2
Strategic Assessment of the Vision 21 Program

This chapter presents nine Vision 21 programwide recommendations that the committee believes to be critical to the success of the Vision 21 Program. Chapter 3 presents the committee’s recommendations in specific Vision 21 Program areas.

Vision 21 has ambitious goals. It represents an important strategic effort by the U.S. Department of Energy (DOE) to develop substantially improved technology that will allow fossil fuels to be used for the production of electricity, chemicals, and fuels with near-zero environmental emissions and with efficient utilization of energy resources. There has been notable progress since the program’s inception. The Vision 21 Program needs to evolve further, largely along lines already identified.

The committee’s nine recommendations address the focus of the Vision 21 Program; linkages to neighboring programs in DOE’s Office of Fossil Energy program but outside the Vision 21 Program; management structure; budget; in-house engineering modeling; linkages to demonstrations; linkages to the basic research community and programs abroad; and program evaluation.

PROGRAM FOCUS

The Vision 21 Program was originally conceived as, and to a large extent remains, a very broad and inclusive program. Vision 21 addresses a variety of fossil fuel and other energy sources, including coal, natural gas, combustible wastes, and bio-products; the conversion of these resources into convenience fuels, chemicals, heat, and electricity; the use of steam cycles and gas cycles for power generation; a wide range of plant scales, ranging from small, distributed systems to large central-station facilities; and the design of plants with and with-



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Review of Doe’s Vision 21 Research and Development Program—Phase I 2 Strategic Assessment of the Vision 21 Program This chapter presents nine Vision 21 programwide recommendations that the committee believes to be critical to the success of the Vision 21 Program. Chapter 3 presents the committee’s recommendations in specific Vision 21 Program areas. Vision 21 has ambitious goals. It represents an important strategic effort by the U.S. Department of Energy (DOE) to develop substantially improved technology that will allow fossil fuels to be used for the production of electricity, chemicals, and fuels with near-zero environmental emissions and with efficient utilization of energy resources. There has been notable progress since the program’s inception. The Vision 21 Program needs to evolve further, largely along lines already identified. The committee’s nine recommendations address the focus of the Vision 21 Program; linkages to neighboring programs in DOE’s Office of Fossil Energy program but outside the Vision 21 Program; management structure; budget; in-house engineering modeling; linkages to demonstrations; linkages to the basic research community and programs abroad; and program evaluation. PROGRAM FOCUS The Vision 21 Program was originally conceived as, and to a large extent remains, a very broad and inclusive program. Vision 21 addresses a variety of fossil fuel and other energy sources, including coal, natural gas, combustible wastes, and bio-products; the conversion of these resources into convenience fuels, chemicals, heat, and electricity; the use of steam cycles and gas cycles for power generation; a wide range of plant scales, ranging from small, distributed systems to large central-station facilities; and the design of plants with and with-

