Power Engineering - Coalition sends White House fiscal year 2005 budget recommendations for energy efficiency and renewable energy programs

WASHINGTON DC, Oct. 1, 2003 -- As the federal government begins the 2004 fiscal year with a final budget still pending action by the U.S. Congress, a coalition of business, environmental, consumer, and energy policy organizations called upon the White House to dramatically increase funding for sustainable energy programs in Fiscal Year 2005 (FY05) and beyond.

In a detailed series of budget proposals prepared and endorsed by 21 of its member groups, the Sustainable Energy Coalition called upon President Bush and officials in the U.S. Department of Energy (DOE) and Office of Management & Budget to double funding for DOE's renewable energy and energy efficiency programs over the next five years.

Towards that end, the groups called upon the Administration to submit a FY05 budget request that is at least 20% over FY04 levels. They further offered recommendations for an ideal budget that envision an increase of 30% - 40% (or more) over the anticipated 2004 budget levels for these programs, many of which are facing reductions from the FY03 levels.

The groups' budget plans outlines suggested funding levels totalling $939 million for the cross-section of DOE's energy efficiency, weatherization, and state grant programs as well as an additional $482.5 million for the agency's solar, wind, geothermal, hydroelectric, biomass/biofuels, and hydrogen programs.

The full text of the Sustainable Energy Coalition's FY05 budget recommendations is provided below along with a list of the organizations submitting them.

The Sustainable Energy Coalition is a coalition of 60 national and state business, environmental, consumer, and energy policy organizations which collectively represent several thousand companies, municipal utilities, and community groups. Founded in 1992, the Sustainable Energy Coalition works to promote increased use of renewable energy and energy-efficient technologies.

Recommendations for the U.S. Department of Energy's energy efficiency and renewable energy programs in the fiscal year 2005 budget request

Energy Efficiency and Renewable Energy Programs have been chronically under-funded for several years. During a time of natural gas shortages, growing dependence on foreign energy resources and worsening environmental degradation, we cannot afford to under-develop our fastest, most cost-effective, and cleanest energy resources.

To this end, we call for a doubling of the Energy Efficiency and Renewable Energy Research, Development and Demonstration budgets in the next five years (2005-2009). Specifically, in 2005, we support an approximate 20% increase in funding levels for these programs. This includes high priority programs but also those that steadily provide energy savings and contribute to the economic recovery but may be less than glamorous. In particular, we call for the following:

Particular emphasis in the Buildings area includes R&D on advanced technologies, increased support for the lighting and appliance standards program, a focus on building systems integration and attention to outreach activities. Advanced windows, lighting, appliances, and air conditioning equipment are particular technology needs.

Additionally, we must significantly increase efforts in systems integration -- that is, how the various systems in a home or building work together to be most efficient. This includes efforts such as Residential Building Integration (Building America), Commercial Building Integration and Zero Energy Buildings. These programs are moving toward the ability to build homes and commercial buildings that are 50% more efficient but with no additional upfront costs. Additionally, the programs bring together component manufacturers and suppliers with the Building community to leverage the best abilities of both worlds.

Weatherization, State Energy Programs and Gateway Deployment: $350 Million (at least $50 M on Gateway Deployment)

The Sustainable Energy Coalition supports the Weatherization and State Grants Programs, which have recently seen significant increases. We are, however, concerned that DOE has decreased emphasis on the Gateway Deployment programs such as Energy Star, Rebuild America, Clean Cities, Industrial Competitive, International Market Development and Inventions.

These programs target education and outreach activities aimed at key energy sectors. Because the building industry comprises hundreds of thousands of builders, manufacturers and others, "stovepipe" research and development on individual components and integration will not transform the market. In order to take advantage of low cost, immediate energy reductions, the DOE must focus more on education and outreach programs, including the Energy Star and the Rebuild America Programs.

