Energy & Water Subcommittee Hearing on the FY05 Budget for the Department of Energy's Offices of Science; Nuclear Energy, Science and Technology; and Energy Efficiency and Renewable Energy: Testimony of David Garman, Assistant Secretary, Office of Energy Efficiency and Renewable Energy
United States Senate Committee on Appropriations
March 3, 2004
Statement of David Garman Assistant Secretary, Energy Efficiency and Renewable Energy U.S. Department of Energy Before the Senate Committee on Appropriations Subcommittee on Energy and Water Development
FY 2005 Appropriations Hearing March 3, 2004
Mr. Chairman, Members of the Subcommittee, I appreciate the opportunity to testify on the FY 2005 President's Budget request for the Office of Energy Efficiency and Renewable Energy (EERE). My focus will be the renewable energy activities under the purview of this Subcommittee. The research and development activities surrounding and the deployment of advanced clean energy technologies are already making a difference in the lives of Americans, and they will have an even greater impact in the future. The overall EERE budget request for FY 2005 is a robust $1.25 billion, an increase of $15.3 million over the comparable FY 2004 appropriation. For the renewable energy programs funded through the Energy and Water Development appropriation, the FY 2005 request totals $374.8 million, a $17.3 million increase over the FY 2004 appropriation and 30 percent of the total EERE Budget.
We are not only mindful of how much we spend on these programs, but also the manner in which we operate and the results we are achieving. Our budget is prioritized in accordance with the National Energy Policy Report and the Department of Energy Strategic Plan. EERE has also used the research and development investment criteria called for in the President's Management Agenda to focus our research and development dollars on a balanced portfolio of well-planned activities that could generate significant public benefits and that require Federal involvement to be successful.
The Office of Management and Budget (OMB) recently announced that DOE has made the most progress among cabinet-level agencies in the implementation of the President's Management Agenda. OMB recognized the Department as the cabinet-level agency "leading the pack with regard to management improvement." In support of that, EERE in 2002 underwent a dramatic restructuring to streamline program management and centralize administration functions with a focus on developing consistent, uniform and efficient business practices. We are also increasingly successful in linking our expenditures with performance and results. We are striving to achieve more work in the laboratory with every research and development dollar entrusted to our stewardship. While we are very proud of the accomplishments we have made, a great deal of progress remains to be made in all of these areas.
RENEWABLE ENERGY PROGRAMS FY 2005 BUDGET REQUEST
The renewable energy programs included in the Energy Supply account and funded within the Energy and Water Development appropriations include Hydrogen Technology, Solar Energy Technology, Wind and Hydropower Technologies, and Geothermal Technology. Activities in the Biomass Program and Intergovernmental programs are funded through both the Energy and Water Development and Interior and Related Agencies appropriations.
HYDROGEN TECHNOLOGY
The FY 2005 Budget Request for Hydrogen Technology is $95.3 million, a $13.3 million increase over the FY 2004 appropriation. Much of the proposed increase is for hydrogen safety research. This includes safety testing and analysis on bulk storage systems, fuel dispensing equipment, and piping to support new codes and standards specific to hydrogen. The Department has worked with the Department of Transportation and other agencies on an interagency codes and standards plan. Under this activity, we will also develop system safety requirements for producing hydrogen and sensors to detect hydrogen leaks.
Research undertaken in the Hydrogen Technology Program is also targeted to reduce the cost of distributed hydrogen production from electrolysis and natural gas reformation. An enhanced focus on electrolysis, as recommended by the National Research Council, may lead to cost competitive production of hydrogen from renewable energy at $2.25 per gallon of gasoline equivalent by 2015.
One of the major technical obstacles we face is developing the means to store sufficient amounts of hydrogen aboard the vehicle to provide a driving range of greater than 300 miles. The FY 2005 budget provides funding for innovative storage technologies to be pursued under our "Grand Challenge" to leading universities and national laboratories. "Grand Challenge" is our name for a competitive solicitation that was directed towards the scientific community to get the best minds at our universities and national labs to propose research ideas to tackle this challenging problem.
The Hydrogen program is also stepping up its efforts on education at all levels, so Americans know what the hydrogen economy will mean for them, their businesses, and the environment, and understand how to handle hydrogen safely in their communities.
Our hydrogen work is well integrated with the fuel cell and vehicle work funded through the Interior Appropriations bill. Taken together, these programs represent the majority of the Federal efforts comprising the Hydrogen Fuel Initiative announced by President Bush during his 2003 State of the Union Address, and we have published very specific, measurable technical goals against which to measure our progress. If we achieve our technical objectives, the automotive and energy industries will be in a position to consider commercialization by 2015, with mass market availability of both vehicles and refueling infrastructure by 2020.
