 I think we're going to get started. Let me just on behalf of Congressman Van Hollen, I'm Bill Parsons. I work for Congressman Van Hollen. He's one of the co-chairs, along with Roscoe Bartlett and my colleague Lisa Wright, say hi. Hello. And we want to welcome you, and really glad you took the time out to be here. The House Renewable Energy and Energy Efficiency Caucus, just a few words about it, it's been around since 1996, makes it one of the older congressional caucuses, sort of ongoing, running on an ongoing basis. Also one of the largest. Technically, we say we're bipartisan. I like to say we're nonpartisan. It's a forum for discussion about the state of renewable energy and energy efficiency as regards the industry, as regards policy and so forth. We have two primary tools that we use to communicate with our membership. It's a weekly events calendar and a weekly clipping service to stay current. The membership, as of today, I'm proud to tell you we have 157 members representing 39 states, the District of Columbia, and three territories. We're always looking for more, and Lisa will say a little bit about that in a moment. We historically have done two events, two marquee events a year. This is the first. The annual budget briefing is the first. I always like it because you kind of are following things with the clip service and the events and so forth, and the budget release and the briefing around it gives us our first kind of benchmark to chew on and to react to and frankly, to plan going forward. And I must tell you, just this year, Carol Werner, who works with EESI, with whom we often partner on events, as well as other outside groups, Sustainable Energy Coalition and so forth, will be introducing our panelists in greater depths. But I'm really pleased, Fred and Henry and Scott, that you took time out, again this year, to join us and to share your expertise with us. Really honored that you're here. With that, so I'm going to leave this, I'm going to turn it over to my co-conspirator here, Lisa Wipe, who's got a few words of encouragement for caucus membership. Hi, thank you and welcome. It was actually the first time for this particular Congress in 2012 that for the first time, this non-partisan caucus, which has a structure of having co-chairs from each of the major parties and two vice chairs from each of the major parties, ended up having co-chairs from the same state. And that was just as a part of the general evolution of leadership within the caucus. Congressman Bartlett joined the caucus, I can't even remember when. But after being an active member for many years, he was invited and stepped up to the plate to a junior leadership position of being vice chair. And at the end of the 111th Congress, the veteran chairman is Congressman Chris Van Hollen, who's our neighbor from the 8th District of Maryland. And at the end of that Congress started this Congress. Congressman Bartlett was the last leader standing among the Republicans and so was very honored to join Congressman Van Hollen as co-chairman. Every Congress we start over new, we have about 90 new members of the 112th Congress of our 435. And members come in and they don't know what tools are available to them to sort through the deluge of information that we receive. And the much often touted information that gets a lot, most of the attention are interpretations of, well, facts are not a part of most of the material and information that come to members of Congress. It's their point of view. The Renewable Energy and Energy Efficiency Caucus exists as a forum for sharing facts. That is why we're here. That's why we consider ourselves to be nonpartisan. That is why I'd like to put you on the spot if I may. Would you raise your hand if you are congressional staff? I won't put you on the spot if you are not currently a member of the caucus, but I would strongly encourage you to join. If your boss has any interest in helping his constituents to save money, because that's what you do through energy efficiency, if your boss has any interest in advancing domestic sources of sustainable energy, I would encourage you. Have your boss join the caucus because what you will get is a steady resource supply of facts upon which your boss can base his or her decisions about energy. And with that pitch, I also want to add to what Bill said, that we are so grateful to be able to partner often with Carol Werner, who's the executive director of the Energy and Environment Studies Institute. And for many years now, this particular briefing is the premier briefing that is open to every member of Congress, every member of staff providing historical perspective as well as the current provisions in the actual budget of the president, every president, whichever president concerning renewable energy and energy efficiency. And we're grateful that we have the dedication and the involvement and the time commitment of Henry Kelly from the Department of Energy and Scott Sklar from the Sustainable Energy Coalition who was at one time a Senate staffer and also Fred Sassine from the Congressional Research Service with that which Congress would be quite, quite, quite. Thank you. And with that, I don't want to take any more time. Thank you for coming. Thanks, Lisa. And if you'd like to join the caucus, it's really simple, you just send an email to bill.parsons, P-A-R-S-O-N, ask at mail.house.gov, and or lisa.right, l-i-s-a dot w-r-i-g-h-t at mail.house.gov, and just simply say please add representative so-and-so as a member of the House Renewable Energy and Energy Efficiency Caucus. And there's no time commitment on the part of your boss, it's just you get access to an incredible resource. But you also get, your boss also gets to tout being a proponent of energy efficiency and renewable energy. That's a good thing. Thank you. Thanks very much, Bill and Lisa. And speaking for EESI, it has always been a wonderful honor to be able to work closely with both Bill and Lisa and Mr. Bartlett and Mr. Van Hollen in terms of looking at the whole role of the caucus and helping them get solid information out and one of the other key things that we all do together as well in conjunction as part of the Sustainable Energy Coalition is an expo, a technology expo and policy form which this year will be held all day on June 21st in the Cannon Caucus Room. And so you can talk to any of us with regard to that event too which we all cosponsor. So at this time, as you heard from both Bill and Lisa, this briefing is specifically designed to really take a look at the budget, the upcoming budget for 2013, that has been proposed by the administration with regard to the role of renewable energy and energy efficiency, particularly at the Department of Energy. So the budget for renewables and efficiency encompasses many different sectors and different approaches. It is something that many of us look at very, very carefully every year in terms of thinking about what this means for overall policy. Energy is the lifeblood of this country. We are seeing enormous changes. It is absolutely integrated into so many other aspects of our society and our economy. I think it is both really important to understand all of those linkages and it is also very exciting to understand all those linkages and how you can address multiple issues, objectives all at the same time by looking at the role of energy and how it is used. So we're going to hear from three speakers this afternoon. We will hear from them first before we open it up for Q&A. I also just want to mention that that after the briefing this afternoon, we will be posting all the presentations on EESI's website. So feel free to go there and also share it with your colleagues as well. Our first speaker this afternoon to walk us through the DOE budget request for the Office of Renewable Energy and Energy Efficiency is Dr. Henry Kelly, who is the Acting Assisting Secretary for Renewables and Efficiency. And Dr. Kelly brings an unbelievable amount of experience in terms of looking at energy and being involved in terms of energy technology, scientific research and policy. I first met Henry back when he was