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All sourcesNASA NTRSDOE OSTI
DOE OSTI2025

Integration of renewable energy generation and storage systems for emissions reduction in an islanded campus microgrid

Microgrid connected building communities are projected to play an integral part in the clean energy transition. These types of systems, when integrated with distributed energy resources (DERs) such as combined heat and power (CHP), district heating and cooling, renewable generation, and energy storage, can provide clean, reliable power to critical facilities and vulnerable communities. The intermittent nature of renewable generation is a challenge when integrating renewables into any grid system, but particularly in islanded microgrids. The University of Texas at Austin (UT) operates an islanded microgrid powered by a CHP plant, while also utilizing district heating and cooling systems and thermal energy storage (TES). High fidelity operating data was used to develop a validated reduced order model of UT’s integrated campus energy systems to serve as a testbed for use in a case study. Hypothetical renewable energy installations on land owned by UT in west Texas were modeled and integrated into the validated campus models along with battery energy storage (BES). Simulations showed that a combination of renewable energy from wind, and optimally controlled 24-hour thermal and battery storage systems could reduce carbon dioxide emissions on campus by 45.4%. The additional retrofit of burner systems to utilize hydrogen natural gas blends resulted in an overall annual emissions reduction of 54.7%. Carbon capture and storage eliminated the majority of the remaining emissions with increased plant energy expenditure. The presented simulations display the practical limitations of a CHP system complemented by renewable generation and short-term storage in eliminating emissions. Furthermore, results highlight the need for further research and development in long duration storage technologies and hydrogen fueled turbines to increase penetration of renewable energy and reduce emissions.

CHP↗
DOE OSTI2022

A framework for feasibility-level validation of high-resolution wave hindcast models

The value of long-term wave hindcasts for investigating wave climates, wave energy resources, and extreme wave conditions has motivated research developing, calibrating and validating wave hindcast models. Past hindcast model validation studies examined the accuracy in modeling bulk wave parameters of overall sea states without considering the dependency of the model's skill within different sea states. In the present study, a framework for wave hindcast model validation is developed by examining the model accuracy for the most frequently occurring sea states, sea states contributing the most energy to total wave power, sea states associated with hurricane events, and those with the largest model error. Here, validations using bulk wave parameters and frequency-directional spectra at these key sea states and extreme wave conditions based on univariate and bivariate-contour methods provide insights to improve model accuracy, identifying the model's strong and weak points, and pathways for improvement, e.g., modeling wave-current interactions and adjusting wind data. This study adds to a growing body of research demonstrating that a carefully calibrated and verified spectral wave hindcast model can be used to estimate key wave energy parameters over a wide range of wave energy climates, as well as their spatial, temporal, frequency, directional, and probabilistic distributions.

54 ENVIRONMENTAL SCIENCES↗
DOE OSTI2021

Clean Energy Integration in Natural Gas Compressor Station Operations

Integrating renewable energy into oil and gas operations could reduce emissions and maximize higher-value use of produced hydrocarbons. In this study, analysts from the Joint Institute for Strategic Energy Analysis (JISEA) and the National Renewable Energy Laboratory (NREL) evaluated clean power technologies for a natural gas compressor station in Texas, using NREL’s REopt tool. Different configurations of distributed energy resources were evaluated based on the technologies available and the load they can satisfy, available land, and hypothetical carbon pricing. The analysis is part of a collaborative program with industry to understand site-specific energy consumption and prices in the oil and gas supply chain and determine under what conditions clean energy options are economically attractive. This work was sponsored by a consortium including Kinder Morgan, Interstate Natural Gas Association of America Foundation, Extraction Oil & Gas, Baker Hughes, and ConocoPhillips.

