“By 2011, the American Recovery and Reinvestment Act (ARRA) … will double the generation of renewable electricity from the wind, sun and earth. ARRA will also lead to energy efficiency retrofits in 1 million homes by 2012. And President Obama’s new fuel economy standards would save 1.8 billion barrels of oil. Additional benefits will accrue as the president and Congress finish some 2009 clean-energy initiatives and additional efforts are launched in 2010.”
ARRA, which was enacted in February 2009, was a $787 billion stimulus package. It included $70 billion for energy programmes, including energy efficiency work in homes and government buildings, additional money for states’ efficiency, renewable energy programmes and funding for high-speed rail. When it was passed, Obama said that it “will double the amount of renewable energy produced over the next three years”. Notable funding streams included:
- $11 billion for ‘smart grid’ investments.
- Nearly $9 billion for the Advanced Research Project Agency for advanced energy technology research, carbon capture-and-storage technologies to remove and store carbon pollution from power plants, advanced batteries, and other projects.
- Over $6 billion in grants for state and local governments (plus several billion to modernise federal buildings), for energy efficiency
- $5 billion for low-income weatherisation programmes.
- $4.5 billion for improving the electricity grid (to make it more efficient and better able to deal with intermittent sources of electricity such as wind and solar).
- $2.4 billion for CCS.
- $2.4 billion for electric vehicles.
- $500 million to help workers train for ‘green jobs’.
ARRA also included $20 billion in clean-energy tax incentives for residential efficiency measures, wind and solar power, and efficient cars. For wind energy, this meant a three-year extension of the ‘production tax credit’, with the option for developers to turn the tax credit into a grant, with the government underwriting 30% of a project’s cost. In January 2010, Obama announced the award of $2.3 billion-worth of tax credits to 183 projects. He said that these:
“… will create tens of thousands of high-quality, clean-energy jobs and the domestic manufacturing of advanced clean-energy technologies including solar, wind, and efficiency and energy management technologies.”
His administration has said that ARRA investments in renewable and smart manufacturing and smart grid technologies will create more than 800,000 jobs, and the $5 billion ARRA investment in low-income home weatherisation projects could create another 160,000 jobs (see Climate Progress: A breath of fresh air: Obama’s amazing first year).
Obama has issued an Executive Order to promote “federal leadership in environmental, energy, and economic performance.” This requires federal agencies to increase energy efficiency and reduce fleet fuel consumption. In January 2010, Secretary of Labour Solis announced $150 million in grants (again from ARRA) for training and placement services to help low-income people into economic self-sufficiency through employment in energy efficiency and renewable energy industries.
More ambitious proposals await Senate approval. In December 2009, Obama proposed including residential and industrial efficiency programs as part of any job creation package considered by Congress to combat unemployment. A week later, the House of Representatives passed the Jobs for Main Street Act, which expands existing energy loan programmes to include large-scale residential and commercial energy efficiency projects. The American Clean Energy and Security Bill (ACES), which the Obama administration supports and which has also passed the House of Representatives but not yet the Senate, includes $150 million for nine combined heat and power (CHP) plants and other industrial waste energy recovery projects. The Bill also requires utilities to reduce demand by 5%.
On vehicle fuel efficiency, Obama reached agreement with automobile companies, the Californian government and the trade union to establish the first-ever US greenhouse gas limits for motor vehicles. The Bush administration had blocked efforts by California and 16 other states to set high greenhouse standards. The new agreement is due to be finalised by March this year and should increase fuel economy standards by one-third by 2016.
Around 8Gw of wind capacity was added in the US during 2009. In fact, this was slightly less than was added in 2008 (8.3Gw), but the Obama administration can take credit for the fact that the economic recession has not led to a significant slow down. According to Green Cross International, there was no significant change in US solar policy in 2009 (see Green Cross: Solar Report Card 2009).
ACES would require utilities to generate 15% of their electricity from renewable sources by 2020 (with utilities allowed to meet 3% of the target by means of energy- efficiency measures).
In the past, US support for biofuels has gone mainly to ones such as corn-to-ethanol, which are worse for the climate than oil is (see Biofuels). Energy Secretary Chu promotes ‘second generation’ biofuels, which are better in their direct effect (in that they emit fewer greenhouse gases than oil) but may still have damaging indirect effects, notably leading to deforestation as food needs to be grown somewhere. He favours electric vehicles rather than biofuels and has given more money to these (see below).
In January 2010, he announced awards of nearly $80 Million (from ARRA) for “Advanced Biofuels Research and Fuelling Infrastructure”, including:
- $33.8 million to go a consortium for research into how to:
“… develop infrastructure compatible, biomass-based hydrocarbon fuels. The result will be a sustainable, cost-effective production process that maximizes the use of existing refining and distribution infrastructure.”
- $44 million to go to an alliance aiming to:
“… develop a systems approach for sustainable commercialization of algal biofuel (such as renewable gasoline, diesel, and jet fuel) and bioproducts. [The alliance] will integrate resources from companies, universities, and national laboratories to overcome the critical barriers of cost, resource use and efficiency, greenhouse gas emissions, and commercial viability. It will develop and demonstrate the science and technology necessary to significantly increase production of algal biomass and lipids, efficiently harvest and extract algae and algal products, and establish valuable certified co-products that scale with renewable fuel production. Co-products include animal feed, industrial feedstocks, and additional energy generation.”
This public money will be topped up by $19 million of private money, for total project investments of over $97 million (see U.S. Department of Energy: Secretary Chu Announces Nearly $80 Million Investment for Advanced Biofuels Research and Fueling Infrastructure).
The Department of Energy promised that this money would lead to a full life-cycle analysis of the environmental impacts. That is good news, as it should mean that the direct effects are better than oil. However, the use of land-based biofuels would still increase pressure on forests. Algal biofuels do not have this problem, so that award is progressive, but algal biofuels are still a long way off.
In July 2009, a project called the FutureGen Alliance, a public-private partnership, was awarded $1 billion from ARRA funds to construct a 275Mw pre-combustion coal plant in Illinois. The private sector members of the Alliance will contribute $400 to $600 million. Hydrogen Energy International, a joint venture between BP and Rio Tinto, plans to build a 250Mw pre-combustion CCS plant in California. The Department of Energy gave this project $308 million (and the Californian government $30 million). The Department of Energy has also awarded $100 million to Basin Electric Power Co-operative, to retrofit post-combustion technology to a 120Mw coal power station in North Dakota, which is due for completion in 2011.
These awards mean that the US is ahead of Europe in CCS large-scale demonstration (though the world leader is China – a group of investors, including the US coal company Peabody Energy, five of China’s largest power companies, two Chinese coal companies and the Chinese government, is constructing a 250Mw pre-combustion CCS plant that is due for completion in 2011, and there are plans to expand this to 650Mw by 2016).
In August 2009, Obama announced 48 projects that will receive the $2.4 billion ARRA funding to:
“… accelerate the development of U.S. manufacturing capacity for batteries and electric drive components as well as the deployment of electric drive vehicles”.
This will be divided as follows:
- $1.5 billion to U.S. based manufacturers to produce batteries and their components and to expand battery recycling capacity.
- $500 million to U.S. based manufacturers to produce electric drive components for vehicles, including electric motors, power electronics, and other drive train components.
- $400 million to:
“… purchase plug-in hybrid and all-electric vehicles for test demonstrations in several dozen locations; to deploy them and evaluate their performance; to install electric charging infrastructure; and to provide education and workforce training to support the transition to advanced electric transportation systems”.