The U.S. Department of Energy (DoE) has provided stimulus funding totaling $16.7 billion to date, and that total should reach $30 billion this fall, according to DoE senior advisor Matt Rogers.
Speaking on Tuesday at the Renewable Energy Finance Forum-WEST conference in San Francisco, Rogers said the DoE has “a very exciting fall” planned.
In all, the department has about $90 billion in stimulus funds to distribute. If the $30 billion mark is reached this fall, it will constitute pretty rapid spending for a department that had previously taken, quite literally, years to dispense funds. (Nearly four years after Congress passed legislation authorizing the agency to guarantee loans for clean-energy projects, it has so far guaranteed very few.)
The money now being dispersed takes the form of renewable energy tax credits, grants, loan guarantees and cash payments to electric and plug-in hybrid car makers, battery makers, smart grid deployments and carbon capture projects.
Rogers said that of the money handed out so far (including $2.4 billion for car battery and electric drive projects, almost $1 billion in cash grants for renewable power projects, and billions in grants for state energy efficiency projects) about $700 million has been spent. That total may actually be higher, he said, as there’s a three-month lag in reporting to the DoE
While it might seem like the spigot of stimulus money has just opened up — with new funding solicitations and announcements coming out every week and companies spending significant time and money in an effort to grab some of it — don’t get too accustomed to thinking of Uncle Sam as cleantech’s Mr. Moneybags. Speakers at the Renewable Energy Finance Forum West in San Francisco on Tuesday reminded cleantech companies and financiers that the government money won’t keep flowing forever — and actually for not that much longer.
Dan Reicher, director of Google’s climate change and energy initiative, said that in the midst of unprecedented government support, “we’re staring at the biggest cliff we’ve ever faced in renewables when the stimulus runs out in 18 months.” John Geesman, a former California energy commissioner and writer of the Green Energy War blog, also warned that the stimulus might have been “the high-water mark” for government support. After that, “the fiscal cabinet is bare,” he said.
The heated race for billions of dollars of stimulus money – along with all the indirect effects of sparking matching investment and local and state policies – mean the industry could be in for a major shock when it abruptly ends. More than half of the total recovery funds have already been announced and a good portion has already been allocated. According to the Recovery Act site, which doesn’t break down the spending specifically on greentech, $85.9 billion in stimulus funds has already been paid out, $239.4 billion in stimulus funds has been announced, and a little over $200 billion in stimulus funds is still available. Matt Rogers, senior advisor to U.S. energy secretary Steven Chu for the Recovery Act, said the Department of Energy has succeeded in spending the money even more quickly than it had set out to do so far, doling out $16.7 billion compared to a goal of $16.3 billion by the end of September.
That quick timeline has been good for companies that got hold of some of the money, but not so awesome if your company was late getting in line. And the quickly depleting pot of money means it’s important for companies not to rely on it. Companies still need to have strong business plans and should avoid making changes that don’t fit into their business plans in order to appeal to government agencies, Josh Green, a general partner at Mohr Davidow Ventures, pointed out at a Thomas Reuters conference back in June. “We encourage our portfolio companies to look for low-hanging fruit, but not to make fundamental changes … to the core business.”
In fact, the impacts of the stimulus haven’t been all positive, pointed out Tim Newell, senior advisor to private-equity firm US Renewables Group, at the Renewable Energy Finance Forum. Overall, government policies have had a surprising “neutral to negative” impact on the capital markets so far this year, he said, as funding in the space actually slowed down while people waited for the rules to get pinned down and to find out how they might impact potential investments. Executives in the smart grid industry have expressed similar concerns about the stimulus funds for that sector.
But Newell expects the neutral to negative effect to change to a “highly positive” one next year as more stimulus awards come out and other policies take effect. Some of those awards will come from applications with deadlines that have already passed, like the smart grid stimulus funds; some could come from funding opportunities that become available over the next few months. But keep an eye out — there are a dwindling number of stimulus opportunities left, and when the window closes, companies need to be able to stand on their own two feet.