with the Congressional Office of Technology Assessment. He also has been at the White House Office of Science and Technology Policy, former president of the Federation of American Scientists and has been now with the DOE leading this work for several years. So without further ado, please welcome Dr. Kelly. Thank you, Carol. One of my other claims to fame is that I'm a longtime Carol Warner fan. So I want to thank EESI and the caucus and particularly Congressman Bartlett, Congressman Von Holling for putting this together. I guess we're up and running here. So I am going to be talking about energy efficiency and renewable energy. It's a complicated portfolio. You can see that this topic is actually very central to the administration's overall priorities for a lot of reasons. The president talked about all of the above energy strategy. We're not all of the above, but we'd like to think we're some of the most important parts of the above, very diverse portfolio, lots of things which are highly competitive. And we do in fact, as I said, touch every part of the American economy, whether it's construction or automobile manufacturing or electric utilities. This is the clean energy technologies we think are really one of the major drivers of the US economy, in addition, of course, to solving crucial national security and environmental challenges. So just an immediate tutorial on this thing. You know, you say, well, we worry about both where the energy goes and how we supply the energy that we continue to need. And so just in brief, about 40% of all the energy used in the US goes to buildings, commercial buildings and residential buildings, with the rest are roughly equally divided between manufacturing and transportation. If you look at where the electricity goes, however, you can see that it is overwhelmingly dominated by what happens in buildings. Over 70% of all electricity goes into commercial residential buildings. So most of it goes to things that we're very familiar with. It's like lighting and heating. With the petroleum, of course, it's a very different story, transportation dominates the petroleum use. And when you look at these sources of energy for electricity, you can see it's still roughly half coal. We're now up to almost 12% renewables. Big chunk of that is conventional hydroelectric, but the non-hydro part has been growing very, very fast. So in terms of the budget, I think for compelling reasons, the administration has said this is a place where for many reasons we want to invest. So in spite of a very fiscally tight budget year, we've got approximately 26% increase in the request over the FY12. We think we've got a very solid case for the ways of spending this in ways that advance not only our energy and environmental agenda, but also tied directly to any strategy for economic growth and recovery, particularly in manufacturing. So I won't give you a, I assume that you all have copies of the budget. I won't go through this in detail. Throughout this, there are difficult choices that you had to make. And one of the things that we're particularly proud of is as we looked at each one of these programs in depth, we didn't just do more of the same. We didn't just sort of coast on the momentum of what we've done. We cut a lot of things out in order to add new things in. And so the growth here, there's a lot of very new things that are, that the growth in new things is much more than 26%, and I'll try to walk you through some of it. We are extremely proud of the way the previous investments in the ERE have actually paid off. This is an area where federal investment has really driven a lot of activity in US businesses and in job creation, and has led directly to major energy savings. Now of course, the things that you see on the market today were things that we invested in 10, 15 years ago, and they profited from a lot of private sector investment and innovation. That's where a lot of the activity came from. But we'd like to think that with strategic intervention on our part, doing crucial research, putting a crucial standard, we were able to really drive the adoption of a lot of things that are quite, are familiar with this. Efficiency of refrigerators is cut by 75%, even though the refrigerators themselves are now cheaper, bigger, and have all kinds of fancy features. And we think we've got another 50%. In fact, we're sure there's another 50%. We can get out of that. If you go back to this, if you compare the average windows sold today with the one that was sold in the late 70s or 80s, three times more efficient. Huge contribution to energy flows in buildings. And there are ones that are five times more efficient than the old ones. Lighting is a particularly exciting place. Lighting is a very big deal. It's like 17% of all electricity goes into lighting. By reference, nuclear power is 20% of all electricity. So I mean, it's a big chunk of the electricity economy. We have devices out in the market today. In fact, yes, this month, Phillips has a device on the market that's almost seven times as efficient as a conventional incandescent. And we have things working prototype that are nine times as efficient. So the batteries, I won't walk you through all of these things, but on the side of solar, essentially the entire industry went from being a device that was useful for NASA spacecraft to something that's beginning to make serious contributions to American electricity supply because of the constant research effort that we've been making over the years. Wind, similar story, huge success. It's something like 35% of the capacity added in the last few years has been wind. It's second only to natural gas. Again, the key innovations in that field that drove this enormous industry came from the work that was supported by EERE. You say, well, okay, so what have you done for us lately? It's always tough to turn when you have to wait 10 years for a roof, I just did what she told me not to do. This thing, I hope it's still working. Here you go. I shouldn't wave my hand. So in fact, I think I have just given everybody time to read this slide. But let me just say, if you have to wait 10 or 15 years for the results or research to pay off, you do have to look back a bit. But in fact, in the last few years, we have done some remarkable things with the Recovery Act. Alone, we have had a huge increase in the expenditures and things like weatherization and batteries, the essentially the entire battery, the growth of the battery production in the Midwest today is a direct result of our intervention. But the question is, so okay, where are you gonna go from here? What's up, what's in this new budget? And I'll try to walk you through this. It's very, one of the agonies for me is to figure out what things in each one of these programs to talk about because there are a lot of fascinating things going on in each. So I'll try to give you the elevator speech for a bunch of these things, but I hope we have enough time to go through some questions. Buildings, I mentioned it's a huge deal, a more than 70% of electricity. Where we've started a vigorous new program in building components. We've had a very good solid state lighting program, but we're adding in new programs in sensors and control, in building shell materials. In the next generation of HVAC, we're looking at the possibility of finding ways of reinventing heating and cooling equipment the same way we reinvented lighting. One of the things we're doing, of course, is looking at better working fluids instead of having potentially environmental hazardous materials in refrigerators and heat pumps and air conditioners. We think we might be able to use CO2. And if we're lucky, we might find there are several ideas floating around where you don't need to have working fluids at all. They're completely solid state devices. They use membranes to move moisture across air flows. The key thing, of course, is not just a bag of components, but looking at the building as a system. And if you compare the way energy systems are run in, say, a modern aircraft or a modern car and the way they run in a building, the difference is