White House details massive clean-tech spending plan

By Christa Marshall | 02/08/2016 07:49 AM EST

The White House outlined a sweeping plan this weekend to double clean energy research spending over five years as part of a global effort to fight climate change.

The White House outlined a sweeping plan this weekend to double clean energy research spending over five years as part of a global effort to fight climate change.

The massive proposal — which involves 12 federal agencies and envisions a 20 percent increase in energy research and development in the president’s coming budget — is meant to be the meat on the bones of the "Mission Innovation" initiative launched at last year’s climate talks in Paris.

There, 20 countries pledged to double their clean energy R&D in five years to help ensure long-term carbon emission cuts. The plan has ties to a coalition of billionaire entrepreneurs like Microsoft Corp. co-founder Bill Gates and Facebook Inc. CEO Mark Zuckerberg, who pledged investments to move transformational energy technologies from lab to market.


The idea is to help bridge the "valley of death" witnessed by many promising clean energy technologies that never reach the commercial stage but could help slash greenhouse gas emissions.

The current international policy framework "is not enough by itself to hit the targets that we’ve set globally on climate change … whether we can meet those targets depends on other things, including principally on the pace of technology innovation," a senior administration official said on a conference call Friday.

The administration will propose an R&D funding jump from approximately $6.4 billion in fiscal 2016 to $12.8 billion in 2021, via annual increases of approximately 15 percent. The budget request would boost clean energy research spending about 20 percent over last year’s level to about $7.7 billion.

The plan focuses heavily on the Department of Energy via proposed spending increases for the national labs and new and existing programs covering everything from electric vehicles to advanced nuclear fuels.

A huge winner under the proposal would be the Advanced Research Projects Agency-Energy (ARPA-E), which would see its annual budget more than triple to $1 billion in five years. DOE officials predicted last month that the agency would be a focus of Mission Innovation (Greenwire, Jan. 25).

Modeled after the Defense Advanced Research Projects Agency, ARPA-E provides funding to cutting-edge energy technologies that are not ready for private-sector investment. At an event last week, agency Director Ellen Williams said about 20 percent of ARPA-E’s completed projects go on to attract private-sector investment.

ARPA-E is also an agency that enjoys significant GOP support. Last week, Sen. Lisa Murkowski (R-Alaska) called it "really pioneering" during a speech on advanced nuclear technologies, for example.

The administration is proposing $350 million for ARPA-E for fiscal 2017, up from $291 million in appropriations under the omnibus deal signed into law at the end of 2015. Additionally, it will propose $150 million in mandatory funding for the program in fiscal 2017, aiming to spend $1.85 billion in such mandatory funding over five years.

The Mission Innovation plan has a heavy regional focus, too. "There is no single energy source that is necessarily going to be a winner," a senior administration official told reporters Friday.

In that regard, the White House will propose more than $110 million for new regional partnerships that would target R&D solutions to the "unique characteristics of each region." It also will push for new partnerships between the national labs and communities.

Existing programs at DOE — for both renewable power and fossil fuel research — would get a boost in the budget request. For example, the White House will call for more than $880 million on sustainable transportation technologies, about $150 million more than last year’s budget deal. It also would increase amounts spent on solar, wind and geothermal energy.

Research on carbon capture and storage technologies to control emissions from fossil fuels would receive $564 million, more than last year’s budget deal. There also would be increased support for advanced nuclear research.

Reception in Congress

The administration’s blueprint raises the obvious question of how much a Republican-controlled Congress will support it. One Republican analyst said it would gain little traction, as the administration is "dead men waiting to be buried."

Republican energy strategist Mike McKenna predicted the proposal wouldn’t go far on Capitol Hill. "There is no way any of this happens," said McKenna, who used the "dead men waiting to be buried" analogy. "The administration is last Tuesday."

Another analyst questioned privately whether some relatively new programs at DOE "that are still being assessed" should receive large funding increases.