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Review of Doe’s Vision 21 Research and Development Program—Phase I out the readiness to sequester greenhouse gases. This comprehensive scope was adopted at the outset in order to involve a broad constituency in the definition of Vision 21 goals and activities. Over the past 2 years, the Vision 21 Program has begun to narrow its scope and focus on coal relative to other energy sources, on electricity relative to other secondary products, and on gasification and gas turbine cycles relative to direct combustion and steam cycles. The committee strongly endorses these developments. The performance, cost, and environmental goals that have now been established for Vision 21 plants argue strongly for a focus on gasification-based systems, as discussed in the committee’s previous report (NRC, 2000) and elaborated in this report, in Chapter 3. A primary focus on coal-based technologies and electric power generation is also appropriate given the importance of domestic coal resources now and in the foreseeable future. A primary focus on electricity production is also warranted, given the dominant role of electricity in domestic uses of coal, and given the competition from petroleum and natural gas as sources of synthetic fuels and chemicals. However, the opportunities for coproduction of chemicals, fuels, and electricity from coal via advanced technologies should continue to be included in Vision 21. The committee believes that the Vision 21 Program will be strengthened substantially by continuing to sharpen its focus. In particular, the committee believes the program should focus on large-scale facilities—200-500 megawatts (MW)—and on designs that produce sequestration-ready CO2 as well as near-zero emissions of conventional pollutants. This sharper focus will allow the Vision 21 Program to concentrate on the most cost-competitive coal-based options, to achieve tight program management, to plan for phased commercialization, to monitor progress closely, and to optimize its use of limited financial and human resources. Systems that capture carbon (in the sense that they produce sequestration-ready CO2) are important as well, given the widely recognized importance of reducing greenhouse gases and the R&D challenges in achieving the long-term Vision 21 goals for CO2 emissions. DOE already plays a leading role in the U.S. carbon sequestration program, and Vision 21 is the logical home for the separation and capture dimensions of this research, given its long time horizon and globally significant consequences. Finally, as elaborated in the next section of this report, the committee emphasizes that a more sharply focused Vision 21 Program requires strong complementary programs outside Vision 21, several of which have long histories and considerable momentum. Indeed, Vision 21 cannot succeed without continued support for the many excellent programs elsewhere in DOE’s Office of Fossil Energy, with which Vision 21 interacts. Recommendation. The Vision 21 Program should continue to sharpen its focus. It should focus on the development of cost-competitive, coal-fueled systems for electricity production on a large scale (200-500 MW) using gasification-based technologies that produce sequestration-ready carbon dioxide and near-zero emissions of conventional pollutants.

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Review of Doe’s Vision 21 Research and Development Program—Phase I LINKAGES TO DOE’S FOSSIL ENERGY R&D OUTSIDE VISION 21 The Vision 21 Program is only one part of the overall R&D program of DOE’s Office of Fossil Energy. Many of the programs in that office are understood to lie outside Vision 21 but are nonetheless closely related and complementary. By design, Vision 21 is aimed at developing a commercial design that can be deployed in the marketplace after 2015. In the period before 2015, the advanced coal combustion program and other non-Vision 21 programs should lead to coal-based electric generating options with significantly improved environmental and operating performance. Both Vision 21 and the advanced coal combustion program benefit from the exchange of knowledge, concepts, and practical experience acquired in the two programs. Further examples of symbiotic relationships are programs addressing the environmental demands on today’s fleet of coal plants; materials research (such as materials for high-temperature and high-pressure steam cycles that also have applications to gasifiers); and the storage or sequestration of CO2 after it leaves the plant gate. If the committee’s recommendation of a sharpened focus for the Vision 21 Program is accepted, further areas will be understood to lie outside the Vision 21 boundary, including advanced technology for distributed power and for natural gas turbines or advanced combustion and advanced steam conditions for utility power plants. Vision 21 should be managed in ways that encourage cross-fertilization across various DOE programs. The stronger the neighboring programs outside Vision 21, the greater the likelihood of success in achieving Vision 21 goals. Recommendation. The Vision 21 Program, with its long time horizon, requires strong companion programs with short-term and medium-term objectives to support it and to provide a two-way flow of technical insight. The committee recommends that the leadership of Vision 21 remain dedicated to this cross-fertilization, closely monitoring the research conducted elsewhere in the Office of Fossil Energy, incorporating the results of that research into Vision 21, and, where appropriate, bringing the insights gained within the Vision 21 Program to bear on work in neighboring areas. PROGRAM MANAGEMENT Responsibility for managing the Vision 21 Program on a day-to-day basis is vested in a small steering committee (called the Vision 21 team) drawn from DOE and National Energy Technology Laboratory (NETL) staff and headed by the Vision 21 program manager. The program manager interacts informally with the NETL program and project managers who control the funding and oversee individual Vision 21 projects. The current management structure thus relies on a process of cooperation and consensus, and ultimate responsibility for ensuring