astounding. The sophistication of controls and feedback and sensors in a car vastly exceeds what's in buildings. But the opportunity space is huge. And so we're trying to develop the ways of thinking about buildings as a whole. How do you operate them? How do you have operations that are self-healing? So if something goes wrong, it knows how to fix it. We're also, of course, very interested in not just inventing stuff, but trying to get ideas and these technologies into the commercial marketplace, effectively. We have a very ambitious appliance. Standard program, our proposal is to, we believe that just as standards, we've gotten out in the last couple of years, they're saving American consumers over $300 billion. We're playing in the FY'13 plan as an additional six standards that we'll be putting in place. We also have better buildings challenge, which is challenging commercial building owners to get 20% more efficient. And of course, FY'13 is the next year we're gonna run the Solar Decathlon. This time it's gonna be in California. So we decided that, you know, since we're essentially booted off the mall, we might as well think big. It ran a competition on where it's gonna be. Vehicles, this is an exciting moment in vehicles because all of a sudden, instead of having essentially one fuel and one propulsion system, we're aimed at a lot of different alternatives. We really don't know in the future whether you're gonna have vehicles being run on gasoline or hydrogen or biofuels or electricity or natural gas, all of these things are in play, which is a good thing because there are a lot of options. One of the things that we've of course concentrated on very heavily here is electric vehicles and plug-in hybrids. And here, the big challenge is cutting the cost of batteries. Our goal is to get to $300 a kilowatt hour, right now we're around $600 a kilowatt hour. And we're very confident we're gonna meet that goal, their improvements in all the battery components and in the way we manufacture batteries. But accompanying that, of course, you need to have better electronic control systems and better motors, electric motors. A lot of the motors now have critical materials in them. You'd like to find motors that don't require any rares. So we have a lot of work going on that. And of course, again, the programs that try to get new innovations into the field, the Clean Cities program continues to help states and municipalities make the regulatory changes and do other work that you need to build an infrastructure to support an electric vehicle program. Advanced manufacturing. This used to be the office of industrial programs. We brought in a guy who ran manufacturing from DARPA who is fired up up. The concept of saying we really need, if we're gonna really rebuild American manufacturing, we have to recapture innovation in manufacturing. We have to invent the next generation of manufacturing and the next generation of materials that are gonna be made in these systems. And so what you recognize, if you look at the way we make stuff, we're a long way from the theoretical optimal in terms of the amount of energy it needs to make the stuff. And if you look at some of the modern techniques that people are using, one of the biggest energy users right now is separation by distillation, which is distilling liquor. It's probably one of the world's oldest professions, but it's a kind of silly way to separate things. You heat things up and then you cool them down. Biological systems like you and me do separations all the time, but we do it at body temperature with very clever membranes that pump things. So could we do these separations at room temperature? Yeah. Right now we do subtractive manufacturing, which is you take a chunk of metal and carve stuff out and have the part you want. The another way to do this is additive manufacturing. I don't know if you've ever seen a 3D printer that builds things up just by adding the material only where it's needed. Well, it turns out you can do that with metal, powdered metallurgy. You can save a factor of 10. Materials we would love to get lightweight and cheap carbon fiber right now. Only can be used in very expensive applications. We think we can make it at a price that you can afford to use it for car parts and for wind machines. Titanium, it's about as much titanium out there as aluminum. The aluminum used to be more valuable than gold, but they found out how to make it cheaper. And now we make beer cans out of it, right? So we think that there's some clever ways of making titanium as cheap as aluminum, or at least in the same ballpark. And I'm not promising titanium beer cans, but if you do get it, automobiles, a lot of other products that you're gonna benefit from that. Now in addition, again, the question is, inventing it is one thing, getting it used is another advanced manufacturing. For us has two features. One is it's a big deal in overall energy use. It's 27% of all energy, but also advanced manufacturing. It's essential to every other goal we've got for cutting the costs of solar cells or batteries or a wind machine. In terms of getting things out, we have a number of programs, the superior energy performance, which is trying to get industries to use the new continuous improvement standard. We have the clean energy application centers that do combined heating power, and we're gonna try to expand them so they do more. There are better buildings and plants programs getting manufacturing facilities to our better buildings program and getting industries to sign up to commitments to do long-term retrofits. And of course, the industrial assessment centers, which have been great in having universities train students and go out and do real assessments on real facilities. And could you hand me that? No, no, thank you. All right. Now, we have to do two other things that are really essential to getting uptake on the particular buildings technologies, but also vehicle technology. One is the federal energy management program that manages 22 different federal agencies. It's got a goal of saving 30% of the energy use in federal facilities by use of both giving them information, tracking their performance and we have a series of ESCOs, these energy service company contracts that allow third parties to come in and finance the investments that you need for, because many times the federal budgets don't provide the capital that you need to make the investments to save money over the long term. This is a long time complaint, but the third parties can now come in through these standard contracts. The picture up there is a FDA's White Oak Campus, which has just gotten through making a $253 million ESCO that's going to retrofit the entire campus. It's really an impressive story. Then, whether it's Asian intergovernmental, this went through a real roller coaster ride. Its budget went up by more than a factor of 10 during the Recovery Act. One of the big challenges we've got is to maintain the momentum that created a lot of businesses and jobs and we're trying to find ways to make sure that other sources of financing can get put in place and continue this. They're a great way to get our technologies out. It turned out to be a great way to train a lot of people with its talents you need. We're now up to something, I think it was 830,000 houses have been retrofitted since 2009 with the weather station and other programs. It's been a difficult transition. You say, well gee, we're gonna end up retrofitting a million houses and it's great but there are 219 million more that have to be retrofitted. So we're really at the beginning of this and not at the end. So that's the 90, it's a quick tour through where does the energy go. Obviously, you still don't, we think that's energy efficiencies in almost every case the most cost effective way to meet our energy challenges. There's still gonna be a need for energy and we have a number of ways that we can contribute to that solution. Solar, of course, is extremely attractive since if you can get it cheap enough, it can scale from rooftops to giant facilities covering sections of the desert. Throughout