3. Uncertainty

All long-term projections engender considerable uncertainty. It is particularly difficult to foresee how existing technologies might evolve or what new technologies might emerge as market conditions change. EIA projects that the requirements of this program can be met using existing technologies or technologies already projected to be commercially available in the reference case.  However, as new clean energy technologies are developed or existing technologies are improved, these new technologies may prove more economically attractive than those technologies projected in this analysis to meet the CEPS targets.  Introduction of lower-cost clean energy technologies could change the projected mix of generation resources and reduce the cost of compliance.  Similarly, the cost and performance of some commercial or near-commercial clean energy technologies may not improve at the projected rates, thus allowing other technologies to gain market share and potentially raise the costs of compliance.

Several of the clean energy technologies projected to gain market share also face uncertainties with respect to resource availability and concerns over ability to site plants and dispose of generation by-products.  Although the United States has witnessed extensive wind development over the past 5 years, some projects have been hampered or stopped by community objections, environmental concerns (such as for local bird or bat populations), or other siting issues.  Of the extensive wind resource remaining undeveloped in the United States, it is largely unknown how much will be associated with such concerns or what the costs of mitigating these concerns might be.  Similarly, nuclear plant siting may face the possibility of additional legal expenses, or local opposition, which could raise costs or limit opportunities; however, the magnitudes of these limitations are currently unknown.  Additionally, nuclear power faces waste disposal issues.  Several States limit the on-site storage of spent nuclear fuels and Federal efforts to commission a permanent storage site are not progressing as originally scheduled.  Furthermore, approved Federal long-term storage sites only contain sufficient capacity for current facilities.  These problems may be mitigated with a combination of additional spent-fuel storage capability and spent-fuel reprocessing, but the cost of either of these options is highly uncertain.

As noted in the methodology section, NEMS was not able to fully model some aspects of the policy.  Provisions to award double credits for projects built on Indian lands, exempt slower-growing utilities from holding credits, and exempt retail energy suppliers with fewer than 500,000 megawatthours of annual sales will affect the actual amount of clean energy generation required under this proposal.  These impacts are believed to be small, but are largely unknown.