DOE releases FY2011 Budget Request

The Department of Energy released their budget request for fiscal year 2011 today. While the Office of Energy Efficiency and Renewable Energy's budget is slated for a slight increase, the Industrial Technologies Program's budget request is the same as 2010's request - $100 million (although the actual 2010 budget as passed by Congress was only $96 million).

We are disappointed that the request is not higher. ACEEE recommends that the ITP budget should be $150 million, closer to the funding a decade ago.

However, we are also surprised (and still disappointed) at how the funds are apportioned. While funding for most cross-cutting research, CHP, and technology deployment is slightly up (from $84 in 2010 to $87 million in 2011), the Industrial Assessment Center program is still being run at the unsustainable level of $4 million, roughly unchanged in the past 5 years (except for a small amount of stimulus funds). The IAC's need closer to $8 million to properly run all 26 centers. For more info on the IAC, see here and here.

More importantly, industry-specific research, once the backbone of ITP, has been cut to almost nothing. ITP currently partners with the top energy-intensive industries, such as forest & paper products, aluminum, steel, metal casting, glass, and chemicals; in 2011 they will only fund projects for the chemicals and cement industries (a new addition to ITP).

But most surprisingly is the apparent plan to replace this proven method of partnering with industries to perform R&D with a new program called "Manufacturing Energy Systems". This program will supposedly conduct R&D and/or technology deployment at 2 major universities to address the technology needs of specific industries through "rapid innovation of new products and processes" to reduce energy and greenhouse gas emissions.

We're withholding judgment on this program until we see more details. It has potential to be an effective tool to reduce manufacturing energy use in this country, but we feel this activity should not be done at the expense of the proven methods of the Industries of the Future program.

ACEEE supports the work of the Industrial Technologies Program, but feels, along with a recent peer review of ITP, that it should focus more on industry-specific research.

The President has spoken often on the importance of the manufacturing sector in our economy, on how research and development is essential to securing our long-term economic growth, and on the vital role energy efficiency plays in increasing our energy independence and ensuring a clean energy future. However, he has not taken the necessary steps to support the only program in the federal government that is actively addressing all three.

New reports: Industry's role in addressing climate change

A new study by the World Wildlife Fund examines the need for US industries to undergo a fundamental transformation to decrease carbon emissions to necessary levels. According to the executive summary:

This report models the ability of low-carbon industries to grow and transform within a market economy. It finds that runaway climate change is almost inevitable without specific action to implement low-carbon re-industrialisation over the next five years. The point of no return is estimated to be 2014.

While WWF focuses on the need for the industrial sector to address climate change before the point of no return, a separate report by the Presidential Climate Action Project gives several important government recommendations for addressing industrial decarbonization.

Efficiency, as expected, plays a huge role in these recommendations. Among the recommendations are the bolstering of two critical DOE programs: Industries of the Future, and Industrial Assessment Centers. ACEEE has been advocating for these programs for many years, and we expect that they will certainly play a key role in addressing climate change in the industrial sector.

DOE Announces $155 Million for Industrial Energy Efficiency

DOE announced today they would be awarding over $155 million for industrial energy efficiency projects and technical assistance. "Many companies already realize that improving efficiency saves money while helping the environment," said DOE Secretary Steven Chu. "These projects will make energy efficiency technologies more widely available, cutting energy use and reducing carbon pollution across the country."

About $146 million was awarded to nine companies implementing energy efficiency projects in plants across the country.

The remaining $9.5 million was awarded to the university-based Industrial Assessment Centers (IAC), state agencies, regional partnerships, and a national technical assistance provider to offer local technical support for the industrial sector. These awards went to 15 IACs, 11 state energy offices/organizations, five regional efficiency partnerships, and one national technical assistance provider.

More detail on the grant selections can can be found here.

This announcement is a very good step for industrial energy efficiency. The bulk of the grant money will go toward the implementation of projects, in accordance with the goals of the stimulus package. Some funds will be retained for more strategic uses such as technical assistance which can beget even more projects down the road.

However, the demand for industrial energy efficiency remains extremely high. DOE has publicly stated that requests for this funding exceeded $10 billion, or nearly 65 times the funds available. The industrial sector continues to be undervalued by policymakers. Despite accounting for one-third of the energy use and 27% of greenhouse gas emissions in the United States (LBNL), the industrial sector has not been receiving appropriate consideration and funding to reflect this importance. As a reference point, industrial energy efficiency was given about 0.02% of stimulus funds, and receives about 4% of DOE Energy Efficiency and Renewable Energy budget.

ACEEE commends today's DOE grant allocation, and hopes that future policies and appropriation will give increased attention to the industrial sector.