this talk, I should have mentioned at the beginning, our main goal, the best way to get stuff taken up by the market is to make it cheap enough so it competes by itself with no subsidy. And that's the goal of every one of our renewable programs. Here we have a project called Sun Shot trying to get the cost of installed PV at the utility scale down to a dollar a watt. And we think we can do it, we're attracted to it. I think we were a little scared when it started off saying that we could actually do this but the costs of the arrays are coming down. One of the biggest challenges facing us now is the cost of installing these things. We can spend something like 50 cents a watt just going through the paperwork, permitting, inspections, and other things to get a facility in. So we're not gonna get to a dollar a watt if we spend that much on paperwork. So we have a number of ways of challenging local communities to find ways to facilitate that permitting and inspection. Wind, as I said, it's a huge commercial operation. One of our success stories. We've got a lot, we've got a ways to go on improving it but the industry itself has taken up the challenge. Our job is to be at the edge of what's possible and we believe one of the most attractive new things we can do here is to go offshore. Offshore wind is strong, it's steady, it's close to population centers and it's really, really expensive. But we are convinced that we can really drive down the price of offshore wind through innovation. Yesterday we just issued a big opportunity announcement for innovative offshore wind. We're expecting some really amazing creative ideas in on this and of course it's attractive to a lot of states along the coast, both East Coast, West Coast, Gulf and the Great Lakes, particularly port cities because you may, some of these concepts involve building the stuff in a port and towing it out and anchoring it offshore. Geothermal, there's two problems in geothermal that we've pinpointed by looking at holding workshops. One is there's a lot of hydrothermal workshop, hydrothermal resources out there but the easy to find ones have been found. The ones with no significant expressions are hard to find. We think we've got some really cool tools for finding those but the bonanza is if you can get to the hot rocks that are deep underneath almost all parts of the country. Again, what you wanna do is do something that looks like fracking but it's very deep under high pressures and high temperatures and all the equipment that works well in the shale just dissolves when you're trying to use it at that depth. One of the things we're trying to do is to start up some test sites, one or more test sites where people, well we can designate them and test sites, bring people in, let them test equipment, let them try to understand the geology of different places. This is something that the industry has come to us repeatedly asking for FY 13, we wanna make that happen. And then finally, water. We've done a lot of work on conventional hydro, fish friendly turbines. We've got turbines that now make electricity and not sushi. You get turbines that allow 98% of the fish to actually get through these things. One of the exciting things is the marine and hydro-kinetic technologies which are title, run of the river, waves and these other techniques. We are in the process right now of putting a lot of these things actually in the water, running cost models. We really don't know what these things cost, but we will and we'll be able to move smartly forward in 2013. Anyway, that's the quick overview of this. The shut up sign was just hoisted here so I will take the cue and be very happy to answer any of your questions. Needless to say, we think we've got a lot of really fascinating and exciting things that are both intellectually challenging and crucial for the country. Thank you. Thanks very much, Henry. And his presentation, as I said, we will post on EESI's website later this afternoon. And so that, I know that this would have been really difficult if not impossible to see, but we will make that available. I'm delighted to be able to turn to Fred Cicin, who is a long time energy policy specialist for the, but it's true Fred, a very long time, right? In the resources science and industry division at the Congressional Research Service. And I think that so many people all over the hill have depended upon Fred, his work, his response to just immediate requests for years. And so we are very glad to have Fred with us again this year to talk about the budget from a CRS perspective. Thank you, Carol. Since I'm turning 39 next week, I don't know that it could have been that long that I've been here. But anyway, good afternoon, everyone. Well, Dr. Kelly certainly presented a complete picture of the 2013 request. The humble goal of this presentation is to give another view of the request. The slides are focused on just a few highlights of the new initiatives. You can see that the handout contains 30 slides, but don't worry, I'm only gonna cover about half of them. I will do this in 15 minutes or less, Carol. The other slides provide some further background and references that you may find handy. After today's panel, if you have any questions about the budget, please feel free to call or email me. My contact information is shown on the last page of the handout. However, before I start the presentation, I need to make a disclaimer. As you may know, all CRS analysts have a firm responsibility to be neutral and unbiased. Thus I must divulge the state of my knowledge on DOE's budget. Many of you know Will Rogers, that famous commentator from the 1930s. He was once asked about his insights about government policy. He famously admitted, and I paraphrase here, all he knew was what he had read in the newspapers. So I have a similar confession about my remarks today. All I know is what I read in the DOE budget request. Thus, if you have any tough or penetrating questions, please direct them to Henry, not to me. But we have a tight time limit, so I will shoot straight ahead in a quest to follow the money, or more specifically, what I tried to emphasize in this handout is proposed changes in funding. Okay, to get started. Let's note that the slide numbers are shown in the bottom right hand corner of each page. Let's start with slide number three entitled Overview. Slide three shows that the total DOE request would go up 856 million or about 3%. EERE would go up about 458 million or about half of the agency total. Compared with the FY 2012 EERE appropriation, this would be an increase of about 25%. You may want to note that EERE increase would, in principle, be partially offset by the administration's broader request to reduce tax subsidies for fossil energy. If congressional staff need more information about that tax proposal, please contact CRS analyst, Molly Sherlock. Slide four shows the FY 2013 EERE emphasis. The focus is on transformation to a clean energy economy, basically the same focus as last year. The three main rationales for the transformation are competitiveness, climate change, and reduced oil imports. Slide seven describes the basis for funding calculations shown in later slides. Please note that all funding changes shown follow those in the DOE request. The differences are calculated between the 2013 request and the 2012 appropriation. Slide eight describes the new sub-program account structure that DOE applies to all EERE technology programs. This will help you find your way through this budget document. The four sub-programs are innovations, emerging technologies, systems integration, and market barriers. They are sequential, following the technology development progression from research to development, then demonstration and deployment. Each sub-program is identified with technology readiness levels, or TRLs that range from one for basic research to 10 for market commercialization. Slide nine shows that the request would provide about $500 million worth of increased funding over five areas. There's four technology programs, manufacturing, vehicles, buildings, and biomass, and also for the weatherization