Biden: Stimulus Funds for Energy Innovation Are Working

According to Vice President Joe Biden, the tens of billions of dollars from the stimulus package invested in research and innovation for clean power, the smart grid, and advanced automobiles are working. In a report, the White House pointed to a series of metrics that they say shows that the funds meant to stimulate innovation, create green jobs, and lower the cost of energy technology, have been successful.

While I fully support the stimulus package’s investments into energy innovation, I’m not sure the metrics are doing exactly what the White House is purporting, which is trying to “prove” that the stimulus is working with data. I think it’s still waaay too early to do that. However, I think in general, the stimulus funds have been allocated in a smart manner, despite the innate difficulties of bureaucrats trying to pick winners and losers, and some potential missteps.

Biden also didn’t mention the fact that a significant chunk of the funds haven’t been handed over yet, and the deadline to allocate the money is looming on Sept. 30, 2010 (it’s use it or lose it by that time). A couple of weeks ago, Inspector General Gregory Friedman said that even though the DOE had increased its staff to try to get all the funds out of the door, “two of the Department’s major projects have less than 50 percent of their Recovery Act funds obligated. And, as of the date of this review [Aug. 4], none of the programs has obligated 100 percent of their respective funding.” I think Friedman’s report is one of the reasons for the press conference today.

In Biden’s speech, he spoke about battery plants, solar thermal in the Mojave Desert, and the smart grid, and specifically called out a meeting with the CEO of LED chip maker Cree. Here are the metrics that are supposed to prove the stimulus funds are being spent well. The U.S. is now on track (thanks to the stimulus) to:

  • Cut the cost of solar power in half by 2015. In addition, the report says the cost of power from rooftop solar panels will drop from $0.21 per kWh in 2009 to $0.10 per kWh in 2015, and as low as $0.06 per kWh by 2030. The cost of utility-scale solar projects will drop from $0.13 per kWh today to $0.06 in 2015.
  • Cut the cost of batteries for electric vehicles by 70 percent between 2009 and 2015. This means that an all-electric vehicle will fall from $33,000 to $10,000, and the cost of typical plug-in hybrid batteries will drop from $13,000 to $4,000. The weight of a typical electric-vehicle battery is forecast to decrease by 33 percent, from 333 kilograms to 222 kilograms, by 2015. The lighter battery means a lighter car, which means less energy is needed to power the car. A typical battery is expected to last 14 years in 2015: more than three times as long as the current 4-year lifetime.
  • Double U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012. Stimulus funds will double renewable energy capacity from the 28.8 GW of solar, wind, and geothermal generation that has been installed as of 2008, to 57.6 GW by the end of 2011, and double renewable energy manufacturing capacity from an annual output of 6 GW of renewable equipment (like wind turbines or solar panels) to 12 GW by the end of 2011. This will increase the U.S. share of global manufacturing of solar photovoltaic modules from 8 percent of all production, to 14 percent by 2012.
  • Green Jobs. The real metric that critics of the Obama administration will look at is how many jobs were created, given the stimulus is supposed to stimulate the economy. Steven Chu said these above breakthroughs are helping to create “tens of thousands of new jobs,” and helping the U.S. to “continue as a leader in the global economy.”

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