The President's initiative was received by Congress with enthusiasm, and we appreciate this Subcommittee's support. However, while the FY 2004 EERE appropriation for hydrogen technology was approximately $82 million, roughly half of those funds were earmarked for specific projects that are not wholly consistent with our research plan or the recommendations of the National Research Council. As a consequence, we must delay some very important work in areas such as hydrogen storage and production, and thus our ability to meet our established research targets in the specified timeframes may be in jeopardy. The Department looks forward to working with the Subcommittee to help ensure that projects supported by the Committee are consistent with our established goals in an effort to keep our progress on track.
SOLAR ENERGY TECHNOLOGY
The Solar Energy Technology program focuses research on advanced solar devices that can provide the nation with a widely available domestic energy resource to help meet electricity needs and reduce the stress on our critical electricity infrastructure. Efforts are directed in the interrelated areas of Photovoltaics, Solar Heating and Lighting, and Concentrating Solar Power. The FY 2005 budget request for Solar Technology is $80.3 million. This is roughly equivalent to the unencumbered amount of the FY 2004 appropriation of $83.4 million, which included $3.6 million earmarked to specific recipients.
Photovoltaic research and development seeks to reduce the manufacturing cost of highly reliable photovoltaic modules from $2.10/watt in 2003 to $1.85/watt by FY 2005. The program is focused on next-generation technologies such as thin-film photovoltaic cells and leap-frog technologies such as polymers and nanostructures. Systems engineering efforts seek to increase system durability and develop technologies to improve interconnections with the electric grid. The FY 2005 request of $75.4 million for photovoltaic includes: $30 million for critical fundamental research, including $2.1 million to equip the new Science and Technology Facility at the National Renewable Energy Laboratory; $29 million for advanced materials, including thin films and next generation materials with potential for dramatic cost reductions; and $16.4 million for technology development efforts to improve reliability of the entire system, including testing, verification, and deployment activities for grid-connected applications and analysis of private sector commercialization options.
The FY 2005 $2.9 million request for Solar Heating and Lighting will support efforts on hot water and space heating for residential and commercial buildings in collaboration with industry partners. The program uses new formulations of lightweight polymer materials to modernize solar water heaters, making them easier to install, while lowering the cost of solar water heating in non-freezing climates. Last year, we did not request any funding for the Concentrating Solar Power (CSP). In light of recent studies we sought from an independent engineering firm, a draft of which was reviewed by the National Research Council, the Department proposes $2 million for Concentrating Solar Power in FY 2005 to support a more thorough investigation of the appropriate R&D course needed to realize the potential for CSP. The FY 2005 budget request will maintain essential facilities and support work with several States on the establishment of 1,000 MW of Concentrating Solar Power in the Southwest, while developing a comprehensive program plan to help inform the FY 2006 budget development process and a longer term R&D plan. ZERO ENERGY BUILDINGS
Zero Energy Buildings activities develop strategies to integrate renewable energy technologies into highly energy-efficient buildings that produce as much or nearly as much energy as they consume on an annual basis. The FY 2005 budget request for the Building Technologies Program funded through the Interior Appropriations bill combines this energy research and development with ongoing activities in the Buildings program and therefore, no FY 2005 funds are requested in this area.
WIND AND HYDROPOWER TECHNOLOGIES
Wind and Hydropower research and development supports the Nation's fastest growing and most widely used renewable energy resources. These technologies emit no air pollution or greenhouse gases, and they produce significant amounts of bulk power to help meet America=s growing need for clean, domestic sources of electricity.
Since 2000, installed wind turbine capacity in the United States has more than doubled, driven in large part by the tremendous reductions in cost that have resulted from wind energy research. Our research contributed to reducing the cost of electricity generation by a factor of 20 since 1982, to four cents or less per kilowatt-hour in areas with excellent wind resources.
The FY 2005 budget request for Wind Energy is $41.6 million, $290,000 more than the FY 2004 appropriation, which included $1.4 million in funds that were earmarked to specific recipients. The $12 million request for Low Wind Speed Technology research and development will support multiple large wind system technology pathways to achieve the goal of three cents per kilowatt-hour for onshore systems. It also supports new work in off-shore systems to help achieve a cost goal of five cents or less per kilowatt-hour. FY 2005 activities will include field testing of the first full-scale low wind speed technology prototype turbine and fabrication and testing of advanced drivetrains, power converter and blades for future low wind speed turbines. The $17 million request for supporting research and testing will engage the capabilities of the National Labs, universities and private sector for technical support including both facility and field tests of newly developed components and systems to ensure design and performance compliance.