grant program. Those are the big five. Slide 10 shows another $82 million of increases for strategic programs and for geothermal and solar technology programs. Slide 11 shows about $62 million in cuts for water power technologies and the hydrogen program. These 2013 cuts parallel similar cuts that DOE proposed for 2012. For both programs, DOE notes that the major projects are reaching completion or are otherwise undergoing planned phase-downs during 2012, so that's why they don't need steady funding or even increased funding. Slide 12 lists the key themes for EERE technology programs that underlie the major requested increases. Slide 13 lists the three innovation hubs for which money is sought in 2013. I could not find a breakout for the materials hub so that figure is a guess based on discussion in the request and based on the fact that most DOE requests for hubs have been set at about 20 million per year. Slide 14 presents an overview of the initiatives proposed for the advanced manufacturing office. The AMO is a transformation of the former industrial technologies program. The largest EERE funding initiatives are proposed for sub-programs under this office. These 2013 initiatives parallel manufacturing initiatives proposed in DOE's 2012 request. However, the 2013 initiatives appear to involve less funding, more focus and more specifics. Slide 15 shows the AMO increase for 2013 broken down by the old account structure. Clearly the bulk of the increase would go to manufacturing processes. The figure for materials is roughly the amount that would be expected to support another year of the critical materials hub. Also note that the activities and funding increase for industrial technical assistance would be identical to that for the market barrier sub-program under the new structure. So that's an easy one to see the correspondence between the two. Slide 16 shows AMO increases broken down by the new account structure. Clearly the bulk of the funding increase would go to activities under the two sub-programs, emerging technologies and systems integration. Slide 17 presents a description and examples of manufacturing process initiatives under emerging technologies. The focus would be on new technology and computer simulation tools to reduce and or integrate the number of steps in industrial processes and to discover alternative processes. One area given as an example involves the development application of sensors and controls to reduce energy losses from industrial motors, steam and process heating activities. Another area given as an example, the trial manufacturing, I think Henry mentioned this, involves using plants as a platform or medium to support the production of feedstocks that could be converted to oil substitutes. Slide 18 presents a description and examples of manufacturing process initiatives under systems integration. The focus would be on addressing technical risk by identifying production scale capability and system level issues. Public-private partnerships would involve project competitions and provide access to specialized technology for small, medium-sized firms. Examples of DOE's candidate projects include high-quality composite curing, three-dimensional layering, which Henry mentioned earlier and reduced material loss, which I think Henry referred to earlier in regard to titanium. Slide 19 presents a description and examples of initiatives for the Next Generation Materials Program. The requested increase would aim for technological breakthroughs to achieve high-functioning performance, improved thermal and degradation resistance and major cost reductions. One example is given as low-density materials for rotating parts in hubs and gears, which would increase design opportunities for wind turbines and for cars. Another example is given as high-temperature and rust-resistant steels that could bypass critical materials and cut costs. Slide 20 shows some highlights of the vehicle's program increase. The largest increase would support the electric vehicle grand challenge, which has aimed at accelerating work on advanced batteries, power electronics and charging stations. This activity would focus on developments under the current sub-program for batteries and electric drive technology. Slide 21 on buildings lists a new goal to reduce the operational energy use of newly constructed buildings by 50% by the year 2030. The main funding increases would support accelerated work on equipment standards and building codes. It would support retrofit demonstrations. It would launch new activities in areas such as solid state lighting and HVAC, and extend funding to operate the innovation hub for building efficiency design. In general, you should note that the program aims to overcome several persistent long-term barriers. These barriers include industry structure, high-first costs that are separated from operational cost savings and market information failures, as well as other problems. Slide 22 on biomass emphasizes a $52 million increase for biorefinery plant demonstrations. DOE says this would support the construction and operation phases for biofuels, such as cellulosic ethanol and renewable diesel. Other increases would support feedstock conversion to solid pellets or to green crude, and propel other technologies for bio, oil and algae dewatering. Also, please note that DOE seeks conditional authority from Congress to transfer $100 million from the EER appropriation to the Defense Production Act Fund. The money would be used in the joint DOE defense and agriculture department activities focused on drop-in biofuel development for military applications. More specifically, it would involve pilot-scale demonstrations for production of renewable diesel and jet fuel to be used by the Navy. Slide 23 provides further context for the EERE technology initiatives. It lists some historical issues involving the purposes and costs of demonstration projects, which are now under the Systems Integration Subprogram. This in the past has been usually the most debated aspects of DOE's applied research programs. Also, there are five slides, numbers 24 through 28, that present historical context for the funding history of the four major energy technologies, nuclear, fossil, renewables and efficiency. From FY 2011 through FY 23, through the FY 23 request, the relative funding order for these technologies, nuclear, renewables, efficiency and fossil is mostly stable. The big picture history is also interesting. Slide 28 gives a long-term view of federal support for energy technologies. The relative proportions reflect the fact that long before DOE existed, large federal investments went to nuclear and fossil energy technologies. For congressional staff, slide 30 prevents some references to CRS reports on DOE energy funding. And time permitting, I have one more statement about a very important administrative item. After last year's EESI presentation on DOE's budget, we asked Carol if there was some way that all of the participants, all of you out there, and the presenters could be rewarded. Carol said she could buy all of us a round of champagne at the local pub. So who wants to hold Carol to that promise today? Let's have a show of hands. Thank you. As you know, what they say with biofuels is drink the best, burn the rest, right? We now will turn to our third speaker who also brings a wealth of experience, more long-time experience. And Scott Sklar has been working in the energy technology and policy area for a few decades, like our other presenters today. And he is the chair of the steering committee of the Sustainable Energy Coalition, our partner organization. And he also is the president of the Stellar Group and is doing a lot of technology system work in the efficiency and renewable energy arenas in terms of really looking at how these things all really work together. And I think all of that is really important, again, as we think about efficiency and renewables and how all of these, the multiple sectors and technologies really need to be looked at as systems and how that is really how we get our optimal performance. Scott? Thank you. Thank you all. As you