These two programs, active in all 50 states, are responsible for leveraging serious private sector investment and advancing the energy efficiency of our nations building stock. Similarly, the Clean Cities Program works with local entities in the states to leverage purchase of alternative fuel vehicles, while the Industrial Competitiveness program concentrates on the industrial sector and International Marketing increases our competitiveness in the energy arena overseas.

Industrial energy use accounts for 35% of the energy used in the United States. This program includes specific Industries of the Future Programs that focus on increasing the efficiency of some of our nation's most energy-intensive industries. The program leverages private sector dollars and is helping to create a U.S. industrial sector that is more effective and efficient overall. An especially high priority is the Industries of the Future Crosscutting Program, which has been especially effective at transferring technology and best practices applicable to many industries.

The Transportation program, in addition to its long term, high-risk commitment to new technologies such as hydrogen, must also increase its efforts in advancing medium-term, lower-risk technologies. High priorities include increasing work on heavy truck engines in the Advanced Combustion R&D program, and increasing support for heavy vehicle work in the Fuels Technology program. Increased support is also important for hybrid vehicle development and materials R&D. DOE should also work cooperatively with USDA and EPA in advancing engine technologies to optimize the use of biofuels including ethanol and biodiesel.

The U.S. Federal Government is the largest energy user in the entire world. For that reason, the Federal Energy Management Program was established to try to have our government "lead by example" in the area of energy reduction. The program leverages energy efficiency and renewable energy activities throughout the Federal Government by providing technical assistance, financing projects, and otherwise working to implement projects that save energy, reduce environmental costs, and save the government money.

Although much of the expenditure on federal energy reductions currently come from private sector financing, the FEMP program educates program managers about the availability of these programs, provides the assistance in working contracts, does some direct financing of projects, and otherwise is THE instrument for improving our Federal facilities - via energy upgrades and therefore basic infrastructure improvements.

This program focuses on developing a variety of technologies that can produce power in buildings and industrial facilities and the additional technology required in integrating these together (and with renewable generation). The program focuses on Gas Turbines, Reciprocating Engines, Microturbines, and Thermally Activated Technologies that utilize waste heat.

Aside from these technology areas, the program must focus on integrated and multi-technology and resource end uses such as fuel cells, desiccants, heat engines, turbines, and absorption chillers) in hybrid and combined heat and power applications. The focus is both on development of the technologies necessary for integration and development of actual packaged systems for customer use. These CHP applications can reach energy efficiencies of upwards of 80%, thereby eclipsing the efficiencies capable in any one technology alone.

The Fuel Cell Program under EERE is primarily for the development of PEM (low temperature) fuel cells for stationary, transportation and portable applications. The program, as a priority of the Administration, is enjoying a goodly level of support; however, we request more emphasis on the stationary and portable technologies, which are closer term, along with development of fueling for such fuel cells that is primarily renewable energy driven. This program works on components such as stack and fuel processors, as well as integration in transportation, stationary and portable applications, and, importantly, validation of fuel cell systems.

Funding would be focused on developing a next-generation wind turbine capable of operating in areas with lower wind speeds, thus expanding wind development potential by twenty times as well as allowing placement of turbines closer to existing transmission lines. Funding also would be used to study increased integration of wind energy into the nation's power grid.

DOE research continues to bring costs down and performance up, fostering a domestic high-tech manufacturing base. However, the US is losing share to Japan and the EU in this rapidly growing market. A 2001 DOE Peer Review concluded that the PV program's work was : "outstanding across all activities... doing an extremely effective job of setting priorities, balancing allocation of available resources, recognizing and addressing critical problems and barriers to progress and commercialization, and supporting the quality of work required to achieve its goals...The panel notes that the consistently high rankings assigned in this evaluation are very unusual, and they are also very deliberate...The panel believes this to be a truly outstanding element of the Department of Energy's programs."

The cost-shared components have been experiencing particular success, doing cost-competitive research in coordination with industry, while keeping solar manufacturing in the United States. This program's competitive environment ensures rapid and cost-effective development and adoption of technologies that would not likely emerge otherwise. The Building Integrated PV program has attracted Administration notice.

