Winning the Future on Clean Energy

A global race is underway to develop and manufacture clean energy technologies, and we are
competing with other countries that are playing to win. America has the most dynamic
economy in the world, but we can’t expect to win the future by standing still. The President is
committed to building a new clean energy economy here at home – because the nation that
harnesses the power of clean, renewable energy will be the nation that leads the 21st century. A
clean energy economy supports job growth, environmental
protection, and fiscal health.

To help drive this transition, the President has laid out a  Double the share of
series of ambitious proposals for the Nation. The 2012 clean energy electricity
Budget supports clear progress toward achieving these in 25 years
targets, and builds on the historic steps that the
 Put 1 million electric
Administration has already taken through the Recovery
vehicles on the road by
Act—which included over $90 billion in clean energy 2015
investments. The Budget also reflects a strategy designed
to ensure we are overcoming challenges, taking steps to  Establish the United
achieve our broader climate and energy objectives, and States as the leader in
building the momentum necessary to transition to a clean clean energy innovation
energy economy.

The President’s FY2012 Budget is a reflection of today’s

realities. The funding priorities set out in the Budget reflect the need for shared sacrifice and
tough choices, with reductions to programs that, absent the fiscal situation, we would not cut.
But budgeting is an exercise in setting priorities, and the few areas of increase in this year’s
Budget focus on items that directly address the priorities of innovation, education, and
rebuilding our infrastructure. Key to these is the focus on clean energy technology:

Doubling the share of electricity generated from clean energy sources by 2035. The President
proposes a new Clean Energy Standard, whereby 80 percent – double the current level of 40
percent – of electricity will come from clean energy sources by 2035. This Clean Energy
Standard will help create a market to unleash innovation across a range of energy sources, from
renewable sources to nuclear power, clean coal, and natural gas. In addition, it will be coupled
with new efforts to promote energy efficiency that saves money for American families and
businesses – including a new initiative to catalyze private sector investment and upgrade
commercial buildings such as offices, stores, schools and other municipal buildings,
universities, and hospitals. It will also build on the U.S. Department of the Interior’s efforts to
site more renewable energy projects on public lands than ever before.

Putting 1 million electric vehicles on U.S. roads by 2015. In 2008, the President set an
ambitious goal of putting 1 million electric vehicles on the road by 2015. To reach that goal, the
Budget proposes a new effort to support electric vehicle manufacturing and adoption in the U.S.
through improved consumer rebates, investments in R&D, and a $200 million competitive
program to encourage communities that invest in electric vehicle infrastructure. This builds on
our ongoing efforts to reduce dependence on foreign oil through aggressive steps including
strong fuel economy standards for cars and trucks and significant investments in biofuels.

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Committing to Efficiency through a “Better Buildings Initiative”. Last year, commercial
buildings consumed roughly 20 percent of all energy in the U.S. economy. Improving energy
efficiency in our buildings can create jobs, save money, reduce our dependence on oil, and make
our air cleaner. The President’s Better Buildings Initiative will make commercial buildings 20
percent more energy efficient over the next decade by catalyzing private sector investment through a
series of incentives to upgrade offices, stores, schools and other municipal buildings, universities,
hospitals, and other commercial buildings. This initiative builds on our investments through the
American Recovery and Reinvestment Act (ARRA), and our continued commitment to passing
“HOMESTAR” legislation to encourage American families to make energy saving upgrades in their
homes.

The Clean Energy Strategy in the Budget. The 2012 Budget focuses on research and
development as the first step in a broader approach that employs all the tools of government to
pull in the same direction for this key priority. This strategy is designed to create the conditions
needed to transition to a clean energy economy and mobilize private-sector investment clean
energy technologies.

The budget includes increased funding for clean energy basic research at key basic physical
science agencies, such as the National Science Foundation and the Department of Energy’s
Office of Science. Building on the knowledge of basic science, the Budget also provides
significant increases in applied energy research and development—with costs and knowledge
shared with industry—to drive innovation. The Budget seeks to reinforce the new approaches
to energy research by adding three new energy innovation hubs and calling for enough funds
for ARPA-E to more than double its portfolio of cutting edge energy research. The Budget
focuses on those areas with the lowest costs and greatest potential for improvement. In
addition, this broader strategy uses targeted incentives to promote deployment of these
technologies into the marketplace, including:

 Loan guarantees  “Race to the Green” incentives to promote

 Reverse auctions voluntary and experimental regulatory
 Consumer tax rebates reform and other investments at the local
 First of a kind engineering and level
licensing support for small modular  Limited tax incentives to encourage
reactors o clean energy manufacturing and
o clean energy projects.

