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Budget Reconciliation: The US electric grid requires immediate attention to early stage research at DOE

With the deadline fast approaching to pass a budget for FY 2018, there is a significant risk that critical early stage research programs at the Department of Energy will be severely underfunded. The House voted to take up the Senate’s budget request instead of trying to reconcile the differences between the two bills as a time saving measure. While the Senate bill  provides more support for critical DOE programs than the Trump Administration’s proposed budget or the House bill, it still falls short of the previous Administration’s budget in several important categories.  For example, the Senate bill cuts solar energy research by 57 percent as compared to the FY 2017 enacted budget and proposes to cut research funds for resilient distribution systems by 26 percent.  See Table 1, below, for details.

DOE’s early stage research matters more today than ever before due to the new challenges of ensuring the electric grid has the tools required to continue to navigate historic changes on both the demand and supply sides. Energy consumption has virtually flat-lined in the last few years–a major change from growth rates that averaged 4 percent in the prior 6 decades. Moreover, the business-as-usual electricity supply profile has been upended by low-cost natural gas, innovations in the efficiency and cost of wind and solar energy, and environmental regulations adding to the cost of coal. In the face of these large-scale market disruptions, research is critically needed on electric storage and smart grid technologies, modeling of grid optimization, technology integration and secure  communications, evaluations of market operations and on advanced energy technologies capable of supporting a reliable, resilient, and efficient electric grid of the future. Solar energy requires continued research to address the technical challenges with integrating higher amounts of PV technologies into the grid and to drive down costs for residential and commercial scale installations.

As illustrated in CCAP’s latest paper, Value of DOE Early Stage Research to the Solar Energy Industry, the Department of Energy’s past investments in early stage research have been remarkably successful. Over the last four decades and with bipartisan support, the DOE’s solar PV subprograms have brought down costs, improved efficiency, and enabled a vibrant domestic industry. DOE’s solar R&D work established the foundational knowledge that drives today’s private sector innovation. In fact, the DOE estimates that its efforts have accelerated solar industry progress by 12 years and that without DOE’s involvement the average solar PV module production cost per watt would be 64 percent more costly.

Table 1. Support Levels for Early Stage Research at DOE in millions of dollars

doe-budget-blog-table

Further, the Senate’s report accompanying the energy appropriations bill highlights the need to also retain later stage R&D. In particular, the Senate report finds that the President’s proposed budget “will not successfully integrate the results of early-state research and development into the U.S. Energy system” and “will not adequately deliver innovative energy technologies, practices, and information to American consumers and companies.”

As the budget negotiations advance through the Upper and Lower Chambers, members of Congress should consider the critical role of DOE’s early- and later-stage electric system research to providing the tools and strategies that the US energy industry will need to maintain a reliable, resilient and efficient electric grid well into the future.

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