&D?

Background

DOE has been designated the lead agency in

bioenergy development and has responsibility

for integrating and coordinating national efforts. Until recently, DOE considered biomass

a low-priority item. This was reversed in the

latest DOE solar energy PSD, perhaps as a result of the DPR’s recognition of biomass as the

single most important solar technology. Even

so, DOE funding is still below that for other

solar technologies ($56 mill ion in fiscal year

1980), and most of the biomass funding increases were mandated by Congress.

BES has also experienced severe understaffing, which has affected the day-to-day operation of the program. Within the last year, two

to three full-time professionals managed the

$56 million budget at DOE headquarters. Program management also changed several times

in the last few years. These shortcomings have

contributed to program operating deficiencies

such as the lack of an adequate program plan,

lack of coordination with other Federal agencies, and the lack of commercialization activities. The absence of a clearly defined plan has

resulted in numerous changes in priorities,

often to the detriment of the program. Many

biomass projects require long-term R&D commitments. The intervention or premature termination of a project or project element(s) wiII

often void the entire effort.

Despite recent interagency agreements between USDA and DOE, very little has been

done to coordinate and develop joint RD&D

programs or parallel/complementary bioenergy commercialization plans. However, there

are indications that DOE/USDA coordination

may improve in the future. For example, recent

interagency agreements define a more explicit

role for both agencies, and USDA is expected

to receive a significant portion of the DOE

biomass budget via pass-through funding for

the purpose-of administering some biomass development projects. Such cooperative efforts

will probably require careful monitoring.

Within DOE, more than 10 distinct programs

support bioconversion activities with apparently no significant coordination. For example,

seven different offices in DOE have been involved in alcohol fuels development. Each office has in the past conducted its activities

largely independent of the others, though the

new Office of Alcohol Fuels has now been designated as the responsible agency.

Finally, little attention has been given to

commercialization. No strategy has been developed to convert program R&D results to

practice. This has resulted in neglect of nearterm technologies, such as the use of wood.

The forthcoming OTA report, Energy from Biological Processes, shows that wood in the single largest potential source of biomass and
56 . Conservation and Solar Energy Programs of the Department of Energy

that production of methanol from wood is

nearly commercial. However, the DOE program almost totally ignores methanol production,

Within the last year, the BES Program has

undergone reorganization in order to rectify

some of its management problems. DOE’s fiscal year 1981 budget request stated that reorientation of the BES Program would be complete in fiscal year 1981 .

changes have been made in

allocation, the adequacy of

stilI to be demonstrated.

Issue 27

Scale and Emphasis

of Biomass Fuel

Production Facilities

Although some

budget and staff

these measures s

DOE has inadequately emphasized smaller

scale biomass systems and approaches that

integrate the energy and nonenergy parts of

these systems.

Summary

In the past, DOE has emphasized largescale, long-term biomass systems and approaches dedicated solely to the production

of fuel. This approach is flawed because it:

1 ) reduces the quantity of bioenergy that could

otherwise be obtained from smaller scale

and/or multi product systems; 2) ignores the

potential benefits of integrating energy with

nonenergy objectives; and 3) ignores the fact

that dedicating large areas of land suitable for

food crops to biomass energy will compete

with food production. The development of

multi product/multipurpose biomass systems,

generating high-value food/feed/fiber, in addition to fuels, is very likely a more rational approach. Recently, DOE has proposed smaller

scale conversion processes for onfarm production of methane and alcohol. However, it is not

clear whether these actions represent a change

in DOE biomass policy. Also, DOE apparently

still is not addressing the need to integrate

energy with nonenergy objectives for biomass.

Questions

1.

2.

3.

4.

Most of the projects supported by the BES

Program emphasize large-scale, long-term

single-purpose fuel production systems. Has

this emphasis been changed? I f so, how?

What steps does DOE intend to take to integrate energy objectives with nonenergy objectives (e. g., increased forest management)

i n the development of bioenergy systems?

What fraction of the budget will be allocated to onfarm and other small-scale applicat ions?

Will the long-term research and exploratory

development component of the BES Program remain essentially focused on the

ocean farm project? What are the alternatives?

Background

Biomass-derived fuels are, at present, mostly

byproducts or waste products of agricultural,

forestry, and related activities, Lumber and

paper mill residues make up the largest fraction of currently used biomass fuels. Municipal

solid wastes, animal residues, food-processing

wastes, and spoiled or excess crops can and, in

some cases, are beginning to be used as feedstocks for alcohol or methane production and

steam generation. Fuelwood is also used extensively.

Over the past 5 years, DOE has almost exclusively supported the development of largescale systems whose sole product is a fuel.

Specific examples of this policy include:

greater emphasis on large systems for algae

biomass production rather than integrated

algae biomass/waste treatment processes, emphasis on large-scale biomass energy farming,

and neglect of onfarrn systems for animal

waste conversion to methane or production of

alcohol. The reasons for this policy can be attributed to DOE’s view that: 1 ) it should not be

involved in agricultural or forestry systems

(traditionally a USDA area); 2) small-scale systems would result in severe diseconomies of
Ch. IV-Program Review ● 5 7

scale in fuel conversion processes due to small

feedstock flows; 3) large-scale systems would

tie in with established energy distribution systems (e. g., pipelines); and 4) the problems of

providing a reliable supply of biomass can best

be solved with dedicated energy plantations.

This policy is too narrow and neglects a major

potential of bioenergy.

The OTA assessment of bioenergy, currently

being completed, indicates that the largest

potential source of bioenergy in the near to

mid-term is residues from increased forest

management. Because of the importance of

the Nation’s forests in providing nonenergy

products and the potential for severe environmental damage to the forests if logging increases, it is important that the objective of

wood energy be integrated with and complement the objectives of environmental protection of the forests and increased production of

nonenergy forest products.

Similarly, most other major near- to midterm sources of bioenergy cannot be isolated

from other sectors of the economy. (Even large

energy farms would require land that could

probably be used for food production. ) Consequently, it is important to integrate the energy

and nonenergy objectives for each source of

bioenergy in order to avoid inflationary competition for feedstocks and to exploit any nonenergy benefits that bioenergy production end

use can provide.

Because the major near- to mid-term sources

of biomass are dispersed, OTA’s analysis indicates that a significant potential exists to utilize the biomass in smaller scale dispersed systems, such as small industrial applications. The

high transportation costs for biomass means

that economies of scale cannot be exploited to

the same extent as with coal conversion facilities. Thus, maximum exploitation will require

an emphasis on small- to medium-sized conversion facilities.

Issue 28

Biomass

Liquid Fuels

DOE must carefully plan a strategy for integrating alcohol fuels into the petroleum system to optimize the use of the resources.

Summary

Because of its limited production potential

and its physical and chemical properties, ethanol’s best use may be as an octane-boosting

additive to gasoline. Such use wouId also maximize its petroleum displacement potential.

However, while gasoline/alcohol blending can

contribute to reducing petroleum needs, it

may also aggravate the shifting of gasoline

supplies from urban to rural areas during al location periods.

Blending methanol with gasoline may cause

more problems with the existing automobile

fleet than would ethanol, Although new cars

can be designed to accept methanol blends,

problems such as evaporative emissions and

acceptable effluent water disposal in the

distribution systems and refinery are less easily

resolved. Consequently, various end uses of

methanol (such as blends with gasoline, a

standalone fuel, or an intermediate in liquid

hydrocarbon production) should be examined

for potential refinery and distribution problems to ascertain the most effective and economical strategies for introducing methanol as

a liquid fuel.

Questions

1.

2.

What are the best strategies for methanol

refining, distribution, and end use?

Will DOE continue to neglect methanol production? Has DOE carried out any analysis

of small-scale methanol plants (1 50 ton/d or

less)?
58 . Conservation and Solar Energy Programs of the Department of Energy

3.

4.

Are potential environmental concerns with

alcohol-gasoline blends (i. e., evaporative

emissions and effluent water disposal) being

adequately addressed?

Is C&SE cooperating with the Economic Regulatory Administration to prevent a distortion of supplies from urban to rural areas

caused by unleaded gasoline assignments

for gasohol blending?

Background

When the alcohol is manufactured using

nonpetroleum process energy and used as an

octane-boosting additive, ethanol use can

make a contribution to reducing crude oil

needs. Experience to date has shown that gasohol (lo-percent anhydrous ethanol in gasoline

blends) can best be handled logistically by

blending the gasohol at terminals and exercising care to keep service station tankage dry.

With an expanded program, however, additional concerns may develop. These concerns,

recently expressed by the Environmental Protection Agency (EPA), are: 1 ) the use of ethanol

would SIightly increase vapor pressures and require exclusion of about 2 percent of the butanes in the gasoline to avoid increased

evaporative emissions; and 2) phase separation

is more Iikely, presenting a problem of acceptable disposal of the effluent water containing

alcohol.

Some experts have expressed concern that

gasohol blending may shift gasoline supplies

away from urban toward rural areas during

allocation periods, The currently proposed

DOE assignment of unleaded gasoline by refiners to blenders/resellers and alcohol manufacturers could result in gasoline being diverted

from historic base period customers, largely

those in urban markets.

Methanol from biomass or coal can be produced in significantly larger quantities and at

lower costs than ethanol. Although methanol’s

octane-boosting properties provide a potential

energy savings at refineries if it is used in

gasoline blends, methanol’s physical and

chemical properties pose problems not present, at least to the same degree, with ethanol.