The FY 2003 Congressional Budget Document trumpets "an exciting and rapidly growing solar application which...will help cross the profit threshold that holds the key to significant growth." Meanwhile, the Thin Films Partnership continues to exceed their own worldwide efficiency records, with the real, near-term potential of cutting solar prices by half.

Concentrated Solar Power deserves serious consideration and support particularly as a bipartisan promotion of Southwestern Governors supporting a 1000 MW initiative. The advanced trough RD&D program for electric power generation, absorption cooling and water and industrial process heating have shown immense promise and should be aggressively continued. Heat engine work focusing on validating the 1 MW deployment in Nevada of concentrated dish/Stirling engine as well as trough ORC needs broadening deployment, Technology validation of the new 1 MW solar trough/organic Rankin system in AZ and of the potential 50 MW power purchase agreement for solar trough electric generation in Nevada deserves high priority to increase market knowledge and acceptance. Finally, continued work on energy storage for all concentrated solar power technologies, including solar power tower, should received greater RD&D attention and deployment.

Formerly filed under the "solar buildings" heading, is Solar Heating and Lighting. Solar water heating technologies are utilized around the world in quantities far exceeding those in the US. Such systems can significantly reduce the consumption of electricity, and of natural gas - up to several percent in many countries. Within this program, emphasis will be placed on reducing the cost of solar water heating - the goal is to reduce the cost of solar water heating to 4 cents/kWh in 2004.

Biomass power funding should support cleaner combustion, gasification, and digestion technologies for electric generation with biomass. A variety of feedstocks should be tested for emissions within these technologies. Distributed generation with small biomass systems should be emphasized as well. The power and fuels programs should work closely together to develop a biorefinery plant that can be operated in the U.S. to produce clean fuel, power and chemicals. The biofuels program should add to the existing biomass options (e.g., corn fiber) with an expanded focus on cellulosic biomass for Ethanol as well as biodiesel.

Accordingly, the Coalition seeks $55 million for Biofuels RD&D program that focuses on cost reductions in the production of ethanol through the fermentation of sugars and the gasification of cellulosic biomass and biomass waste streams for the production of synfuels and their conversion into biofuels.

1) developing new products for distillers grains and positioning corn-to-ethanol plants to accommodate cellulosic biomass for the production of fermentable sugars and for the use of Residuals and lignin to produce both thermal and electrical power;

2) Accelerating the use of ethanol in E-85 vehicles by optimizing these engines for the higher octane of ethanol;

3) Working with the Energy Future Coalition in implementing their concepts for advancing the ethanol industry;

4) Continuing to work with USDA and DOI -- in locating and funding RD&D projects that will convert agricultural and forestry crops and residues into biofuels;

5) Working with EPA in funding their RD&D in developing an advanced biofuels spark-ignited engine;

6) Working with engine manufactures to optimize the performance of diesel engines using a no-sulfur, middle distillate produced from cellulosic biomass it is possible that this combination will more than favorably compete with hydrogen in terms of costs and environmental benefits; and

7) [see item 5) under Biomass Electric with a focus on the production of biofuels].

The Coalition further asks for a $45 million Biomass Electric RD&D program which becomes less line-itemed but directed towards industry commercialization partnerships around five technology areas:

1) gasifiers - maintain a program to validate and enhance performance on large and smaller-scale generators,

2) anaerobic digestion - assist existing industry on standardization, replication and integration with a range of biomass-electric generation technologies,

3) heat engines - assist existing industry manufacturers in validating systems using biogas, biodiesel, landfill gas, and waste heat,

4) diesel and reciprocating engines using biodiesels, ethanol and other liquids and biogases, and

5) utility education programs for independent, cooperative and municipal utilities on utilization of their biomass resources to stabilize electric rates, enhance reliability of the US electric grid, and lower emissions.

The US urgently needs to develop the technology and resource knowledge necessary to tap its extensive geothermal resources base. While the USGS estimates the accessible resource base to be at least 95,000 MW, because of the high risk and cost of production we are tapping only 2% of this potential.

