DOE's Office of Energy Efficiency and Renewable Energy (EERE): FY2017 Budget Request and Appropriations Status

Contents

• Introduction
• Background
• EERE
• FY2011-FY2016 Appropriations
• FY2017 Request
• Discretionary Portion of Request
• Mandatory Portion of Request: 21^st Century Clean Transportation Program
• Legislative Issues
• FY2017 Appropriations Action

Summary

The U.S. Department of Energy's (DOE's) Office of Energy Efficiency and Renewable Energy (EERE) is the principal government agency responsible for renewable energy technologies and energy efficiency efforts. EERE works with industry, academia, national laboratories, and others to conduct research and development (R&D) and to issue grants to state governments. EERE oversees nearly a dozen technologies and programs—from vehicle technologies to solar energy to advanced manufacturing to weatherization and intergovernmental programs—each with its own respective mission and program goals.

EERE receives funding from the annual energy and water development (E&W) appropriations bill. For FY2017, the Administration is requesting $2.9 billion of discretionary funding for EERE and $1.3 billion of mandatory funding for a new program, bringing the total FY2017 budget request to $4.2 billion. This total request, if enacted, would be an increase of $2.2 billion (104%) over the enacted FY2016 level of $2.1 billion (the Consolidated Appropriations Act, 2016; H.R. 2029; P.L. 114-113, Division D). The $2.9 billion of discretionary funding requested would be an increase of $829 million (40%) over the FY2016 enacted level of $2.1 billion. The bulk of the discretionary portion of the request would be split among three areas: nearly 32% for energy efficiency programs, about 21% for renewable energy programs, and about 29% for sustainable transportation programs. The discretionary funding portion of the request is nearly 10% of the $30.2 billion discretionary portion of the FY2017 request for DOE.

The EERE request includes new and ongoing efforts that range in scale and cost. EERE would continue to support the EV Everywhere Grand Challenge, concerning the adoption and use of plug-in electric vehicles; the SunShot Initiative to make solar energy cost-competitive by 2020; and the establishment of energy efficiency requirements for equipment and appliances. With the discretionary funding, EERE is requesting $40 million to establish a new R&D program focused on reducing the climate impacts of heating, ventilation, and air conditioning systems. Further, EERE is requesting $215 million for a new Crosscutting Innovation Initiatives program, which has several goals, including the establishment of regionally focused clean energy innovation partnerships across the country and the acceleration of next-generation clean energy technology pathways.

A relatively significant new measure contained in the budget request is $1.3 billion in mandatory funding for EERE's portion of the Administration's 21^st Century Clean Transportation System—a new multiagency initiative to build a clean transportation system. EERE reports that this initiative will "expand investment in transportation technologies of the future; establish regional fueling infrastructure to support the deployment of low-carbon fuels; and accelerate the transition to a cleaner vehicle fleet."

Some in Congress, along with renewable energy and energy efficiency proponents and opponents, and others may express concern about the EERE budget request. The main areas of concern may be the 40% increase in requested discretionary funds, EERE involvement in the 21^st Century Clean Transportation System, and the mandatory funding requested for this involvement.

On May 12, 2016, the Senate passed the Energy and Water Development and Related Agencies Appropriations Act, 2017 (H.R. 2028). The bill would provide $2.1 billion for EERE, $825 million below the Administration's FY2017 discretionary request and $3.8 million above the FY2016 enacted level. On May 26, 2016, the House rejected an Energy and Water Development and Related Agencies Appropriations Act for 2017 (H.R. 5055). The bill would have provided $1.8 billion for EERE, $1.1 billion below the Administration's FY2017 discretionary request and $244 million below the FY2016 enacted level.