"Is the stimulus working? That has been the question continually asked since the $787 billion economic stimulus bill—the American Recovery and Reinvestment Act of 2009—passed four months ago. The question carries an increasing sense of urgency with plans underway to accelerate the pace of spending. The law places states and governors on the front lines—partnering with the federal government to make the stimulus work. So it's a question governors are following closely.
For answers to whether the stimulus package is working, we can look at several indicators on the economic dashboard that show the good news, bad news, and some we'll-have-to-wait-and-see news..."
May 15, 2009 – Forbes
The Smart Grid Vs. Grandma
Squeezing savings from smart metering systems means convincing consumers to use them."The smart-metering movement slowly rolling out across the country's utility systems doesn't merely represent an invisible upgrade to America's power supply, it also aims at a more ambitious transformation: changing passive power customers into active participants in energy savings..."
Energy directives and billions of dollars in smart grid funding are driving hundreds of smart metering initiatives around the world. Over the next five years, $21 billion will be spent on smart metering infrastructure, according to a recent report by ON World.
"Of the $350 billion earmarked by governments for climate-related projects, 53 percent, or $184 billion, went to projects and to companies that improve the efficiency of buildings, transportation and industry, or to projects and companies developing and producing fuel cells and energy storage systems..."
"...Applicants have between now and the end of the summer (as little as six weeks for one program) to put together requests for a total of more than $150 million in grants for analyzing transmission upgrades as well as hiring and training staff to work with smart grid technology, renewable energy feeding into the grid and cybersecurity." May 18, 2009 – Forbes
Smart Grids Get A Pay Raise
"Our goal is to fund projects of all sizes as quickly as possible, A U.S. energy policy change means that a smaller number of smart-grid projects could receive larger chunks of stimulus funds.
On Monday, the Department of Energy announced that it would raise the maximum amount of the matching grants aimed at so-called smart grid projects tenfold, from $20 million to $200 million per project. The cap on grants for demonstration projects will also be raised, from $40 million per recipient to $100 million. May 18, 2009 – Time
Locke, Chu Announce Significant Steps in Smart Grid Development
"The Smart Grid is an urgent national priority that requires all levels of government as well as industry to cooperate" Secretary Chu also announced that based on feedback from the public and Smart Grid stakeholders, the Department of Energy is increasing the maximum award available under the Recovery Act for Smart Grid programs. The maximum award available under the Smart Grid Investment Grant Program will be increased from $20 million to $200 million and for the Smart Grid Demonstration Projects from $40 million to $100 million. In making awards, DOE will ensure that funding is provided to a diversity of applications, including small projects as well as end-to-end larger projects.
"President Obama has made a smart electrical grid a key element of his plan to lower energy costs for consumers, achieve energy independence and reduce greenhouse gas emissions," Secretary Locke said. "Today, we took a significant step toward developing the open and transparent interoperability standards necessary to realize the Smart Grid vision."
The $4.5 billion in matching funds allocated to "Electricity Delivery and Energy Reliability" by the American Recovery and Reinvestment Act (ARRA) includes a significant boost to “smart grid” and smart metering initiatives, aimed at updating the seriously ageing US electrical infrastructure.
March 11, 2009 – Forbes
The Stimulus Bill Matters To IT
The bill will spur IT growth and promote energy efficiency.There are billions of dollars more for modernizing the electric grid, too--at least $4.5 billion more and possibly as much as $11 billion, according to published reports. While it's unclear how the money will be divvied up, advocates of the smart grid likely will see many benefits in connecting grid infrastructure to the Internet. Doing so could improve the ability of utilities to forecast, prevent or fix grid problems "The electricity-related provisions in the economic stimulus package sharply brought into focus the essential nature of electricity to our nation's economic recovery. Our economy cannot get stronger, nor can our standard of living be raised, without a reliable, affordable and environmentally sustainable electricity supply. " |