Currently, DOE geothermal research program is severely under funded. At one time the geothermal research budget was over $150 million, but today the program struggles to maintain a bare-bones research program. When one production well can cost $10 million, a research program that is presently funded at $25.5 million (FY04 budget) is simply below critical mass. The DOE research program lacks funding to support cost-shared research into advanced technologies, cannot support or undertake critical resource assessment, and fails to take the other measures needed to tap the huge identified potential of this resource.

In addition to continuing the base program funding (FY04 budget of $25.5 million), we recommend: an additional $1.5 million for resource assessment - the US geothermal resource assessment is over 25 years old and urgently needs updating; $3 million for direct use geothermal efforts, which are directed to expand the utilization of geothermal energy for agricultural, commercial, and other uses by building upon successful efforts of organizations like New Mexico State University; $5 million for an advanced power technology development solicitation, which will seek industry partners to develop the geothermal power system of the future; and, $7.5 million for "enhanced geothermal systems" technology development, work which holds the promise of increasing the geothermal resource base ten-fold.

Funding for the Department's hydropower program shall be used for the Department's Advanced Hydropower Turbine System (AHTS) program and related activities. The funding shall also support broadening the Department's hydropower program to study other operational and environmental issues related to hydropower production, including the potential integration of hydropower with other renewable energy technologies. Funding shall also be made available to conduct research and development that will improve the technical, societal and environmental benefits of hydropower and provide cost competitive technologies, such as microhydropower, that enable the development of new and incremental hydropower capacity. The Department shall disperse appropriated money among these program areas as appropriate.

1) better testing and validating performance and new interconnection and storage applications for distributed generation technologies, including renewable, hybrid renewable, and other clean energy technologies

2) development of multiple products of "smart interconnection" equipment to be able seamlessly to integrate any distributed generation technologies at three different use or size levels: at the distribution line, transmission lines and at the consumer side of the grid, and

3) analysis on impacts of DG on preventing black and brownouts, reduce pollution, reduce electric line loss, enhance power quality, and prove greater grid and user energy security.

While Hydrogen is not a fuel, it represents an important energy carrier. The Coalition stresses that the DOE RD&D be focused on utilizing renewable resources, waste heat, and related clean processes to generate hydrogen, and to de-emphasize the use of coal or nuclear energy, traditional energy resources, for this purpose. Hydrogen RD&D should focus in three prime areas:

1) Infrastructure - to transport, store and safely utilize hydrogen at a maximum of $40 million,

2) Creation of hydrogen from renewable energy and waste heat (CHP) utilizing the many options including novel concepts, at $60 million, and

3) Unique conversion of hydrogen to electricity including primarily fuel cells, but also heat engines and NIMH storage systems at $20 million.

The Department of Energy's Renewable Energy Production Incentive (REPI) program was created by the 1992 Energy Policy Act to provide public power systems and rural electric cooperatives with a counterpart to the tax incentives that are available to for-profit utilities for renewable generation.

Under the program, new solar, wind, geothermal, biomass and landfill gas projects are eligible to receive 1.8 cents per kWh of production, payable for ten years. The REPI program is invaluable to not-for profit utilities in helping them to make investments in these costly but critical resources. Over the past decade, however, REPI has been underfunded by $40 million. The REPI program must be fully funded to cover all eligible projects in order to realize its objective of spurring increased investment in renewable energy.

Alliance for Affordable Energy
Alliance to Save Energy
American Bioenergy Association
American Council for an Energy-Efficient Economy
American Public Power Association
American Solar Energy Society
American Wind Energy Association
Bob Lawrence & Associates
Breakthrough Technologies
Cascade Associates
Environmental and Energy Study Institute
Geothermal Energy Association
International District Energy Association
National Hydropower Association
Natural Resources Defense Council
New Uses Council
Potomac Resources, Inc.
Renewable Fuels Association
Solar Energy Industries Association
The Stella Group, Ltd.
Vermont Energy Investment Corporation

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