FY20 Appropriations Bills: DOE Applied Energy R&D

Congress is poised to ramp up spending on the Department of Energy’s applied R&D programs, building on significant increases provided over the last two years. But while the House and Senate are united against the Trump administration’s requests for large cuts , there are still substantial differences between their proposals that need to be ironed out.

Controlled by Democrats for the first time since 2010, the House passed legislation in June that would keep spending on nuclear and fossil energy R&D steady while significantly increasing funding for other programs. But Senate appropriators recently proposed even larger increases covering all of DOE’s applied R&D programs. Sen. Lamar Alexander (R-TN), who chairs the appropriations subcommittee for DOE, has said he would like energy R&D spending to double over the next five years as a way to combat climate change.

The resolution of these differences may ultimately depend less on the chambers’ respective enthusiasm for energy R&D than on how they agree to distribute funding across the government as a whole. Once budget toplines have been determined, negotiations can proceed over program-level priorities, which the House and Senate outlined in their committee reports on their respective bills. Detailed figures for some of these proposals are collected in the FYI Federal Science Budget Tracker .

For now, although fiscal year 2020 began on Oct. 1, DOE is operating at fiscal year 2019 spending levels through stopgap legislation that lasts until Nov. 21. A final spending agreement could come sooner, or, as has often happened in the past, additional stopgaps could be passed until a deal is reached.

Department-wide policy

R&D funding policy. The House and Senate reports both reiterate previous years’ rejections of the Trump administration’s proposals to focus energy R&D largely on early-stage research. They instead direct DOE to fund technologies at all stages of development and implementation.

Expenditure of funds. Both reports also contain language indicating appropriated funds should be expended in a timely manner. Lawmakers have previously noted that DOE was found to have violated federal law by temporarily withholding some grants and that it has failed to spend certain funds from prior years.

Advanced Research Projects Agency–Energy

Established in 2009, ARPA–E employs a program direction model that empowers its officers to strategically select and support energy innovation projects through a critical stage in their development. Although the Trump administration has sought to close the agency down, claiming private industry can do its work, Congress has instead funded it at record levels.

This year, the House and Senate both propose increasing its budget a further 17% to $428 million. A pending policy bill backed by House Science Committee Democrats recommends that same level as the first step in a five-year ramp up to a $1 billion budget. That goal is equal to the funding level envisioned for the agency when its creation was first proposed in the 2005 National Academies “Rising Above the Gathering Storm” report.

Energy Efficiency and Renewable Energy

EERE funds a wide variety of R&D programs as well as initiatives to promote energy efficiency in homes, buildings, and industry. The office’s budget is currently $2.38 billion and has been gradually rising since fiscal year 2013, when it stood at $1.69 billion. This year, the House proposes a further 11% increase to $2.65 billion, while the Senate proposes an 18% increase to $2.8 billion. The distribution of the increase differs significantly between the proposals, as detailed in the following table.

Solar and wind energy. The House’s proposed budgets for solar and wind energy are the same as the levels recommended in pending legislation introduced by Democrats on the House Science Committee this summer. That legislation further recommends those programs’ budgets ramp up over another four years until solar energy reaches $328 million and wind energy reaches $126 million. The Senate report endorses EERE’s transformation of the National Wind Technology Center in Boulder, Colorado, into a “large-scale grid integration research platform linked to national laboratories, universities, and industry.”

Wave energy. Within the Senate’s proposed $160 million for water power, appropriators specify $26 million for PacWave , a major wave energy test facility being built off the Oregon coast. The Senate report states appropriators are “concerned” with the project’s increased cost estimate and stipulate it may not exceed $85 million in total costs, but the report also indicates they continue to support it “given its unique capabilities and expected demand.” The Senate also recommends DOE spend at least $5 million to “establish an Atlantic Marine Energy Center, a new regional design and testing center on the eastern U.S. coast as a resource for technology developers to accelerate the transition of wave and tidal energy technologies to market.”

