United States: Forecast For The Department of Energy Finance Programs

Taite R. McDonald is a Sr Policy Advisor and Stephen R. Bolotin is a Public Affairs Advisor both in our Washington, D.C. office.


  • Despite concern over President-Elect Donald Trump's selection of former Texas Gov. Rick Perry as Secretary of Energy and a recent questionnaire circulated at the Department of Energy (DOE) by the Trump transition team, top DOE programs related to clean energy innovation have all been enacted by Congress, mostly during the George W. Bush Administration.
  • These programs – including the Office of Energy Efficiency and Renewable Energy (EERE), Advanced Research Project Agency-Energy (ARPA-E) and the Loan Programs Office (LPO) – have continued to receive appropriations funding in a Republican-controlled Congress, albeit at decreased levels.
  • This alert takes a closer look at these top programs in clean energy innovation and what historical trends may indicate about their near- and long-term futures.

President-Elect Donald Trump announced former Texas Gov. Rick Perry on Dec. 13, 2016, as his selection for Secretary of Energy. To many champions of renewable energy, Perry is considered an adversary for his hardline denial of climate change, his 2011 election campaign promise to abolish the Department of Energy (DOE) and his 2015 stance against extending the federal tax credit for wind. Nevertheless, his actions as governor speak to a more pragmatic leader who presided over an "all of the above" energy strategy that made Texas not only an economic powerhouse and a world leader in oil and gas production but also a global leader in wind and renewable energy investment. Indeed, Perry fostered a pro-business economic climate in the state and even supported the construction of transmission lines that have enabled wind power to grow from 116 megawatts when Perry took office to 18,000 megawatts today, making Texas the nation's No. 1 wind producer.

In addition to Trump's energy secretary pick, uncertainty over the fate of DOE is further heightened with the recent questionnaire circulated at DOE by the Trump transition team that posed 65 probing questions regarding issues such as the loan guarantee program, the validity of the work at the U.S. Energy Information Agency (EIA) and which programs are most critical to President Obama's climate change agenda. Most contentious of all have been the questions specifically requesting names of DOE employees and contractors who have participated in official activities related to climate change. In all, two themes emerge from these questions:

  1. a suspicion of all climate change-related initiatives
  2. a noteworthy interest in the potential of nuclear energy

Importantly, despite the anxiety that Trump's transition questions and energy secretary pick have produced, DOE's top programs related to clean energy innovation – the Office of Energy Efficiency and Renewable Energy (EERE), Advanced Research Project Agency-Energy (ARPA-E) and the Loan Programs Office (LPO) – have all been enacted by Congress, mostly during the George W. Bush Administration, and have continued to receive appropriations funding in a Republican-controlled Congress, albeit at decreased levels. Despite popular perception, DOE's primary functions actually involve nuclear weapons development, nuclear arsenal safety and reliability, and environmental clean-up of weapons development sites.

Consequently, we anticipate that most of these programs will remain in place in the near term. For the long term, we envision the programs being legislatively tweaked to incentivize energy innovation more broadly, perhaps with a renewed interest in advanced nuclear and small modular nuclear reactors given the number of related questions in the transition questionnaire. Lastly, it's important to bear in mind that the ideological positions being born out during this transition period do not necessarily reflect the personal convictions of either Trump or Perry, who have both exhibited pragmatic tendencies in their leadership style despite their hardline rhetoric employed in election campaigns. What follows is a closer look at these top programs in clean energy innovation and what historical trends may indicate about their near- and long-term futures.

Office of Energy Efficiency and Renewable Energy (EERE)

For each of the past five years, DOE has requested increased funding to support EERE programs and objectives, and the response of Congress has been to provide funding at levels lower than what was requested. Instead of the Trump Administration wholly abolishing these programs as some conservative organizations promote, we anticipate that the new administration will recommend decreases in funding and encourage that these programs return to their pre-Obama positions, objectives and funding levels.

