President’s Budget Draws Clean Energy Funds from Climate Measure
President Obama released a rough outline of his proposed budget for fiscal year (FY) 2010 last week, and the document proposes to support clean energy development with a 10-year investment of $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. The funding hinges on the passage of an economy-wide GHG emissions program, under which the Obama administration intends to reduce U.S. GHG emissions to 14% below 2005 levels by 2020 and to 83% below 2005 levels by 2050.
Under the proposed cap-and-trade program, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019 (and presumably increasing more beyond that, although the budget proposal doesn’t look any further). The president’s proposed budget directs $15 billion per year of those funds toward clean energy technologies, while directing the remaining funds toward a tax cut.
According to President Obama, the clean energy funds will be used "to develop technologies like wind power and solar power, and to build more efficient cars and trucks right here in America." See the president’s budget announcement, as well as pages 21, 100-101, 115-116, and 123 of the president’s budget proposal (PDF 1.8 MB).
The budget proposes to provide DOE with $26.3 billion in FY 2010, representing a 10% increase above the DOE appropriations for FY 2008 (Congress is currently working on the appropriations for FY 2009). Those funds would be in addition to the funds provided by the American Recovery and Reinvestment Act of 2009, which provided $39 billion for energy programs.
Although the president’s proposed budget doesn’t provide a breakdown of the DOE funds, the proposal highlights loan guarantees for innovative energy technologies, as well as accelerated research, development, demonstration, deployment, and commercialization of clean energy technologies, including biofuels, renewable energy, and energy efficiency. The budget proposal also specifies $50 million for the U.S. Department of Interior to conduct resource assessments, environmental evaluations, and technical studies needed to support renewable energy development on public lands. See page 63-64 and page 79 of the president’s budget proposal. See the DOE press release.
DOE and HUD Team up to Support Home Weatherization
DOE and the Department of Housing and Urban Development (HUD) announced last week a major partnership designed to streamline and coordinate federal weatherization efforts. DOE and HUD have created a high-level interagency task force to leverage roughly $16 billion in funds from the American Recovery and Reinvestment Act to spur growth in the home energy efficiency industry in the U.S.
HUD’s funding includes $4.5 billion to renovate and upgrade public and tribal housing and $250 million for energy retrofits of privately owned, federally assisted housing, while DOE’s funding includes $5 billion for weatherization assistance; $3.2 billion for new block grants that states, local governments, and tribal governments can use to retrofit homes; $3.1 billion for the State Energy Program; and more.
The new interagency task force will coordinate the expenditure of the new funds in local communities and will develop guidelines and specifications for retrofitting public housing and privately owned, federally subsidized rental properties. The task force will also evaluate home energy disclosure and audit standards and develop new financing tools for home energy efficiency efforts. In addition, the task force will lead a government-wide effort to develop a common baseline for measuring home energy use and documenting gains from energy efficiency improvements. See the DOE press release.
Ford Begins Production of Fuel-Efficient Engines at Cleveland Plant
Ford Motor Company announced it has resumed production at an engine plant in Cleveland, Ohio, for the manufacture of its new fuel-efficient EcoBoost engines. Cleveland Engine Plant No. 1 has been idled since 2007 as the company invested $55 million in new tooling and equipment to build the EcoBoost engine, a V-6 engine with the power of a larger V-8 engine. The new "flexible" manufacturing line features modern machine tools that can be easily retooled and reprogrammed to manufacture new engines.
Ford is shifting about 250 employees to the production of the new engine, which will be standard on the 2010 Ford Taurus SHO and available for the 2010 Lincoln MKS, Lincoln MKT, and Ford Flex. The EcoBoost engine combines twin turbochargers and direct injection of fuel into the engine’s cylinders to produce the power of a traditional V-8 engine from the smaller, more fuel-efficient V-6. By 2013, the EcoBoost engine will be available for more than 90% of Ford’s vehicle lineup in North America. See the Ford press releases on the EcoBoost manufacturing line and the technologies employed in the engine.
General Motors also plans to produce a new fuel-efficient engine at an existing engine plant, the Flint South engine plant in Flint, Michigan. GM will begin installing new machinery and equipment at the plant this spring and is planning to invest $250 million in a flexible manufacturing line that will allow the production of a variety of four-cylinder engines without retooling. The new manufacturing line will start production of the 1.4-liter, four-cylinder, "Family 0" engine in December 2010, just in time for it to be deployed in the Chevy Volt. The engine will also power the new Chevy Cruze. GM originally planned to build a new manufacturing plant for the engine, but chose instead to save money by using its available floor space at the Flint South plant. See the GM press release.
While such flexible manufacturing lines are new to Ford and GM, Honda has been investing in a highly flexible and efficient network of manufacturing plants in North America for the past decade. Honda’s flexible manufacturing system is allowing the company to increase its U.S. production of four-cylinder vehicles this year without making major investments in retooling and without having to idle its production plants. Honda announced the production shifts in October 2008. See the Honda press release.
