DOE FY 2010 Budget Request and Recovery Act Funding for Energy Research, Development, Demonstration, and Deployment: Analysis and Recommendations

The combination of the FY 2010 budget request for the Department of Energy (DOE) and the portion of the American Recovery and Reinvestment Act of 2009 (ARRA) funds likely to be available in 2010 would (assuming that they would be split evenly between FY 2010 and FY 2011) result in a doubling in funding available for energy research, development, and deployment (ERD and D) from $3.6 billion in FY 2009 to $7.2 billion in FY 2010. Without the stimulus funds, DOE ERD and D investments in FY 2010 would decrease very slightly when compared to FY 2009. Excluding the $7.5 billion for the Advanced Technology Vehicles Manufacturing Loans in FY 2009, the FY 2010 budget request for deployment represents a 33 percent decrease from the FY 2009 levels from $520 million to $350 million. This decrease is largely due to the large amounts of funds appropriated in ARRA for DOE deployment programs, or $23.6 billion, which are three times greater than those appropriated in the FY 2009 budget. These very substantial funding amounts, coupled with the broad range of institutional innovations the administration is putting in place and movement toward putting a price on carbon emissions, will help accelerate innovation for a broad range of energy technologies. DOE's Advanced Research Projects Agency-Energy (ARPA-E) and the Energy Innovation Hubs are important initiatives that could contribute to two weak points of the government's energy innovation effort, namely funding high-risk projects in transformational technologies and in companies that have not traditionally worked with the government and strengthening the integration of basic and applied research in priority areas. Increasing the funding for different types of energy storage research, providing some support for exploring opportunities in coal-to-liquids with carbon capture and storage (CCS) and coal-and-biomass-to-liquids with CCS, and reducing funding for fission RD and D are other actions that Congress could take in the short-term. Energy storage may play a crucial role in the future of the power and transportation systems, which together consume two thirds of primary energy in the United States. A recent National Academy of Science report recommended carrying out detailed scenario assessments of the penetration of unconventional fuels from coal and coal and biomass with CCS. And the research plan provided for nuclear fission does not justify spending as many funds as were requested. The proposed funding for FY 2010 and the resources from ARRA, however, do not guarantee that the United States will finally enjoy the predictable and consistent publicly-funded energy technology innovation effort that it needs. The Obama administration must put in place a comprehensive energy technology innovation strategy that will ensure that an expanded ERD3 effort is both sustainable and efficient. This commission would be charged with, inter alia, developing a strategy that optimizes the integration of the various stages of innovation (research, development, demonstration, early deployment), as well as integrates efforts across technology areas. The database upon which this analysis is based may be downloaded in Excel format at: http://belfercenter.ksg.harvard.edu/publication/19119/ .