- DOE Requests $2.3B for Efficiency, Renewable Energy in FY 2010
- Interior, Ag Departments Propose More Renewable Energy Funding
- DOE to Invest $33.5M in Wind Energy Projects
- DOE, HUD Sign Agreement to Streamline Weatherization Process
- DOT Awards $742.5M in Recovery Act Funds to 11 Transit Projects
- Maryland Aims for 25% Cut in GHG by 2020
- Expectations Dim for Near-Term Growth in Oil Demand
DOE Requests $2.3 Billion for Efficiency, Renewable Energy in FY 2010
President Obama unveiled last week a $26.4 billion budget request for DOE for fiscal year (FY) 2010, including $2.3 billion for the DOE Office of Energy Efficiency and Renewable Energy (EERE). The budget aims to substantially expand the use of renewable energy sources while improving energy transmission infrastructure. It also makes significant investments in hybrids and plug-ins, in smart grid technologies, and in scientific research and innovation. The budget request for EERE represents a 6.4% increase above the appropriations for FY 2009, not counting funds provided through the American Recovery and Reinvestment Act (ARRA).
The president’s budget includes significant increases for a number of EERE programs, including an 82.9% increase for solar energy, a 36.4% increase for wind energy, a 22% increase for vehicle technologies, a 69.8% increase for building technologies, and a 46.7% increase for the Federal Energy Management Program.
The budget also requests a near doubling in funding for program direction, in part to support "unprecedented project management and oversight" associated with the Recovery Act. The budget also includes a more than five-fold increase in funding for program support (to $101.8 million), primarily to support analysis and commercialization efforts. The President’s budget generally represents a starting point for the Congressional appropriation process. See the DOE press release and text pages 24-31 (PDF pages 30-37) of the DOE Budget Highlights (PDF 1.0 MB) on the DOE budget and performance Web page.
The proposed DOE budget also includes $280 million to fund eight multi-disciplinary Energy Innovation Hubs, each of which is focused on a particular energy challenge. The hubs are meant to advance highly promising areas of energy science and technology from their early stages of research to the point that the risk level will be low enough for industry to commercialize the technologies.
Two of the eight hubs are included in the EERE budget and will focus on integrating smart materials, designs, and systems into buildings to better conserve energy and on designing and discovering new concepts and materials needed to convert solar energy into electricity. Another two hubs, included in the DOE Office of Science budget, will tackle the challenges of devising advanced methods of energy storage and creating fuels directly from sunlight without the use of plants or microbes. Yet another hub will develop "smart" materials that will allow the electrical grid to adapt and respond to changing conditions, while the remaining three hubs will address challenges related to nuclear energy and carbon capture and storage. See text pages 1-2 and 6-7 (PDF pages 7-8 and 12-13) of the DOE Budget Highlights document.
Interior and Ag Departments Propose More Renewable Energy Funding
The U.S. Departments of Interior and Agriculture are proposing to boost funding for renewable energy programs in their budget requests for fiscal year (FY) 2010. The Interior Department is proposing $50.1 million for a new Clean Energy Future Initiative, which will facilitate responsible renewable energy development on public lands managed by the department and in offshore areas on the Outer Continental Shelf (OCS).
The initiative will focus on areas with the highest potential for renewable energy development, including areas with significant wind, solar, geothermal, and biomass energy resources. The funds will spur renewable energy projects, facilitate the siting of new transmission facilities, assess renewable energy resources, and ensure adequate environmental protections. As part of the initiative, the Minerals Management Service would receive an increase of $24 million for the development of a robust renewable energy leasing program on the OCS, while the Bureau of Land Management (BLM) would receive an increase of $16.1 million for permitting and leasing activities related to renewable energy projects and for the planning efforts, environmental assessments, and analyses needed to develop new transmission facilities.
The BLM would use $11 million of that funding to establish four renewable energy coordination offices, which will increase the BLM’s capacity to process permits. In addition, the Bureau of Indian Affairs (BIA) would receive $5 million to support renewable energy development on tribal and BIA-managed lands; the U.S. Geological Service would receive $3 million for renewable energy resource assessments, and the Fish and Wildlife Service would receive $3 million to ensure the protection of fish and wildlife throughout the development process. See the Interior Department press release.
The proposed funding for the U.S. Department of Agriculture (USDA) is more difficult to interpret, because much of the agency’s funding is mandated by the 2008 Farm Bill, and discretionary funds are added to that mandatory pot of funds.