Introduction

This report discusses the FY2017 budget request for the U.S. Department of Energy's (DOE's) Office of Energy Efficiency and Renewable Energy (EERE) and the status of FY2017 congressional appropriations for EERE. The Administration requests both discretionary funding ($2.9 billion) and mandatory funding ($1.3 billion) for EERE for FY2017, for a total of $4.2 billion.¹ The total $4.2 billion request is an increase of $2.2 billion (104%) from the enacted FY2016 level of $2.1 billion. The Administration's discretionary portion of the FY2017 request is 40% higher than the FY2016 enacted level ($2.1 billion). The Senate-passed energy and water appropriations bill for FY2017 includes $2.1 billion for EERE.²

The funding level Congress decides to provide could impact goals set by EERE, including sustainable transportation goals (e.g., vehicle electrification and biofuels), renewable energy goals (e.g., grid modernization for solar energy, enhanced geothermal technologies), and energy efficiency goals (e.g., establishment of one additional Clean Energy Manufacturing Innovation Institute). It also could affect EERE's involvement in the proposed 21^st Century Clean Transportation Plan and EERE assistance with industry competitiveness. This report does not discuss the opportunities, challenges, economic value, or commercial status of the various renewable energy technologies and energy efficiency initiatives selected by EERE, nor does it delve into the goals of the individual EERE programs or congressional oversight of certain EERE issues.³

Background

EERE

EERE leads the DOE's effort to accelerate development and facilitate deployment of energy efficiency and renewable energy technologies and market-based solutions intended to strengthen U.S. energy security, environmental quality, and economic vitality. EERE is led by the Assistant Secretary for Energy Efficiency and Renewable Energy, and it is organized into four offices: Office of Transportation, Office of Renewable Power, Office of Energy Efficiency, and Office of Operations.⁴ EERE contends that it invests in only what it considers to be the highest-impact activities. EERE collaborates with industry, academia, national laboratories, and others to develop technology-specific road maps and then focuses on early stage research and development (R&D), technology validation and risk-reduction activities, and the reduction of market barriers to the adoption of market-ready new technologies. EERE also manages a portfolio of research and development programs that support state and local governments, tribes, and school leaders. In addition, EERE oversees the National Renewable Energy Laboratory (NREL)—the only national laboratory solely dedicated to researching and developing renewable energy and energy efficiency technologies.⁵

FY2011-FY2016 Appropriations

EERE receives its appropriations from the annual energy and water development (E&W) appropriations bill.⁶ For each of the last several years, DOE has requested increased funding to support EERE programs and objectives, and Congress's response has been to provide funding at levels lower than what was requested. Appropriations for EERE have averaged $1.86 billion annually for the last six years in current dollars (see Table 1). The appropriations are split into four major categories: sustainable transportation, energy efficiency, renewable energy, and corporate support (e.g., program administration). From FY2011 to FY2016, approximately 65% of the appropriations were spent on sustainable transportation and energy efficiency, while approximately 25% of the appropriations were spent on renewable energy and approximately 12% was spent on corporate support.

FY2017 Request

DOE has requested $4.2 billion to support EERE programs and objectives for FY2017 ($2.9 billion in discretionary funding and $1.3 billion in mandatory funding). The total $4.2 billion request would represent an increase of $2.2 billion (104%) from the enacted FY2016 level of $2.1 billion.

Discretionary Portion of Request

The discretionary portion of the request, $2.9 billion, would be an increase of $829 million (40%) from the FY2016 enacted level of $2.1 billion (see Table 1).⁷ The discretionary portion of the EERE FY2017 request is approximately 10% of the discretionary portion of the overall DOE FY2017 request of $30.2 billion.⁸ The FY2017 EERE request would allocate approximately 61% of the appropriations to sustainable transportation and energy efficiency, combined. However, energy efficiency would receive slightly less in its share of the two categories combined than it did in FY2016 (32% in the FY2017 request, as compared with 35% in FY2016). The FY2017 request allocates close to 21% and 10% of the request for renewable energy and corporate support, respectively.

