Multi-Year Analysis Plan Page 55
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80program as compared to what would probably have happened if the program did not exist. The difference
in benefits can be presented as a cost of DOE’s research to show the benefits of DOE’s work.
Unfortunately, the tool does not automatically capture knowledge benefits although a single economic
input can be entered for them. In other words, knowledge building (that could be in the form of patents
that others build on) is not included in the current generation of the tool. The information gathering
techniques and market curve fitting may also help with prospective analysis.
The results of retrospective analysis could assist with funding justification by showing how previous
DOE research that now fits under the Biomass Program’s heading has improved society. The information
gathering techniques and market curve fitting may also help with prospective analysis by improving
intermediate outcome calculations due to a better understanding of the markets and their drivers.
Expected prospective benefits have been reported for the Government Performance and Results Act
(GPRA) during the last several budget cycles and are calculated by the EERE version of NEMS. The
predicted economic, environmental, and security benefits that success in the programs will bring are
compared to a baseline future that is reported in the Energy Information Administration’s (EIA’s) Annual
Energy Outlook (AEO). The prospective benefits are used to justify the program’s potential benefits to
the country and to compare them with potential benefits of other programs. NEMS is intended to capture
macroeconomic interaction that will affect the market size of any single factor. This includes feedback
effects, upstream effects, and competition and synergies between technologies. To calculate the
program’s outcomes, feedstock cost curves and conversion costs are entered into NEMS for multiple
future time-points. NEMS then estimates the macroeconomic status of the energy quadrant for each year
through 2030. The difference between the baseline and the case with the program’s inputs are the reported
outcomes. MARKAL is an easier tool to use for these calculations but since NEMS is used by the EIA, it
is easier to justify results from NEMS. MARKAL also provides better technology detail and estimates to
2050, but its market detail is not as rich as that in NEMS.
Other worldwide factors may affect the program’s benefits, so an “Options” analysis has been deemed
necessary. For example, greenhouse gas or carbon dioxide emissions may be taxed or restricted in the
future. That would increase the outcomes of the Biomass Program’s research because the world would
likely become more dependent upon biofuels to replace petroleum fuels. PBA is investigating ways to
capture the effects of those “Option” futures. The options analysis was originally envisioned as a couple
of additional potential prospective scenarios. PBA is currently working with DOE’s nuclear and fossil
energy offices to define those scenarios. One of the defined cases will most likely involve constraints on
greenhouse gas or carbon dioxide emissions and a second will involve increased fossil fuel prices. Like
the expected prospective analysis, NEMS and/or MARKAL could be run to determine baselines for the
defined cases and then estimate the program’s benefits in these other potential scenarios. The analysis is
not expected to require different feedstock or conversion cost information than the expected prospective
case.
Other methods of options analysis are also being investigated. One involves calculating the technical
potential of renewable technologies that would then provide “back-stop” prices for standard model
technologies. In that case, a research product does not have to enter a market to add societal value; it
provides value by keeping other prices low. A second “options” analysis under consideration involved
measuring the reduction in price uncertainty. It is similar to the “back-stop” price calculation because the
renewable technology provides a minimum price for the standard technology yet it also involves
international trade issues and economic values.
Benefits resulting from options analysis will probably mirror those of the expected prospective analysis.
They will most likely report the same criteria but have different values due to the different constraints on
the energy quadrant.
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