Final FY21 Appropriations: DOE Applied Energy

Most of Department of Energy’s applied energy R&D programs are receiving flat or modestly increased funding under the department’s fiscal year 2021 appropriation, following a recent trend of substantial growth. The appropriation does not employ the “emergency” spending mechanism that House Democrats had proposed using to stimulate the economy, including by boosting DOE support for carbon reduction, advanced nuclear, and renewable energy R&D and for energy-efficient buildings and clean energy manufacturing projects.

The appropriation also falls well short of the levels recommended for this fiscal year in the Energy Act , which was enacted through the same legislative package as the appropriation. Depending on how the political dynamics surrounding federal spending play out this year in Congress, lawmakers could feel freer to begin implementing the act’s funding recommendations in fiscal year 2022, when statutory budget caps expire.

An explanatory statement accompanying the appropriations legislation provides detailed funding and policy direction, and language from the House Appropriations Committee report conveys additional direction unless specifically negated in the final statement. The Senate Appropriations Committee did not formally submit its report, but language from a publicly released draft is incorporated in the explanatory statement. For summary tables and detailed figures, consult the FYI Federal Science Budget Tracker .

Advanced Research Projects Agency–Energy

Funding for ARPA-E is increasing by $2 million to $427 million, $8 million less than called for in the Energy Act. Notably, the act also expands the agency’s mission to encompass work on nuclear waste cleanup and the resilience, reliability, and security of energy systems.

Nuclear Energy

The Office of Nuclear Energy’s budget is increasing by $14 million to $1.51 billion.

Versatile Test Reactor. Congress is pumping the brakes on the Versatile Test Reactor project, reducing its annual budget from $65 million to $45 million. The proposed facility would provide a U.S.-based capability for irradiating fuels, components, and materials intended for use in certain advanced reactor designs, and DOE estimates its total construction cost to be between $2.6 billion and $5.8 billion. The project has been a high priority for some members of Congress, most notably Rep. Randy Weber (R-TX), the ranking member of the House Science Committee’s Energy Subcommittee. The Energy Act endorsed the project and the Trump administration’s request that it receive $295 million this year. However, Senate appropriators have previously expressed skepticism over whether the project is worth the cost. In line with that view, the explanatory statement directs DOE to reformulate it as a public-private partnership, potentially using a funding approach that would reimburse its backers once defined project milestones have been achieved.

Reactor demonstrations. In its second year, funding for DOE’s Advanced Reactor Demonstration Program is increasing by $20 million to $250 million. Within that, Congress increases the budget for the new National Reactor Innovation Center at Idaho National Lab from $20 million to $30 million, of which up to half is for pre-construction activities for a demonstration reactor test bed. DOE established the demonstration program last year at the direction of congressional appropriators and it has already awarded cost-sharing agreements to the companies TerraPower and X-energy, expecting to expend $3.2 billion on them over seven years, pending funding availability. The program has also made smaller awards for developing new reactor design concepts and refining established concepts. The Energy Act provides statutory authorization for the program and had recommended its annual funding increase to $405 million in this year’s appropriation.

Transformational Challenge Reactor. Congress meets DOE’s request to increase funding for the Transformational Challenge Reactor project at Oak Ridge National Lab from $23 million to $30 million, overriding the House’s proposal to cancel its funding. The project aims to demonstrate capabilities for building a micro-reactor using additive manufacturing techniques.

Nuclear fuel security risks. DOE is directed to initiate a National Academies study on “non-proliferation and security risks and international safeguards challenges associated with advanced nuclear reactors and related fuel cycle technologies,” focusing in particular on high-assay low-enriched uranium (HALEU), uranium-plutonium mixed oxide fuel, and fuel cycles that require separating plutonium from spent fuels. The study is to be limited to the technical considerations surrounding different policy options without making value judgements about their relative desirability.

Energy Efficiency and Renewable Energy

The budget for the EERE office is increasing by $16 million to $2.86 billion, leveling out after a period of significant growth.

Renewable energy. Combined funding for its renewable energy R&D programs will increase $4 million to $646 million. Funding for wind energy is increasing by $6 million to $110 million, of which $63 million is directed to offshore wind energy, a $10.5 million increase. The budget for geothermal technologies is decreasing $4 million to $106 million. The House report specifies funding of $20 million for the Frontier Observatory for Research in Geothermal Energy, a research and test site in Utah, which the Energy Act stipulates may be expanded to up to two additional sites. Funding for water power is increasing $2 million to $150 million while solar energy remains steady at $280 million. Drawing from across renewable energy programs, DOE is instructed to allocate $40 million for activities related to integrating renewable energy into the electricity grid.

Advanced manufacturing. Congress provides level funding of $396 million for EERE’s advanced manufacturing programs, which includes continued support for the Energy-Water Desalination Hub and Critical Materials Institute and provides for the fifth and final year of the Cybersecurity in Energy Efficient Manufacturing Institute awarded last year. The appropriation also includes $14 million to establish a new Clean Energy Manufacturing Innovation Institute.

Fossil Energy

The budget for the Office of Fossil Energy is remaining level at $750 million. The Energy Act calls for a marked increase in the office’s budget and for shifting its focus to carbon emission mitigation.

Carbon capture, utilization, and storage. This year, the combined budget for CCUS technology is increasing 5% to $228 million. In addition, Congress directs the office to contribute at least $40 million to a department-wide effort to advance negative emissions technologies, including at least $15 million for work on technologies that capture carbon dioxide directly from the atmosphere. EERE and the DOE Office of Science are together directed to provide a further $32.5 million for negative emissions R&D.

Coal FIRST. The Trump administration proposed to more than double funding for the Advanced Energy Systems program to support its recently launched Coal FIRST initiative, the office’s “flagship” effort to develop a coal-fired power plant that produces zero or near-zero emissions. The House instead proposed cutting the Advanced Energy Systems program budget from $120 million to $80 million, with “up to” $15 million for Coal FIRST, but the final report cancels that direction and keeps the overall program budget essentially level at $122 million.

Energy Storage

Grid Storage Launchpad. Within the Office of Electricity, $80 million is for energy storage activities, an increase of $24 million. Most of the increase is allocated to construction of the Grid Storage Launchpad facility at Pacific Northwest National Lab. DOE had requested $40 million for the facility, which aims to provide modernized and expanded research capabilities for the development, testing, and independent validation of materials and systems for grid-scale batteries. The department estimates it will cost between $57 million and $77 million in total to build.

Energy Storage Grand Challenge. Congress directs DOE to provide a development roadmap and implementation plan for its crosscutting Energy Storage Grand Challenge initiative, outlining program goals through 2030 and breaking down the roles and responsibilities of each participating program office. It stipulates that the roadmap should focus on “reducing costs and improving the performance of a diverse set of grid-scale storage technologies to meet industry needs, improve reliability and environmental performance of the electricity grid, and reduce greenhouse gas emissions.” While the House report instructed DOE to allocate at least $205 million toward energy storage activities, drawn from across the department, the final statement cancels that direction and does not specify a total budget. The Energy Act directs DOE to unify its energy storage efforts via a new crosscutting Energy Storage System Research, Development, and Deployment Program and recommends that it receive $201 million in funding annually.