can see, my company, I blend all these efficiency and renewable energy technologies all over the world for Fortune 500 companies and including the US military. And I also teach a interdisciplinary course at George Washington University on sustainable energy. Now, next slide, please. I just wanna say before we start on this budget, the private sector itself is putting in a lot of money in the energy efficiency renewable energy world. So as you can see from the top one, Pew Charitable Trust, $243 billion of private sector investments. That's just in renewables. If you look at the Bloomberg for 2009, they had $336 billion.78, and that's for renewable storage and high value energy efficiency. Private sector only globally. So we're talking into the hundreds of billions of dollars. If you add government investments around the world and renewable energy and efficiency, it's a little over $600 billion. So we're getting at the trillion dollar mark per year for these technologies. So I don't want you to think that everything is happening investment is coming from the government sector by far. Next, please. If you took my course, I see Andrew here, so he did this and kept his hair. If you took my course, you would have a list of 24 studies that have been done in the last three and a half years that shows the United States or the world could meet most or all of its energy from high value energy efficiency and renewable energy sustainably. There are no studies you can do that with traditional energy. And I hear all this about fracking. I have no problem with natural gas that we have 100 years of gas by doing this. My grandmother lived more than 100 years. So it sounds like a long time, it's really not. So these technologies are sustainable. And I had my grad student interns have to read all those studies. You don't have to, thank goodness. And they took the most conservative estimates from all of them to look at what the blend of the United States would be. And these are existing commercial technologies now. And you can see the blend. Again, this includes the high value energy efficiency of the biomass of the buildings of the geothermal, this concentrate solar, the distributed solar waste heat, water energy, and wind energy. It takes a portfolio to drive, quote, some kind of comprehensive energy strategy. Next, please. And this is the study that was done by the Institute of Local Self-Reliance a year and a half ago, which basically say 32 states in the United States have economically retrieval resources to meet their energy needs. And most of those 32 states are huge oversupply, meaning they could deal with the other 18 states that can only meet a portion from the renewable resources they have. So there's an immense amount of resource capability in the United States here. And by the way, this study did not talk about the marine technologies, which I will talk about shortly. Next, please. The Energy Information Administration, February 29, 2012, so we're right in this year, said that electric generation increased by 55%. And if you read out of the Sustainable Energy Network, we put out press releases that talk about renewables now have exceeded nuclear output per year in the United States. So this is a growing set for investment as well as energy generation. Next, please. And so that's again, next one. Sorry, that's a double slide somehow. So I wanted to highlight the two decreases because that is part of my job here to wine slightly. And there's nothing like a fine wine, W-H-I-N-E. So I want to have you all realize something, that every administration and every budget out of the US Department of Energy since the beginning, and I worked up here since that beginning, through a technology or two overboard to show they were fiscally prudent. And this budget has done the exact same thing. So the awardees this time to show fiscal prudence but not smart technology prudence is the water energy R&D budget. And you can see that the $58.7 million in investment other requests is $20 million. Now, I need to give you some history, and I need to give you some background. First of all, there have been several studies, and the one I like the most is the EPRI study, which showed that we can meet 10% of US energy needs conservatively through non-damned water technologies, plural, and that is free flow hydro, tidal wave, ocean currents, and ocean thermal. So 10%. And by the way, I believe that's conservatively. And the other issue is this is 24-hour power, no carbon emissions, no waste, and most of the people in the world live near water. Think about that. So that's where your population centers tend to be on the coast or on rivers. So and what we're trying to do with this program is focus on, it was used to call the hydropower program, a focus on the mature hydro industry, and through a bipartisan effort in Congress, through a bipartisan effort in Congress starting in the last term of the Bush administration and in this administration, we have been able to push to expand this program to all the water technologies and to focus not as we usually do on just technology efficiency, but how to make the technologies compatible with the many uses of the water resource. And those many uses are obviously environmental, marine life, and other things that share the water, shipping, recreation, all the things we use water for. So we're actually a little premonition on how we smartly developed technology than what we did have done sometimes before. So to cut a program where the rest of the world is putting in $8 billion a year and the leaders are Britain, Spain, Australia, Japan, and for now the US in these technologies, plural. And we have some real stars in technology, particularly in the title and wave, and I actually have a couple of ocean current companies here in the United States who are spending lots of time, money with demo projects on both shores to push this forward. So to give this up because its expedient is nice, but it is not mature technology, it is totally new, it is very important to me, security, climate, environmental, whatever. And if we're gonna do it, and it's going to evolve on its own, we ought to do it in the most smartest way, again, both to protect environment and the multi-resource that we all enjoy and also be able to get energy. Next one please. Next one, oh this is the hydropower budget from the Water Program budget history and you can see the budget was minimal starting at 2006 and before and then it started moving up to 2008, nine, 10, a little dip in 11, up in 12 and really that up in 12 was coming back to Congress bipartisanly to drive this up. This is an important sector, it is not being taken frankly as seriously nor staffed as seriously by the department, we need to correct that. Next please. Hydrogen is the other one that's sort of been thrown over the boat. Now hydrogen, I want to remind you, hydrogen is a storage technology. It is a medium, it is like electricity and there are different ways you can get hydrogen, create hydrogen, move hydrogen around, format you can store hydrogen in and then places you can utilize hydrogen and that can be in transportation and electric generation, I've done some electric generation projects, I actually have a hydrogen fuel cell in my zero energy office building in Arlington, Virginia. So this one gets a dump down as well and it's a complex play but the issue is storage is the holy grail of energy and for a while the Department of Energy really wasn't in advanced battery technology, now it is and it's doing good work primarily through the ARPA E program and of course DARPA in defense is doing great work with it as well. As is the National Science Foundation, hydrogen is another storage technology, compressed air and liquids are a third, pumped hydro is a fourth, flywheels is a fifth, a thermal salts and advanced thermal storage is a sixth. We need to be able to store and use energy that is more efficient, that's closer to energy efficiency than it is with generation, it's cheaper to store and move and utilize than it is to generate and we need smart grids, smart transportation systems, storage is essential. So