Matt Rogers of the Department of Energy discusses how $36.7 billion from the Recovery Act is helping to define the future of green power--and the agency itself
By Katherine Harmon
FLASH OF FUNDING: The Recovery Act, signed into law last February, made available the largest investment in renewable energy development in history.
Can wind turbines help to get the U.S. economy spinning again? The U.S. Department of Energy (DoE) is banking on the notion that they will at least help. With the $36.7 billion it received from the 2009 American Recovery and Reinvestment Act last February, the agency is making historic investments in the energy industry.
Not all of the money is going into building better turbines, of course. The agency is also putting big green toward a host of other emission-lowering projects, including better batteries ($2 billion), geothermal technologies ($400 million) and carbon capture and storage ($3.4 billion).
Whereas the largest chunk of change ($16.8 billion) is going to renewable energy and energy conservation, one of the smallest cuts of the DoE stimulus payout ($1.6 billion) is going toward scientific research. In a congressional hearing on the DoE's 2011 budget earlier this month, Energy Secretary Steven Chu noted that science, however, was a crucial part of future development: "With every initiative the department undertakes, sound science must be at the core."
Regardless of where the contracts, grants and loan guarantees are heading, though, little of the economic juice has gotten out to jump-start the energy field—or job market. Like many federal agencies, the DoE has yet to spend more than a small fraction (about $2.1 billion, or 6 percent) of its total allocation.
"Everywhere down the food chain we want this money out as fast as possible because it's fundamentally jobs—as well as saving money faster," Chu noted in the hearing with the Senate Committee on Energy and Natural Resources. "Many of these organizations aren't used to dealing with that magnitude of money or dealing with some of the federal rules," he said of the local agencies charged with doling out much of the money, after expressing disappointment with the rate of disbursement.
"The public sector must invest in research and innovation not only because the private sector is sometimes reluctant to take large risks, but because the rewards will be broadly shared across the economy," Chu noted in his formal testimony (pdf). In the year since the stimulus was passed, what has the DoE been doing to fulfill these charges?
We spoke with Matt Rogers, the Energy Department's senior advisor for Recovery Act implementation about the agency's stimulus boost.
[An edited transcript of the interview follows.]
How significant was the amount of stimulus money for energy?
The Recovery Act provided, overall across the federal government, about $80 billion. It's a very significant commitment to energy—and in particular to clean energy and R&D in terms of how we can accelerate commercial deployment. For example, we have $3.2 billion for new battery factories in the U.S. Historically the deployment part has not been well funded.
In terms of renewable energy and energy conservation, what are you funding now, as opposed to a year ago, before the stimulus was signed?
What we're excited about is we've been able to fund a portfolio of technologies that hold the potential to change the equation of energy technology. We have really innovative proposals that we can take a relatively early technology and get out a 10-fold efficiency increase. Today a battery costs roughly $1,000 a kilowatt-hour. When the new battery factories open in 2012, we will be able to produce them for $500 a kilowatt-hour, with the eventual goal of reducing that to $100 a kilowatt-hour. We're doing the same thing in carbon capture and storage, and the same thing in some of the renewable areas—with some really innovative approaches to solar and some fascinating approaches to wind in terms of finding ways to make them smaller and more effective. It's being able to fund that portfolio that put us on a path to having renewables be cost-competitive with the grid.
By far the biggest chunk of stimulus funds is going to energy efficiency and renewable energy, and the smallest is going to advanced research. How was this distribution decided?
The big-bucket breakdowns were decided by Congress as part of the guidance given to DoE, so the $2.3 billion for electric batteries and electric transportation, all of that was really part of the design of the Recovery Act. In the DoE we took those big buckets and turned them into 144 specific projects that we are going to fund and track. Moving through the selection and evaluation process was a massive peer review project over the summer.
The Recovery Act money has made a big difference in the DoE's budget. How was all of that extra money handled?
Just the sheer operational challenge was quite a significant task, so we, for example, had to get 4,500 reviewers involved in the process. We wanted to make sure we increased the quality of the review pool at the same time so we get high-quality decisions coming out of that. But it's been good to really upgrade the qualities of our reviewing process.
Many federal agencies have so far spent a small fraction of allocated funds—in the DOE's case, only about 6 percent. What has been taking so long?
Almost all of the $36.7 billion has recipients identified. We have obligated $25.5 billion. Once the recipient has the obligations, they are getting those funds under contract, and once they have spent the money, we reimburse them. The important part we are seeing is getting a lot of these projects started. For example, the Thomas Jefferson Lab is building a large continuous electron beam accelerator facility, and it has well over 60 percent of the project contracted out, but it doesn't actually pay for that until the equipment has been delivered, installed and is working correctly.
When do you expect the majority of the money to have been spent?
We're expecting by the end of 2011 we'll have 70 percent of it show up in the reimbursement column. We'll know better by the end of March.
What can be done to get the funds out faster?
One of our key tasks right now is working with each of our participants to expedite their rate of spending. Now, we're working with more than 5,000 individual recipients. Each one of them has their own spending challenges, but we share a goal of making sure we get the jobs working in the marketplace and get this research underway.
Do you have any concern about what happens to all of these projects when the stimulus money does come to an end?
I think that what we've done is make a down payment on accelerating the pace of technological innovation. There are two components to what should happen next. First, we need a set of long-term incentives in the marketplace. The private sector needs clear market incentives to make those investments. Second—and you can see the beginnings of this in our 2011 budget—is making sure that we continue to play the appropriate role, as the federal government, in each of these areas. Then, I think this actually can become something that has real momentum. If I look at the portfolio of innovation we've been able to fund, I get really excited.
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