First, blending 10 percent methanol with gasoline would require removal of about 8 percent

of the butanes and other Iight gasoline components to avoid excessive evaporative emissions. The removal of these components from

the gasoline pool would largely negate the

contribution of methanol to expanding gasoline supply, unless automobiles using the

blends are engineered to accept a more volatile fuel without vapor lock or excessive evaporative emission. Second, methanol also is

more susceptible to separation from gasoline

in the presence of very small amounts of water; disposal of large quantities of a separated

fuel would be a related problem. Cosolvents or

drying of the gasoline before blending could

conceivably reduce these problems. A blend

containing 2.5 percent methanol and 2.5 percent t-butanol (another alcohol) is being test

marketed by Sun Oil Co., and may answer

some of the questions. Third, service station

underground tanks may also be damaged by

methanol blends and require replacement.

Although all of the problems with methanol

blends are technically solvable in several different ways, it is unclear whether the use of

methanol blends would be the most economical strategy for consumers or the optimal way

to introduce methanol as a liquid fuel. Other

possible high-value uses for methanol include:

1 ) as a fuel by itself in captive fleet automobiles (12 percent of the U.S. automobiles are in

captive fleets, such as taxis, corporate fleets,

etc.); 2) in gas turbines for peakload electric

generation; 3) in diesel engines with a dual-fuel

capability with later expansion to methanolfueled vehicles that are not part of a captive

fleet; and 4) further conversion of methanol to

gasoline.

To provide early guidance for methanol policy decisions, an accelerated analysis should

be undertaken to examine the relative attractiveness of alternative methanol strategies.

This should include an examination of the entire liquid fuels systems from refineries

through distribution to the various potential

end uses; it should also quantify the costs and

delineate and analyze the constraints associated with the various options for using methanol.
Ch. IV—Program Review ● 59

Transportation Programs

The Office of Transportation Programs

(OTP) is an end-use division in the Office of the

Assistant Secretary for C&SE, and has four major program areas: Vehicle Propulsion RD&D,

Electric and Hybrid Vehicles RD&D, Transportation Systems Utilization, and Alternative

Fuels. The goals of OTP are to reduce the

transportation sector’s energy consumption

and its nearly complete dependence on petroleum by developing and commercializing alternative transportation and fuel technologies,

as well as disseminating information and conducting educational programs to encourage

energy efficiency. The programs within OTP

are based on legislative mandates, budgetary

considerations, industry estimates, technology

expectations, and market assessments. Table 6

gives the OTP budget for fiscal years 1979-81.

The principal laws mandating R&D activities

on electric vehicles (EVs) and automotive propulsion systems are the Electric and Hybrid

Vehicle Research, Development, and Demonstration Act of 1975 (Public Law 94-413) a n d

the Automotive Propulsion Research and Development Act of 1978 (Public Law 95-238).

Public Law 94-413 authorized $60 million for

programs which would evaluate and demonstrate some 7,500 EVs. I n addition, the law authorized a $60 million program for loan guarantees to aid smalI manufacturers, and

directed DOE to contract for the production of

a number of urban passenger and commercial

EVs. Public Law 95-238 also provided for ongoing R&D on EVs and established an EIectric

and Hybrid Vehicle Development Fund for the

purpose of carrying out loan guarantees and

assistance programs. The Automotive Propulsion R&D Act of 1978 established within DOE

an R&D program to ensure the development of

advanced automobile propulsion systems. The

law directs DOE to: 1) establish and conduct

new projects and accelerate existing ones; 2)

give proper attention to the development of

advanced propulsion systems; and 3) ensure

that the program supplements and does not

duplicate or supplant industry programs.

Table 6.–Office of Transportation Programs Budget, Fiscal Years 1979.81

(in thousands of dollars)

FY 1979 FY 1980 FY 1981 FY 1981

Transportation appropriation appropriation base request

Vehicle propulsion RD&D:

Operating expenses. . . . . . . . . . . . . $46,300 $ 59,500 $ 59,500 $ 55,400

Capital equipment . . . . . . . . . . . . . 1,500 1,000 1,000 500

Subtotal. . . . . . . . . . . . . . . . . . . . 47,800 60,500 60,500 5,900

Electric and hybrid vehicle RD&D:

Operating expenses. . . . . . . . . . 37,500 41,000 41,000 42,100

Transportation systems utilization:

Operating expenses. . . . . . . . . . . . 6,100 6,700 6,700 6,700

Alternative fuels utilization:

Operating expenses. . . . . . . . . . . 5,800 5,200 5,200 4,300

Capital equipment . . . . . . . . . . . 0 100 100 1,000

Subtotal. . . . . . . . . . . . . . . . . . . . 5,800 5,300 5,300 – 5,30 0

Total:

Operating expenses. . . . . . . . . . 95,700 112,400 112,400 108,500

Capital equipment . . . . . . . . . . . . . . 1,500 1,100 1,100 1,500

Program direction . . . . . . . . . . . 1,949 2,923 3,000 3,000

Total transportation. . . . . . $99,149 $116,423 $116,500 $113,000

—— ——

;-OURCE Congress,ona/ Budget Request FY 7987 VOI 2 Department of Energy, January 1980, p 48
60 . conservation and Solar Energy Programs of the Department of Energy

Issue 29 for DOE to develop improved spark-ignition

and diesel engines instead?

Advanced- 3. Will these engines have a role if the exEngines RD&D pected improvements in fuel consumption

are not realized ?

Summary

A major part of DOE’s transportation energy

conservation program is the development of

advanced engines, specifically the gas turbine

and Stirling engines. The advanced-engines

RD&D project accounts for about half of the

fiscal year 1981 budget request ($11 3 million).

While it is possible that advanced engines

could meet future exhaust emissions standards

and achieve multifuel capability, there are

serious technical obstacles to meeting fuel

economy goals. DOE is making progress, but it

is not certain that advanced engines will be

able to attain fuel efficiencies sufficiently

beyond those expected for internal combustion and diesel engines to justify a major shift

by the automobile industry to turbines or Stirling engines. In view of the time and effort

already given to these programs and the lack

of major breakthroughs, Congress should perhaps direct DOE to reassess these programs

and their prospects for meeting fuel economy

and emissions goals within the established

time and budget. Otherwise, the programs may

continue on their own momentum without assurance that the goals are still attainable and

relevant to national needs. Other approaches

or other forms of technology may offer greater

promise of attaining the same goals.

Government support for advanced engines Background

RD&D should be evaluated in light of the The Advanced Heat Engine Development

engines’ potential contribution to energy Program was first established in EPA in 197 1

conservation. and its primary goal was the reduction of exhaust emissions. Later, a second goal of fuel

economy was added and responsibility for the

program was given to the Energy Research and

Development Administration/DOE. The Automotive Propulsion R D&D Act of 1978 further

emphasized the need for developing advanced

automotive systems, to improve fuel economy

and lower exhaust emissions, and directed

DOE to support private industry efforts. However, DOE was not limited to support activities

and was authorized to initiate projects not undertaken by industry. The Government undertook the alternative engines program in the belief that the automotive industry was unwilling

to make a major commitment to developing.

new engines and vehicle propulsion systems.

Questions

1. Could the automobile industry meet fuel

economy and emissions goals without Government R&D assistance?

2. Will these engines, if perfected, offer sign if i cant advantages over stratified-charge or

diesel engines? If not, would it be less costly

While much of the R&D in the automobile

industry has concentrated on short-term improvements to spark-ignition and diesel engines, there has been some rather limited work

on the gas turbine (Brayton cycle) engine. I n

the 1950’s and 1960’s – as an outgrowth of development of the gas turbine for aircraft — experimentation was conducted on the use of

gas turbine engines for trucks and stationary

applications. Several years ago, both General

Motors and Ford were close to offering large

turbines in trucks and buses, but the engine

was not marketed. The present GM gas turbine

development program is quite active. Within

the last 6 months, DOE has signed two costsharing contracts with industry to develop and

demonstrate a gas turbine engine. A $56.6 million contract was signed with A i Research Manufacturing Co. and Ford Motor Co,; the Federal

share was $53 mill ion. A second contract was

signed with Detroit Diesel Allison, a division of

General Motors, for $65 million, with the

Federal share amounting to $59.8 mill ion,
Ch. IV—Pro.qram Review ● 61

UntiI recently, most experience with the Stirling engine has been in the research laboratory The only commercial application of the

Stirling cycle has been in a cryogenic machine

for producing liquid air, Some development

was done for the potential application of the

Stirling in heavy-duty trucks and some minor

production for miIitary hardware.

The major thrust of DOE’s program is to develop gas turbine and Stirling engines because

they offer the potential for meeting fuel economy and low exhaust emissions goals and have

multifuel capability. The programs’ objectives

include increasing fuel economy 30 percent

over the best 1984 gasoline internal combustion engine (ICE) vehicle of equal performance, meeting exhaust emissions, and producing engines with multifuel capability. No major

propulsion system development is planned

specificalIy for trucks and buses because many

of the automotive technological advances

achieved can be applied to trucks and buses.

Both engines have a high probability of

meeti ng future emissions standards and

achieving multifuel capability. However, it appears doubtful that fuel economy goals can be

met within established time frames. The gas

turbine’s poor part-load efficiency is the major

obstacle to achieving fuel economy, Greater

fuel efficiency depends on reaching higher

operating temperatures, which will require the

use of special materials — ceramics. The substitution of ceramic materials for the expensive,

high-alIoyed metals presently used will also reduce costs. DOE has emphasized the testing

and development of ceramic materials for critical components (turbines and nozzles). However, DOE considers the development of these

materials to be technicalIy risky, requiring

long-term testing and evaluation. Without the

development of these materials, the use of gas

turbines would be improbable.

The Stirling engine has received considerable attention in Europe (Phillips in Holland

and United Stirling in Sweden) since the 1800’s.