Officially referred to as the Food, Conservation, and Energy Act of 2008, the Farm Bill renamed the Renewable Energy Systems and Energy Efficiency Improvements Program as the Rural Energy for America Program. Discretionary funding for the former program was roughly $5 million in FY 2009, but the proposed budget for FY 2010 boosts that funding to $68 million, which exceeds the $60 million in mandatory funding provided by the Farm Bill.
Together, the two funding sources would allow $65 million in grants and $459 million in guaranteed loans. Likewise, the budget requests $17 million for the Biorefinery Assistance Program, a new loan guarantee program that is already receiving $245 million in Farm Bill funds. The combined funds would finance $740 million in loan guarantees.
The budget also requests $22 million for Value-Added Producer Grants, which help to develop markets for bio-based products, biofuels, on-farm renewable energy systems, and other value-added agricultural products. In FY 2009, that grant program was funded with $15 million in Farm Bill funds and $6 million in discretionary funds, but no Farm Bill funds are provided for FY 2010. See pages 56-58 of the USDA Budget Summary and Annual Performance Plan for FY 2010 (PDF 1.5 MB).
DOE to Invest Up to $33.5 Million in Wind Energy Projects
DOE announced it plans to provide Massachusetts with $25 million in funding from the ARRA to accelerate development of the state’s Wind Technology Testing Center. Conveniently located in Boston Harbor, the new center will be the first commercial facility in the nation for large wind turbine blades. It will allow for the testing of blades longer than 50 meters to help reduce cost, improve technical advancements, and speed deployment of the next generation of wind turbines.
DOE selected Massachusetts for the facility in June 2007, pledging $2 million to support the project. The Massachusetts Renewable Energy Trust also committed $13.2 million in grants and loans to develop the facility, and the state is now concluding the final design for the testing center. With the injection of Recovery Act funds, construction can begin in September and will be complete by the end of next year, creating hundreds of new jobs in the area. See the DOE press release.
DOE also announced it will invest up to $8.5 million in 53 new wind energy projects in 24 states, plus the District of Columbia. Funded with fiscal year 2009 appropriations, the projects will support the goals outlined in DOE’s 20% Wind Energy by 2030 report, which found that the U.S. has enough wind resources to generate 20% of the country’s electrical needs. The report also identified several challenges to this goal, including the need for investment in a national transmission system; larger electric load balance areas and better regional planning; reduction in wind turbine capital costs; improvement of turbine performance; resolution of siting and environmental issues; and workforce development.
The awards include four topic areas: market acceptance, environmental impact, workforce development, and distributed wind technology. Awards for two other topic areas-supporting wind turbine research and testing and transmission analysis; planning and assessments-will be announced at a later date. The awards went to colleges and universities, organizations, companies, and state governments in Arizona, California, Delaware, Florida, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Montana, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming, as well as Washington, D.C. See the DOE press release for a list of all of the awardees.
DOE and HUD Sign Agreement to Streamline Weatherization Process
Secretary of Energy Steven Chu and Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development (HUD), signed an agreement to coordinate energy retrofit programs under ARRA. The new process will help minimize the administrative barriers and simplify the process for residents of HUD public and assisted housing that are seeking to increase the energy efficiency of their homes through DOE’s Weatherization Assistance Program.
Specifically, the agreement recognizes that HUD uses a rigorous process for verifying the income of families living in HUD Qualified Housing and in rental housing supported by the Low Income Housing Tax Credit Program. To help bring weatherization services to these families, HUD will provide DOE with a list of families that would qualify for weatherization assistance, and DOE will rely on the validity of the HUD data. This will simplify the application process for families that want weatherization assistance.
Within the next two months, DOE and HUD intend to provide joint guidance to all affected entities, including states, local governments, and nonprofit and for-profit partners, describing how the agencies’ programs can be further aligned. DOE and HUD will continue to work together to provide guidance to public and assisted housing on energy efficiency programs, to develop a common baseline for measuring energy efficiency, and to develop new home energy financing products. See the full text of the agreement between DOE and HUD (PDF 47 KB).