again, to throw this over because it was created under some old programs and different plays actually is a mistake. The world leaders in hydrogen, frankly are Japan, India is moving into an advanced stage, South Korea and Chinese are swarming on this, this is something for us to look at, it is a critical issue, we should not give it up just for ceremonial throwing over, next please. Bill Gates in February 2012 said, the lack of energy funding is crazy and it is true and I want you to, I wanna leave this briefing with a thought for you, how are we going to compete globally without reducing our input costs to manufacturing? All right, you can't do it with labor, we will never compete on labor with Chinese or anyone else, it's gonna work, we're an industrialized country and commodities, metal, steel, cement, glass, are global commodities, they are set in global markets. The way you compete is advanced R and D in manufacturing technology and that's where the budget is good, the administration's proposal for advanced manufacturing is excellent and then the other one is to reduce the inputs of energy and water, those are the inputs that we can control, if we can manufacture something for half the energy and half the water, we win and if we have a better material process to use less materials to make it, that's advanced manufacturing, we win, usually it's not gonna be one or the other, it's gonna be the team of inputs to be able to do it. So we need to be smart about that if we wanna be competitive. The other issue I wanna lay out in the building section of the US Department of Energy, they have walked away or closed the Zero Energy Buildings Program. This was the place they integrated and Dr. Kelly is correct, a good portion of energy goes towards buildings, the high value energy efficiency and all the different renewable technologies that can be. In fact, I have standing there a piece of glass, I'm gonna take a pick up right here, thank you Fred for this technical assistance which is smart building glass with nanotechnology photovoltaics embedded in it. So it has all the insulative and low e-coatings that are the cutting edge of technology and the glass also produces electricity for big buildings, all right? So the issue is each of these programs go on their little way and the part of the deal is we wanna do what Apple does. We want elegant integration of technology. It provides better cost, better economics, ease of use. So we need to start promoting this whole approach and revive some of this interdisciplinary R and D so that while we're dealing with the little parts, the tires in the car, the engines of the car, the windows on the car that may be the whole system, the car or to be better and I'm using that as the analogy of course. Lastly and finally, these budget issues can be very, very complex but the issue is we are in a global competition for these technologies. I hope we don't wind up in what I call the whole VCR syndrome where the very technology we created, we import. So right now we have a lot of the IP in these technologies. We are still a global leader in these technologies, believe it or not. But again, it is critical for us to sustain the investment and make sure the entire portfolio of energy efficiency renewable energy is taken seriously and consider it. Thank you. Thanks Scott. I think every year as we look at the budget we recognize that there are immense challenges in terms of choices and looking at how to best push goals, ideas further. And at the same time, what is also the best way to think about providing the kind of assistance to move forward on deployment in terms of looking at all of the technology development and that has been done and now needs to make it into the market or to be deployed at much larger scales. And so there's always some tension and particularly when they're seemingly are very, very constrained budgets. And as Scott said, we are looking at huge investments that are being made in the private sector and also by nations around the world who all recognize that energy is a huge, game changer in terms of how we use it and how it affects everything that we do. So let's open it up for your questions and comments. And if you could just identify yourself when you ask your question. Okay, here first. All I can say is that the budget that we submitted is consistent with it. I don't know that, I must say I don't know the details. My part of the universe was to put together the budget with the cranes we had. So we, you know, the budget as a whole obviously conforms to the budget control. By the way, one thing I need to set the record clear, I forgot to show to the slide on biomass and a slide on hydrogen. For the record, I would say it's not because I don't, I ran out of love, but I ran out of time. But that's the kind of question we ask of CBO. Right. They would probably be able to answer that. I saw a report recently on battery technology. A company called NDEA Systems was reporting that they have made a energy density breakthrough that would have, based on argon biobarri with other cars. That was the report. Is that being oversold or are you familiar with this? Is this the breakthrough that this particular report I saw was kind of portraying to me? I shouldn't be more familiar with it than I am, but you know our goal is to, right now the price is $600 kilowatt hour. We think we can get down to 400. Yeah, so you need to work on the anode cathode and the electrolyte. I think that that innovation was on the cathode, but you do have, you need work on the entire battery. But we think that we can probably push lithium ion down, and this is like, we think we can get to $300 by 2014, 2015. And this technology is one of the things that was in the pipeline when we made that forecast. We'd still like to go a lot lower. And if you see, beyond lithium ion there, there's another whole generation of metal air, lithium air, zinc air, where we think we can get down to much, you know, maybe down to $120 a kilowatt hour. But you know, this technology that came out of argon is great. It's one of the things we need to be on the trajectory. There's a, fortunately there's a whole portfolio of things that are coming out now. There's a lot of private sector money and a lot of innovation in the battery industry. Actually, manufacturing these things at scale is one of the things that our manufacturing guys are trying to help with. Can I just say, I do want to point out there are probably about 100 companies in the United States with very advanced battery technology coming out. As Dr. Kelly said, lithium ion is one of the plays, but we have carbon supercapacitor batteries being manufactured now with very, very long lives and can take high heat and cold. And I think the price points that Dr. Kelly said is right in terms of where we need to go down to, I don't see anything in the way except, you know, investment dollars and entrepreneur ingenuity. But there's, I would say about $60 billion of the private sector money going into advanced batteries, you know, deep cycle batteries, both for vehicles and grid interaction in some way. Mr. Sissing, you brought another one of the time to do that. I don't have a quick answer for you. Maybe we can follow up afterwards and talk about it. We will be right here. We have rolled that up. It's not a huge difference, you know, but moving things to these TRLs, it makes it a lot easier for us to do the kind of analysis you're talking about. Identify where it is in the process. It's probably in this book, but I'll take you a while to find out. Other questions? I'm going to ask some of the guys on the rest of the water power program and we'll close the rations out behind that. Usually my policy, not to argue with people with beards, but I will try to do my best. I think you should keep that up. I'm going to do my best. It's going to be a great afternoon. On the conventional hydro side, which is where some of the beard decreases took place, actually. We think that this is not a technology problem right now. It's a regulatory permitting siting problem. And while we can help with that, there are a lot of other