Only within the last few years have Stirling

engines been demonstrated in passenger cars.

The inherent advantages of the Stirling, which

make it attractive as an alternative engine, are

its high theoretical efficiency, low level of

noise, low carbon monoxide and hydrocarbon

emissions, and fuel versatility The major disadvantages of the engine include its high initial cost and high specific weight. I n order to

penetrate the automotive market, experts have

concluded that engine cost and weight must

be reduced and efficiency improved. Therefore, DOE R&D efforts have focused on improving fuel economy through the development of a higher temperature engine and reducing size and weight through lightweight

con struction and system matching (engine/

vehicle). According to DOE, reducing the

weight of the Stirling so that it can be used in

automobiIes (4 lb/hp) wiII be difficuIt but improving fuel economy will be less of a problem.

Even if both engines meet their fuel efficiency goals, a question stilI remains concerning

the extent of their commercial application,

The automobile industry is continuing research

on improving the fuel efficiency of spark-ignition and diesel engines, It is noteworthy that

the DOE work on gas turbine and Stirling engines very likely plays an important role in motivating the industry research, In any event, it

is not clear that the difference in efficiency between gas turbine and Stirling engines and

spark-ignition and diesel engines, assuming

their respective R&D goals are met, will be sufficient to justify substantial industry conversion. The capital costs needed to tool up for

completely new engines will be very large, and

the gas turbine and Stirling engines will have to

be significantly superior to current engines for

industry to make this investment. It the DOE

program is to be justified because it motivates

industrial research, analysis should be done to

see how this compares to reguIation in achieving the same end.
62 ● conservation and Solar Energy Programs of the Department of Energy

Issue 30

Electric

Vehicles

Extensive commercialization of EVs is improbable unless improved batteries are

made available.

Summary

The goal of the EV program is to promote

and accelerate the commercialization of personal and commercial use of EVs. The major

obstacle to extensive commercialization is the

limited storage capacity of present-day batteries. Currently operating EVs use lead-acid

batteries which are expensive and provide very

limited performance. Improved lead-acid batteries may be forthcoming, but are still unlikely to be adequate to lead to a significant reduction in gasoline consumption. Most experts

agree that EV commercialization would be

greatly accelerated if batteries with improved

service life and performance were developed.

However, the current battery R&D budget

amounts to less than 20 percent of the total EV

budget of $42 million (fiscal year 1981 request).

Quest ions

1.

2.

3.

4.

5.

Is the present demonstration program justifiable given the current state of battery development?

Is DOE’s EV program duplicating the efforts

private industry could be expected to make

if adequate batteries were available to power a mass-marketable vehicle?

What energy/petroleum savings can be expected as a result of this program over the

next several decades? At what cost?

What other benefits (and negative impacts)

might be expected to accrue as a result of

widespread EV use?

How much new utility capacity might be

necessary to handle charging during peakIoad hours, such as late afternoons when

commuters arrive home and expect to plug

in?

Background

The EV program budget accounts for a large

percentage (37 percent) of the fiscal year 1981

transportation energy conservation budget request of $113 million. The program was enhanced by the passage of the Electric and Hybrid Vehicle RD&D Act of 1976 (Public Law

94-413) as amended by Public Law 95-238.

These laws established requirements for EV

demonstrations, provided financial incentives

to industry, and emphasized the commercialization process. The goal of the EV program is

to promote and accelerate the introduction of

EVs into the national transportation fleet. The

DOE program consists of four main elements:

demonstration, incentives, product engineering, and R&D. The Product Engineering Branch

and the National Battery Testing Lab are responsible for work in near-term battery development. DOE has concentrated on three battery types: lead-acid, nickel/iron, and nickel/zinc. In addition, research has recently been

started on the zinc/chloride battery which, according to DOE, shows great promise.

A major obstacle to extensive commercialization of EVs is the high cost, weight, and

relatively short service Iife of present batteries.

The present range of EV’s is approximately 50

miles between recharges, and battery Iife expectancy is 18 months to 3 years, depending on

maintenance procedures. I n addition, replacement costs for battery packs now range from

$800 to $1,600. Nevertheless, improvements

have been made in lead-acid batteries. Before

the program started, lead-acid batteries typically stored 30 watthours per kilogram (Wh/

kg). Recent tests show that improved lead-acid

batteries will store more than 40 Wh/kg. Nickel/zinc batteries show a storage capacity of 60

Wh/kg. The near-term battery project’s goal is

to achieve 20- to 30-percent improvements in

performance and life. The most promising batteries will then be used in vehicle testing. Federal support for battery R&D appears to be

necessary and should be given proper emphasis.

Some experts feel that major automakers

could readily build EVs if improved batteries
Ch. IV—Program Review . 63

were available, and that commercialization

would not be a serious problem. Several companies in the private sector are currently designing and building EVs and industrial markets for specialized EVs already exist, such as

industrial fork trucks, However, DOE has concluded that the demonstration of a small

number of vehicles operated in “sheltered” environments would be a positive force toward

commercialization and that optimization of

non battery equipment is still necessary. DOE’s

demonstration project is oriented towards

identifying, testing, and proving market sectors

where EVs can be used. The demonstration

project also provides necessary market support infrastructure.

EVs have the potential to become a preferred mode of transportation in urban areas

for commuting and for small commercial and

industrial shipments and limited personal

transportation. EVs are less polluting and

quieter than conventional vehicles in congested areas, and reduce the need for liquid

petroleum. However, the EV’s potential for

petroleum savings will not be realized unless

used in large numbers.

Buildings

Both the Office of Solar Applications for

Buildings and the Office of Buildings and

Community Systems have programs dealing

with energy use in buildings. Solar Applications is responsible for active, passive, and

hybrid solar systems for building heating and

cooling as well as photovoltaics, which are

discussed in Issues 22 and 23, Buildings and

Community Systems is responsible for programs to improve the efficiency of energy use

in buiIdings, buiIding components, appliances,

and community designs. These two offices are

treated together here as a single DOE “buildings program” to highlight their complementary character and the need for a unified approach to innovation in the building sector.

The programs in Solar Applications include

both system development and market development activities. Systems development focuses

on the engineering phases of product development, whiIe market development includes market testing and product support along with programs in information dissemination, training,

education, building codes, standards, testing,

and certification. Buildings and Community

Systems contains major programs in community systems, consumer products, appliance efficiency standards, and buiIding energy performance standards (BEPS). It is also responsible for

the Residential Conservation Service (RCS) and

the Federal Energy Management Program. The

budgets for these programs from fiscal years

1979-81 are shown in table 7.

The solar energy DPR estimated that active

heating and cooling systems could provide 2

Quads of energy while passive heating and

cooling could provide 1 Quad by 2000. DOE

has subsequently discussed short-term goals

for 1985 of 0.2 Quad for active systems and 0.1

Quad for passive systems. Goals for energy

conservation in buildings are less explicit. The

DPR on solar energy contained an implied conservation goal of limiting demand to 95 Quads

in 2000. What that level of demand might

mean for the building sector is suggested by

the report of the demand/conservation panel

of the recently published Committee on Nuclear and Alternative Energy Systems (CONAES)

energy study. In the panel’s scenario involving

94 Quads of primary energy consumption in

2010, the building sector used 13 Quads — a reduction of 6 Quads from the 19 Quads used in

buildings in 1978. The OTA report Residential/

Energy Conservation also supports the conclusion that dramatic reductions in buiIding energy use are achievable.

Authorization for solar energy programs is

scattered through legislation enacted from the

93d Congress (1973-74) to the present. The

Solar Energy RD&D Act of 1974 established an

Office of Solar Energy Research within the
64 ● Conservation and Solar Energy Programs of the Department of Energy

Table 7.—Buildings and Community Systems and Solar Applications Program

Budget Requests, Fiscal Years 1979-81 (in thousands of dollars)

FY 1979 FY 1980 FY 1981 - FY 198 1

appropriation appropriation base request

Buildings and community systems (CS):

— —

Building systems:

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,600 $ 17,350 $ 17,350 $19,565

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 750 750 500

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,500 18,100 18,100 20,065” -

Appliance standards—operating expenses . . . . . . . . . . . . . . . . . . . . . 4,950 6,000 6,000 7,925

Community systems:

Operating expenses. ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,400 16,550 16,550 15,550

Capital equipment . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . 300 250 250 250

Subtotal. . . . . . . . . . . . . . . . . . . ... ... . . . . . . . . . . . . . . . . . . . . . 19,700 16,800 16,800 15,800

Urban waste:

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500 13,000 13,000 10,100

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 800

Subtotal/ ...,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500 13,000 13,000–- 10,900

Technology and consumer products:

Operating expenses. . . . . . . . . . . . . . . . ..., . . . . . . . . . . . . . . . . . . . . 20,350 29,600a

29,600a 22,040

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 200

Subtotal /.,..,, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,350 29,600a

29,600a 22,240

Analysis and technology transfer—operating expenses. . . . . . . . . . . . 2,800 5,400 5,400 5,900

Residential conservation service:

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 4,600 4,600 5,000

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 200

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal energy management program—operating expenses. . . . . . . .

Small business—operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . .

Emergency building temperature restrictions program—operating

expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . , .

Program direction—operating expenses . . . . . . . . . . . . . . . . . . . . . . .

Total

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,533

78,133

1,200

4,600 4,600 5,200

700 400b

2,700

700 750

3,675 3,675

5,137 5,284 6,120

102,412 102,559 95,650

1,000 1,000 1,950

Total buildings and community systems. . . . . . . . . . . . . . . . . . . . . . . . .

