The US DOE: To Be or Not to Be in Renewable Energy

Without exception, the U.S. Department of Energy (DOE) is all about Atomic Energy Defense (AED). Energy Efficiency and Renewable Energy (EERE), on the other hand, are far from mission-critical. To the extent that the DOE’s 2016 budget request allocates 63 percent to AED activities and only 9 percent to EERE, energy efficiency and renewable energy programs seem to make good publicity and little else (See Figure 1).

The argument is not whether AED is more important than EERE; rather it is a question of the horsepower behind EERE, and DOE’s performance in ensuring America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.

The DOE states, “the FY 2016 Budget Request includes robust funding levels for clean energy technologies that advance American leadership in nuclear power, fossil energy, renewables, efficiency, and grid security for the 21st century. To sustain the nation’s primacy in scientific discovery, the request also increases funding for basic research.”

Figure 1 shows a breakdown by apportions for DOE’s 2015 Enacted Budget and the 2016 Congressional Budget Request; $27.4 billion and $29.9 billion, respectively.  The top section is a high-level overview; segmented into five major areas of investments. This is followed by EERE appropriations, which consist of four primary areas: Sustainable Transportation, Renewable Energy, Energy Efficiency, and Corporate Support.

Figure 1
Source: Department of Energy

Note that differences between requested and enacted items are anticipated. For example, the 2015 enacted budget was 1.9 percent lower than the request. The largest reduction was EERE programs at 17.4 percent, from $2.3 billion to $1.9 billion. AED request of $17.7 billion was reduced by $133 million, a mere 0.7 percent decline.

Key points are (percent of total budget):

  • EERE allocations of $1.9 billion (7 percent) and $2.7 billion (9.1 percent) for 2015 and 2016, respectively
  • AED funding approximately 820 percent and 600 percent of EERE program for 2015 and 2016, respectively
  • RE investments of $456 million (1.7 percent) and $645 million (2.2 percent) for 2015 and 2016, respectively
  • EE investments of $642 million (2.3 percent) and $1 billion (3.4 percent) for 2015 and 2016, respectively

Figure 2 illustrates the relationship between the total DOE (red bars) and EERE (blue bars) budget requests from 2000 through 2016. EERE allocations ranged from a low of 1.4 percent in 2003 to a high of 9.8 percent in 2014. EERE allocations averaged about 5.8 percent during the 17-year period, with a slight upward trend in the latter years, though never exceeding 10 percent.

Figure 2
Source: Department of Energy FY 2000 through 2016 Congressional Budget Requests

Figure 3 shows 2012 to 2016 EERE budget allocations for 14 programs. Vehicle technologies received the most funds and strategic programs the least. Within RE programs, the lion’s share of investments went to solar projects. Collectively, the three corporate support activities — facilities and infrastructure, program direction and strategic programs — absorbed about 12 percent of all EERE dollars.

Figure 3
Source: Department of Energy FY 2012 through 2016 Congressional Budget Requests

Renewable Energy

Using total RE capacity as a measure of DOE’s effectiveness in transitioning the U.S. to a low-carbon energy future, America’s prowess is unquestioned. According to the Renewable Energy Policy Network, by the end of 2014, the seven countries with the highest capacity of renewable energy (not including hydro power) were China, the U.S., and Germany followed by Italy, Spain, Japan, and India (See Figure 4).

Figure 4: Renewable Power Capacities* in World, EU-28, BRICS, and Top Seven Countries, 2014
* not including hydropower Source: REN21. Renewables 2015 – Global Status Report

Considering investments made in new renewable power and fuels relative to annual GDP, top countries included Burundi, Kenya, Honduras, Jordan, and Uruguay. The leading countries for investment per inhabitant were the Netherlands, Japan, Uruguay, the UK, Ireland and Canada.

Another meaningful measure to determine DOE’s effectiveness in transitioning America to a low carbon-energy future is the percentage of renewable energy (hydro, wind, geothermal and solar) in total electric generation.

This measure gives an entirely different picture from capacity statistics. Figure 5, compiled from data supplied by Enerdata, shows the 2014 share of renewables (including hydropower) by countries. The red bar shows the U.S. share at 13.7 percent (about 8 percent without hydro). Norway, with a 98 percent share of renewable energy, is the world leader and benchmark towards 100 percent renewable energy.

Figure 5
Source: Enerdata

Of the 44 counties in the study, 26 had a higher percentage of renewables than the U.S. That list included Canada, Romania, Nigeria, China, India, Russia and Mexico. The U.S. share of renewables was also below the average share for the World — OECD, G7, BRICS, Europe, European Union, CIS, America and North America.

Most developed countries showed higher rates of renewables in their energy mix than U.S.  Developed countries with lower RE inventories than the U.S. include the Netherland, Poland, Australia, the Czech Republic, and South Korea.

Energy Efficiency

The other major program under EERE is Energy Efficiency. Figure 6 shows useful EE statistics from The 2014 International Energy Efficiency Scorecard, published by the American Council for an Energy-Efficient Economy. The scorecard evaluates the energy efficiency of the world’s 16 largest economies.

Figure 6: 2014 International Energy Efficiency Scorecard
Source: American Council for an Energy-Efficient Economy

The analysis found that “the U.S., long considered an innovative and competitive world leader, has allowed 12 of the 16 counties studied to surge ahead. Germany has the highest overall score. The top-scoring countries in each sector include:

  • China in buildings
  • Germany in industry
  • Italy in transportation
  • France, Italy, and the European Union in national efforts

The report suggests the U.S. can improve by:

  • National Effort — The U.S. Congress should pass a national energy saving target
  • Buildings — The U.S. federal government should strengthen national model building codes
  • Industry — The federal government should support education and training in the manufacturing and industrial sectors
  • Transportation — The U.S. Congress should prioritize energy efficiency in transportation spending

The U.S. “made some progress toward greater energy efficiency in recent years, particularly in areas such as building codes, appliance standards, voluntary partnerships between government and industry, and, recently, fuel economy standards for passenger vehicles and heavy-duty trucks,” the report said.

Disappointing Results

In closing, DOE’s performance in transitioning America to an energy efficient and renewable energy economy is rather disappointing when compared to other developed and developing economies of the world. The million-dollar question is, “Why?” The short answer is renewable energy costs more and is less reliable than traditional energy and significant gains in energy efficiency can be capital intensive.

The long and more plausible answer is fourfold — insufficient funds, politics at play, mismanagement, and lack of accountability. Fixing the problem is simple but politically impossible. DOE should be taken out of the EERE business. In addition, the cost of the programs should be transitioned to bottom line incentives granted by the IRS, such as Section 1603 Treasury Cash Grant Program. And tax deductions should be provided for energy efficiency improvements made to new and existing residential, commercial and industrial facilities. If incentives become a point of contention, then incentives for the fossil fuel industry should be discontinued. With these measures in place, America could return to a leadership role in renewable energy and energy efficiency and help save our planet.

Lead image: Collage of sustainable energy. Credit: Shutterstock.

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Dr. Barry Stevens is Founder and President of TBD America, Inc. a Technology Business Development consulting group serving the public and private sectors in the energy and fuels industries. Barry’s experience in the energy industry spans shale gas (up- and midstream), CNG, natural gas, hydrogen, waste-to-energy, wind and solar. He co-founded the National Hydrogen Fund to commercialize technologies demonstrated by the U.S. Department of Energy

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