Hydropower is the most widely used form of renewable energy in the world today and accounts for about seven percent of total electricity generation in the United States and over 75 percent of domestic renewable electricity generation. The FY 2005 budget request for Hydropower Technologies is $6.0 million, a $1.1 million or 22 percent increase over the FY 2004 appropriation. The Department's research approach involves a unique combination of computer modeling, instrumentation, lab testing, and field-testing that is improving the design and operation of the next generation of hydropower technology. The request will support development of technologies that will enable hydropower operators at existing plants to generate more electricity with less environmental impact. This will be done through environmentally enhanced, improved efficiency turbines, as well as with new methods for optimizing unit, plant, and reservoir systems to increase energy production per unit water. Supporting research and testing will improve understanding of fish response to the physical stresses experienced in passage through turbine systems. The program will also explore ways to harness undeveloped hydropower capacity without constructing new dams.
GEOTHERMAL TECHNOLOGY
The FY 2005 budget request for Geothermal Technologies is $25.8 million, a $300,000 increase from the FY 2004 appropriation of $25.5 million, which included almost $2 million in funds that were earmarked to specific recipients. Geothermal energy generates electricity and provides heat for applications such as aquaculture, crop drying, and district heating, and for use in heat pumps to heat and cool buildings. The program focuses on developing technology that optimizes the use of geothermal energy through improved exploration, drilling, reservoir engineering, and energy conversion. These technology improvement lead to cost-effective energy production at new geothermal fields and expanded production at existing fields.
FY 2005 resource development activities will characterize and assess the geothermal resource by understanding the formation and evolution of geothermal systems, including a collaborative effort with the U.S. Geological Survey on a national geothermal resource assessment. Activities in the Enhanced Geothermal Systems program seek to increase the productivity and lifetime of reservoirs, potentially more than doubling the amount of viable geothermal resources in the West. FY 2005 activities will include Enhanced Geothermal System field tests in California and Nevada, and tests of the Diagnostics-While-Drilling advanced drilling system in a high temperature geothermal well. New geothermal State working groups in Alaska and California will be added, bringing the number of groups to nine.
BIOMASS AND BIOREFINERY SYSTEMS R&D
Biomass and Biorefinery Systems R&D focuses on advanced technologies to transform the Nation's domestic biomass resources into high value chemicals, fuels, and power. With the U.S. Department of Agriculture, the DOE biomass program leads the multi-agency Biomass Research and Development Initiative that coordinates and accelerates all federal bioenergy research and development in accordance with the Biomass Research and Development Act of 2000.
The 2002 EERE reorganization integrated several bioenergy activities into one office to allow a clear and consistent set of goals and objectives and increased collaboration with industry. The program worked closely with industry to produce a vision and R&D roadmap that focuses on the most promising long-term opportunities that, with leveraged funding from industry, can realize a goal of establishing the first large-scale biorefinery based on agricultural residues by 2010. A multiyear technical plan in support of this goal provides a comprehensive work breakdown structure with milestones, costs and schedule, so that every project is linked to program goals, objectives and technical barriers. In FY 2005, the Department is requesting $72.6 million for biomass program activities in the purview of the Energy and Water appropriation, $13.9 million less than the FY 2004 appropriation. However, it is important to note that the FY 2004 appropriation included nearly $41 million, or nearly half of the biomass budget, targeted to specific projects not identified in program plans. Congressional earmarking has delayed progress toward the program goals and diminished core research capabilities at the National Laboratories. Biomass activities funded through the Energy and Water appropriation focus on advanced biorefinery technologies to produce low cost sugars, syngas and pyrolysis oils. In FY 2005, the thermochemical program will test the continuous production, cleanup and conditioning of biomass syngas and pyrolysis oils suitable for conversion to fuels, chemicals or hydrogen, and examine the production of hydrogen from biomass via synthesis gas. Work will continue with industry on improved process integration capabilities for industrial biorefineries, and the program will evaluate existing partnerships for more productive and lower-cost cellulase enzyme systems. Additional partnerships may further improve the procession operations leading to cheaper biomass-based sugars. Projects to test and evaluate the performance and costs of converting corn fiber to fuels and co-products will also continue.
INTERGOVERNMENTAL ACTIVITIES
Intergovernmental Activities funded through the Energy and Water appropriation include a variety of programs to promote renewable energy technologies. The FY 2005 request for these programs is $16 million, an increase of $1.3 million over the FY 2004 appropriation.
The International Renewable Energy Program provides technical assistance to support sustainable development and emerging market economies. These efforts expand the market of U.S. industries and reduce the cost of energy to trading partners while improving their environment and creating new jobs. In FY 2005, we request $6.5 million for international activities, a $612,000 increase from the FY 2004 appropriation, which included nearly $2.7 million in funds that were earmarked to specific recipients. We propose to use these funds for a wide variety of partnership activities under the U.S. Clean Energy Initiative arising from the World Summit on Sustainable Development.