federal agencies that have got the action in that area. I think that it's not an R&D play. It's going to be really important. This next generation of turbines that we came out with recently, including this fish friendly turbine, allow you to achieve very high efficiencies in an environmentally responsible way. Now the problem is to get the permission to use them. We are, because of the significant increase in FY12 budget over 11, we were able to actually, we're putting our emphasis this year in gathering data from these experiments that are out of the field. And I said, one of the big problems here is to find out how much this stuff costs. Our goal is sort of obsessively trying to invest in things that can actually compete. And the cost estimates for a lot of these very innovative technologies are hard to nail down. By the end of this fiscal year, we think we'll have really good sense per kilowatt hour estimates for five or six of these most promising technologies. And so the thought was to try to get the data in place, put together and figure out how to move the program forward, but that FY13 was not the place to be investing or making a lot of big investment decisions in there. But I'm always pleased to get opposing opinions in the debate. So for the following fiscal year? If some of these look like they're economic testives, is there a lot of it out there, a lot of resource out there at a cheap price, then you go forward. You get a bright green light. Matt, finish out the National Higher Power Association. Following up on this question about the Hector Power and Meat Pads, you talk a lot about conventional hydropower projects and that's where conventional hydropower research development and that's where the majority of the tests are. You said that, or I believe Mr. Sussin said that the major products are winding down, but that doesn't necessarily speak to the objectives of the program, such as reducing the cost of small hydropower technologies, where a lot of that will go to building on existing infrastructure. Can you speak to, or have the objectives been met? Have things like the cost been brought down at the counter? Well, we did support a fair number of low-head hydro, run the river hydro that could be put in at small scale. They are also in the category of, we're gonna need to get a year or so of data from those experiments and find out what shape our programs around some hard evidence. Right now though, there are a lot of promising things that are cost effective today that aren't moving and we're trying to work with our regulatory colonies to get those things underway, but it's not primarily an R&D barrier in many of these cases. Yes, my name is Robert Robinson. I'm with DC Solar United in the U.S. with the densest penetration of solar in the United States. That doesn't mean we have more of it than means the stands are here. One of the problems with energy budgets, it seems to me, is it because there is a lack of acceptance of these things within the public, it makes it harder and harder to get support at the budget level. So I'm wondering why the U.S. Department of Energy doesn't do more to encourage end user support for alternative energies generally. It's extremely difficult in the United States to get things through the welter of legislative regulatory and financial requirements that jurisdictions have to face if they want to embrace alternative energies. Thank you. Well, I think I said in my remarks that one of the, we've looked very hard, particularly the barriers to affordable take installations, and we actually, there's a giant difference around the country between jurisdictions. We found that the time it takes to get a permit in San Diego, from the time you apply for a permit to time you're through all of the inspections and everything in San Diego is less than two weeks. In New York City, it's 18 months. It takes four pages just to explain the processes. So we actually have put together a project with a very clever name, which I can't remember at the moment, but it was a competition among communities to try to find ways to benchmark their processes and to pledge to go through and try to meet a goal of vastly cutting the time and complexity of going through this process. We had really, and then they're gonna exchange best practices. They're gonna basically teach each other how to do this. Got really good applications. We funded projects in cities that cover 51 million people in the country. So they're big systems that are now competing in this. The first stage is to benchmark it and find out what the current system looks like. At the end of the year, we hope to have some really solid solutions, including things that have actually gone through city governments and permitting authorities and actually trying to fix this. See if you can have it. Yeah, the other thing the Department of Energy done is they have an ongoing training program through the state energy offices for code officials. And we get a lot of pushback on the different code officials because they don't understand what this stuff is. So it's trying to create education programs and they've done some very creative things around them. I don't know how much, and you probably know better that a lot of that hasn't trickled into DC, but we might want to take a look at what's been done at some of the other municipalities and try to drag it in here. So we can drag the nation's capital in 21st century. How about that? It's the rooftop filler challenge. Thank you. The only other thing I want to mention is I know that EPA used to have, it was a modest program, but a state local program. And I know that they supported groups like Ickley if you're familiar with Ickley to support energy efficiency and renewable energy at the local level. They're not dealing with end users. And state and local governments frequently are not proponents of renewable energy. Oh, it's changing really fast. That's an intriguing thing. Right, right. State energy offices that we've dealt with historically that we're seeing a lot of those jurisdictions and those are, and certainly in terms of like the state energy program, it's a highly leveraged program that has played a critical role in helping deploy a lot of things that have been funded through realty. There's a question here? Yeah, thank you. John, with the association of women in government. Whoever may be the best one to answer this. What, if any, impact will the proposed budget have on state and tribal energy plans? Well, we... Let's take the question again. State and tribal energy plans. Yeah, what did any impact will this proposed budget have on state and tribal energy plans? I think the funding's level is $1 billion or something. This is a very complicated problem because the Recovery Act led to a huge increase in many of these programs. Some of the states did not end up spending their money as fast as other states. So what we've gotten is the ability to reallocate the Recovery Act money with the new appropriations so that people will come out whole. And so it will look much more like a normal year than last year, for example. So they'll be, they will, everybody may not get what they want, but it'll be much more like a typical year for weatherization, state and local and tribal programs. Okay, so that's state. What about the impact on tribal energy plans, if any? As far as I know, it's... Well, there's actually a number of energy programs and it's $31 million for a state which is $1 million from last year. But tribal is level, I think. Yeah, I would always love it. Yeah. It's level, it's very low. For tribal energy. Perfect, thank you. Okay, I found it. Okay. Tribal energy, $7 million in 2011. $10 million in 2012 and acted and back to $7 for 2013 requests. So it is down a little bit. It's down from $12, yeah. Other questions, comments, okay, go ahead. Henry, I'm Andrew Seale from George Washington University actually is in Scott's class. I was just wondering if you could just take a moment to discuss Scott's closing point about kind of the BCR phenomenon. I'm sure everyone's familiar with the very library based on TD modules that even when you...