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The Good and Bad News of the FY 2014 DOE and Renewable Energy Budget Requests to Congress

April 24, 2013

This updated article of  “Was Senator Matsunaga Right About Hydrogen After All?” includes the FY 2014 Department of Energy (DOE) Budget Request to Congress.

The good news is the DOE fiscal year (FY) 2014 total Congressional Budget Request of $28.415 billion shows an increase of 5.2% and 8.0% percent increase from the FY 2013 annualize budget and the current FY 2012 Budget, respectively.  Also, requested allocations by the Office of Energy Efficiency and Renewable Energy (EERE) for FY 2014 is a much brighter picture with a funding request of $2.775 billion, a 52% and 56% % increase from the FY 2013 and FY 2012 budgets, respectively.

The bad news is the FY 2014 DOE budget has not been approved by Congress. If recent history dictates, the budget is certain to be cut, perhaps substantially. For FY 2012, Congress approved about 89% or $26,320 billion of the total budget request by the Energy Department. However, only 56%, or $1.780 billion, of the requested allocations for EERE survived the Congressional axe for FY 2012. FY 2012 DoE budgetary numbers serves as recent example between requested and approved funding.

Figure 1: FY 2014 DOE Budget Request

2014 DoE Budget Reguest to Congress

It may be a surprise to some, but EERE programs are not major priorities with the DOE. As the above numbers show, only 9.8% of the Energy Department’s budget request was allocated to EERE. Several non-renewable and non-energy efficiency programs including weapons activities, defense nuclear proliferation and naval reactors absorb a significant part of the DOE 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. The disparity between the total DOE and EERE budgets is dramatized in Figure 2; total DOE Budgets – red columns, total EERE budgets – blue columns.

Figure 2: FY 2000 – 2014 FY Total DOE and EERE Budgets

FY 2002 - 2014 DoE Budget Allocation Summary Renewables in Constant 2013 $ v0.02

Programs such as Atomic Energy Defense Activities constitute about 64% of the FY 2012 DOE 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-supported technologies further these goals by reducing dependence on oil, minimizing the emissions associated with energy production and use, and stimulating economic growth and job creation in the US through the reduction of energy costs and investment in next generation renewable energy and manufacturing.”

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, communication and outreach.

EERE program funding for FY 2012 to FY 2014 is given in Figure 3.  According to the DOE, the EERE FY 2014 Budget Request “develops and accelerates the adoption of new energy generation technologies ― technologies that will make our buildings, factories, power plants, and vehicles cleaner, safer and more efficient and productive.” EERE prioritizes its RDD&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.

EERE portfolio includes thirteen programs and activities, one management function (Program Direction) and one adjustment (Use of Prior Year Balances). Bioenergy Technologies is a new function that takes over Biomass and Biorefinery Systems RD&D programs from previous years. Similarly, Advanced Manufacturing is a new activity evolves from Industrial Technologies funded in previous years. Program Direction funds federal staff and support services for management, oversight, and technical direction.

Figure 3: FY 2012 – 2014 EERE Budget Allocations by Program

FY 12 - 12 EERE Programs (best)

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 programs show a reduction in requested in funds for FY 2014.   A breakdown of FY 2000 to FY 2014 DOE budget allocations for wind, hydrogen, biomass and solar renewable energy programs in 000’s of constant 2013 dollars is given in Figure 4. Most notable is the steady increase in funding solar energy projects. By 2010 solar energy investment exceeded all other renewable energy technologies.  Requested allocations for solar in FY 2014 exceeds $350 million. Bioenergy technologies have seen strong support by the DOE as a renewable energy technology since 2000. Projected spending on bioenergy programs is in excess of $250 million for FY 2014. Hydrogen energy technologies have seen the biggest swings in funding. 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 and remain to be the poor boy of renewable energy funding with requested allocations the lowest of the four since 2004.

Figure 4: FY 2000 – 2014 EERE Allocations

FY 200 - 2014 EERE Budget Allocation (wind, hydrogen,solar)

The U.S. Electricity Generation by renewable energy resource from 2005 to 2014 (projected) is given in Figure 5.  Only wind and biofuels made significant gains in renewable energy output in the U.S. economy. It is projected that by 2014 that wind will contribute almost as much renewable energy as biomass and biofuels. Hydropower energy supply remains steady though this period. At the other end of the spectrum, solar is overshadowed by almost all other sources of renewable energy. Only by year-end 2013 is solar energy’s contribution to the supply of renewable energy starts to overtake geothermal energy output.

Figure 5: US Renewable Energy Supply

2005 - 2014 U.S. Renewable Energy Supply

Considering bang for your buck, wind power has been a winner.  Total cumulative allocations for wind power from FY 2000 through FY 2012 has been substantially lower than hydrogen, biomass and solar; in real dollars throughout this period, each received: wind — $0.622 billion; hydrogen — $1.446 billion, biomass — $1,787 billion and solar — $1.873 billion.  Possibly, as an investment for the future, it is a wise decision to heavily fund loosing programs such as solar and hydrogen. Neither of which has yet to make a substantial impact on net electrical energy consumption in the U.S. economy. Energy is not a horse race, but a betting person would put his/her dollars on wind and biomass. Nevertheless, the ultimate benefits from a hydrogen economy can be a game changer for the U.S. in terms of energy security and a cleaner environment.

It is uncertain what Congress will approve for the DOE in 2014, but if history is an indicator, renewable energy and energy efficiency programs will suffer disproportionate cuts from the Congressional knife.

In actuality, however, it makes little difference. The amount requested for these programs is insufficient to begin with. Add this to faulty decision making—such as that which prompted the DOE to infuse about $535 million to Solyndra, the California-based solar company. That alone amounts to 20% of the total Energy Efficiency and Renewable Energy budget Congressional Budget Request for FY 2014.

Seems like our government’ message to “energy research, development, demonstration, and deployment activities necessary to meet national security, environmental, and economic goals” is “no forward looking energy policy is the best policy of all.”

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