Some of the goals, highlights, and major changes presented in the EERE FY2017 request, as reported by DOE, include the following:

• Sustainable Transportation [$852.9 million]
• Continues support for the Electric Vehicle (EV) Everywhere Grand Challenge by reducing the combined battery and electric drive system costs of a plug-in electric vehicle by up to 50% (by 2022, from a 2012 baseline).⁹ [$282.7 million]
• Continues support for the SuperTruck II initiative started in FY2016 to research, develop, and demonstrate a suite of technologies with the goal of improving the freight-hauling efficiency of heavy-duty Class 8 long-haul vehicles by 100% by 2020 (with respect to comparable 2009 vehicles) and demonstrating applicability of these technologies to heavy-duty regional-haul vehicles as well.¹⁰ [$60 million]
• Explore opportunities for energy efficiency above the program's traditional vehicle-level focus at the overall transportation system level with the Transportation as a System (TAS) initiative by evaluating how transportation assets, travelers, and the transportation system interact and influence each other using multiscale, multisystem models, with the longer-term goal of optimizing efficiency of the transportation system. [$20 million]¹¹
• Support the conversion of cellulosic and algal-based feedstocks to bio-based gasoline, diesel, and jet fuel at a target cost of $3.00 per gallon of gasoline equivalent (gge) by the end of 2017, with an emphasis on drop-in hydrocarbon biofuels from nonfood sources.¹² [$30 million for the Advanced Algal Systems subprogram]
• Develop a Synthetic Biology Foundry to improve efficiencies in the conversion of biomass to fuels and products.¹³ [$35 million]
• Support reduced cost and increased durability of a fuel cell system and invest in R&D for technologies that can lower the cost of hydrogen from renewable resources to less than $4.00/gge by 2020.¹⁴ [$35 million for fuel cell R&D; $44.5 million for hydrogen fuel R&D]
• Renewable Energy [$620.6 million]
• Support the SunShot Initiative goal of making solar power cost-competitive without subsidies by 2020, equivalent to a cost of solar power of $0.06 per kilowatt-hour, and support solar grid integration.¹⁵ [$43 million for concentrating solar power; $83 million for systems integration]
• Issue a competitive solicitation to establish an Offshore Wind R&D Consortium to accelerate fundamental R&D for offshore wind-specific technology barriers.¹⁶ [$25 million]
• Competitively fund new R&D projects for new stream reach development for innovative hydropower designs and construction methods.¹⁷ [$7.8 million]
• Commence procurement and construction for the critical infrastructure needed for an open-water, fully energetic, grid-connected wave energy test facility to assist with the development of marine and hydrokinetic technologies.¹⁸ [$20 million]
• Support research, development, and demonstration activities for a hydrothermal (geothermal) subprogram subsurface initiative focusing on technologies that provide for effective, adaptive, and safe control of fractures and fluid flow.¹⁹ [$33 million]
• Energy Efficiency [$919 million]
• Establish one additional Clean Energy Manufacturing Innovation Institute (CEMI) [$14 million] and continue support for five existing CEMIs [$70 million].²⁰
• Continue support for activities that assist and enable federal agencies to meet aggressive energy, water, greenhouse gas, and other sustainability goals.
• Establish a Low-Global Warming Potential (Low-GWP) Advanced Cooling (HVAC) R&D funding opportunity announcement for advanced cooling and heating technologies.²¹ [$40 million]
• Create a Metropolitan Systems initiative that enables the use of historic and real-time, data-driven tools to support the design and development of low-energy, resilient infrastructure that will help U.S. cities meet their climate and energy targets.²² [$15 million]
• Support appliance and equipment standards.²³
• Provide access to home weatherization services for low-income households across the country to reduce their income spent on energy.²⁴
• Establish the Cities, Counties, and Communities Energy Program (3C Energy Program) to provide technical assistance and competitively awarded funds to catalyze more extensive clean energy solutions in community development and revitalization efforts.²⁵ [$26 million]

Other EERE initiatives include technology-to-market activities (e.g., National Incubator Initiative for Clean Energy) and international activities (e.g., expanding the number of Chinese cities using DOE's low-carbon planning tools and conducting demonstration projects featuring low-carbon technologies from U.S. companies). Additionally, EERE would establish a new crosscutting innovation initiative program introduced as a separate line item in the EERE budget table. The program would focus on providing funding for research, development, and demonstration activities, with the goal of strengthening regional clean energy innovation ecosystems, accelerating next-generation clean energy technology pathways, and encouraging clean energy innovation and commercialization collaborations between the National Laboratories and American entrepreneurs.²⁶ Approximately 51% of the $215 million requested for the crosscutting innovation initiative would be spent on regional energy innovation partnerships.²⁷

