Energy Innovation
Issue Summary
Various federal agencies support the advancement and use of new and renewable energy technology. For example, the Department of Energy (DOE) seeks to advance new technology—such as advanced nuclear, carbon capture, and enhanced geothermal—through research, development, and demonstrations. The Nuclear Regulatory Commission (NRC) licenses and regulates the safety of the nation’s commercial nuclear infrastructure.
However, these (and other) federal agencies could better address the challenges related to such technology. For example:
- The NRC expects a significant increase in licensing applications for advanced nuclear reactors in the coming years. These reactors may provide benefits over existing commercial reactors, including faster and cheaper electricity production. NRC has begun updating its regulations and processes to include these reactors—but it has had difficulty hiring and retaining the staff needed to license them.
- A 2022 experiment demonstrated that nuclear fusion could produce electricity. However, this technology faces challenges before it can produce electricity on a commercial scale. For example, new materials will need to be developed that can withstand the extreme conditions expected inside a power plant using fusion energy. There are several policy options that could help address such challenges.
- Since 2009, DOE has invested $1.1 billion in 11 demonstration projects to show how carbon dioxide emissions from coal-power and industrial facilities could be captured and stored. DOE initially committed to 8 coal projects, mostly new power plants with carbon-capture equipment. But 7 were not built, largely due to factors that made coal power less economically viable. Also, senior management directed DOE to bypass some cost controls to help struggling coal projects. As a result, DOE spent almost $300 million more than planned on 4 facilities that were never built.
- The Renewable Fuel Standard program calls for greater use of advanced biofuels—fuel made from waste fats and oils or crop residues, for example—in the transportation fuel supply. But there is not nearly enough of this fuel to meet the program's targets—nor will there likely be enough in the near future. According to industry experts, the high costs of creating advanced biofuel, the relatively low price of fossil fuel, the timing and cost to bring new tech to commercial-scale production, and regulatory uncertainty are some challenges to increasing production.
- Nuclear power plants account for about 20% of the electricity and half of the carbon-free electricity generated in the U.S. However, plants are aging, and economic challenges have led to closures and planned shutdowns. In FY 2021, DOE made 3 awards totaling $4.6 billion to support the development of new reactor types that are expected to bring improvements over existing commercial reactors. To monitor these projects, DOE uses practices such as milestone tracking and plans to add additional practices—such as independent reviews—to oversee awards. However, DOE should document its processes for overseeing these projects.
- Deployment of energy storage and solar and other technologies could make the electricity grid operate more efficiently and provide other benefits—such as cleaner generation of electricity. However, these technologies also present challenges, such as uncertainty about how they perform over time and in various operating conditions. There are several policy options that could help address these challenges.
- The development of offshore wind energy in the U.S. requires oceangoing vessels for turbine installation and other tasks. These vessels may need to comply with the Jones Act, which requires that vessels carrying merchandise between two points in the U.S. be built and registered in the U.S. However, there are currently no U.S.-built specialized ships for installing wind turbines. Stakeholders pointed to uncertainty of federal approval for offshore wind energy projects as a challenge to pursuing investments in these ships, which may cost up to $500 million in the U.S.