03 NATURAL GAS↗
DOE OSTI2021

Cook Inlet Tidal Energy Resource Characterization Effort

Located in the southcentral region of Alaska, Cook Inlet contains one of the greatest tidal resources in the world. A pinch point in the channel increases the water velocity and provides an excellent site for a potential tidal farm. Access to affordable, clean power would provide a cascade of economic benefits to Alaskans, who face some of the highest energy costs and most extreme climates in the U.S. NREL researchers are collaborating with universities and private partners to gain a better understanding of the underwater environment to pave the way for development of an efficient, durable tidal farm. This summer, they will deploy a buoy in Cook Inlet to characterize the site.

50 EE - Wind and Water Power Program - Water (EE-4↗
DOE OSTI2024

Impact of Inverter-Based Resources on Grid Protection: A Review of Negative-Sequence Current Generation

The increasing integration of inverter-based resources (IBRs) in power grids poses challenges to traditional protection systems, primarily due to their different fault current signatures compared to conventional synchronous generators. Unlike synchronous generators whose fault response is dictated by their physical design, IBRs exhibit a wide range of fault characteristics due to manufacturer-specific control algorithms and settings. This dependence on proprietary control schemes makes modeling IBR behavior during faults significantly more complex, especially considering the rapid evolution of inverter technology and the diverse control strategies employed. While much research has focused on the positive-sequence current injections of IBRs during symmetrical faults, the understanding of negative-sequence current generation during non-symmetrical faults remains limited. This report provides an overview of current research on IBRs' negative-sequence current generation during unbalanced faults and its impact on protection schemes based on negative-sequence components. It covers both type III wind turbines and full-size converter-based IBRs. Additionally, this report reviews strategies for grid-forming controlled inverters to generate negative-sequence current during unbalanced faults, in addition to grid-following controlled ones.

24 POWER TRANSMISSION AND DISTRIBUTION↗
NASA NTRS2004

Examples of Current and Future Uses of Neural-Net Image Processing for Aerospace Applications

Feed forward artificial neural networks are very convenient for performing correlated interpolation of pairs of complex noisy data sets as well as detecting small changes in image data. Image-to-image, image-to-variable and image-to-index applications have been tested at Glenn. Early demonstration applications are summarized including image-directed alignment of optics, tomography, flow-visualization control of wind-tunnel operations and structural-model-trained neural networks. A practical application is reviewed that employs neural-net detection of structural damage from interference fringe patterns. Both sensor-based and optics-only calibration procedures are available for this technique. These accomplishments have generated the knowledge necessary to suggest some other applications for NASA and Government programs. A tomography application is discussed to support Glenn's Icing Research tomography effort. The self-regularizing capability of a neural net is shown to predict the expected performance of the tomography geometry and to augment fast data processing. Other potential applications involve the quantum technologies. It may be possible to use a neural net as an image-to-image controller of an optical tweezers being used for diagnostics of isolated nano structures. The image-to-image transformation properties also offer the potential for simulating quantum computing. Computer resources are detailed for implementing the black box calibration features of the neural nets.

Decker, Arthur J.↗
NASA NTRS2012

Customizing NASA's Earth Science Research Products for addressing MENA Water Challenges