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Review of Doe’s Vision 21 Research and Development Program—Phase I the effectiveness of Vision 21 lies with the senior management of DOE and NETL. This means that the Vision 21 Program lacks the control and accountability at the program level seen in successful R&D programs. Recommendation. A more rigorous management structure is needed to accomplish the ambitious goals of the Vision 21 Program. The Vision 21 program manager should be provided with the budget and overall responsibility and authority needed to manage the program, including appropriate staff responsible for program planning, implementation, and evaluation. BUDGET The Vision 21 Program does not have an identifiable budget of its own. DOE estimates that roughly $50 million of the current (FY 2002) funding (approximately one fourth of the Office of Fossil Energy R&D budget) is devoted to Vision 21 activities. DOE also projects that to achieve current Vision 21 Program goals the Vision 21 budget would have to grow by roughly an order of magnitude over the next 5 years. The committee agrees that there is a potential for large imbalances between future program requirements and future funding. It also believes that Vision 21 goals will not be reached if the program continues to be funded at the present level, in which case its goals would have to be modified and its projects prioritized. Rigorous assessment requires the formulation of several alternative schedules for achieving Vision 21 Program goals, matched to alternative budget scenarios. This exercise should lead to a convincing argument for funding the Vision 21 Program at an appropriate level. Recommendation. The U.S. Department of Energy (DOE) and the National Energy Technology Laboratory (NETL) should estimate the budget required to support the current Vision 21 Program goals and should reconcile these estimates with various funding scenarios. DOE/NETL should also estimate and articulate the benefit (or cost) to the United States of achieving (or failing to achieve) Vision 21 goals. SYSTEMS INTEGRATION AND ANALYSIS More than any previous program within the DOE’s Office of Fossil Energy, Vision 21 requires a strong component of systems integration and analysis in order to set goals and priorities. For Vision 21 to lead to systems that can compete in the marketplace, the advanced technologies being developed within NETL’s current programs structure (e.g., gasifiers, turbines, fuel cells) must be successfully integrated with one another at the commercial scale. Many integration issues remain unresolved—for example, the effective integration of fuel cells and gas turbines.

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Review of Doe’s Vision 21 Research and Development Program—Phase I Currently, systems analysis and integration activities are handled piecemeal, mainly by external organizations performing independently as DOE contractors. The DOE Vision 21 team appears not to have sufficient internal engineering capability to model, analyze, and evaluate alternative Vision 21 plant configurations. Nor does DOE/NETL currently have access to many of the proprietary models and databases developed and used by its contractors for process development and systems evaluation. The committee recognizes that the development of an in-house capability for independently evaluating alternative systems in support of Vision 21 Program planning and prioritization is not a simple or straightforward task and will require additional resources and time. Nonetheless, it is critical to the overall Vision 21 Program effort, especially in light of the budget issues discussed earlier. Systems integration and engineering analysis should play a far more prominent role in the Vision 21 Program and management structure than is currently the case. The key planning decisions, such as decisions about priorities and funding levels for the various component technologies, should stem from careful and systematic analyses of alternative options, the likely benefits, and the likelihood of success. Recommendation. The U.S. Department of Energy and the National Energy Technology Laboratory should create an independent systems analysis group for the Vision 21 Program, colocated with the program leadership and responsible for systems integration and engineering analysis. This group should provide an independent view of the promise and value of various projects and technologies from the perspective of Vision 21. It should develop the in-house ability to use credible engineering performance and cost models for all major plant components; to configure and analyze alternative Vision 21 plant designs; and to evaluate the reliability, availability, and maintainability of alternative designs. By continually refining its process flowsheets and iterating with Vision 21 project teams, the systems analysis group should identify key technical bottlenecks and integration issues. It should draw on its in-house technical expertise and modeling capabilities to provide assistance, advice, and R&D guidance to the DOE program leadership and Vision 21 project teams. LINKAGES TO LARGE-SCALE DEMONSTRATIONS The federal government has embarked on several new programs aimed at encouraging the early phases of deployment of large, coal-based, central generating plants with improved performance and reduced emissions and costs. These programs provide financial support for first-of-a-kind demonstrations and financial and other incentives for subsequent early commercial applications. They complement the Vision 21 Program. The programs offer an effective path to the first full-scale Vision 21 plant. They create an opportunity for Vision 21 to test