Advanced Energy Manufacturing Tax Credit - Applications Due September 16, 2009

From the DOE office of Energy Efficiency and Renewable Energy:

Through the American Recovery and Reinvestment Act of 2009, the Department of Treasury is awarding $2.3 billion in tax credits for qualified investments in advanced energy projects to support new, expanded, or re-equipped domestic manufacturing facilities. The Advanced Energy Manufacturing Tax Credit will help secure American leadership in the clean energy sector by supporting the larger goals of the Recovery Act to stimulate economic growth, create jobs, and reduce greenhouse gas (GHG) emissions.

The U.S. Department of Energy (DOE) and the Internal Revenue Service (IRS) will review applications and make determinations on eligibility and merit. The application period opens August 14, 2009. Preliminary applications are due September 16, 2009, followed by final applications due to DOE and the IRS October 16, 2009.

Eligible projects include:

• Technologies that create energy from renewable resources
• Energy storage technologies
• Advanced transmission technologies that support renewable generation
• Renewable fuel refining
• Energy conservation technologies
• Plug-in electric vehicles and components
• Property to capture and sequester carbon dioxide emissions, and to reduce GHG emissions.

Successful applicants will receive acceptance agreements from the IRS by April 16, 2010. Projects must be completed within 4 years of acceptance. Credits will cover future expenses and will not award past investment(s).

Read the DOE press release to learn more. Make sure to look in the right column for application forms and contact information.

Visit ITP's solicitations page for information on other financial opportunities.

Motor Crusher Credit part of House & Senate Bills

The "Motor Crusher Credit" (actually entitled the Motor Efficiency Rebate Program) passed out of the Senate Energy Committee last Wednesday as Sec. 228 of the comprehensive energy bill the American Clean Energy Leadership Act. See ACEEE's press release on the bill for details and a link of our assessment of the energy efficiency impacts of the bill.

The motor rebate provision (as Sec. 245) is also part of the House Climate Bill (H.R. 2454), the American Clean Energy and Security Act, which appears headed to a floor vote in the House this week. The provision's inclusion in both bills makes it likely that the authorizing language will be included in any bill that emerges from a conference between the two houses, whether it is a climate bill or just an energy bill. We are guessing that the bill, if passed, will not pass until the fall.

The provision would then go to DOE for the development of a program plan covering how it would actually be implemented.

It is important to remember that this is just authorizing language, and that were it enacted we would still need to have money appropriated to fund the program. We hope that this would be part of the FY2011 appropriation request from U.S. DOE. As a result it appears unlikely that this program would actually be funded until the 2010 program year at the earliest.

Industry Receives $256 Million in Stimulus Funding

From the Office of Energy Efficiency and Renewable Energy (EERE) bulletin:

On June 1, 2009, DOE Secretary Steven Chu announced plans to provide $256 million from the American Recovery and Reinvestment Act (Recovery Act) to support energy efficiency improvements in major industrial sectors across the American economy.

The funding is targeted at reducing the energy consumption of America's manufacturing and information technology industries, while creating jobs and stimulating economic growth. These programs will help create manufacturing jobs quickly, along with jobs for technicians and experts who will be needed in the long-term to maintain and operate the new equipment.

• Combined Heat and Power (CHP), District Energy Systems, Waste Energy Recovery Systems, and Efficient Industrial Equipment ($156 Million)—This funding is targeted toward projects that represent proven and effective near-term energy options that can be deployed in industrial and residential settings to improve efficiency, control costs, and limit greenhouse gas emissions—making U.S. industry more productive and competitive. Learn more about ITP’s Industrial Distributed Energy research and development projects, including CHP.
• Improved Energy Efficiency for Information and Communication Technology ($50 Million)—This project will select and fund applicants to conduct research, development, and demonstration (RD&D) projects to promote new technologies that improve energy efficiency in the growing information and communication technology (ICT) sector. Read the ICT vision and roadmap, Routing Telecom and Data Centers Toward Efficient Energy Use (PDF 2.3 MB). And learn more about ITP’s data center efficiency activities.
• Advanced Materials in Support of Advanced Clean Energy Technologies and Energy-Intensive Processes ($50 Million)—DOE will support RD&D projects for advanced industrial materials that can be used in fuel flexibility programs, CHP technologies, energy intensive processes, and nanomaterials and nanomanufacturing. These projects will help the American industrial sector increase competitiveness, while rapidly introducing advanced technologies. Learn more about ITP’s crosscutting technologies RD&D efforts.

Disappointing DOE 2010 Budget Request

DOE released its budget request for FY2010. Unfortunately it is disappointing with respect to the Industrial Technologies Program. Overall, funding increases from $90 million for FY2009 to $100 million for FY2010. However, funding actually goes down for the Industries of the Future (industry specific), with distributed energy and industrial assessment centers level funded. The major increases are for deployment (e.g., SEN) and for cross-cutting research.

We will post some more details once we get a chance to analyze the request in greater detail.