New Stimulus Bill: $35.2 Billion for Energy Initiatives

According to summary documents reviewed by TechCrunch, the recently approved economic stimulus package from Congress allocates approximately $35.2 billion to various energy initiatives.

Dr. Leah Stokes, an Assistant Professor at the Bren School of Environmental Science & Management at the University of California, Santa Barbara, commented, “This is likely the most substantial energy legislation enacted in the last ten years.”

The funding is distributed between the Energy Act of 2020 and the Energy for the Environment Act, both of which provide new financial resources for significant technological advancements.

“[The Energy Act of 2020] represents a bipartisan and bicameral effort to promote energy innovation, authorizing over $35 billion in research, development, and demonstration (RD&D) activities throughout the Department of Energy’s (DOE) portfolio, and either establishing or strengthening programs vital for bringing emerging technologies to market,” a legislative summary explains.

The spending plan incorporates over $4.1 billion dedicated to novel technology initiatives.

Photovoltaics, advanced transportation technologies, and energy-efficiency technologies are projected to benefit the most from this investment.

There’s $1.5 billion designated for cutting-edge solar technologies, encompassing modules, concentrated solar power, innovative photovoltaic systems, and programs designed to broaden solar manufacturing and recycling capabilities. An additional $2.6 billion is allocated to transportation technologies. Furthermore, energy-efficiency and weatherization programs will continue to receive support through a $1.7 billion reauthorization of the Weatherization Assistance Program. 

Energy-grid technologies will experience a $3.44 billion enhancement, comprised of $1.08 billion for supporting short-term, long-term, seasonal, and transportation energy storage solutions, and $2.36 billion for intelligent utility and energy distribution technologies. 

An additional $625 million is devoted to new research, development, and commercialization efforts for both onshore and offshore wind technologies. Furthermore, $850 million is earmarked for geothermal technology development, and $933 million for marine energy and hydropower technologies. Finally, $160 million is allocated for upgrades to hydropower generators, and $180 million is designated for improvements to existing federal infrastructure through the Federal Energy Management Program. 

With the goal of directing resources and innovation toward sectors where decarbonization presents the greatest technical hurdles, a $500 million fund is established for stakeholders in industries such as iron, steel, aluminum, cement, and chemicals, as well as transportation companies involved in shipping, aviation, and long-haul transport, who are pursuing decarbonization strategies.

The summary report states that, “By making these crucial investments now, the Energy Act of 2020 will help reduce our nation’s greenhouse gas emissions, create well-paying jobs in the United States, and enable the export of these technologies to expanding international markets in the years ahead.”

While funding is directed toward next-generation technologies with established commercial viability, a significant portion of the investment supports the commercialization of technologies that have yet to prove their feasibility on a large scale.

This includes carbon capture, utilization, and storage technologies, which are receiving a $6.2 billion boost for implementation at industrial and energy facilities. Congress is also approving a $447 million research and development program for large-scale carbon dioxide removal projects—with a $100 million grant specifically for direct air capture facilities that capture at least 50,000 metric tons of carbon dioxide annually.

Nuclear technologies are also receiving substantial support, with $6.6 billion in funding for the modernization of existing nuclear power plants and the development of advanced reactor designs. Additionally, the emerging fusion industry can add $4.7 billion to its available capital through investments in both basic and applied research.

This comprehensive spending package also includes provisions to ensure that promising new technologies are not overlooked. A $2.9 billion allocation is designated for ARPA-E, the government’s advanced energy research agency, which operates under a structure similar to DARPA, the agency responsible for the development of the internet. Moreover, drawing inspiration from NASA’s successful commercialization of technologies, the Office of Technology Transitions, which fosters partnerships with national laboratories, is being formalized and will support milestone-based projects similar to those effectively utilized by the Air Force and the Department of Defense.

Finally, the new energy bill directs the Department of the Interior to facilitate the generation of 25 gigawatts of solar, wind, and geothermal power on public lands by 2025.

Stokes explained, “As I understand it, they are examining what the federal government has accomplished with solar and wind energy and seeking to replicate that success with other technologies.”

From a climate perspective, Stokes emphasized the importance of other provisions within the stimulus package. There is a commitment to phase out hydrofluorocarbons, a significant contributor to global warming and climate change, by 2035. Eliminating the use of these chemicals globally in refrigeration and other applications could potentially reduce warming by half a degree Celsius (a substantial impact).

Stokes expressed concern regarding the limited duration of some tax credits and the absence of a tax credit for electric vehicles. “Tax credits for EVs provide a direct consumer benefit that is essential for widespread adoption,” Stokes stated. “They served as a crucial equalizer between EVs and gasoline-powered cars.”

Despite the positive developments for climate advocates embedded within this portion of the stimulus, Stokes cautions against premature celebration.

Stokes said, “This package will not, by itself, resolve the climate crisis.” She added, “If Republicans gain control next year, there will be a new committee chair who may not be as supportive… We must learn to acknowledge our successes while recognizing what remains incomplete—and there is still a great deal to be done.”