As projected by IPCC 2007 report, by the end of this century the Middle East North Mrica (MENA) region is projected to experience an increase of 3 C to 5 C rise in mean temperatures and a 20% decline in precipitation. This poses a serious problem for this geographic zone especially when majority of the hydrological consumption is for the agriculture sector and the remaining amount is for domestic consumption. In late 2011, the World Bank, USAID and NASA have joined hands to establishing integrated, modem, up to date NASA developed capabilities for various countries in the MENA region for addressing water resource issues and adapting to climate change impacts for improved decision making for societal benefits. The main focus of this undertaking is to address the most pressing societal issues which can be modeled and solved by utilizing NASA Earth Science remote sensing data products and hydrological models. The remote sensing data from space is one of the best ways to study such complex issues and further feed into the decision support systems. NASA's fleet of Earth Observing satellites offer a great vantage point from space to look at the globe and provide vital signs necessary to maintain healthy and sustainable ecosystem. NASA has over fifteen satellites and thirty instruments operating on these space borne platforms and generating over 2000 different science products on a daily basis. Some of these products are soil moisture, global precipitation, aerosols, cloud cover, normalized difference vegetation index, land cover/use, ocean altimetry, ocean salinity, sea surface winds, sea surface temperature, ozone and atmospheric gasses, ice and snow measurements, and many more. All of the data products, models and research results are distributed via the Internet freely through out the world. This project will utilize several NASA models such as global Land Data Assimilation System (LDAS) to generate hydrological states and fluxes in near real time. These LDAS products will then be further compared with other NASA satellite observations (MODIS, VIIRS, TRMM, etc.) and other discrete models to compare and optimize evapotranspiration, soil moisture and crop irrigation, drought assessment and water balance. The floods being a critical disaster in many of the MENA countries, NASA's global flood mapping and modeling framework (CREST) will be customized for country specific needs and delivered to the remote sensing organizations for their future use. Training is an important component under this activity and adequate level of training will be offered to build basic capacity to work with NASA provided data products, models for their future use. This paper provides a comprehensive introduction to NASA's Earth Science mission for understanding the behavior of our home Planet, projecting its health for future generations and applying research results solving societal issues.

Habib, Shahid↗
DOE OSTI2023

Representing the Future Role of Hydropower and Pumped Storage Hydropower (PSH) in Electricity Planning Tools

Existing tools for long-term electric sector planning struggle to represent hydropower's nuanced site-specific technical and operating characteristics, which depend on technical specifications as well as water management practices and regulations. As a result, long-term planning models and tools insufficiently characterize hydropower value and incentives, and they cannot fully represent the role hydropower can play in a future electricity system that could include a high penetration of variable wind and solar generation, battery storage, and other low-carbon technologies. This presentation demonstrates the culmination of a multi-year effort to enhance hydropower representations in electricity planning models at the National Renewable Energy Laboratory (NREL), as part of the U.S. Department of Energy (USDOE) HydroWIRES Initiative. New modeling techniques are demonstrated using the NREL Regional Energy Deployment System (ReEDS), an open-access electric sector capacity expansion model used extensively in a wide range of technology deployment and integration analysis, including the 2016 USDOE Hydropower Vision. ReEDS uses a least-cost optimization approach to understand investment and operation of electricity generation, storage, and transmission technologies under future scenarios of electricity technology innovation, demand, policy, and other sectoral drivers. ReEDS was modified to better represent value and opportunities for both pumped storage hydropower (PSH) and hydropower systems without pumping. We incorporated a new national closed-loop PSH resource and cost assessment to explore new PSH deployment opportunities and added plant-level data to better represent the existing PSH fleet. New upgrade pathways enable opportunities for enhanced hydropower flexibility by adding pumps, upgrading dispatchability, increasing capacity, or increasing energy availability. The model was also modified to better represent the value of long-duration energy storage beyond diurnal time scales, allowing both hydropower and PSH to better balance energy supply and demand variations in high-renewable systems. These new features are demonstrated under reference and high-renewable futures and a range of sensitivity scenarios to understand which hydropower and PSH deployment and upgrade opportunities are the most attractive. These scenarios indicate potential for new closed-loop PSH deployment and for hydropower flexibility improvements to have important impacts on long-term electricity system emissions and economic outcomes. Increasing flexibility of the existing hydropower fleet can reduce the need to invest in new flexible grid technologies and help achieve decarbonization goals. Systems with sufficient energy storage could also be valuable for balancing seasonal differences in renewable energy availability, particularly from solar energy. The methods developed for ReEDS and subsequent scenario results reveal important considerations for future hydropower and grid system planning, and all data and code is freely available in a public code repository for use throughout the hydropower industry.