The new agreement is the first fruit of a DOE and HUD partnership that was formed in February to streamline and coordinate federal weatherization efforts, with a particular focus on ARRA funds. The Recovery Act provided $16 billion to DOE and HUD to improve the energy efficiency of existing homes. The new partnership between DOE and HUD will coordinate funding for the Weatherization Assistance Program, which received $5 billion under the Recovery Act. HUD also received $4.5 billion in Recovery Act funds to renovate and upgrade public and Native American housing, as well as $250 million to retrofit privately owned, federally assisted housing. DOE has received $3.2 billion in Recovery Act funds for Energy Efficiency and Conservation Block Grants that will be used by cities, counties, states, and tribes, as well as $3.1 billion for the State Energy Program, and more. See the DOE press release, the article from this newsletter on the partnership, and the Recovery Act Web site for DOE’s Office of Energy Efficiency and Renewable Energy.
DOT Awards $742.5 Million in Recovery Act Funds to 11 Transit Projects
The U.S. Department of Transportation (DOT) announced it will award $742.5 million in funds from ARRA to 11 transit projects located in nine states. The awardees include light rail projects in Phoenix, Arizona; Los Angeles, California; Denver, Colorado; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; and Seattle, Washington. Other projects include both a commuter rail extension and a subway project in New York City, and a bus rapid transit system in Springfield, Oregon. The funds will also support a heavy-rail project in northern Virginia that will mainly benefit Washington, D.C., connecting the Washington Dulles International Airport to the "Metro" rail system operated by the Washington Metropolitan Area Transit Authority. DOT previously committed to providing $900 million for that project between now and 2016. See the DOT press release on the Recovery Act funding.
President Obama’s budget request for fiscal year 2010 also includes $1.83 billion in funding for major transit projects, of which more than $600 million will go towards 10 new or expanding transit projects. The proposed budget provides additional funding for all of the projects currently receiving Recovery Act funding, except for the bus rapid transit project. It also continues funding for another 18 transit projects that are either currently under construction or soon will be. The proposed funding will support transit projects in Arizona, California, Colorado, Florida, Illinois, Massachusetts, Minnesota, Missouri, New Jersey, New York, Oregon, Pennsylvania, Texas, Utah, Virginia, Washington, and the District of Columbia. See the DOT press release.
Maryland Aims for a 25% Cut in Greenhouse Gas Emissions by 2020
Maryland Governor Martin O’Malley approved a legislative package last week that includes a requirement for the state to reduce its greenhouse gas (GHG) emissions to 25% below 2006 levels by 2020. The Greenhouse Gas Emissions Reduction Act of 2009 places the burden on the Maryland Department of Environment to concoct a plan for achieving the emissions reduction. The department has until mid-2011 to establish an inventory of statewide GHG emissions for 2006 and for projecting the GHG emissions in 2020 under a "business as usual" scenario, and then it has until the end of that year to adopt a plan for achieving the emissions target.
However, in the absence of new federal laws or regulations for reducing GHG emissions, state agencies cannot require GHG reductions from the state’s manufacturing sector, nor can they cause a significant increase in costs for the state’s manufacturing sector. Maryland is already a participant in the Regional Greenhouse Gas Initiative, which requires the power sector to reduce its GHG emissions by 10% by 2018. See the governor’s press release and the full text of the legislation, House Bill 315 (PDF 157 KB).
EIA: Expectations Dim for a Near-Term Growth in Oil Demand
The global oil market for 2009 looks weaker today than it did a month ago, according to DOE’s Energy Information Administration (EIA). The EIA’s "Short-Term Energy Outlook," released yesterday, projects a fall in global oil consumption of 1.8 million barrels per day in 2009, a decline that is 0.4 million barrels per day larger than the EIA projected in April.
The EIA notes the initial data for the first quarter of 2009 shows high oil inventories, weak oil consumption, and higher-than-expected oil production, all of which are maintaining downward pressure on oil prices. Crude oil prices are now projected to average $52 per barrel in 2009 and only $58 per barrel in 2010, with the latter projection falling $5 below the EIA’s projection released in April.
That’s good news at the pump for consumers, who are projected to pay an average of $2.12 per gallon of regular-grade gasoline this year and only $2.30 per gallon next year, while diesel fuel users are projected to pay $2.26 per gallon, on average, in 2009 and $2.48 per gallon in 2010. However, that news is less welcome for fuel efficiency advocates and producers of competing energy sources, such as biofuels, who are facing narrow profit margins. See the EIA’s "Short-Term Energy Outlook" and the accompanying chart of World Liquid Fuels Consumption.
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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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