To help pay for these programs and align policies toward new clean energy technologies, the
Budget proposes to repeal over $4 billion per year in inefficient fossil fuel subsidies, and the
Administration will continue to work in a bipartisan fashion to put in place market-based
incentives to promote US leadership in the clean energy marketplace.

The 2012 Budget. Overall, the Budget includes $8.7 billion in Federal investments in clean
energy technology1 programs across the government. These programs focus mainly on the first

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Clean energy technologies are energy generation technologies that are renewable or alternative to traditional fossil
fuels and technologies or practices that help improve energy efficiency or reduce energy consumption.

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components of the strategy – research and development to improve the technologies of today
and create the technologies of tomorrow. However, this investment also includes on-the-
ground actions that focus on accelerating the diffusion of clean energy technologies in the
marketplace.

Funding for Clean Energy Technology Programs

FY 2012 Budget

($ in millions)  2010* 2012

Environmental Protection Agency                 134                  130  
Department of Agriculture                 803                  534  
Department of Commerce ‐ NIST                   34                    63  
Department of Defense                 555                  548  
Department of Energy               4,146               6,340  
Tennessee Valley Authority                     6                      6  
Department of Housing and Urban Development                   50                     ‐    
Department of Transportation                 149                  134  
National Aeronautics and Space Administration                 228                  282  
National Science Foundation                 373                  577  
Nuclear Regulatory Commission                 100                    93  
Total 6,577 8,707
* FY 2010 data excludes earmarks

Beyond the $8.7 billion, the Budget also supports a variety of other efforts that use different
mechanisms to drive increased deployment, including loan guarantees, tax credits, and other
incentives. Examples of these deployment efforts include:
 Up to $36 billion in additional loan guarantee authority for nuclear power plants and
$200 million of new budget authority to support up to $2 billion of loans for innovative
renewable energy and energy efficiency projects;
 $5 billion in Section 48C tax credits for renewable energy manufacturing facilities;
 Extension of the Section 1603 tax credit for renewable energy deployment; and
 Accelerated permitting of new solar, wind, and geothermal electricity generation
capacity on Federal lands through the Department of the Interior.

Energy Efficiency
Since improving our energy productivity is often the lowest cost means of increasing our
competitiveness, improving the environment, and reducing dependence on fossil fuels, the
Budget targets improvements in all major areas of energy use: buildings, vehicles, and
industrial energy use.
 Department of Energy: More than doubles energy efficiency investments, focused on
R&D, with initiatives that increase funding for electric vehicle, battery and energy
storage R&D (including a new Batteries and Energy Storage Energy Innovation Hub),
industrial technology R&D (including a new Critical Materials Energy Innovation Hub)

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 and building technology R&D. The Administration is also calling for passage in of the
$6 billion Homestar program to promote household energy efficiency.
 Department of Defense: Includes a wide range of clean energy programs, with a focus
on increased war fighting capability by saving energy and simplifying logistics. DOD
investments include projects to reduce carbon-based energy use, including development
of more efficient turbine engines, alternative energy sources and storage technologies
that could reduce the need for local generators, and lightweight materials for use in
vehicles.
 Environmental Protection Agency: Increases Energy Star funding by $3 million to $56
million, enhancing compliance and verification of Energy Star products and
strengthening residential and commercial buildings programs.

Renewable Energy
Renewable energy is domestically produced energy such as solar, wind and geothermal that
uses technology to capture natural energy flows. Research efforts over the last few decades
have lowered the cost of many of these technologies to a point where they are poised to enter
the market. These key investments will insure US leadership in these industries.
 Department of Energy: More than a 70 percent increase in renewable energy R&D
investments, including support for a $1 a Watt initiative to make solar energy cost
competitive; increased funding for 24-hour geothermal renewable energy; and increased
funding for wind energy R&D.
 National Science Foundation: $577 million for grants to universities for long-term core
research activities and more targeted cross-agency initiatives in sustainability, advanced
manufacturing, nanotechnology, information technology, and biotechnology.
 National Institute of Standards and Technology: $16 million for research and
development in solar energy generation, specifically to develop measurement tools that
would enable development of advanced solar cell technologies. The NIST budget also
provides $22 million for research and standards development to support interoperable
and secure Smart Grid devices.

