Obama’s budget doubles down on renewable energy

The administration’s budget wish list comes as Republicans in Congress are ramping up criticism of the Energy Department’s loan program, pointing to the September collapse of Solyndra, the California solar panel maker that received a $535 million loan guarantee and then went bankrupt.

Using Solyndra as a rallying call, the GOP has raised broader questions about the administration’s investments in clean energy. But Monday’s budget request is the latest signal that Obama will continue to position renewable energy as a key policy priority and campaign issue.

The budget request touts Obama’s plan to mandate that utilities produce 80 percent of the country’s electricity from low-carbon sources like wind, solar, natural gas and nuclear by 2035.

The “clean energy standard,” the budget request says, “is the centerpiece of the Administration’s strategy to ensure strong American leadership in the clean energy economy.”

But the proposal, which requires congressional approval, faces major hurdles on Capitol Hill. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) is expected to soon float clean energy-standard legislation. But he has acknowledged that the proposal faces major opposition.

The administration calls for funding the department’s Office of Energy Efficiency and Renewable Energy at $2.33 billion, a 29 percent increase from fiscal 2012 enacted levels.

The budget request sets aside about $5 billion for the department’s Office of Science, a 2.4 percent increase from exacted fiscal 2012 levels. But the administration’s fiscal 2012 budget request called for funding the office at $5.4 billion, a slightly higher level.

“The choice we face as a nation is simple: do we want the clean energy technologies of tomorrow to be invented in America by American innovators, made by American workers and sold around the world, or do we want to concede those jobs to our competitors? We can and must compete for those jobs,” Energy Secretary Steven Chu said in a statement Monday.

The budget request includes an 80 percent increase in funding for “energy efficiency activities to improve the energy productivity and competitiveness of our industries and businesses.”

In addition, the budget request would provide $310 million for an Energy Department program aimed at making solar energy cost-competitive; $95 million for developing wind energy technology; and $350 million for the Advanced Research Projects Agency–Energy, a program aimed at boosting innovative energy technologies.

The administration would also dole out $770 million for the department’s Office of Nuclear Energy to develop small modular reactors and implement the recommendations of a federal commission on nuclear waste management.

As part of Obama’s Advanced Manufacturing Partnership, the budget request sets aside $290 million at the Energy Department for research and development “on innovative manufacturing processes and advanced industrial materials that will enable U.S. companies to cut the costs of manufacturing by using less energy, while improving product quality and accelerating product development.”

Overall, the Energy Department would receive $27.2 billion under the budget request, a 3.2 percent increase from fiscal 2012 enacted levels. But that’s slightly less than Obama’s fiscal 2012 budget request of $29.5 billion for the Energy Department.

While the White House is “doubling down” on its bid to boost green energy funding, the administration revealed a more cautious betting strategy Monday when it comes to its controversial loan guarantee program.

The Energy Department loan guarantee program would not receive any expanded funding authority under the plan — the budget instead calls for continuing to vet loan proposals and oversee the existing loan portfolio.

From the Energy Department’s budget plan:

The Department does not request new loan authority or credit subsidy in FY 2013. In FY 2012, as well as FY 2013, the Department’s focus will be on effectively deploying its remaining $170 million in credit subsidy and $34 billion in loan authority in the nuclear power, front-end nuclear, fossil, and renewable and energy efficiency sectors.

Elsewhere, the plan seeks extension of renewable energy tax credits and revival of a lapsed program that provides tax credits for domestic manufacturing of renewable energy and energy efficiency equipment.

—Ben Geman contributed

This post was updated at 1:23 p.m.

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