capacity expansion↗
NASA NTRS2016

Crowd Sourcing Approach for UAS Communication Resource Demand Forecasting

Congressional attention to Unmanned Aircraft Systems (UAS) has caused the Federal Aviation Administration (FAA) to move the National Airspace System (NAS) Integration project forward, but using guidelines, practices and procedures that are yet to be fully integrated with the FAA Aviation Management System. The real drive for change in the NAS will to come from both UAS operators and the government jointly seeing an accurate forecast of UAS usage demand data. This solid forecast information would truly get the attention of planners. This requires not an aggregate demand, but rather a picture of how the demand is spread across small to large UAS, how it is spread across a wide range of missions, how it is expected over time and where, in terms of geospatial locations, will the demand appear. In 2012 the Volpe Center performed a study of the overall future demand for UAS. This was done by aggregate classes of aircraft types. However, the realistic expected demand will appear in clusters of aircraft activities grouped by similar missions on a smaller geographical footprint and then growing from those small cells. In general, there is not a demand forecast that is tightly coupled to the real purpose of the mission requirements (e.g. in terms of real locations and physical structures such as wind mills to inspect, farms to survey, pipelines to patrol, etc.). Being able to present a solid basis for the demand is crucial to getting the attention of investment, government and other fiscal planners. To this end, Mosaic ATM under NASA guidance is developing a crowd sourced, demand forecast engine that can draw forecast details from commercial and government users and vendors. These forecasts will be vetted by a governance panel and then provide for a sharable accurate set of projection data. Our paper describes the project and the technical approach we are using to design and create access for users to the forecast system.

air traffic↗
DOE OSTI2021

Pala Energy Options Analysis (Final Report)

The Pala Energy Options Project scope focused on assessing electric and thermal energy related options for the Pala Band of Mission Indians. Although the assessment also considered options for transportation fuels – including potential for electrification – and other energy uses, initial reviews with PED staff indicated that the most practical and substantial options likely would involve serving current building electric and thermal energy resources and uses. Assessment scope varies by specific options considered; some merited in-depth assessment for immediate action to initiate or advance implementation, while higher level assessments were more appropriate for options that would take longer to implement and would require updated in-depth assessments during project planning and design phases. The primary objectives of the Project were to 1) identify energy resources/loads, 2) assess energy needs and exports, 3) investigate and evaluate supply-side and demand side energy options, and 4) select and prioritize options in an implementation plan.

14 SOLAR ENERGY↗
DOE OSTI2025

Selection of Global Climate Model Data for Downscaling With Generative Machine Learning and Use in the Power Planning for Alignment of Climate and Energy Systems Project

The range of results from climate models and scenarios is important to the understanding of uncertainty in power planning analysis. A U.S. Department of Energy-funded analytic project called Power Planning for Alignment of Climate and Energy Systems is developing data and analytic methods to reflect the effects of climate change on key variables for power system planning, as part of the Grid Modernization Lab Consortium. This project will select and prepare global climate model results for use in power system planning models. A related report (Evaluation of Global Climate Models for Use in Energy Analysis) assesses the performance of various global climate models from the Coupled Model Intercomparison Project Phase 6 data archive for their historical skill with respect to energy system performance and for their future projections under multiple climate change scenarios. Building from that report, we describe the selection of a climate scenario (Shared Socioeconomic Pathway [SSP] 2-4.5) and five climate models: TaiESM1, EC-Earth3-CC, GFDL-CM4, EC-Earth3-Veg, and MPI-ESM1-2-HR. We describe the model selection criteria, which were based on the quality of the match between model results under historical conditions and on the representation of the range of future values for several variables. These results will be downscaled via an open-source generative machine learning method called Super-Resolution for Renewable Energy Resource Data with Climate Change Impacts.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2022

Using a Grid-Forming Inverter to Stabilize a Low-Inertia Power System - Maui Hawaiian Island