——-

$79,333 ‘$103,41 2 $103,559 $97,600

Solar applications:

Systems development(CS):

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000 $ 52,000 $ 52,000 $ 54,500

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1.000 1,000 1.500

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,000 56,000

Market test and commercial applications

Buildings:

Operating expenses. . . . . . . . . . . ..., . . . . . . . . . . . . . . . . . . . . . . (55,00) (35,750)

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..., . . . . (1,000)

Subtotal. .,.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,000) (367%0)

Agricultural and industrial process heat—operating expenses . . . . (11,000)

Photovoltaic—operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (15,000)

Total market test and commercial applications

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,000

Capital equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,00 0

Market development and training (CS)—operating expenses. . . . . 2,800

Solar international applications (CS)—operating expenses . . . . . . . .

Program direction (CS)—operating expenses . . . . . . . . . . . . . 2,230

Total

Operating expenses. . . . . . . . . . ..., . . . . ..., . . . . . . . 126,030

Capital equipment . . . . . . . . . ..., . . . . . . . . ..., . . . . . . . . . 1,000

Total solar applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $127,030

NOTE ‘Progra-rnsprlnted Inltahcsarenot spectflcally discussed Inthlsdocument

a[ncludes $9ml[llon for40 kW fuel cell demonstration

bA supplemental reque st for$23 mflllon has been approved by OMBandwtil be forthcoming

cFUndlngdOeS no{ lrlclUde$156000 for cost oflncreased personnel contained In FY 1980Supplemental Request

(14,000

(10,000)

59,750

1,000

60,750

20,500

2,341

134,591

2,000

$136,591c

(35,750)

(1,000)

(36,750)

(14,000)

(10,000)

59,750

1,000

60,750

20,500

2,664

134,914

2,000

$136914

SOURCE Congresslona/ Budgefffeques/FY7987 VOI 2 Department of Energy January 1980 pp 24and27
Ch. IV—Program Review ● 65

Federal Government, and the Solar Heating

and Cooling Demonstration Act of 1974 provided for commercial demonstrations of heating and cooling systems. The National Energy

Act of 1978 contained an Energy Tax Act which

provided purchaser tax credits for home installation of solar devices and an investment

tax credit for businesses that install solar

systems. The National Energy Act also contained NECPA, which authorized a program to

install solar heating and cooling equipment on

Federal buildings and a program of loans for

solar devices operated through the Federal National Mortgage Association. The Energy Supply Act would create a Solar Bank to provide

low-interest loans to purchasers of solar systems and also to provide for coordination of

solar information dissemination programs.

Other laws provide incentives to small businesses and farmers, encourage international

programs, and mandate the use of solar equipment in miIitary construction.

In the area of building conservation, the

Non-Nuclear Research and Development Act

of 1974 mandated RD&D to promote efficient

energy use in residential and commercial

buildings. The Energy Policy and Conservation

Act of 1975 (EPCA) established programs in appliance efficiency standards and BEPS. NECPA

created RCS and the Federal Energy Management Program.

Not all activities within the Office of

Buildings and Community Systems are specifically examined in this analysis.

Issue 31

Retrofitting

Buildings

DOE’s conservation and solar buildings programs should cooperate closely to define

and promote a strategy for retrofitting existing buildings with the most cost-effective

combinations of conservation measures and

solar energy systems.

Summary

DOE conservation and solar research programs focused on new buildings are important,

but they have greatly overshadowed retrofit

opportunities that could have an even larger

impact on near-term energy availability. The

oil and gas that could be saved by an aggressive retrofit program during the next 10 years is

equivalent to discovering two Alaskan oilfields. The prospect of low economic growth

and a tight capital market makes it essential to

determine how conservation measures, passive

additions, active solar systems, storage, and

backup systems can be combined most economically for different kinds of buildings and

climates, Developing a “least cost retrofit

strategy” can be an opportunity for achieving

a better integration of DOE’s conservation and

solar buildings programs.

Questions

1.

2.

3.

4.

5

6

Does DOE have a long-term strategy for retrofitting existing buiIdings? I f not, why not?

What is the balance of funding in the buildings research program between new buildings and retrofits? Between single-family and

multifamily residences? Between residential

and commercial buildings?

Have retrofit programs adopted a strategy

for combining conservation measures and

solar energy systems? Is consideration being

given to the development of standards for

existing buiIdings?

How much effort does the passive program

allot to retrofit technologies and retrofit

commercialization ?

What institutional and behavioral barriers

are the major roadblocks to an aggressive

retrofit program, and what Federal policies

have been developed to remove these barriers? Is sufficient attention being given to behavioral research related to retrofit barriers?

How will the Department integrate what it

learns in the weatherization and RCS programs, the active and passive solar buildings

programs, and other related programs, to

meet President Carter’s goal of retrofitting

90 percent of the Nation’s housing stock by

1 995?
66 ● Conservation and Solar Energy programs of the Department of Energy

Background

Over the decade of the 1980’s, improving

the energy efficiency of buildings can reduce

U.S. dependence on depletable fuels more rapidly and at less cost than virtually any other

energy policy action. OTA analyses indicate

that cost-effective investments in conservation

technologies could actually decrease residential energy use in 2000 (compared to 1977) with

no loss of comfort and despite a substantial

amount of new construction. Saving energy in

buildings is a rare situation where the fastest

and least expensive investments are also preferable because of the opportunities they present for individuals to protect themselves

against rising fuel prices and for the Nation as

a whole to improve environmental quality and

generate new employment.

The current DOE buildings programs in both

conservation and solar energy emphasize R&D

related to new buiIdings. This reflects the large

proportion of resources allocated to implementing BEPS, developing and testing new passive designs, and lowering costs on promising

new conservation and solar technologies.

While programs focused on new buildings are

important and should be maintained, OTA research indicates that even more oil and gas

can be saved over the decade ahead by programs to retrofit existing buildings. It will take

over 50 years to replace most of the existing

building stock, and most of these buildings are

very inefficient because they were built during

a period of cheap energy when there was Iittle

incentive for conservation (1 940-73). Substantial funding is earmarked for the schools and

hospitals and weatherization programs, which

directly affect existing buildings.

Table 8 indicates the potential impact of implementing an aggressive program for retrofitting U.S. residences and setting strict standards

for new construction. It demonstrates that approximately two-thirds of the potential savings

result from retrofits, with the remaining third

resulting from improvements in new construction practices.

Table 8.— Potential Energy Savings by 1990 From

Housing Retrofits and Strict Building Standards

(millions of bbl/d oil equivalent)

Oil and gas-- Other Total -

Retrofit savings . . . . 1.9 -

0 . 4

- ‘-- ”2.3

Strict building standards. . . 0.7 0.9 1.6

Total savings . . . . . . . . . . 2.6 1.3 - 3.9--

—

Assumptions

— Baseline case continues present construction practices to 1990 and includes

no further retrofits

—Retrofit savings are based on 50°. heating savings and 20°. hot water savings in all existing housing still used in 1990

—Strict building standards Incorporate BEPS and 35% hot water savings in

new buildings

SOURCE Testimony of Dr Henry C Kelly, OTA, before the Subcommittee on

Energy Conservation and Supply of the Senate Committee on Energy

and Natural Resources, JuIy 31 1979

The potential retrofit savings of oil and gas

by 1990 is equivalent to 1.9 million bbl/d of oil.

That is over three times as much energy as the

U.S. imported from Iran before their revolution

and approximately half the total amount of recent imports from the Middle East. Moreover,

the estimates in the table reflect only the potential savings available in residential buildings. Since commercial buiIdings use approximately 60 percent as much energy as is consumed in the residential sector, and since these

buildings are often even less efficient than

residential buiIdings, equalIy dramatic savings

are possible through retrofitting buiIdings used

for commercial and public services.

Still more oil and gas can be saved by incorporating solar energy systems in retrofit programs. To do this in the most cost-effective

way wilI require research to determine the performance and economics of various combinations of conservation measures, solar energy

systems, storage, and backup technologies for

different types of buildings and climates. Information is needed on how much of a role

passive solar additions can play in building retrofits, and how passive and active systems can

best be combined. Above all, better information is needed to clarify what combinations of

conservation measures and solar energy systems can be more cost effective than the conservation measures alone. Preliminary evidence indicates that “tight” conservation

retrofits can reduce the collector area needed

to meet building heating loads enough to im-
Ch. IV—Program Review . 67

prove the economics of solar heating. In addition, neighborhood-scaIe district heating

systems using coal or solar energy may prove

economically attractive as part of retrofit programs in dense urban and suburban areas.

The fact that many cost-effective retrofit

products are not being used at present suggests that a successful retrofit strategy must

address institutional and behavioral issues as

welI as technical issues. For example, financing

is usualIy a more difficuIt problem for retrofits

than for new construction. Some situations,

such as retrofitting inner city multifamily rental dwelIings, wilI require new Federal policies

to remove barriers and provide incentives. Aggressive information and outreach programs

are needed to influence the investment decisions of homeowners, landlords, commercial

building operators, bankers, installers, and

other groups.

Developing a least cost retrofit strategy addressing both technical and institutional issues

will require closer cooperation between the

buildings programs in conservation and solar.

These programs already cooperate both formally and informally in several areas. The effort to define and promote the most cost-effective combinations of conservation measures

and solar systems can provide an opportunity

for these programs to reduce institutional divisions still further and to move toward an integrated DOE “buildings program. ”

Issue 32

Residential

Conservation

Service

DOE should conduct marketing research to

identify the barriers to widespread public acceptance of energy audits and home weatherization measures as part of the planning

for RCS. Its program design should take into

account regional conditions such as local energy resources, previous consumer education, and local utility practices.

