The 2016 Budget: Impacts on Energy Efficiency & Renewable Energy

See our related issue brief, Obama FY2016 Budget Proposal: Sustainable Energy, Buildings, Transportation and Climate

The Environmental and Energy Study Institute (EESI)—in partnership with the House Renewable Energy and Energy Efficiency Caucus—held a briefing on the energy efficiency and renewable energy implications of the fiscal year (FY) 2016 budget proposal released by President Obama on February 2. The Administration's budget proposal would invest $7.4 billion in clean energy technology programs across all agencies, led by the Department of Energy (DOE), the Department of Defense, the National Science Foundation, and the Department of Agriculture. This briefing focused on the DOE's Office of Energy Efficiency and Renewable Energy (EERE), whose budget would increase to $2.7 billion.

Speakers from the Department of Energy and the Congressional Research Service (CRS) gave an overview of the EERE budget requests, explained the Office's budget priorities, and provided context on how these priorities and trends compare to prior years.

• Michael Carr, Senior Advisor and EERE Principal Deputy Assistant Secretary, Department of Energy Office of Energy Efficiency and Renewable Energy (EERE), emphasized that EERE's mission is to create and sustain American leadership in the global transition to a clean energy economy. In particular, the Agency’s role is to break down barriers to market entry, and fund high-impact research, development, and demonstrations to make clean energy as affordable and convenient as fossil fuels.
• Carr outlined the administration's major energy goals:
  • Reduce greenhouse gas emissions by 17 percent by 2020, 26-28 percent by 2025 and 83 percent by 2050 from 2005 baseline emission levels.
  • Generate 80 percent of electricity from a diverse set of clean energy resources by 2035.
  • Double energy productivity by 2030.
  • Reduce net oil imports by half by 2020 from a 2008 baseline.
  • Reduce carbon dioxide emissions by 3 billion metric tons cumulatively by 2030 through efficiency standards implemented between 2009 and 2016.
• Carr highlighted many recent EERE accomplishments. In sustainable transportation, its SuperTruck program exceeded its goal of 50 percent improvement in freight efficiency. Three commercial cellulosic ethanol plants that came online in 2014 were catalyzed by DOE support. The cost of U.S. wind energy has decreased by more than a third over the last five years alone, in large part thanks to DOE-funded research.
• The FY2016 budget reflects the Administration's strong commitment to clean energy with increases across all of EERE's main programs. In all, EERE’s budget would receive an additional $800 million (over 2015 enacted levels), with a particular focus on advanced manufacturing, vehicle technologies, and solar energy technologies.
• Fred Sissine, Energy Policy Specialist, Congressional Research Service (CRS), noted that EERE’s request for an additional $809 million represents 42 percent of the total increase of $2.5 billion requested by DOE.
• Nevertheless, EERE's total budget request of $2.7 billion is still less than 10 percent of DOE's total 2016 request of $29.9 billion.
• Advanced Manufacturing represents the largest EERE program increase, at 102 percent. Geothermal (75 percent increase), Vehicles (59 percent), Buildings (54 percent), and Solar (45 percent) round out the top five programs.
• Over a 66 year period (1948 to 2014), nuclear energy has received 49 percent of DOE funding, followed by fossil fuels (25 percent). Renewables are at 12 percent, and energy efficiency at 10 percent.
• Over the past nine years (2005-2014), nuclear energy's share has decreased to 27.4 percent of total DOE funding, but it still represents the largest program. It is followed by fossil energy (23.5 percent), renewables (18.5 percent), and energy efficiency (15.8 percent).
• Scott Sklar, Chair, Steering Committee, Sustainable Energy Coalition and President, Stella Group, Ltd., showcased the 12 disruptive technologies identified by McKinsey & Company, a consultancy. He noted that these disruptive technologies, which include advanced materials, 3D printing, and battery storage, will all have major impacts on the energy sector.
• Sklar explained that we are moving from central ‘dumb’ power plants to ‘smarter’ plants and distributed energy installations that use energy storage and smart systems to manage loads. According to Sklar, “That is the self-healing grid of the future. It will be more economic, it will be more reliable, it will be cleaner, it will use less water…”
• According to Bloomberg, new private-sector investment in clean energy reached $310 billion in 2014. This is in addition to nearly a trillion dollars in government investment.
• The International Renewable Energy Agency (IRENA) analyzed the levelised cost of electricity from utility-scale renewable technologies in both 2010 and 2014. Most are now within the fossil-fuel power cost range, with hydropower, onshore wind, and biomass performing particularly well, and solar catching up quickly.
• Sklar also noted that, according to IRENA, renewable energy accounts for 6.5 million jobs across the world.
• Sklar concluded that energy efficiency and renewable energy are neither Democratic nor Republican issues: they are technologies. And, with all the threats facing the grid (terrorism, extreme weather, cyber security breaches, human error, climate change…), it is in the nation's interest to have a varied energy portfolio, to avoid being too dependent on any one source.