As power systems around the world integrate greater amounts of wind and solar photovoltaic power, periods of very high instantaneous power shares of inverters, the primary interfacing technology for these generation sources, are complicating system stability and control. The contemporary, primary mode of inverter operation, grid-following, which explicitly assumes the presence of a local, stable voltage waveform, yields operational inadequacy at high instantaneous power shares potentially leading to instability due to the low-inertia conditions, as well as the correlated reduced voltage forming capacity on the respective system. Parallel connected grid-forming inverters, which directly regulate the local voltage, are a solution that is expected to bolster system stability and mitigate the shortcomings of the grid-following technology. In this paper, grid-following and two types of grid-forming inverter control, the traditional linear droop and the recently introduced nonlinear exponential droop (Droop-e), are simulated on a low-inertia, H = 0.48s, high inverter-based resource scenario, 97%, with a validated electromagentic transient domain model of the Hawaiian island of Maui power system. The benefit of a single grid-forming device over its grid-following counterpart is significant, both in terms frequency deviation and voltage stability. Further, the superiority of the Droop-e and the associated secondary power sharing control over both grid-following and linear droop grid-forming technologies is displayed, with improved nadir and rate of change of frequency over the linear droop control.

droop control↗
NASA NTRS1999

Computer Modeling of Sand Transport on Mars Using a Compart-Mentalized Fluids Algorithm (CFA)

It has been postulated that aeolian transport on Mars may be significantly different from that on Earth. From laboratory experiments simulating martian grain transport [2], it has been observed that (saltating) grains striking the bed can cause hundreds of secondary reptation trajectories when impact occurs at speeds postulated for Mars. Some of the ballistically induced trajectories "die ouf' and effectively join the ranks on the creep population that is merely nudged along by impact. Many of the induced reptation trajectories, however, are sufficiently high for the grains to become part of the saltation load (it is irrelevant to the boundary layer how a grain attained its initial lift force). When these grains, in turn, strike the surface, they too are capable of inducing more reptating grains. This cascading effect has been discussed in connection with terrestrial aeolian transport in an attempt to dispel the notion that sand motion is divisible only into creep and saltation loads. On Earth, only a few grains are splashed by impact. On Mars, it may be hundreds. We developed a computer model to address this phenomenon because there are some important ramifications: First, this ratio may mean that martian aeolian transport is dominated by reptation flux rather than saltation. On Earth, the flux would be a roughly balanced mixture between reptation/creep and saltation. On Venus, there would be no transport other than by saltation. In other words, an understanding of planetary aeolian processes may not be necessarily understood by extrapolating from the "Earth case", with only gravity and atmospheric density/viscosity being considered as variables. Second, the reptation flux on Mars may be self sustaining, so that little input is required by the wind once transport has been initiated. The number of grains saturating the boundary layer near the bed may mean that average grain speed on Mars might conceivably be less than that on Earth. This would say much for models of sand comminution on Mars. A multiple-grain transport model using just the equations of grain motion describing lift and drag is impossible to develop owing to stochastic effects --the very effects we wish to model. Also, unless we were to employ supercomputing techniques and extremely complex computer codes that could deal with millions of grains simultaneously, it would also be difficult to model grain transport if we attempted to consider every grain in motion. No existing computer models were found that satisfactorily used the equations of motion to arrive at transport flux numbers for the different populations of saltation and reptation. Modeling all the grains in a transport system was an intractable problem within our resources, and thus we developed what we believe to be a new modeling approach to simulating grain transport. The CFA deals with grain populations, but considers them to belong to various compartmentalized fluid units in the boundary layer. In this way, the model circumvents the multigrain problem by dealing primarily with the consequences of grain transport --momentum transfer between air and grains, which is the physical essence of a dynamic grain-fluid mixture. We thus chose to model the aeolian transport process as a superposition of fluids. These fluids include the air as well as particle populations of various properties. The prime property distinguishing these fluids is upward and downward grain motion. In a normal saltation trajectory, a grain's downwind velocity increases with time, so a rising grain will have a smaller downwind velocity than a failing grain. Because of this disparity in rising and falling grain proper-ties, it seemed appropriate to track these as two separate grain populations within the same physical space. The air itself can be considered a separate fluid superimposed within and interacting with the various grain-cloud "fluids". Additional informaiton is contained in the original.