In FY 2005, we request $5.5 million for the Tribal Resources Program, an increase of $594,000 over the FY 2004 appropriation. The program provides assistance to Native American Tribes and Tribal entities in assessing energy resources, comprehensive energy plan development, energy technology training, and project development. This primarily involves the development of energy efficiency and renewable energy resources on Tribal lands. Projects include resource assessments and development plans for energy efficient and renewable energy technologies. Technical assistance helps Native American Tribes, and Tribal Colleges develop culturally compatible energy and economic development plans and strategies reflecting Tribal priorities. In addition, the program invests in technical program and market analysis and performance assessment in order to direct effective strategic planning. Again, this is an area where congressionally directed spending totaling $3.2 million, or more than half of our funding, inhibits our ability to issue and entertain competitive funding opportunities for tribes.
We are also requesting $4.0 million dollars for the Renewable Energy Production Incentive, which will create an incentive similar to the renewable production tax credits available to investor-owned utilities for public power providers.
DEPARTMENTAL ENERGY MANAGEMENT PROGRAM
The Departmental Energy Management Program seeks to improve energy and water efficiency, promote renewable energy use, and manage utility costs in DOE facilities and operations. The Department owns or leases about 11,000 buildings at more than fifty sites across the United States. The FY 2005 request for Department Energy Management Program activities of $1.97 million, about the same as the FY 2004 appropriation, will allow continued facility audits to identify energy conservation opportunities; provide funding for best practices identification and dissemination; and accomplish energy conservation retrofits through direct funding and alternative financing.
NATIONAL CLIMATE CHANGE TECHNOLOGY INITIATIVE COMPETITIVE SOLICITATION PROGRAM
This is the third year we seek funding for the Competitive Solicitation Program as part of the President's National Climate Change Technology Initiative. The competitive solicitation process will seek innovative, novel, high-impact climate change technology options that can complement and enrich the existing portfolio of climate change-related research and applied technology. By stimulating and strengthening Federal research in this area, the program hopes to inspire private sector interest and international cooperation in a sustained collaborative program of research investment aimed at accelerating technology development and advancing the Administration's climate change goals. The Department is requesting $3 million in FY 2005 for this initiative.
FACILITIES AND INFRASTRUCTURE
This Facilities and Infrastructure budget addresses capital requirements for capital projects, equipment and plant maintenance at the National Renewable Energy Laboratory (NREL). NREL provides state-of-the-art research facilities, user facilities, analysis, and management of R&D contracts for the Solar, Wind, Geothermal, Biomass, and Hydrogen programs within the Energy Supply budget, and does the same for the programs in the Energy Conservation budget and superconductivity research in the Office of Electricity Transmission and Distribution. NREL is home to 1,100 researchers, engineers, analysts, and administrative staff, plus visiting professionals, graduate students, and interns on a 300-acre campus in Golden, CO, occupying five large research buildings and over 200,000 square feet of research and administrative space in a neighboring office park.
The FY 2005 request of $11.5 million will provide $4.8 million for operation and maintenance funded activities and $6.7 million for continued construction of the Science and Technology Facility.
PROGRAM DIRECTION
Program Direction provides the technical direction and oversight resources needed to successfully implement EERE renewable energy programs. The budget requests covers Federal staff, as well as associated properties, equipment, supplies, and materials required to support the management and oversight of programs. Areas funded by these requests include information systems and technology equipment; travel; public information activities; support service contractors; and crosscutting performance evaluation, analysis and planning.
The FY 2005 budget request for Program Direction in the Energy Supply account is $20.7 million, which is $8.3 million more than the FY 2004 appropriation. The increase in FY 2005 will fund activities to develop and strengthen EERE's program management and project management practices at both Headquarters and field offices. A new Project Management Center that includes the Golden Field Office and other EERE field organizations is responsible for project management of research and development partnerships, laboratory contract administration including the management and operating contract for the National Renewable Energy Laboratory, and providing procurement, legal, business management, and information resource management. This Project Management Center initiative allows our Laboratories to devote more time to real research as opposed to management oversight functions, and will help our program dollars remain focused on research, development, and deployment.
The proposed increase will also provide full funding for the renewable energy programs' share of landlord services at the Golden Field Office and its fair share of Information Technology services and local-area network operations.
The budget request also includes $3 million to provide analytical and technical support services to the cross-cutting Climate Change Technology Program, a multi-agency research planning and coordination activity led by DOE. CONCLUSION
Mr. Chairman, we believe the Administration's FY 2005 budget request for renewable energy technologies reflects a robust, balanced and consistent approach toward meeting the Nation's energy goals of increased energy security through utilization of diverse domestic supplies, greater freedom of choice of technology, and reduced financial costs and environmental impacts of energy utilization.
This completes my prepared statement, and I am happy to answer any questions the Subcommittee may have.
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