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Review of Doe’s Vision 21 Research and Development Program—Phase I components and systems directly at an early stage and to gain early information about actual costs and technical hurdles. These new programs are being developed based on a model of the path to commercial deployment. In this model (1) first-of-a-kind plants entail incremental costs related to the technical risks of emerging technologies, and these costs exceed the cost of the best available alternative; (2) as the second, third, fourth, etc. plants are built, more becomes known about their design, construction, and operation, and unit costs decrease; and (3) when the technology has been deployed in sufficient numbers, the plants outperform their competitors. Recommendation. The leadership of the Vision 21 Program must work with industry to develop a commercialization strategy that takes advantage of the nation’s current and emerging demonstration programs. Vision 21 must find ways to involve developers and users of Vision 21 technologies with these demonstrations. Equally important, Vision 21 must be a force for the inclusion of strong research programs within the federal demonstration programs, in order to accelerate the commercial application of Vision 21 technologies. LINKAGES TO BASIC RESEARCH AND INTERNATIONAL ACTIVITIES In its 2000 report, the committee recommended that “the U.S. Department of Energy (DOE) should develop mechanisms to link the Vision 21 Program with other basic science and engineering research programs in and beyond DOE. DOE should also coordinate the domestic and international commercialization and deployment of Vision 21 technologies” (NRC, 2000, p. 5). Over the past 2 years, linkages to the basic research community have been established in a few areas. However, the Vision 21 Program has had only minimal involvement with programs of research and commercialization in other countries. Recommendation. The committee reiterates its earlier recommendation that much more should be done within the Vision 21 Program to involve the basic research community and gain commitments from it in order to acquire state-of-the-art fundamental concepts. Furthermore, much more should be done within Vision 21 to leverage technology developments and commercial opportunities elsewhere in the world. EVALUATING PROGRESS The Vision 21 Program leadership has developed a technology roadmap that lays out plans and milestones for achieving Vision 21 goals. Currently, however, many of the plans and milestones of Vision 21 describe end points more than a decade from now. Such long-term milestones have limited programmatic value.

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Review of Doe’s Vision 21 Research and Development Program—Phase I Recommendation. The Vision 21 Program leadership should develop detailed intermediate milestones in the context of an overall technology roadmap. These milestones should have high technical content and specified costs. Responsibility within Vision 21 for creating these interim milestones and for designing the programs to reach them should be clearly assigned. Moreover, formal processes should be established that lead to independent technical audit and evaluation of the programs. The Vision 21 Program has advanced from the inception and definition stage to the productive phase, where the measurement of progress and an assessment of the soundness of the guiding principles should be the basis for prioritizing projects. This is also a phase where the proliferation of projects in an environment of limited resources will require that projects be selected for termination with the rigor provided by careful engineering analysis and state-of-the-art chemical and engineering knowledge. The descriptions of the programs and their milestones in Vision 21 lacked the level of detail required to judge progress. This will become increasingly critical to the effectiveness of future reviews, whether conducted by the National Academies or by other expert groups for DOE, as the Vision 21 Program progresses and evolves. With careful attention to conflict of interest, it will be important for DOE and NETL to bring industry experience and expertise to bear on external reviews of Vision 21 Program activities. Recommendation. The U.S. Department of Energy and its National Energy Technology Laboratory should enable future reviews of the Vision 21 Program that examine in considerably more detail the technical content of each project. Such reviews should provide sufficient technical detail and bring to bear sufficient engineering analysis to answer the following questions about each project and subprogram: Does the project lie along a critical path and provide an economic incentive to make a significant difference? Is the approach taken (i.e., the guiding principles) novel? Does it use knowledge that comes from state-of-the-art and sound scientific and engineering principles? How does it compare with competing technologies, and how is benchmarking rigorously and routinely carried out? Are the projects tapping the leading intellects and centers of excellence in each area? What are the technical and intellectual barriers, and are they being addressed specifically by strategies taken or proposed? How are the targets and milestones set within the context of complete engineering analyses of an overall Vision 21 plant? Are the milestones frequent and detailed enough to be useful to judge progress?

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Review of Doe’s Vision 21 Research and Development Program—Phase I In such reviews, mechanisms should be put in place to protect intellectual property through the filing of patents and through a limited number of non-disclosure agreements, but the exchange of required information should not be otherwise restricted in a way that might protect inappropriate or poorly conceived approaches from scrutiny.