The Value of Advanced Energy Funding: Analysis for Active Legislative Discussion

Daniel Shawhan, Kathryne Cleary, Christoph Funke and Steven Witkin
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Daniel Shawhan: Resources for the Future
Kathryne Cleary: Resources for the Future
Christoph Funke: Resources for the Future
Steven Witkin: Resources for the Future

No 21-10, RFF Issue Briefs from Resources for the Future

Abstract: The benefits of additional research, development, and demonstration (RD&D) for advanced energy technologies are likely to greatly exceed the costs. The additional funding authorized by the Energy Act of 2020 for the five technologies we consider would generate projected societal benefits averaging $30 billion in present value per technology during 2040–2060. All dollar values in this brief are in 2020 dollars.Twenty-six experts in advanced nuclear, advanced geothermal, energy storage, natural gas with carbon capture and sequestration (NG-CCS), and direct air capture (DAC) projected the effects of the additional RD&D funding on the future costs of the technologies. The experts expect the additional funding to reduce the costs of the technologies by 9–30 percent in 2035, compared with the case of no additional funding.Applying the expert projections, we find that average power sector benefits of the added RD&D spending are likely to exceed costs by about 7 times without additional federal policies like a national clean energy standard. Benefits outside the power sector are likely to also be significant and would increase these ratios.The estimated benefits of added RD&D funding are split mainly among lower electricity bills, health benefits, and climate benefits. Average annual electricity bill savings per household for each technology are about $14.

Date: 2021-08-13
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