White House aides, however, are quick to note that many clean energy programs got a boost in last year’s budget with bipartisan support.

"While Republicans in Congress are still considering their position on climate change, many of them realize that clean energy is an incredible source of good-paying jobs for their constituents. That’s why we were able to boost clean energy research and development in last year’s budget agreement," President Obama said in his weekly address Saturday.

Paul Bledsoe, a former Clinton White House energy and climate aide, said "this is not dead on arrival," as there is growing bipartisan support for targeted spending on energy R&D.

He noted recent Senate passage of a bipartisan amendment to increase funding for DOE’s Office of Science, for example. The Senate also voted last month to boost funding for ARPA-E (E&ENews PM, Jan. 28).

"If the president is willing to work with Republicans … and give them some of their priorities and find some offsets … I think it is not inconceivable that they could get a really big chunk of the doubling," said Bledsoe, who is also a senior adviser to the American Energy Innovation Council, whose members include Gates and CEOs of major energy companies.

The administration will need GOP lawmakers like Sen. Lamar Alexander (R-Tenn), who told E&E Daily this month that he supported Mission Innovation in theory but wanted to pay for it with an idea not likely to be popular with some Democrats — ending wind subsidies.

Bledsoe said Congress should recognize that if they increase R&D, other countries might follow suit. "Some members of Congress have objected to the U.S. carrying this entire weight on its back. Now is an opportunity to galvanize other nations to double their funding," he said.

Since its launch in Paris, Mission Innovation has stirred debate about whether it is the most effective approach to investing in low-carbon technology.

In a recent interview, Joe Romm, a senior fellow at the Center for American Progress, said money from the federal government and billionaires like Gates would be better spent on deploying existing technologies like solar in countries like India, where key energy decisions are under consideration (ClimateWire, Dec. 4, 2015).

However, Gates and others have said the energy sector spends much less on research and development in terms of a percentage of its overall revenue than other sectors like health care.

The White House has said that, despite falling costs for technologies like solar and electric vehicles, the pace of innovation is falling short of what is needed to hold temperature increases below 2 degrees Celsius by century’s end.

The new plan is "much more in line with the scale of investment we need to be making … to really fully leverage the strength of the national innovation ecosystem, especially given the scale both of the challenge of climate change and the market opportunity that many of these technologies are going to present," said Brad Townsend, associate director for energy innovation for the Bipartisan Policy Center’s Energy Project.

More details

Eighty percent of the plan involves funding at DOE, including a call in fiscal 2017 for:

  • $350 million in discretionary funding for ARPA-E, $59 million above last year’s level. Additionally, the administration is proposing $150 million in mandatory funds that would allow the agency budget to grow to $1 billion by fiscal 2021.
  • More than $880 million for sustainable transportation technologies, $177 million for grid modernization and $261 million for advanced clean energy manufacturing R&D projects. There would at least $500 million for renewable power, up by more than $20 million from last year’s level. That includes $213 million for DOE’s SunShot Initiative, which has a stated goal of making solar cost-competitive with other power sources by decade’s end.
  • At least $804 million for programs and infrastructure that support the advancement of nuclear energy technologies and about $564 million for research focused on carbon capture and sequestration technologies.
  • New initiatives include $110 million for partnerships targeting technologies for specific regions, and $105 million for new "innovation initiatives" to speed up technology development, partly through partnerships with the national labs.

The budget request also will include:

  • $512 million for research at the National Science Foundation in "a wide array" of energy technology areas.
  • $348 million for clean energy research at NASA.
  • $106 million for programs at USDA to support "bio-based" energy sources, such as increased biofuel production.
  • A $10 million effort at the Department of Housing and Urban Development to improve energy efficiency, including by creating an advisory group to develop studies on facilitating "long-term behavior" change in the housing sector.
  • A U.S. Agency for International Development plan to establish a new R&D clean energy effort to assist a range of technologies in developing nations.