Geothermal energy. DOE’s Utah-based Frontier Observatory for Research in Geothermal Energy (FORGE), which will test and evaluate enhanced geothermal systems, is currently entering its five-year implementation phase. The project has been well funded in prior years and the House proposes to meet the administration’s request for $5 million still needed for the project’s eventual ramp down. The Senate, though, proposes $20 million for activities that include “ongoing novel subsurface characterization, full-scale well drilling, and technology research and development to accelerate the commercial pathway to large-scale enhanced geothermal systems power generation.” The Senate further proposes $10 million, $3.3 million more than requested, for a new “Wells of Opportunity” project, which aims to facilitate tests of high-risk technologies on unused geothermal wells prior to their testing at FORGE.

EERE staffing. The Senate report expresses concern over a reduction of EERE staff by 90 full-time equivalents since 2017, stating also that “rather than using available funds to hire the federal staff needed to responsibly manage a growing portfolio, the committee is aware that funds are being used to pay general overhead expenses, a change in historical practice.” The report directs DOE to formulate a plan to increase staffing to at least 650 full-time equivalents in the first half of fiscal year 2020.

Nuclear Energy

Congress has been steadily increasing funding for DOE’s Office of Nuclear Energy, with its annual budget rising nearly $500 million, or 59%, since fiscal year 2015. While the House proposes a slight budget reduction this year, the Senate is aiming for a further 14% increase to $1.52 billion and also offers a number of strong policy prescriptions.

Advanced reactor demonstrations. The most significant Senate proposal is $300 million for a new advanced fission reactor demonstration program called for in the Nuclear Energy Leadership Act currently pending in Congress. Senate appropriators specify $100 million for each of the program’s first two demonstration projects, which are to have a one-to-one cost-sharing arrangement with industry partners. They allocate a further $50 million for between two and five demonstration proposals not selected for the first two projects, to support work to reduce project risks. Another $40 million would go to DOE national labs for work with the Nuclear Regulatory Commission to identify and resolve technical challenges associated with advanced reactor licensing, and $10 million would go to evaluating nonproliferation safeguard issues unique to advanced reactors.

Versatile Test Reactor. The Versatile Test Reactor is a multi-billion dollar user facility that would be built at either Idaho National Lab or Oak Ridge National Lab to irradiate fuels and materials intended for use in certain kinds of advanced reactors. The project is required through the Nuclear Energy Innovation Capabilities Act , signed into law a year ago, and has been championed by Rep. Randy Weber (R-TX), the ranking member of the House Science Committee’s Energy Subcommittee.

Although DOE requested ramping up funding for the project from $65 million to $100 million, the House proposes level funding while the Senate proposes a decrease to $40 million. The Senate report states that while appropriators support the project, they are “concerned” about its “cost, schedule, and prioritization.” It elaborates, “For example, the department has not explained how it intends to fund either the construction or the operations of the reactor, and it will take more than 40 years to fund the design and construction at the funding level requested in the budget. Also, the department has not explained why it prioritizes this project above delivering an advanced small modular reactor or demonstrating an advanced reactor.” The Senate stipulates no funding should go to any activities other than completing the preliminary design and cost estimate that is currently in preparation, and it encourages the department to seek international and private sector partners to help fund the reactor.

High-assay low-enriched uranium. Many advanced reactor designs propose using a fuel known as HALEU, which is uranium enriched to contain between 5% and 20% of the highly fissile uranium-235 isotope by weight. As there is no domestic supply for it, DOE has contracted a demonstration project for HALEU production. However, there are concerns the fuel’s widespread availability would carry a risk of its theft and use in a nuclear bomb development program.

The House and Senate both meet the administration’s request for $40 million for further work on HALEU production. In addition, the House proposes that at least $45 million go toward the recovery of highly enriched uranium from fuel used in naval reactors and research reactors to support HALEU production. However, Senate appropriators state they are “concerned that the department lacks an overall strategy for HALEU, lacks a plan for shipping HALEU, and does not have [a] reasonable estimate of the quantity or timing of HALEU required.” To address such matters, they direct DOE to establish a “team of experts” drawn from the national labs and industry and to contract with a “company experienced in shipping nuclear materials.” Beyond the HALEU production project, Senate appropriators specify DOE should spend a further $10 million on “enrichment and shipping” generally.

Modeling and simulation. With the Energy Innovation Hub for Modeling and Simulation set to complete its 10-year term, the House and the Senate recommend consolidating its funding with the Nuclear Energy Advanced Modeling and Simulation account. Under both proposals, the accounts’ current combined funding level of $59 million would ramp down to $40 million, which is $10 million more than requested.

