New benefit-cost methodology for evaluating renewable and energy efficiency programs of the US Department of Energy

Abstract

This paper describes a new methodology developed in 2009 for performing retrospective benefit-cost studies of Energy Efficiency and Renewable Energy (EERE) research and technology development (R&D) programs of the US. Department of Energy (DOE). The methodology uses a four-part benefits framework that includes economic, environmental, security, and knowledge benefits, and a technology cluster approach to address larger parts of major programs or entire programs. It improves on and extends an earlier approach developed by the US National Research Council (NRC) and applied in a 2001 NRC study, Energy Research at DOE: Was It Worth It? The new EERE methodology was designed to answer the following questions about the EERE programs: To what extent have the programs thus far produced economic benefits in terms of resource savings relative to program costs? To what extent have the programs yielded environmental benefits, with a focus on health benefits from reduced air emissions? To what extent have the programs yielded energy security benefits in terms of reducing imported oil and reducing threats to the US energy infrastructure? To what extent have the programs built a knowledge base within each respective field and outside those fields? What has been the return on public investments in these energy programs thus far? The new EERE methodology set forth in a draft Guide was applied in 2009 in four benefit-cost cluster studies to address the key evaluation questions in the following EERE program areas: Wind Energy, Solar Energy, Geothermal Energy, and Vehicle Technologies. This paper describes the methodology and gives an overview of its initial applications.