3. Uncertainty
All long-term projections engender considerable uncertainty.
It is particularly difficult to foresee how existing technologies might evolve
or what new technologies might emerge as market conditions change. Since the requirements of this program are
readily met using existing technologies or technologies already projected to be
commercially available in the reference case, the CEPS by itself is not likely
to require or spur development of new clean energy technologies. However, as new clean energy technologies
are developed or existing technologies are improved, they may prove more
economic than those technologies projected to meet the CEPS targets. Introduction of lower-cost clean energy technologies
would change the projected mix of generation resources and tend to reduce the
cost of compliance. Similarly, the cost
and performance of some commercial or near-commercial clean energy technologies
may not improve at the projected rates, thus allowing other technologies to
gain market share and potentially raising the costs of compliance.
Several of the clean energy technologies projected to gain
market share also face uncertainties with respect to resource availability and
concerns over ability to site plants and dispose of generation by-products. Although the country has witnessed extensive
wind development over the past 5 years, some projects have been hampered or
stopped by community objections, environmental concerns (such as for local bird
or bat populations), or other siting issues. Of the extensive wind resource remaining undeveloped in the United States,
it is largely unknown how much will be associated with such concerns or what
the costs of mitigating these concerns might be. Similarly, siting a nuclear plant may also face the possibility
of expensive or limiting local opposition, which could raise costs or limit
opportunities; however, the magnitude of these limitations are currently
unknown. Nuclear also faces
uncertainties associated with the cost of waste disposal. Several states limit the on-site storage of
spent nuclear fuels, and Federal efforts to commission a permanent storage site
are not progressing as originally scheduled. Furthermore, approved Federal long-term storage sites only contain
sufficient capacity for current facilities. These problems may be mitigated with a combination of additional
spent-fuel storage capability and spent-fuel reprocessing, but the cost of
either of these options is highly uncertain.
As noted in the Model Application section, NEMS was not able
to fully model some aspects of the policy. Provisions to award double credits for projects built on Indian lands,
exempt from holding credits for the significant share of retail energy
suppliers that do not experience positive load growth in a given year, and
exempt retail energy suppliers with less than 500,000 megawatthours of annual
sales will affect the actual amount of clean energy generation required under
this proposal. These impacts are
believed to be small, but are largely unknown. |