Fossil Energy R&D

Funding for R&D programs in the DOE Office of Fossil Energy has been relatively steady in recent years, including for its work on carbon capture, storage, and utilization. This year, House appropriators have proposed level funding while their Senate counterparts propose an 8% increase to $800 million. Policy bills currently pending in the House and Senate are seeking large increases for carbon reduction technology programs, partially on the grounds that such technologies can be exported to help reduce carbon dioxide emissions globally.

Carbon capture and storage. Although the House’s proposal of $227 million and the Senate’s proposal of $216 million for carbon capture and storage both represent increases, those amounts are well less than the increase to $520 million called for in the Fossil Energy R&D Act introduced by Rep. Marc Veasey (D-TX) and backed by House Science Committee Democrats. The bipartisan Enhancing Fossil Fuel Carbon Technology Act backed by the leaders of the Senate Energy and Natural Resources Committee also calls for a large investment in these technologies, but the levels of investment it recommends are only partially demarcated from the bill’s sizable proposed investment in advanced coal and natural gas technologies.

Atmospheric carbon dioxide removal. Within their respective recommendations for carbon capture technologies, the House proposes $10 million and the Senate $20 million for R&D related to the removal of carbon dioxide directly from the atmosphere. The Senate also proposes $10 million within EERE’s Advanced Manufacturing program and $20 million within the DOE Office of Science’s Basic Energy Sciences program for related efforts. The House and Senate fossil energy R&D policy bills both recommend $75 million be spent in fiscal year 2020 and would require the establishment of a Direct Air Capture Test Center.

Fossil energy advisory committees. Both the Senate and House reports direct DOE to solicit input on its fossil energy R&D programs from advisory committees. The Senate report notes that, although the department has used fossil energy advisory bodies in the past, they “have been curtailed recently without formal explanation.” The Trump administration is seeking to cut back on federal agencies’ use of advisory committees.

Electricity

R&D within the Office of Electricity focuses on the modernization and reliability of the electric grid. Congress is set to significantly boost its funding, with the House proposing a 28% increase and the Senate 42% to $221 million.

Grid-scale energy storage. DOE currently regards energy storage R&D as a high priority and has proposed an Advanced Energy Storage Initiative that cuts across several of the applied R&D offices and supplants the existing Beyond Batteries initiative. The House and Senate do not specify funding levels for many activities related to the initiative, which is concentrated primarily within EERE. However, the Senate does propose increasing the grid-scale energy storage program budget within the Office of Electricity from $46 million to $51 million, while the House proposes $62 million. Within those amounts, the House and Senate both meet DOE’s request for $5 million for early planning work on a “Grid Storage Launchpad” at Pacific Northwest National Lab, which would consolidate into one facility materials R&D and testing efforts related to grid-scale storage.

North American Energy Resilience Model. DOE sought a $32 million increase in its Transmission Reliability and Resilience program, largely to fund the development of a computer model to assess resilience risks associated with a highly diversified and regionalized electric grid. The House proposes providing about half that increase, stating generally that it supports the work as described in a briefing to its appropriations committee. The Senate proposes a $41 million increase for the program.

Cybersecurity, Energy Security, and Emergency Response

DOE formed an office dedicated to cybersecurity and emergency response R&D in early 2018. Following a budget boost in fiscal year 2019, Congress appears set to make a substantial commitment to the office’s further growth, with the House proposing a 25% increase and the Senate 49% to $179 million.

EMP and geomagnetic disturbances. However, the House and Senate both question DOE’s request for $30 million to establish a “national physical energy system and component testing capability” that would be used to assess the U.S. electric grid’s vulnerabilities to electromagnetic pulses and geomagnetic disturbances. The House requests a report on the rationale behind the proposal, while the Senate states the project should not be funded “if nongovernment facilities are available and can be used.” Its report stresses, “Taxpayer dollars shall not be utilized to duplicate capital equipment and infrastructure capabilities that can, in a classified or unclassified manner, be contracted to universities that can provide these services and capabilities for a fraction of the cost [of] using or enhancing existing capabilities.”