by Anna Mulrine

Congress passed a bill that set aside $80 billion for clean energy ventures, the largest one-time investment in "green" improvements in U.S. history. It was a centerpiece of the $787 billion American Recovery and Reinvestment Act, otherwise known as the stimulus bill, and its supporters said that the overall act would create 3.5 million jobs, many of them green. The administration also hoped the clean energy funding would be a catalyst for American innovation in areas as diverse as smart electricity grids, wind power, and high-speed rail lines.

But into the experiment, the money is caught in the pipelines. Critics point out that the Obama administration has actually spent less than one third of the $80 billion allocated for green energy ventures. And administration officials estimate the number of jobs created from the energy portion of the stimulus to be 60,000.

Today, the Department of Energy faces "an enormous challenge," says David Sandalow, the assistant secretary of energy for policy and international affairs. "The recovery act asks us to manage more money than we've ever had -- on tight timetables -- giving money to more entities than ever before." Traditionally, DOE is responsible for clean technology development, but it's also the nation's largest funder of basic scientific research."It's comprised of the most careful, intelligent, and risk-averse people in the entire federal government," says Kevin Book, managing director for research at Clearview Energy Partners. That makes it "a lousy place to try to turn into a bank." But DOE, Book says, is being careful. "They're looking before they spend," he adds. "The fiscal conservatives would be less inclined to say this is a bad thing if it weren't such a partisan atmosphere."

Critics have singled out funds that have been particularly slow to be delivered, including $5 billion devoted to the weatherizing of low-income homes. "We've never had a program that valued energy efficiency in homes," says Bracken Hendricks, senior fellow at the Center for American Progress, a liberal-leaning think tank. "But the cheapest, cleanest energy is the energy you never have to use." While nearly $4.8 billion of the program's money has been allocated, far less has been spent. DOE pushed the money out to state energy offices that were ill-equipped to disburse such a large influx of funds. Another hitch involved interpreting the Depression-era Davis-Bacon Act, which requires contractors for public-works projects to be paid wages equal to the prevailing local rate. "It was an unexpected question that hadn't been thought through," says Hendricks. "Each state had to interpret it." And that, he adds, took time.

Batteries included.

One of the more lauded programs changed the distribution of tax credits for wind energy to help wind farms compete with the coal and natural gas industries, part of $23 billion allocated to build renewable energy manufacturing. The earlier tax credit system had led to a boom-and-bust cycle, and the global economic meltdown meant that "suddenly these tax credits were useless in the market," says Hendricks. Once the administration made the tax credit a grant, wind farms "took off."

In Maine, offshore wind resources could provide enough electric power for the entire state in the coming decades, making Maine the "Saudi Arabia" of wind power, says Sandalow. The $4 billion planned for updating the nation's electrical grid has also received widespread praise, as have grants totaling $8 billion to spur the development of a nationwide high-speed intercity passenger rail service.

The administration hopes, too, that $4 billion to develop the next generation of clean energy vehicles will transform transportation in America and help to develop advanced biofuels. Already, applications for a $2.3 billion program to provide tax credits for 183 manufacturers in 43 states -- to spur the creation of products like high-tech insulation and advanced electric car batteries -- have outpaced available credits by a ratio of 3 to 1. This has prompted the administration to request $5 billion more for the program.

The stimulus also puts $400 million into the Advanced Research Projects Agency -- Energy, modeled on the Pentagon's famed DARPA program, widely credited for inventing the Internet (story, Page 44). The new agency will fund "high-risk, high-reward" technology research, Sandalow says, including liquid metal batteries that could double energy density and cut battery costs by 90 percent. While ARPA -- E has its funding, other projects are still waiting for the money to start to flow.

Available at Amazon.com:

The Next Hundred Million: America in 2050

 

Many clean energy stimulus projects have yet to get off ground | Anna Mulrine