Over a year after the Recovery Act of 2009 was signed into law, the U.S. Department of Energy says that $32.5 billion of the $36.7 billion it was authorized to spend is “spoken for,” and nearly 5,000 projects have been funded. The department has selected all but 1 percent of the proposals that will receive grants and contracts. So far, however, only $3.5 billion has actually been spent, and the money has only directly created 22,841 jobs.
This week, the DOE’s senior advisor for Recovery Act implementation, Matt Rogers, provided an update on the department’s progress in identifying projects that will receive funding. While much of the Recovery Act focused on funding for near-term recession relief, including tax relief for individuals and support for local and state governments, the funding allocated to the DOE was mainly for projects with longer term payoffs, including building infrastructure such as wind farms and battery factories and conducting research.
Rogers highlighted the battery industry as an area that needed investment, noting that while much of the technology was first developed in the United States, “we’ve allowed 99 percent of battery manufacturing to move over to Asia.” Currently there are only three battery factories operating in the U.S., he says. Through the Recovery Act and related incentive programs, 30 battery and battery component factories are now being built. This will result in the capacity to build enough batteries for 500,000 electric vehicles a year, “whereas today we can hardly touch the topic,” Rogers says.
Meanwhile, the DOE is funding research projects that could increase the performance of batteries threefold to sixfold, while reducing costs by 90 percent or more. Rogers noted that today’s batteries can store about 100 watt-hours per kilogram; research projects aim to increase that to as much as 600 watt-hours. He also said batteries cost at least $1,000 per kilowatt-hour (although automakers such as GM say that batteries are less than that now); the factories being constructed are supposed to cut this in half by 2012. Long-term research projects aim to reduce it to as little as $50 per kilowatt-hour by 2020 via new materials and battery designs. Mass-market electric vehicles with a range of around 80 miles will soon be on the market (although some more expensive electric cars already have a much greater range); the goal is to make practical, affordable electric vehicles with a range of 400 miles.
The DOE’s general approach–funding near-term demonstration plants or factories at the same time as long-term research projects–is being taken in other areas of energy investment. Rogers mentioned 19 pilot biofuels plants as well long-term research efforts to make fuels out of carbon dioxide using energy from the sun. The DOE is also funding large-scale demonstration facilities for capturing and storing carbon dioxide at five power plants and more than a dozen industrial facilities, and is investing in developing new carbon-dioxide capture technologies, such as synthetic analogues of biological enzymes. The DOE has taken a similar approach with investing in more efficient lighting and solar-power technologies.
The DOE has also helped the U.S. Treasury Department sort through applications for grants and tax credits for building factories or installing solar panel arrays and wind farms. Rogers says these programs have been “among the most successful programs under the Recovery Act.” So far, $2.3 billion in tax credits has been directed to help fund 183 factories; about 700 renewable-energy projects have been helped with $3.3 billion in grants.
Two out of three applicants for the manufacturing tax credits had to be turned down, however, due to a lack of funds. President Obama wants Congress to add $5 billion to this program as part of a jobs bill this summer.
Similarly, many renewable-energy projects haven’t been funded because of delays in getting construction approved by state and federal agencies. The administration isn’t planning to extend these deadlines, though. Instead, Rogers says, it is looking to a comprehensive climate and energy bill that would support such projects in the future. Such a bill would include some sort of long-term signal to investors, such as a cap on carbon emissions that would attract capital for such installations. An energy and climate bill was passed by the House last year, but recent attempts to introduce such a bill in the Senate have stalled.