A group of current and former CEOs, including the heads of several major electric utilities, are recommending a new framework for the U.S. Energy Department to improve federally funded demonstration and deployment of new clean energy technologies.
The proposals follow Congress' recent approval of historic funding for the DOE to scale up a range of advanced energy technologies that could help the Biden administration achieve its lofty climate goals.
The report was released Jan. 20 by the American Energy Innovation Council, a group of CEOs, technology and labor leaders organized by the Bipartisan Policy Center. The council's principal members include Southern Co. Chairman, President and CEO Thomas Fanning, Dominion Energy Inc. Chairman, President and CEO Robert Blue, and Xcel Energy Inc. Executive Chairman Ben Fowke.
The 32-page report urged Congress to increase funding for the Advanced Research Projects Agency-Energy, known as ARPA-E. It also urged Congress to bolster the agency's new SCALEUP program aimed at helping potentially disruptive energy technologies to transition from proof-of-concept prototypes to commercially scalable and deployable ones.
In addition, the report called for the creation of a new federal entity that would work with the private sector to "close gaps in later stages of the innovation and deployment process." That entity, which the report referred to as the Energy Demonstration and Finance Corporation, would have an "explicit focus" on large-scale demonstration and early-stage mass deployment of advanced energy technologies.
The new development corporation would combine the functions and authorities of several proposed and existing entities within the DOE and U.S. government, including merging the department's newly created Office of Clean Energy Demonstrations and existing Loan Programs Office.
The corporation would be governed by an independent board of directors nominated by the president and use a "broad set of financial tools," including contracts, grants, cooperative agreements, loans, loan guarantees and letters of credit. The board could also offer equity investments, insurance products, securitization for resale, and other means of secondary market credit enhancement, the report said.
Congress should initially fund the entity at $60 billion for at least 10 years of operation, the report said.
"The creation of an energy technology corporation would represent a monumental change in how the U.S. commercializes energy technologies," the report asserted.
The recommendations came after U.S. President Joe Biden signed a $1.2 trillion infrastructure bill into law in November 2021. The measure provided more than $62 billion for the DOE's energy transition efforts and established a new Office of Clean Energy Demonstrations to speed the commercialization of emerging technologies.
The new funding will require the agency to substantially increase staffing. In December 2021, DOE loan program Director Jigar Shah said the department needed to hire around 1,000 more people to implement the infrastructure law. Congressional Democrats are still trying to advance a massive social spending and climate bill that would direct additional money to the DOE.