Nuclear Energy
Nuclear Energy is a well developed source of electricity generation without greenhouse gas
emissions. As such, it will be an important part of the future energy mix in order to achieve our
climate and clean energy goals.
 Department of Energy: $741 million for Federal efforts to research and develop nuclear
energy technologies, including generation, safety, waste storage and management, and
security technologies. With 104 operating reactors in the U.S. today, nuclear provides
about 20% of U.S. electricity. Safely extending the life of these reactors and deploying
new technologies that have cost, security, and other benefits can contribute to reaching
our domestic climate and clean energy goals.

Carbon Capture and Storage

Finding a way to continue to use coal, one of the most abundant domestic fossil fuels, in a way
that does not endanger the climate, is a key goal of these clean energy investments. Carbon
capture and storage technology could also be adapted for use in natural gas applications.
 Department of Energy: Supports clean coal R&D with $453 million for a fossil energy
R&D portfolio focused on carbon capture and storage technologies. The Budget focuses

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 resources on activities that have potential benefits for both the existing fleet and new
power plants ̶ specifically, post-combustion capture R&D and geologic carbon storage
R&D.

Other Clean Energy Activities

Beyond the funding outlined above, there are a variety of efforts all pulling in the direction of
promoting US leadership in the clean energy future.
 Department of Agriculture: $6.5 billion in financial assistance to electric cooperatives,
research institutes, and small businesses to promote the expansion of renewable energy
and biofuels. Of this amount, $6 billion will be targeted to decrease the Nation’s reliance
on fossil fuels and promote renewable and clean energy at electric generation,
transmission, and distribution sites in rural communities. The President’s Budget
proposes a program level of approximately $400 million to support biofuels.
 Department of the Interior: $73 million (a +$14 million increase) for renewable energy
development activities. A primary emphasis of this funding is to facilitate the review
and permitting of new solar, wind, and geothermal electricity generation capacity on
Federal lands, with the goal of permitting at least 9,000 megawatts of new solar, wind,
and geothermal electricity generation capacity on Department of the Interior-managed
lands by the end of calendar year 2011.
 Environmental Protection Agency: Supports greenhouse gas permit programs to drive
clean energy and energy efficiency with $25 million in new funding for states and $5
million for EPA technical assistance.
 Environmental Protection Agency: $6 million in new funding for EPA to develop and
implement mobile source standards that push new clean, low carbon, efficient vehicles
that save consumers money.
 Environmental Protection Agency: $7.5 million to develop New Source Performance
Standards to promote the use of already existing, proven cost-effective technologies that
will help increase the efficiency of new and existing facilities.
 Housing and Urban Development: Building on the findings of the Recovery through
Retrofit (RTR) report, the Federal Housing Administration (FHA) at HUD has a
announced a new FHA PowerSaver loan guarantee program that will offer homeowners
up to $25,000 to make energy-efficient improvements of their choice, including the
installation of insulation, duct sealing, doors and windows, HVAC systems, water
heaters, solar panels, and geothermal systems. For this Pilot Program, HUD will deploy
up to $25 million appropriated in 2010 for a single family Energy Efficient Mortgage
Innovation Fund pilot program. HUD will utilize those funds primarily to provide
incentive payments with grant funds to participating lenders to support approved
activities, with remaining funds available to support evaluation of the program.

Leading by Example. To complement all these efforts, the government is leading by example,
making cost-effective investments in renewable energy, water and energy efficiency and
reducing petroleum use in its own buildings, facilities, and vehicles in order to reduce its
carbon footprint and its greenhouse gas (GHG) emissions. More than 50 federal agencies
developed annual Sustainability Plans to manage and track progress in reducing Federal GHG
direct emissions by 28% and indirect emissions by 13% by 2020. Examples include:

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 The Budget proposes granting NASA new authority to partner with local utilities in
constructing clean energy power plants on NASA property to service both NASA
Centers and their surrounding communities.
 GSA is doubling its annual investment in its energy and water conservation measures
program from $20 million to $40 million in the Budget to help it meet a 30% reduction in
building energy intensity by 2015 and has established policy to make all new building
construction achieve LEED Gold certification.