Summary

The RCS Program of DOE is based on the assumption that providing people with information about the cost effectiveness of weatherizing their homes will cause them to make such

investments. Conflicting evidence exists about

the validity of this assumption, and suggests

that consumer response will vary in different

areas according to regional energy conditions,

utility programs, or prior State efforts to encourage energy conservation.

Quest ions

1.

2.

3

4

On what basis has DOE determined that the

35-percent response rate to the RCS Program

is Iikely?

What research has DOE conducted to identify the barriers preventing people from investing in home energy efficiency?

Does DOE have plans to stimulate home

weatherization should consumer response

to RCS fall below expected levels?

Is a 5-year period long enough to allow residents to take maximum advantage of the

program? To allow utilities to maximize return?

Background

The goal of the RCS Program is to offer energy audits to 95 percent of U.S. households by

1985, and to bring about a reduction in energy

use in at least 35 percent of those homes

through voluntary actions by homeowners.

The program is based on the assumption that

lack of information has prevented people from

making energy-efficient improvements in their

homes.

Despite the clear grounds for concern, no

funds have been budgeted to identify empirically the barriers that may exist to the widespread enthusiastic public acceptance of this

expensive, large-scale, high visibility, voluntary

program. The $5,2 million currently budgeted

for fiscal year 1981 is specifically meant for

the operation of the program, e.g., review of

State plans, development of model audit procedures, liaison and assistance to States, qualification of additional conservation measures,

etc.
68 ● Conservation and Solar Energy Programs of the Department of Energy

Lack of information may not be the only (or

even a major) barrier to conservation. Evidence suggests that response to the RCS Program will vary in different regions, and will reflect energy costs, audit costs, public information campaigns, community action efforts, and

the methods used by the utility to encourage

participation. An analysis of consumer actions

and attitudes, conducted in various regions

and localities, would identify the real barriers

facing RCS, For example, while ignorance

about energy conservation might be the barrier

in some areas, other considerations such as regional climate, availability of equipment, community concern, or previous utility experience

with audits might prove to be more important

than information in motivating people. In the

State of California, utilities have already

received a large volume of requests for audits,

yet in other States, demand for audits has been

small. Modification of the State programs to

reflect these variations would contribute to

the success of RCS.

In addition to conducting market research

as part of its program design activities, DOE

could build in an ongoing evaluation of RCS to

assure that the solutions it offers continue to

be appropriate, As energy costs continue to

rise, RCS may welI require modification to refIect changing economic conditions.

Issue 33

Passive Heating

and Cooling

The passive heating and cooling program

should emphasize designs and products that

integrate passive, active, and conservation

concepts. Greater efforts are needed on design tools, performance analysis, product

development and testing, and basic R&D.

Summary

The passive program should cooperate

closely with the active solar program and

building conservation programs to identify and

promote least cost solar building designs. I n

general, the most cost-effective designs appear

to be substantially “tighter” than typical construction practices today, leading to changes

in solar design philosophy. An expanded passive program will require increased staff and

funding.

While the amount of R&D needed for a technology as “simple” as passive heating and

cooling may seem surprising, optimizing the

performance of passive systems actually requires a far more scientific approach to building design than has yet been attempted. Better

data is needed on passive system performance,

especially in multizone applications. Product

development and test activities need to be expanded to include components for commercial as welI as residential buildings. Basic R&D

is needed on energy utilization in buildings, climate characteristics, and other environmental

and physical phenomena that influence the

performance of passive systems. Additional

R&D is needed on passive cooling to determine

its potential, which is not welI understood.

Questions

1. Has the passive cooling program adopted a

least cost strategy for combining passive solar features with conservation measures and

active solar systems in new building designs?

2. Are detailed performance data being gathered from passive solar buildings of widely

varied design, including designs with extensive conservation measures?

3. How much funding for product development and testing is being devoted to products for commercial buiIdings?

4. IS sufficient effort being devoted to basic

5

R&D on energy utilization in buildings, climate characteristics, and environmental and

physical phenomena affecting passive system performance?

How adequate are existing passive solar

design tools?
Ch. IV—Program Review ● 69

6. To what extent can passive cooling combined with dehumidification substitute for

more expensive cooling systems in residential applications?

Background

Passive systems represent a promising

method for dramatically lowering energy demand. In the design of new buildings, as i n

retrofits (see Issue 31), the passive heating and

cooling program shouId cooperate closely with

the active solar program and building conservation programs to develop a more coherent

“whole systems” approach. The goal should be

to identify and promote designs that contain

the most cost-effective combinations of passive solar features, conservation measures, and

active solar systems for different types of

buildings and climates

Table 9 shows the annual heating requirements of several types of recently built houses.

The Balcomb house has a heating load of onetwenty-fourth the size of the typical U.S. house

built in 1978 (some part of this difference can

be accounted for by differences in climate and

building size). Its heating load is so small that

it can be met entirely by passive heating with a

backup system The “tightest” house in the

table, the well-known “Conservation House” in

the cold climate of Regina, Saskatchewan, has

such a low heating load that it can be met with

modest passive features (mainIy south-facing

Table 9.—Annual Heating Requirements of Selected

Existing Houses (oil heat at $0.80/gal)

Typical U S. construction practice in 1978 scaled to

correspond to a 1,400-ft 2 house in a 4,762 degree-day

climate $360

Bowman house near Gaithersburg, Md., 2,050-ft2

house retrofitted by the National Bureau of Standards for $2,650 . . . . . . $200

Hart houses, Alexandria, Va., average for five

speculative homes built in 1978 for an Incremental

cost of $1,000 to $2,000 $120

Robinson house, Minneapolis, Minn., well-insulated

house Incorporating passive solar heating . $ 90

Saskatchewan (Canada) Conservation House—superInsulated house with modest passive solar system

and small active system. . . . . . . $ 20

Balcomb house, Santa Fe. N. Mex., heavily Insulated

house with extensive passive solar features $ 15

SOURCE Of flc~ of Technology Assessment

windows), a Iittle more collector area than

would otherwise be needed for solar water

heating alone (9..5 percent of the floor area),

and reasonably sized water storage (2.8 percent of house volume). The increased cost of

its extensive conservation measures is largely

offset by the reduction in required collector

area and the elimination of a conventional furnace and heat distribution system.

These particular buildings may prove to be

extreme examples, but they illustrate the major changes in solar design philosophy that can

occur as the Nation moves toward buildings

with higher thermal integrity. Evaluating new

designs like these, and many other possible

combinations of conservation measures and

solar systems, would almost surely lead to major changes in the DOE buildings programs as

the most economical approaches are identified and refined.

The amount of scientific knowledge needed

to optimize “simple” passive and hybrid designs is quite extensive. The effort is justified

because the knowledge gained is likely to lead

in time to a “scientific revolution” in the building industry. Moreover, design mistakes on

passive buildings are big mistakes, difficult

and expensive to correct. Research is needed

to prevent such mistakes that could make

builders and the public skeptical of the feasibility of passive solar design.

Better data on passive system performance

are needed to guide further R&D efforts. Test

cell and field-measured performance data are

needed on a wide variety of systems, including

clusters of relatively similar designs, because

little is known about the sensitivity of performance to minor design changes and variations in environmental conditions Special attention should be given to identifying integrated passive heating and cooling designs

that appear more effective for multizone commercial applications. Better quantification of

passive system performance would also be valuable for the BEPS Program.

Product development and testing efforts are

inadequate relative to the variety of geographical areas and buiIding types for which new
70 ● Conservation and Solar Energy Programs of the Department of Energy

materials and components are needed. Glazings, absorber surfaces, storage systems, movable insulation, reflectors, shading devices,

heat exchangers, sensors, actuators and controls, and other components all require further

development and testing. Little product development has been done for commercial buildings, yet this area presents greater challenges

than the residential area.

Passive designers need better data on climate characteristics, including information on

local microclimates, day lighting, and cloud

cover. More extensive basic physical studies

are needed in solar insolation, landscaping,

ground properties, atmospheric effects, night

sky radiation properties, and heat exchange

mechanisms. Data collected in these basic

physical studies need to be integrated with system performance data to create better passive

and hybrid solar design tools such as guidelines, handbooks, computer programs, and

thermal models.

Additional R&D and information dissemination are needed on passive cooling. Some analysts believe passive cooling techniques, combined with dehumidification in humid climates, may eventually prove more cost-effective than active cooling or even conventional

air-conditioning in many residential applications, but little is known about such systems

today.

These areas of effort will require additional

staff as well as a larger budget. The passive

program has suffered substantially from the

burdens of funding increases with no change in

the size of the program staff.

Issue 34

Active Solar

Hot Water and

Space Heating

Nonhardware activities such as market

development and the formulation of better

“off-budget” policies should be emphasized

in the active solar program, and R&D should

be focused on long-term, high-risk, or generic problems.

Summary

The use of active hot water and space heating systems can now be accelerated more by

market development activities, incentives, and

other “off-budget” Federal policies than by

Federal RD&D efforts. In recognition of this

fact, the Off ice of Solar Applications for Buildings has been phasing out demonstrations and

adopting a more comprehensive approach,

supporting the development of the emerging

solar industry in all phases of product development. This shift, which includes increased support for information and education programs,

merits support. R&D funding should be maintained and focused on projects that are longterm, high-risk but high in potential rewards, or

that involve generic problems and nonpatentable processes that industry is not likely to explore. Reducing the cost of active solar systems should be a prime goal in both systems

development and market development activities.

Questions

1.

2.

3.

4.

5.

How do the potential benefits of nonhardware actions for accelerating the use of active hot water and space heating systems

compare with those of technology improvements?