Ford Launches Hybrid Sedans, Plans All-Electric Delivery Van
Ford has launched the sale of its first hybrid mid-size sedans, the 2010 Ford Fusion Hybrid and the 2010 Mercury Milan Hybrid. The 2010 Ford Fusion Hybrid achieves a best-in-class fuel economy of 41 miles per gallon (mpg) in the city and 36 mpg on the highway. Its price starts at $27,995, a premium of $8,000 above the base price of the non-hybrid version. The well-equipped Mercury Milan Hybrid achieves the same fuel economy at a starting price of $31,300, a premium of roughly $9,400 above the base price of the non-hybrid model.
Customers that buy either hybrid by March 31 may qualify for a $3,400 tax credit. People that have ordered the car thus far seem to be well aware of that tax credit, as Ford reports that nearly 80% of the early retail orders have been for the hybrid versions. See the Ford press release.
Ford has also announced plans to introduce its first all-electric vehicle, and those expecting a rival to the Chevy Volt may be disappointed. In 2010, Ford will launch a battery-powered version of its new Transit Connect commercial vehicle, a delivery van aimed primarily at small businesses. Smith Electric Vehicles will work with Ford to produce the all-electric versions of the new vehicle. Those longing for an all-electric small car from Ford will have to wait another year, as Ford plans to launch such a vehicle in 2011. Ford will wait until 2012 for its first production of a plug-in hybrid vehicle. See the Ford press release.
U.S. Utilities Pursue Large-Scale Solar Power Facilities
Utilities in or near the southwestern U.S. are planning to build or buy power from massive concentrating solar power (CSP) plants, while utilities throughout the nation are investing in solar photovoltaic (PV) power plants, creating growing momentum for the utility deployment of solar power throughout the country.
In terms of CSP plants, Southern California Edison (SCE) recently reached an agreement with BrightSource Energy for 1,300 megawatts (MW) of solar power, which qualifies as the world’s largest solar power deal to date. The agreement calls for a series of seven projects, starting with a 100-MW CSP plant that could start operating near Ivanpah, California, in early 2013.
BrightSource Energy employs "power tower" technology, in which a field of thousands of flat mirrors, called heliostats, focuses sunlight onto a boiler mounted at the top of a tower. Steam produced in the boiler is piped to a turbine, which drives a generator to produce electricity. A commercial power tower was recently built in Spain, but only demonstration plants have been built in the U.S.
In addition, NRG Energy, Inc. signed an agreement with eSolar last week to develop three solar projects totaling as much as 500 MW, also using solar power towers. See the press release from Edison International, SCE’s parent company, as well as the NRG Energy press release (PDF 104 KB).
In terms of PV power plants, California’s Pacific Gas and Electric Company (PG&E) appears to be taking a leadership position, as the utility announced in late February that it plans to develop and own up to 250 MW of solar power facilities, while buying power from another 250 MW of solar power owned by independent developers.
The California Public Utilities Commission has also approved two previous large contracts that PG&E has signed with solar power developers, including a contract for 550 MW of thin-film solar PV from Topaz Solar Farms on the Carrizo Plain in San Luis Obispo County, as well as another contract with High Plains Solar Farms for 210 MW of silicon solar panels. SunPower, Inc. owns the latter project, and the former project was owned by OptiSolar, Inc., but First Solar, Inc. just bought out all of OptiSolar’s projects, including the PG&E project.
In the fourth quarter of 2008, First Solar managed to cut the manufacturing cost for its thin-film solar modules to 98 cents per watt, breaking the $1 per watt cost barrier. The company’s annual production capacity is expected to exceed 1,000 megawatts per year by the end of this year. See the PG&E press release, the CPUC press releases about Topaz Solar Farms and High Plains Solar Farms, and the First Solar press releases about OptiSolar and its cost achievement.
While California has a definite lead in solar power development, utilities in other states are now pursuing megawatt-scale solar PV projects. In New Jersey, the Public Service Electric and Gas Company (PSE&G) has proposed to spend $773 million to support the development of 120 MW of solar PV power through many projects located throughout its service territory.
In New York, Governor David Paterson announced that the Long Island Power Authority is planning to support 50 MW of new solar power, including 13.1 MW of smaller projects developed by enXco and 36.9 MW to be installed by BP Solar in two large projects at DOE’s Brookhaven National Laboratory. And down in the Sunshine State, Florida Power & Light (FP&L) has just broken ground on a 25-MW solar PV facility, the DeSoto Next Generation Solar Energy Center, which should be completed by year’s end. See the press releases from PSE&G, Governor Paterson, and FP&L.
Report Highlights the Importance of Water for Energy Production
Water and energy are often treated as two separate but related issues, but a new report from the World Economic Forum stresses the connection between the two resources. According to the report, the energy sector uses about 8% of all freshwater withdrawn worldwide and as much as 40% of freshwater withdrawn in developed countries (although most of the water is returned to its source, so the amount consumed is much less). Energy is also a key input to the water value chain, used to power water movement and treatment.
The report concludes that pressure on freshwater resources will translate into the need to use water much more efficiently throughout the energy value chain. As a result, water issues will impact future energy choices, and energy companies will increasingly be called upon to be partners in managing the world’s water resources. See the World Economic Forum’s February 19 press release and the full report (PDF 2.8 MB).
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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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