Marshall, J.↗
DOE OSTI2024

Impact of Glen Canyon Generation Loss

Colorado River Basin hydropower generation has faced challenges due to droughts and ecological and social water requirements. Specifically, Glen Canyon hydropower generation fluctuates substantially with recent extreme weather trends. Further, the western grid evolves with higher wind and solar share, and Glen Canyon hydropower's contribution to grid flexibility services is essential. The Western Area Power Administration (WAPA) markets and schedules electricity production at GCD, and the loss of this power could have significant financial consequences for the WAPA Colorado River Storage Project's (CRSP) Office because it may need to purchase relatively large amounts of energy to serve its firm electrical obligations. In addition, GCD provides grid reliability services for the WAPA Colorado-Missouri (WACM) balancing authority (BA). Both WAPA and DOE's Water & Power Technology Office (WPTO) are interested in researching how these drier hydrological conditions will impact federal electrical energy production, the Western Electricity Coordinating Council (WECC) power grid, and the value of hydropower in the face of lower production. We study multiple hydrologic and power grid scenarios to understand the grid impacts of the loss of Glen Canyon generation. The study uses a production cost model, water resources planning models, water-centric grid models, and various data analytic techniques. The study progress presentation discusses the selection of probable CRSP' hydropower scenarios and power grid scenarios to understand the impacts of Glen Canyon generation, which includes technologies that compensate the Glen Canyon energy and ancillary services contributions, transmission availability, and energy local marginal prices at interested grid locations of WAPA operation.

droughts↗
NASA NTRS2001

The Mechanism Responsible for High Concentrations of Be-7 in the Near Space

In 1990 an unexpectedly high concentration of Be-7 was discovered on the LDEF satellite surface, facing in the RAM direction. The search for an explanation of this high concentration of Be-7 which is in thermal equilibrium in the upper atmosphere, led the researchers to the hypothesis of Be-7 transport by vertical turbulent fluxes from deeper layers in the Earth's atmosphere, where Be-7 is produced as a result of nuclear reactions between solar energetic protons (which penetrated there after a solar flare) and terrestrial atmosphere elements. The experiments carried out during 1995-1999 on 'Resource F1' and 'Cosmos' satellites not only confirmed the existence of high Be-7 concentrations at altitudes of about 200 km, but also permitted to establish correlation between the concentration of Be-7 in the upper atmosphere and flare activity on the Sun. More detailed analysis of the whole set of experimental data on Be-7 measurements at satellite altitudes showed, that the appearance of high Be-7 concentrations in the upper atmosphere of the Earth is a more complicated phenomenon. Two more mechanisms , explaining the observed effect can be indicated. Firstly, the observed concentrations could be associated with direct penetration of energetic Be-7 nuclei, originating in flares, into the terrestrial atmosphere. Calculations show, that in solar cosmic rays the flux of Be-7 nuclei should be maximum in comparison to the fluxes of other Beryllium isotopes. Secondly, the high concentration of Be-7 in the upper atmosphere of the Earth could be explained by solar wind penetration through the polar zones. Theoretical analysis of active processes including flares, occurring in the solar atmosphere, leads to the conclusion, that radioactive Beryllium is constantly present in the solar atmosphere, and, possibly, is the main isotope of solar Beryllium.