Does DOE have the analytical capacity and

level of staffing needed to design better

“off-budget” policies to accelerate commercialization of solar systems?

Are programs for standards, testing, certification, professional and installer training, information dissemination, and education

adequate to forestall constraints in the

future?

Is Federal R&D on solar hot water and space

heating systems duplicating efforts underway in the private sector or pushing into

areas where the private sector would otherwise have a strong interest?

Is R&D being focused on long-term, highrisk, and generic problem areas such as materials research?
Ch. IV—Program Review ● 71

6. What cost reduction may occur from these

R&D and market development activities?

Background

As a result of technical success over the past

several years, the effort to accelerate the use

of active solar hot water and space heating systems has shifted from R&D to field testing and

market development activities, and is now supported by purchaser tax credits. This shift has

been resisted to some extent, especially by the

Office of Management and Budget, largely because present benefit/cost methods tend to discount benefits of nonhardware actions (e. g.,

solar information and education programs),

which are difficult to quantify. This shift

toward supporting all phases of product development appears fully appropriate, given the

well-developed state of active hot water and

space heating products. There is actualIy a risk

that overemphasis on R&D directed at nearterm results could tend to retard rather than

accelerate investments in the private sector

because of loss of market incentives such as

proprietary know-how and patent protection.

A great deal remains to be done to fulIy support the commercialization of these solar technologies beyond the R&D stage. Many of the

most effective measures involve “off-budget”

Federal policies which have often been neglected in the past (see Issue 6). These include

larger tax credits, loan programs, incentives,

utiIity rate reform to prevent discrimination

against solar homeowners, legislation and policy changes to equalize access to financing

and equalize tax treatment, and initiatives to

foster the development of institutional innovations Iike solar municipal utilities, solar cooperatives, or utility programs to finance and

certify the installation of solar systems. An

expanded capacity for economic and policy

analysis is essential for developing better “offbudget” policies.

Many “on-budget” market development activities also merit increased support. For example, the lack of public confidence in solar

systems is a major barrier. WhiIe too specific a

set of performance standards could stifle costcutting innovations in the solar industry, it is

important to increase support for the development of improved standards and testing and

certification procedures. At present, the bewildering variety of State warranty and information laws makes it difficult for solar manufacturers to meet widely varying requirements.

Another major barrier is the widespread lack

of adequate technical, economic, and market

information. Few buiIding professionals understand solar technology (active or passive) or

appreciate its potential. Few heating, ventilating, and air-conditioning contractors or other

potential installers are adequately trained. Expanded training programs could do a great

deal to remove this barrier. Better information

dissemination is also needed to consumers, industry, builders, bankers, State and local

government officials, utilities, real estate appraisers, insurance agents, land use planners

and other groups. Consideration should be

given to expanded funding of the National

Solar Heating and Cooling Information Service

to allow it to market solar information more

aggressively and to begin supplying conservation information. The demand for solar curriculum materials now greatly exceeds the supply at all levels of public education, and at the

present level of funding only a small number

of teachers and school administrators are able

to participate in DOE-sponsored workshops

and programs.

R&D on active hot water and space heating

systems should be maintained and focused

more specifically on areas that industry is not

Iikely to explore. The understandable tendency

to choose low-risk, high rate-of-return projects

that can be preplanned for major milestones

should be resisted; it tends to push R&D funding into areas where the private sector already

has considerable self-interest, reduces market

incentives for industry investment, and may

lead to neglecting important new ideas and

fundamental scientific advances. Thus it

seems advisable to give priority to those R&D

areas in which risks are too great, the time for

commercialization too long, or the potential

returns too low for private industry to

countenance.
72 ● Conservation and Solar Energy Programs of the Department of Energy

Key R&D areas in need of support include

materials development, systems integration,

selective surfaces, and thermal storage techniques. Materials R&D is especially critical because of the high and increasing cost of conventional materials, such as copper and glass,

and the possibility of constraints on resource

availability in the future. Research is needed

on materials substitutes such as inexpensive

plastics that can withstand high temperatures,

ultraviolet Iight, inclement weather, and corrosive agents for periods of 25 years or longer.

Cost reduction should be a prime goal in

R&D as well as in market development activities. As recently as 3 years ago, R&D on active

solar heating did not treat the expense of proposed designs as a prime consideration. Perhaps the aerospace background of many researchers and policy makers entering the field

of solar energy was a contributing factor to the

emphasis on expensive, high-performance systems designed to maximize the energy extracted per square foot of collector surface.

Now, however, there is a general understanding that a system must be cost effective to be

good, no matter how excellent its technical

performance. R&D should be directed at developing systems that are both technically efficient and cost effective, and at systems that

are extremely low cost (even at some loss of efficiency). An immediate priority in this regard

is the development of low-cost site-built systems applicable to new and existing homes of

traditional design.

Issue 35

Solar

District Heating

The potential importance of neighborhoodscale solar district heating systems in dense

urban and suburban areas is not recognized

in the C&SE budget.

Summary

DOE has done virtually no RD&D on neighborhood-scale solar district heating systems

(10 to 1,000 dwelling units). Yet district systems

may be the only feasible way to meet a large

proportion of the heating load with solar energy in some high-density residential areas.

These systems also appear likely to be economically attractive compared to individual

building hot water and space heating systems

in dense urban and suburban areas (more than

eight people per acre) due to economies of

scale in storage and collector operation. Increased RD&D funding also appears justified

for the related, advanced concept of using

solar ponds for community energy systems

that provide both district heat and electricity.

Quest ions

1.

2.

3.

4.

5.

6.

Why has the Department done virtually no

RD&D on solar district heating?

How much can the costs and land requirements of solar district heating be reduced by

increasing the energy efficiency of the building stock?

Given a comparable degree of building

tightness, how do the costs of solar district

heating compare with the costs of solar units

on individual buildings at different density

levels?

What are the major technical problems involved in retrofitting neighborhoods with

distribution mains under the streets and retrofitting houses with hot water pipes, heat

exchangers, and ducts?

What institutional arrangements and financing mechanisms are necessary for building

and operating district heating systems?

Could local solar cooperatives play a major

role?

Does DOE agree with SERI’s finding that

solar ponds are technicalIy and economicalIy feasible and capable of providing 1 Quad

of energy annual I y by 2000?

Background

Solar district heating systems offer several

potential advantages over individual building

hot water and space heating systems in dense

residential areas. Individual structures that are

difficult to retrofit with solar systems can be

served. The problem of “solar rights” can be
Ch. IV—Program Review ● 73

minimized. Rather than having to create a solar “envelope” around each building– limiting

the height of adjacent structures and trees to

prevent the obstruction of sunlight—only the

locations of clusters of collectors would need

to be protected. In high-density neighborhoods

where a large portion of the buildings lack the

surface area to provide their own solar heating, district systems appear to be the only way

to meet the heating load with solar energy,

The economics of solar district heating may

be more favorable than is commonly realized,

OTA’s study of the Application of Solar Technology to Today’s Energy Needs analyzed the

cost of providing different forms of district

heating and electricity to a new community of

about 30,000 people Iiving in an area a Iittle

more densely populated than the denser neighborhoods of Washington, D.C. (about 7,000

housing units per square mile). With fuel prices

at historicalIy low levels, district heating and

cogeneration systems using conventional fuels

cost less than any form of solar district

heating As fuel prices rise, however, some of

the less expensive solar district heating methods show a total monthly cost substantially

less than the conventional district heating.

Solar heating with neighborhood-scale systems may prove cheaper than with individual

building systems in many high-density residential areas because of significant economies in

both storage and collector operation. The

large shared-storage tanks now under consideration are cheaper and more efficient than

the equivalent distributed-storage capacity.

Large tanks can be better stratified than small

tanks, or segregated into vertical cells They

eliminate the need for storage in individual

buildings and they can be backed up by a single cogenerator rather than individual furnaces in each dwelIing unit. Because largetank storage can operate on a true seasonal cycle, collectors can run at full capacity all year

round. ColIectors can be sited and oriented for

optimal performance with less restriction, utiIizlng areas like the space over parking lots

and highways as welI as buiIding surfaces.

The major cost problem in district heating

systems — the laying of distribution mains —

may be reduced substantialIy if flexible plastic

unrolIable heat cables prove effective. Plastic

heat cables are therefore an important area for

R&D emphasis. In new developments, distribution mains could be laid along with other utilities. If natural gas pipelines were no longer installed, the overall cost of utility installation

would not have to increase significantly because the amount of piping would remain constant. Some analysts (e. g., T. B. Taylor, A. B.

Lovins, M. Ross, and R. Williams) believe properly designed neighborhood-scale solar systems could be less expensive than current individual buiIding heating systems using electricity or oil.

Research is especially needed on the feasibility of retrofitting solar district heating

systems into existing high-density areas. Some

analysts believe it would be cost-effective to

begin building small group and district heating

systems in urban areas in the early 1980’s, to be

fueled by wastes or coal. They could be linked

into larger, neighborhood-scale systems and

converted to solar energy over time.

For existing urban areas, the most obvious

technical difficulty with solar district heating

is the land use requirement. The various ways

of providing solar heating to the communities

analyzed in the OTA study all require between

one-quarter and one-half of the available land,

which simply would not be feasible in many existing neighborhoods that are of high enough

density to support district heating. This land

use problem highlights the importance of increasing the energy efficiency of the housing

stock to minimize the collective heating load

and the collector area required to meet it. As a

result, district heating retrofits may be most

practical when combined with a more comprehensive building retrofit strategy.

