Additionally, it is important for the DOE to separate the programs that it includes under systems integration management from its exploratory research programs. Exploratory research requires a dramatically different management approach. As noted in the committee’s interim report (see its Letter Report, reprinted in Appendix B) and throughout this report, exploratory research is absolutely essential if the DOE is to identify and develop the dramatically new technologies necessary to the eventual viability of a hydrogen economy. Indeed, without breakthroughs that can only come from exploratory research, the likelihood of a hydrogen economy’s coming into being would be greatly diminished.

Systems Analysis

On April 4, 2003, the committee provided the DOE with its interim report, which includes four management-related recommendations focused on the areas of systems analysis, exploratory research, safety, and organization (see Appendix B). The committee is pleased to acknowledge that the director of the DOE Office of Hydrogen, Fuel Cells, and Infrastructure Technologies and others in the DOE immediately began action to respond to those recommendations. In this chapter, the committee presents some additional perspectives related to systems analysis and management.

The Office of Energy Efficiency and Renewable Energy (EERE) has assigned responsibility for the establishment of an independent hydrogen systems analysis program to the National Renewable Energy Laboratory (NREL). The director of the DOE Office of Hydrogen, Fuel Cells, and Infrastructure Technologies informed the committee that there will be a “firewall” between normal NREL activities and the systems analysis function in order to minimize the possibility of undue influence favoring renewable technology interests. The director of the DOE Office of Hydrogen, Fuel Cells, and Infrastructure Technologies and the director of NREL agreed to seek an experienced, objective, systems analysis professional from outside NREL, and a national search was initiated.

In parallel, the Office of Fossil Energy has established a new, independent systems analysis function at the National Energy Technology Laboratory. The primary focus of this effort will be on hydrogen production from coal, and the intent here is also to perform comparative analyses with other options for hydrogen production, which is appropriate in order to understand the capabilities and economics of alternative technologies.

With the participation of staff from the National Research Council, members of the committee held separate, informal meetings with personnel from FE and EERE so that some of the committee members with related expertise could share their individual thoughts on the important elements of effective systems analysis. No committee positions were provided beyond those presented in the committee’s interim report. Among the items discussed, which the committee endorses, are the following:

  • The most important ingredient in systems analysis is the people who do the work. There are relatively few with the training, talent, and background to be able to properly identify, evaluate, trade off, and deal with the myriad of technical and economic parameters characteristic of complex energy technologies. A core of specially selected people is therefore essential.

  • A viable systems analysis function must be managed independently of the various DOE line research and development (R&D) programs in order to minimize both the existence and even the appearance of technology bias.

  • There are many envelopes for systems analysis. At one end of the spectrum are unit operations, such as the analysis of all elements of a production concept. At the opposite end is a fully integrated national system, including fuel acquisition for a production plant, production operations, transportation and storage of product, distribution, end use, and other related considerations. Detailed analysis within envelopes and across the national energy system must all be part of an effective systems analysis program, particularly in the case of a potentially vast, future energy system based on hydrogen.

  • A viable systems analysis program for a wide-ranging effort such as the hydrogen program is a very significant activity, requiring substantial funding—on the order of $10 million per year on a continuing basis. Without such a comprehensive effort, research priorities may be less well justified, and the full meaning of research results will be less well understood.

  • A few of the topics to be studied in systems analysis are the following: (1) systems and subsystems currently under development; (2) the character of competitive approaches to providing energy services—electricity, for example—and how such systems are likely to change over time; (3) an examination of different future energy scenarios and forcing functions that may impact the nation; and (4) the development of an understanding of how proposed technologies might fit into the national system.

  • The benefits that can accrue from a properly managed systems analysis program include (1) an independent, consistent, unbiased description of technologies as they are and might be; (2) a fact-based prescription to guide the selection and evaluation of research projects; and (3) a sound basis for estimating the potential benefits of research programs.

  • A number of potential pitfalls must be avoided in doing effective systems analysis. Poor-quality or biased results have the potential to severely damage institutional credibility, in addition to providing faulty direction to programs. Perhaps most significant is the need to guard against outside influences, because an independent systems analysis function will almost certainly be inundated by people wanting to protect their own preferences or projects.

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