Energy Efficiency, Renewables, and the DOE Budget

Posted on May 15th, 2013 by
   

Belt-tightening in Washington hasn’t yet hit the Department of Energy (DOE). Its fiscal year (FY) 2014 Congressional Budget Request of $28.415 billion represents an increase of 5.2% and 8.0% from the FY 2013 annualized budget and the current FY 2012 budget, respectively, see Figure 1.  The requested allocation for the Office of Energy Efficiency and Renewable Energy (EERE) for FY 2014 is also a brighter picture, at $2.775 billion, a 52% and 56% increase from 2013 and 2012 budgets, respectively.

That’s the request, at least. If recent history is any indication, the budget is certain to be cut, perhaps substantially. For FY 2012, Congress approved about 89%, or $26.320 billion, of the total DOE request. However, only 56%, or $1.780 billion, of the requested allocations for EERE survived the axe.

 

Sources: U.S. Department of Energy.

EERE Is Not a Priority

It may be a surprise to some, but EERE programs are not major priorities for the DOE. Weapons activities, nuclear nonproliferation, naval reactors and other defense-related initiatives absorb a major part of its budget. This is in keeping with the department’s DNA that descends from the Manhattan Project and a long lineage of atomic and nuclear commissions. These programs constitute about 64% of the 2012 enacted budget. EERE allocations were significantly smaller, comprising about 6.8% of enacted budgets in both 2011 and 2012.

What is EERE, exactly? According to the DOE, “The Office of Energy Efficiency and Renewable Energy (EERE) supports clean energy research, development, demonstration, and deployment (RD&D) activities on technologies and practices that help meet national security, environmental, and economic goals.” EERE programs are classified as Renewable Energy, Energy Efficiency, or Crosscutting.

Renewable Energy RD&D programs include solar, wind, hydro, and biomass, as well as geothermal and hydrogen technologies and fuel cells. Energy Efficiency covers well-known vehicle efficiency initiatives as well as more obscure projects such as advanced manufacturing and building technologies. It also covers the federal government’s own use of energy as well as activities to help state, local, U.S. territory, and tribal governments achieve their energy efficiency and renewable energy goals. Crosscutting initiatives cover funding for facilities and infrastructure, as well as overhead and communication and outreach. EERE prioritizes its RD&D work according to its impact; ability to make a large difference relative to current private sector activities; openness to broad problems, new ideas, approaches, and performers; economic benefit; and level of government responsibility.

Major funding shifts for FY 2014 include large increases in allocations for Vehicle Technologies and Advanced Manufacturing. Most programs show increased funding for FY 2014. Only Hydrogen and Fuel Cell Technologies and Wind Power show a reduction. Bioenergy Technologies is a new function that takes over Biomass and Biorefinery Systems RD&D from previous years. Similarly, Advanced Manufacturing is a new activity evolved from Industrial Technologies funded in previous years.

 

Requested Budgets Rise

EERE allocations have shown interesting trends over the years. A breakdown of 2000 to 2014 allocations for wind, hydrogen, biomass, and solar renewable energy programs is given in Figure 2. Most notable is the steady increase in funding solar with a requested allocation in FY 2014 exceeding $350 million. Bioenergy technologies have seen strong support since 2000, and projected 2014 spending is in excess of $250 million. Hydrogen energy technologies have seen the biggest swings. From FY 2004 to FY 2010, hydrogen exceeded or was on par with biomass and solar, only to fall from grace in FY 2011. Wind energy allocations have remained the poor boy of EERE funding, with requested allocations the lowest of the four since 2004.

Figure 2: FY 2000 to FY 2014 EERE budget allocations for renewable programs.

 

Yet, considering bang for your buck, wind power has been a winner. Total cumulative allocations for wind power from FY 2000 through FY 2012 have been substantially lower in real dollars ($622 million) than for hydrogen ($1.446 billion), biomass ($1.787 billion), and solar ($1.873 billion), even though wind capacity additions over the same period have far outstripped the others. Possibly, as an investment for the future, it’s a wise decision to fund losing programs such as solar and hydrogen, neither of which has yet to make a substantial impact. Energy is not a horse race, but a betting person would put his/her dollars on wind.

It’s uncertain what Congress will approve for 2013 and 2014, but if history is an indicator, renewable energy and energy efficiency programs will suffer disproportionate cuts from the congressional knife. In actuality, however, much of the damage is already done, since the amount requested for these programs is insufficient to begin with. Add this to faulty decision making, such as the failed $535 million loan guarantee to Solyndra, an amount that alone is equal to about 20% of the total 2014 EERE request.

It seems like our government’s message to “energy research, development, demonstration, and deployment activities necessary to meet national security, environmental, and economic goals” is “Frankly, my dear, I don’t give a damn.”

The opinions expressed in this article are solely those of the author Dr. Barry Stevens, an accomplished business developer and entrepreneur in technology-driven enterprises. He is the founder of TBD America Inc., a global technology business development group. In this role, he is responsible for leading the development of emerging and mature technology driven enterprises in the shale gas, natural gas, renewable energy and sustainability industries. To learn more about TBD America, please visit: http://tbdamericainc.com/

Related Posts:

Tags: , ,

One Person has left comments on this post



» Kevin Swartz said: { May 16, 2013 - 09:05:12 }

Barry, I think you are right. Wind is getting the least amount of attention from EERE. Of course it is a vibrant industry that self funding its own R+D, without government support. If Congress would just pass a law codifying the tax incentives for some reasonable period of time, instead extending them every couple of years, they would be set. I wouldn’t spend any more taxpayer money on it.

I personally think hydrogen will be a waste of time, due to the power consumption needed to produce and liquefy it. The low energy density in gaseous form is a substantial hurdle against its wide spread use. The cost necessary to put an entirely new distribution system (existing gas valves and related equipment will leak so much hydrogen, they are unusable) is prohibitive. I’d be happy to let the Germans experiment with it (which they are doing).

Solar, I think either is, or will be shortly, the same kind of success wind is. Solar is certainly attracting a fair amount of venture capital. Both wind and solar technologies are capable of generating power at less than $0.10/kWh, which put them on par with other power generating options.

That leaves us with biomass, efficency and an area that I think they should be spending more money on, energy storage. Both wind and solar are intermittent power resources that can’t be relied upon 24/7 like fossil. We need cost effective energy storage that will allow increased renewable power deployment. When I see a company like GE jump into batteries, maybe we won’t have to fund it that much longer, but it probably could use and additional kick to support lower cost technologies.

I hope biomass will come unto its when greenhouse gases actually start to have a market value. The technology is available for biomass, it is policies that encourage it’s active deployment. No need to spend a lot of R+D money here either.

I think you might guess were I am going. Taxpayers should only step in where private industry is unwilling to to provide the capital necessary to make a promising technology competitive in the marketplace. Once it is deployed on a commercial basis, taxpayers shouldn’t be paying a lot of money supporting it.

One area I think is underfunded is energy efficiency. The United States is the largest per capita energy consumer in the world by orders of magnitude. This is less of a technical challenge (Europe and the rest of the first world seem to have pretty good lifestyles with out the kind of energy consumption we seem to feel is our right.) and more of a behavioral one. So far, the only answer we seem to have is to charge a lot for power when it is needed the most and hope people use less. Hmm…the people that can afford power won’t really care and the people most effected by it won’t have the capital to make the kinds of technical changes needed to reduce consumption. Talk about a regressive policy, that is almost as bad as taxes on gasoline! Ahem….



Spam Protection by WP-SpamFree


>