The greatest barriers to solar district heating

are probably institutional rather than technical. While municipal governments appear to

have the jurisdiction to deal with the land use

requirements of installing and operating district systems, new city and neighborhood-scale

financing mechanisms and management arrangements are needed to allow communities

to act in concert to realize the advantages of
74 . Conservation and Solar Energy programs of the Department of Energy

solar district heating. The lack of well-organized and well-financed neighborhood-scale

constituencies is part of the reason why solar

district heating has received so little attention.

A related, advanced concept, the use of solar ponds for integrated community energy systems, also merits increased RD&D funding.

Ponds can provide district heating, low-temperature industrial process heat, seasonal heat

storage, and electricity generated from heat

engines that utiIize the temperature variations

that occur in salt-gradient ponds. A recent

SERI study estimates that solar ponds could

supply 1 Quad of energy annually by 2000,

with an ultimate potential of up to 10 Quads.

The low-level funding that solar ponds have

received over the past few years is reduced in

the fiscal year 1981 budget, despite the recommendation of the SERI study that ponds appear technically and economically feasible

and should be vigorously pursued in the U.S.

soIar energy program.

Industrial Energy Conservation Programs

The potential for energy conservation in industry, which consumes 38 percent of the U.S.

energy budget, is very large. The sharp energy

price rises of the 1970’s left most industrial

plants using energy at rates far above the economically optimum level. Most industry, in

fact, was built when oil cost only $2/bbl.

The technical barriers to industrial energy

conservation are not great, but institutional

difficulties, especially in financing capital investments for energy conservation, can be severe. DOE’s Office of Industrial Programs

(OIP), however, is alloted only 0.6 percent of

the total DOE non-Defense budget to meet this

considerable chalIenge.

0IP will spend most of its $59 million fiscal

year 1981 budget on demonstration programs

(table 10). These programs, the cost of which

DOE shares with private industry, are geared

to demonstrate the technical and economic

feasibility of existing and new energy-conserving devices and processes. The basis of this

Table 10.—lndustrial Energy Conservation Program Budget Requests, Fiscal Years

1979-81 (in thousands of dollars)

FY 1979 FY 1980 FY 1981 FY 1981

Industrial energy conservation (CS) appropriation appropriation base request

Waste energy reduction:

Operating expenses. . . . . . . . . . . . . $14,740 $16,450 $16,450 $19,800

Capital equipment . . . . . . . . . . . . . . 500 0 0 0

Subtotal. . . . . . . . . . . . . . . . . . . . . -

15,240 16,450 16,450 19,800

Industrial process efficiency:

Operating expenses. . . . . . . . . . . . . 14,400 20,675 20,675 19,000

Capital equipment . . . . . . . . . . . . . . 0 0 0 1,000

Subtotal. . . . . . . . . . . . . . . . . . . . . 14,400 20,675 20,675 20,000

Industrial cogeneration:

Operating expenses. . . . . . . . . . . . . 5,000 10,750 10,750 12,000

Capital equipment . . . . . . . . . . . . . . 0 500 500 0

Subtotal. . . . . . . . . . . . . . . . . . . . . 5,000 11,250 11,250 12,000

Implementation and deployment:

Operating expenses. . . . . . . . . . . . . 3,160 9,800 9,800 4,500

Program direction . . . . . . . . . . . . . . . . 2,193 2,067 2,131 2,600

Total:

Operating expenses. . . . . . . . . . . . . 39,493 59,742 59,806 57,900

Capital equipment . . . . . . . . . . . . . . 500 500 500 1,000

Total industrial energy conservation . $39,993 $60,242 $60,306 $58,900

SOURCE Congress/ona/ Budget Request, FY 7987, VOI 2, Department of Energy, January 1980, p 48
Ch. IV—Program Review ● 75

approach lies in the belief that industries will

not adopt unproven or unfamiliar technologies

until it is demonstrated that the risk in their

use is acceptably low relative to the potential

for energy cost savings.

OIP selects, for the most part, unsolicited

proposals which it finds consistent with its objectives and criteria. OIP's stated objectives

are to:

●

●

●

achieve maximum penetration of existing

and new energy conservation technologies in as short a period as possible;

substitute, where possible, abundant fuels

for scarce fuels; and

minimize the energy embodied in waste

streams of all types (discarded products,

materials, and energies).

Projects are selected to meet these objectives on the basis of high energy-saving potential, their effect on accelerating market penetration, nonredundancy with efforts of private

industry, the degree to which benefits accrue

to fragmented industries without research

funds, and the degree and appropriateness of

cost sharing. In addition to the foregoing, the

following, more specific criteria must be met:

●

●

●

●

return on investment for the investing industry must equal at least 15 percent;

the risk to an industry of adopting the

process or device involved is greater than

industry is wilIing to accept;

an industry is willing to share the cost of

the demonstration project with OIP; and

the value of energy saved by the project

will be no less than 10 times as great as

the Federal investment.

In addition to its RD&D efforts (authorized

by the Federal Non-Nuclear R&D Act of 1974),

OIP conducts other programs in conservation.

These include: setting and monitoring voluntary goals for energy and materials conservation [required by EPCA and NE CPA); funding of

three pilot Energy Analysis and Diagnostic

Centers (EADCs), which may be considered

prototypes for an industrial energy extension

service; and other programs for promoting the

adoption of industrial energy conservation, including workshops, symposia, distribution of

manuals, audiovisuals, and other materials.

OIP must also evaluate the efficacy of mandatory efficiency standards for industrial

equipment (pursuant to NE CPA), and works

with the Internal Revenue Service (IRS) in

drafting regulations for tax credits for investments in certain energy-conserving industrial equipment (in accordance with the Energy

Tax Act of 1978).

Issue 36

Criteria for

Selection

Improved criteria are needed for allocation

of DOE funds to OIP, and for selection of

projects within OIP.

Summary

Although OIP has established an analytical

procedure for selecting industrial energy conservation R&D projects, there are indications

that they may not be selecting the major conservation opportunities. First, the criteria used

to select among industry groups for priority in

funding projects do not seem to distinguish

adequately among most of these groups. Second, budget constraints and 0IP decisions

have limited funding to relatively small demonstration projects. While this is not unproductive, it means that there is no opportunity to

demonstrate new industrial processes or even

large process steps that could result in major

energy and cost savings. Third, fuel-switching

projects, unless carefully structured to consider the unique properties of the target fuel,

may not result in any increase in energy efficiency, It would be helpful in this connection

for OIP to work in close cooperation with the

program offices responsible for research on

the fuels in question. Finally, it is possible that

increased emphasis on an energy extension

service, modeled after 0IP’s highly successful

EADCs pilot programs, could be the best way

to promote energy conservation in the next

few years, Coupled with an effective OIP R&D

program, this service could reach many indus-
76 ● Conservation and Solar Energy programs of the Department of Energy

trial operations currently lacking the resources

to determine the best steps to take in reducing

energy use.

Background

OIP has established a set of criteria for funding projects based on the amount of energy

used by the industry, the fragmentation of the

industry, the quality and type of fuel used, the

difficulty of putting in a parallel process step,

the private funds expended on RD&D, and the

degree of secrecy connected with the process,

Using these criteria, OIP has established a

weighting system to judge the industry groups

with the most potential for conservation

through Federal R&D. The analytical methodology for selecting the best projects is commendable, but the process could be improved.

The ratings for most of the industrial groups

fall within 15 percent of each other which is

probably too close to allow setting priorities

among the various industries. This system provides no criteria for choosing among major

energy-using equipment within one industry or

across industries, For example, examination of

the OIP list of projects to be funded in fiscal

year 1981 shows that industrial equipment that

operates at high temperatures receives far

more attention than devices that function at

relatively low temperatures. Five types of

equipment, ranging from furnaces with typical

efficiencies of almost 50 percent (second-law

efficiency), to ovens and heaters with efficiencies of an average of 23 percent, consume 30

percent of all industrial energy. Relatively lowtemperature devices such as distilIers, evaporators, dryers, washers, and sterilizers require

20 percent of U.S. industrial energy, but operate at efficiencies of only 0.3 to 6.0 percent

(second law efficiency). Thus, the case could

be made that devices with the greatest potential for improvement, that is, low-temperature

equipment, are not receiving adequate attention.

The rating system does not truly clarify what

OIP’s priorities are, and it is difficult to

evaluate its performance without better explanation of the selection process. It is clear, however, that there are many more opportunities

to save energy that could benefit from DOE

participation.

Another difficult in ensuring that the OIP

projects accelerate industrial energy conservation is the limitation imposed by the budget

and OIP decisions to fund small projects. It is

not possible for OIP to demonstrate entire

processes or even large process steps that

could substantially reduce energy use and

costs. In the past, industry could be counted

on to introduce new processes because rapid

economic growth allowed experimentation

with new capacity production faciIities, 2 B ecause growth may be slower in the near future,

new energy-efficient processes will not be rapidly adopted except as replacements for old

processes. Here the economic advantage of

the new process will have to be great enough

initially to offset the advantage the old plant

has with its recovered capital investment (and

its much lower initial price, because of subsequent rapid inflation). Without some way to

demonstrate new processes that may be very

energy efficient but are of high risk, their introduction will be greatly hindered.

