Preliminary Policy Recommendations for Enhancing Energy Innovation in The United States

February 19, 2009

A new paper by Laura Diaz Anadon, Kelly Sims Gallagher, Matthew Bunn and Charles Jones in the Belfer Center for Science and International Affairs offers the Obama administration policy recommendations on energy challenges and areas to spend money in energy development.

The incoming Obama Administration and the 111th Congress face enormous challenges and opportunities in tackling the pressing security, economic, and environmental problems posed by the energy sector in the United States and worldwide. Improving the technologies of energy supply and end-use is a prerequisite for surmounting these challenges in a timely and cost-effective way.

Accelerating the development and deployment of advanced energy-supply and end-use technologies will require a comprehensive strategy integrating efforts from invention to deployment, including strong leadership, alignment of policy incentives, consistency of policies, and a long-term view. In the following sections we outline our preliminary recommendations for near-term actions to strengthen the U.S. effort to develop and deploy advanced energy technologies. Our analysis is continuing, and we will be publishing long -term policy recommendations later this year. The budget recommendations in this paper are only for fiscal year (FY) 2010. They represent minimum levels based on ramping up from FY 2008 levels where such increases are most needed. They do not take into account the amounts provided in the recently approved economic recovery package.

Increase the Department of Energy (DOE) budget for energy research, development, and demonstration (ERD&D) to $6,060 million in FY 2010 (from $4,173 million in FY 2008), distributed as follows:

Basic Energy Sciences to $1,500 million
Progress in basic energy sciences is essential to developing new energy technologies. The Office of Science has engaged in planning and developed new initiatives which support the call for $1.5 billion in FY 2010 found in the FY 2009 budget request.

Fossil Energy to $1,700 million
Carbon capture and storage has been identified by most analysts as an essential component of any comprehensive plan to reduce carbon dioxide emissions worldwide. This level of funding is required to begin a series of commercial-scale carbon capture and storage demonstrations in various conditions.

Electric Transmission and Distribution to $220 million
Smart grid technologies are needed to ensure reliable and efficient electricity delivery. There should be both a smart grid R&D program and regional demonstration projects.

Energy Efficiency to $770 million
Significant opportunities to improve energy performance exist in vehicle technologies, building technologies, and energy storage.

Renewable Energy to $850 million
Opportunities in the portfolio of renewable energy technologies — wind, geothermal, solar, and biomass — justify a substantial investment increase over FY 2008 levels.

Hydrogen to $220 million
There are more opportunities in fuel cell technology than are being explored, justifying a modest increase in the hydrogen programs.

Nuclear Fission to $350 million
Nuclear fission RD&D should focus on improving the factors that have limited nuclear power's potential as an energy option — cost, safety, security, proliferation-resistance, and waste management. Funding for the Global Nuclear Energy Partnership should be redirected to a portfolio of long-range R&D on improving both open and closed fuel cycles, and support for reactor designs the private sector can carry forward itself should be reduced.

Nuclear Fusion to $450 million
Fusion is a long term prospect that also advances basic science. The U.S. must meet its commitments to ITER and maintain other fusion work.

For more recommendations and information, including a PDF of the paper, visit the Belfer Center's Web site.

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