Mandatory Portion of Request: 21^st Century Clean Transportation Program

The 21^st Century Clean Transportation program is a multiagency effort to be funded at $320 billion over 10 years. This program aims to be a key step in "making smart and strategic investments to create a cleaner, more sustainable transportation system," according to the Administration.²⁸ The program is to be funded by both a new fee paid by oil companies—a $10 per barrel fee on oil gradually phased in over five years—and "one-time revenues from pro-growth business tax reform."²⁹ The Administration states that some benefits of the proposed plan include carbon pollution reduction, economic strengthening, and transportation expansion.

The EERE FY2017 budget request would provide $1.3 billion of mandatory funding to support the program. More than half, approximately 56%, of the funding would be spent on deployment of low-carbon fueling infrastructure. DOE reports that EERE will seek to support this effort with $11.3 billion over 10 years.³⁰ EERE participation in the program would include the following activities.³¹

• Develop regional low-carbon fueling infrastructure, including charging stations for electric vehicles, biofuels, hydrogen, and other low-carbon options in partnership with others that take into account the unique economies, resources, and development needs of different regions. [$750 million]
• Conduct R&D to accelerate cutting the cost of battery technology and establish public-private partnerships to achieve lowest carbon end-to-end intermodal transport for freight and fleets. [$200 million]
• Establish a smart mobility research center that will investigate the intersection of information and communication technologies, vehicle technologies, low carbon fuels, and disruptive transportation business models with the goal of reducing overall system level greenhouse gas emissions and petroleum consumption. [$200 million]
• Conduct R&D that focuses on transformational developments that address technical barriers in biofuel feedstock logistics, lower conversion costs, enhanced economics of biofuel production by focusing on high value coproducts, and the certification of new fuel pathways. [$100 million]
• Accelerate the transition to a cleaner vehicle fleet by issuing challenge grants to encourage cleaner state, tribal, and local government vehicle fleets. [$85 million]

Legislative Issues

The Administration is requesting significantly more funding for EERE compared to the FY2016 enacted appropriations—at least an $829 million increase, and possibly a $2.1 billion increase if the mandatory funding request is taken into account. The funding requested would support numerous programs and activities. The $1.3 billion in mandatory funding requested to support the 21^st Century Clean Transportation Plan is part of a multiagency effort that depends on the enactment of a new revenue source. It could be a significant undertaking for EERE to implement the clean transportation plan's activities in addition to current responsibilities given that the funding requested for the plan would represent 64% of the FY2016 EERE enacted appropriations. In addition, it is possible that the plan may involve efforts previously dismissed by Congress. For instance, EERE states that it will use the mandatory funding, in part, to "establish regional fueling infrastructure to support the deployment of low-carbon fuels." It is not known if EERE considers blender pumps to be a part of this regional fueling infrastructure. If so, Congress rejected a related effort in the 2014 farm bill (P.L. 113-79) by forbidding the use of Renewable Energy for America Program (REAP) funds to support blender pump installation.³² Congress may want to examine what impact such a program may have on clean transportation expansion, clean energy sources, or conventional energy sources; how quickly such a program may be implemented; and how effective such a program would be given its scope and that multiple participants—government and others, with various objectives—need to be involved to achieve the proposed outcomes.

FY2017 Appropriations Action

The Senate passed the Energy and Water Development and Related Agencies Appropriations Act, 2017 (H.R. 2028) on May 12, 2016. The bill would provide $2.1 billion for EERE, $825 million below the Administration's FY2017 discretionary request and $3.8 million above the FY2016 enacted level. On May 26, 2016, the House rejected an Energy and Water Development and Related Agencies Appropriations Act for 2017 (H.R. 5055). The bill would have provided $1.8 billion for EERE, $1.1 billion below the Administration's FY2017 discretionary request and $244 million below the FY2016 enacted level.

Author Contact Information

Footnotes