Panasyuk, M. I.↗
NASA NTRS2006

Elemental and Molecular Relative Abundances in the Ejecta of Eta Carinae

We are measuring relative elemental abundances for the ejecta in the line of sight from Eta Carinae using high dispersion spectroscopy with the HST/STIS and the VLT/UVES. While multiple velocity components have been identified, we focus on the -513 and -146 km/s components originating from the Homunculus and the Little Homunculus. Complicating factors are the complex nebular structures in the immediate vicinity of the bright, massive star: the very bright emission structures, Weigelt blobs B, C and D, the broad, clumpy structures of the extended wind apparently not photoionized by Eta Car B, and general scattered starlight from the extended wind and the dusty core of the circumstellar material. We have used the 3050 to 3160A region of overlap between STIS and UVES to intercompare equivalent widths of absorption lines to estimate the 'contributing factor', namely the amount of light originating from the star compared to nebular structures. While the extracted STIS spectra are from 0.1" wide aperture, the UVES spectra are limited by the 1" seeing conditions. Curiously we find that the scattering contribution in the UVES spectra changes with time, apparently with orbital phase of the 5.54-year period. This indicates that the dust may be modified by changes in the central source with phase. The noticeable drop in scattered light appears to occur about 1.7 years (phase 0.35) after the spectroscopic minimum. Relative abundances of iron peak elements and some molecules will be estimated. Observations in this study were accomplished with HST through STSci and with VLT through ESO and funded under STIS GTO resources.

Kober, G. V.↗
DOE OSTI2021

Impact of operating reserve rules on electricity prices with high penetrations of renewable energy

In competitive wholesale electricity markets, significant effort is devoted to designing markets that set efficient prices for maintaining supply-demand balance. One factor that can impact prices is administratively-set scarcity pricing, which sets prices to a preset level when the market is not able to meet operating reserve or energy requirements. When energy and operating reserves are co-optimized, assumptions surrounding operating reserve requirements and scarcity pricing can impact system-wide price outcomes for both operating reserves and energy. This study uses production cost modeling of an ERCOT-like system to evaluate the impact of operating reserve eligibility, scarcity pricing, and quantity rules on electricity prices, and therefore also on generator revenues. Results reveal economic and operational benefits with allowing open participation in reserve markets, as this enables greater access to the full set of capable resources at lowest cost. Furthermore, both energy and reserve prices are strongly impacted by reserve scarcity pricing events, which reveals that reserve scarcity pricing assumptions can impact price outcomes even for units not providing reserves. This study highlights the importance of operating reserve scarcity pricing rules because of the strong coupling between energy and reserve prices and because these rules serve as proxies for true price responsive demand.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2021

Capacity Investment under Bayesian Information Updates at Reporting Periods: Model and Application

We consider capacity addition decisions by a new product manufacturer faced with uncertain technology alternatives. The manufacturing capacity addition and technology development occurs in parallel, with preliminary results from a technology project's success providing valuable information to the manufacturer in adding capacity. We solve a stochastic dynamic program with Bayesian updates to obtain the manufacturer's expected profit‐maximizing capacity investment decision. Our model and applications are motivated by the Critical Materials Institute (CMI) (funded by the Department of Energy), which manages research projects focused on mitigating critical material constraints, vital to renewable energy technologies such as direct‐drive wind turbines, electric vehicles, and energy‐efficient lighting. We capture three unique aspects of the problem: first, the learning from project progress depends on task‐based stochastic outcomes and a project's percent‐done. Second, the underlying technology's profitability is based on a model of competition. Third, we evaluate the impact of progress across a portfolio of projects based on a manufacturer's capacity addition. We develop a heuristic that produces results that are close to optimal and can thus be used for large problem sizes. The managerial insights from an application of our model to CMI projects include: (i) technology projects that report the percent‐done of a project earlier increase expected manufacturer profit; (ii) careful choice of “safe bets,” that is, technologies with low profitability but a high probability of success, can increase expected manufacturer profit; (iii) a portfolio of projects can increase profits significantly over separate project evaluation; and (iv) dynamic management of project resources can increase overall profit.

Vedantam, Aditya↗