Fuel switching can offer opportunities for

more efficient processes, especially if account

is taken of the unique properties of the new

fuel. Most current fuel-switching projects in

OIP, however, seem to be examining ways existing equipment can be altered to use differen t f u e Is. For exam p I e, most process furnaces

are designed to burn oil or natural gas. If they

are modified to burn coal, they are likely to be

less efficient even though a more abundan

fuel is burned. Designing a new process of

process step around the fuel itself, however

could result in a tar more energy-efficiency

operation. The direct reduction of alum i nun

project currently being undertaken by OIP is a

good example; a fossil fuel process would be

substituted for electricity with a significant in

‘C A Ilerg, “Energy Cons(irvdtlon In Industry The Pre~ent A[;

proac h, the Future C)p[)ortllnit Iej, Counc II on E nvlronrnenta

Qualltv, W~jhlngton, [) (- , Nldy 1979
Ch. IV—Program Review ● 77

crease in efficiency. Because of the necessity

for making the new fuel a major focus in these

cases, there should be a much greater role for

the program off ice responsible for that fuel,

The complexity and diffuse nature of the

Nation’s industrial capacity may require that

more than demonstration programs are needed

to accelerate conservation. DOE should expand its excellent EADCs to a full nationwide

industrial energy extension service to augment

the demonstration program. Revision of the

tax code to provide incentives for conservation

investment, such as the 10-5-3 proposal for accelerated depreciation, could also bring Federal leverage worth bilIions of dollars per year to

bear on the problem of industrial energy conservation.

Issue 37

Cogeneration

OIP should more effectively promote industrial cogeneration.

Summary

Industrial cogeneration could add perhaps

20 percent to existng U.S. electric generating

capacity by using available, economical

sources of industrialIy produced steam. Yet

DOE spends only 0.1 percent of its budget on

Industrial cogeneration. Although some of this

money is used to demonstrate systems using

conventional diesels and steam turbines, the

principal effort is on systems that do not depend on gas or oil I n addition to these needed

demonstrations, more emphasis should be

given to technical assistance for industrial

cogeneration investments. A deeper problem

n this connection is that the Fuel Use Act of

1978 and IRS tax regulations on tax credits for

cogeneration equipment discourage the use of

gas- and oil-fired systems. OIP shouId work

with IRS, FERC, and Congress to promote the

use of cogeneration where natural gas and/or

esidual oil have to be used.

Questions

1.

2.

Would DOE assistance to industry in making

technical and economic evaluations of possible systems hasten the adoption of cogeneration?

Would OIP recommend reviewing current

policy about using oil and natural gas for cogeneration to see if systems using these fuels

should be allowed the various tax credits

now reserved for more abundant fuels?

Background

Industrial cogeneration, according to some

sources, could add 100 gigawatts of electrical

generation capacity for the United States with

the retrofit of existing industrial sites. The use

of this capacity would generalIy produce power at a cost savings of 1 cent or more per kilowatthour. DOE’s promotion of industrial cogeneration, at a funding level of $12 million

per year, or 0.1 percent of the DOE nondefense

budget, is small relative to cogeneration’s potential.

Proposed demonstration efforts may be less

productive than would be provision of legal,

financial, and technical expertise– in short, an

extension service — to interested industries and

utilities. The rate of acceptance of EADC recommendations for major capital investments

for conservation in industry averages about 50

percent, and usually provides saving 10 times

as great as the Federal investment in the extension service itself. This service typically consists of about 10 days of analyses, including a

l-day audit, collection of energy consumption

data, and benefit/cost analyses. The EADC

service could be invaluable to the market penetration of industrial cogeneration.

Steam turbine and diesel cogeneration systems are not new technologies, and are not in

need of technical demonstration. Institutional

barriers to cogeneration are far greater than

technical barriers. Natural gas and oil may be

used very efficiently in these systems, and their

use may be reasonable in existing industrial

plants. The Fuel Use Act, the Energy Tax Act,

and the WindfaII Profits Tax Act all discourage

this highly efficient use of oil and gas, how-
78 ● Conservation and Solar Energy Programs of the Department of Energy

ever, either by prohibiting their use of these

fuels outright, or by making such systems ineligible for tax credits. The recent IRS decision to

make diesel cogeneration systems ineligible

for these credits is a prime example of the Federal Governments’ inconsistent position on cogeneration. DOE, IRS, FERC, and Congress

should arrive at a consistent policy on this

issue i n order to promote the most efficient

cogeneration systems.

Issue 38

Solar

Agricultural

and Industrial

Process Heat

R&D for agricultural and industrial process

heat should be focused on lower cost approaches, and should include work on demand analysis and high-temperature storage.

Summary

Continuing efforts should be made to reduce the cost of agricultural and industrial

process heat (AlPH) systems through the development and testing of low-cost-collector designs and through R&D on materials, trackers

and controls, and other components. A major

effort is needed to better understand the demand for process heat — both today and in the

future – and to clarify what process heat needs

can best be met by solar energy, by cogeneration, and by other energy sources. Exploratory

R&D is also needed on the feasibility of hightemperature thermal storage systems.

Questions

1 .

2

What R&D areas show the most promise for

reducing the installed cost of AIPH systems?

What are the actual terminal temperatures

required today by different industrial processes? What spectrum of temperatures

would be required if the preheat of process

3.

4.

material from ambient temperature is taken

into account?

What is the temporal pattern of process heat

demand? Could the development of hightemperature storage technologies make

solar systems more widely applicable and

cost-effective?

What process heat needs can be met most

economically by solar energy, cogeneration,

and other sources?

Background

Projected costs for solar process heat, even

including presently understood opportunities

for technical improvement, are considerably

higher than industrial costs today. Consequently, the greatest R&D need in this area is for

reducin g the installed cost of AIPH systems.

The AlPH program is already working in several important areas related to cost reduction,

including the development and testing of lowcost Iine focusing collectors, large area collectors, dish-type collectors, site-built air heaters

for crop drying, improved low-cost trackers

and controls, and materials research. This emphasis on cost reduction should be reinforced

and extended to every aspect of the program.

Critical to the development of solar systems

to meet industrial demand for thermal energy

is an understanding of the demand itself, today

and in the future. A detailed survey of the temperature spectrum of U.S. industrial process

heat should be undertaken by DOE and closely

coordinated with the AIPH program and OIP,

Since much heat of high thermodynamic availability is wasted today because it is used for

low-temperature applications, the survey

should identify the actual temperatures required by different processes rather than the

temperature at which heat is currently provialed. It should examine not only the termina

temperature desired, but also the correspond

ing spectrum of temperatures required if the

preheat of process material from ambient tern

perature is taken into account. Consideration

should be given to changes in demand that

might occur as a resuIt of waste heat recover}

and process modification, I n addition, in order

to establish the requirements to be met by
Ch. IV—Proqram Review ● 79

thermal storage systems, the temporal pattern

of demand should be investigated.

Many systems development and market development activities would eventually benefit

from closer cooperation between the Off ice of

Solar Applications for Industry and OIP. Joint

participation in a major survey of industrial demand for process heat, and cooperation in related research to clarify what process heat

needs can be met most economically by solar

energy, cogeneration, and other sources, could

provide an opportunity for these two programs

to begin working together in a more coordinated approach to industrial energy problems.

There is disagreement concerning the need

for R&D on high-temperature thermal storage

systems. Some analysts believe that the industrial need to have energy available in spite of

time of day or weather implies a priority need

for R&D on high-temperature thermal storage

systems, Others believe that storage is not an

important consideration because high-temperature process heat applications wilI draw heat

as fast as it can be provided by solar systems,

or because storage would not be cost-effective

compared to backup systems. An exploratory

research effort to clarify these issues appears

advisable. No work on high-temperature storage is being funded at present.
80 ● Conservation and Solar Energy Programs of the Department of Energy

Related General Accounting Office Reports

Twenty Per Cent Solar Energy Goal — Is There a

Plan to Attain It?, EMD-80-64, Mar. 31, 1980

Transportation Energy Conservation in the

Federal Government, EMD-79-3, Jan. 25,1979

Letter report to the Secretary of Energy on the

Off ice of Conservation and Solar Applications,

EMD-79-64, May 18, 1979

Evaluation of Four Energy Conservation Programs, Fiscal Year 1977, EMD-78-81, Nov. 21,

1978

The Federal Government Should Establish and

Meet Energy Conservation Goals, EMD-78-32,

June 30,1978

The Department of Energy’s Practices for

Awarding and Administering Contracts Needs

to be Improved, EMD-80-2, Nov. 2, 1979

Commercializing Solar Heating: A National

Strategy Needed, EMD-79-19, July 20,1979

Federal Demonstration of Solar Heating and

Cooling on Private Residences–Only Limited

Success, END-79-55, Oct. 9,1979

Federal Demonstrations of Solar Heating and

Cooling on Commercial Buildings Have Not

Been Very Effective, END-80-41, Apr. 8,1980

Letter Report–Views on Legislation to Con -

tinue State and Local Government involvement in Promoting National Energy Objectives, EMD-80-15, Nov. 27, 1979

Federal Government Needs a Comprehensive

Program to Curb its Energy Use, EMD-80-11,

Dec. 12,1979

More Use Should be Made of Energy Saving

Products in Federal Buildings, EMD-79-10

The Solar Federal Buildings Demonstration

Program, EMD-79-84, Aug. 10,1979

Letter report on Certain Aspects of the Solar

Energy Research Institute, EMD-77-67, Sept. 9,

1977

Letter report — Roles and Reporting Structure

of SERI and the Regional Solar Energy Network, EM D-78-26, Jan. 24, 1978

Selected Aspects of DOE’s Solar Photovaltaic

Programs, EM D-79-40, Apr. 19, 1979

The Congress Needs to Redirect the Federal

Electric Vehicle Program, EMD 79-6, Apr. 9,

1979

Industrial Cogeneration: What it is, How it

works, It’s Potential, E MD-80-7, April 1980

A Framework for Developing a National Energy Conservation Program, EM D-79-76, July

1979

U.S. GOVERNMENT PRINTING OFFICE : 1980 0 - 63-604