Pre-Obama Administration EERE

Prior to the Obama Administration, EERE programs were funded at levels 20 percent to 40 percent lower than they are now and in a way that strategically emphasized technologies with the potential for reducing our growing reliance on oil and to promote domestic clean energy production, jobs and innovation; Congress also re-evaluated the priorities for each subprogram on an annual basis instead of simply funding them at the same levels of prior years. Further, these programs didn't concentrate on climate but instead focused on targeted research, demonstration and deployment to overcome market obstacles and critical "valleys of death" for new energy technology, which typically occur post-laboratory research, post-technology pilot and post-technology demonstration.

While the market for clean energy investment – as promoted by numerous conservative policy agendas – already exists where technology is economically viable, EERE programs represent a small amount of funding overall to ensure the deployment of alternative sources of energy that can enhance national security and economic growth. For instance, DOE's enacted budget for Fiscal Year (FY) 2016 was $29.6 billion, of which EERE constituted less than 7 percent.

Statutory Foundation of EERE

The importance of strategically investing in technologies through EERE – that harness abundant, naturally occurring, domestic sources of energy, diversify the nation's energy portfolio and minimize the environmental impact of conventional sources – has been recognized by each Congress and President, long before EERE was organized into what it is today in 2001 by President Bush.1

Most notably, EERE and its predecessors have a strong track record over the past 30 years of yielding significant economic and security benefits. In 2006, a study sample of EERE energy efficiency portfolio projects over more than 20 years by the National Academy of Science's National Research Council found that the total net realized economic benefits associated with the DOE energy efficiency programs that it reviewed had already returned approximately $30 billion from the roughly $7 billion (1999 dollars) total federal energy efficiency investment.2 To date, third-party evaluations have assessed one-third of EERE's research and development portfolio and found that an EERE taxpayer investment of $12 billion has already yielded an estimated net economic benefit to the United States of more than $230 billion, with an overall annual return on investment of more than 20 percent.3 Finally, many of the programs within EERE – such as the SunShot Initiative, Bioenergy Technology Office (BETO) and Vehicle Technology Office (VTO) – focus on clear objectives that drive American competitiveness in advanced manufacturing and energy technology innovation.

Our Forecast

Accordingly, we anticipate that there will be an impact on funding levels and more scrutiny with regard to the objectives of these programs. However, we believe that these programs will remain in place at reasonable levels of funding due to the long-standing bipartisan support of EERE combined with a strong track record of success and documentable economic benefits to the U.S. economy for a very minimal investment. Similar to the Department of Defense (DoD) energy programs covered in previous Holland & Knight Government Energy Finance Blog posts (see Department of Defense Positioned to Untangle the Tether of Fuel," Dec. 13, 2016, and " Department of Defense Programs Provide Strong Foundation for Energy Independence," Dec. 2, 2016), we anticipate that the focus of the EERE's initiatives will shift from climate change and "more funding is necessary" to strategic support that focuses on national security, technology innovation, energy independence and domestic job growth for renewable energy applications – all of which can continue to benefit significantly from the investment that the EERE program provides.

Advanced Research Projects Agency-Energy (ARPA-E)

Unlike the EERE programs noted above, ARPA-E has been able to increase its budgets by more than 50 percent over the past five years due to its underlying statutory foundation, a focus on keeping our country globally competitive in the race for energy security, and its development of market-driven solutions in lieu of government mandates and interventions. Although some conservative organizations advocate to cut the program and reports that the recent transition questionnaire specifically zeroed in on ARPA-E's role in President Obama's climate change agenda, we expect the program to remain in place at least in the short term due to bipartisan congressional support and growing market demand for innovative energy technology. However, ARPA-E's long-term stability remains in question in the absence of programmatic refinement due to controversial Obama-era execution and a minimal track record of energy breakthroughs reaching commercialization.

Statutory Foundation of ARPA-E

ARPA-E was officially created in 2007 when President George W. Bush signed into law the America COMPETES Act. The creation of the agency was the result of a series of reports commissioned by the National Academies of Science (NAS) at the request of congressional leadership. In 2005, leaders from both parties in Congress asked NAS to "identify the most urgent challenges the U.S. faces in maintaining leadership in key areas of science and technology," as well as specific recommendations to policy makers to shore up American competitiveness and security in the global economy. In its report for Congress, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, NAS called for decisive action, warning policymakers that U.S. advantages in science and technology – which made the country a technological world leader for decades – had already begun to erode. The American COMPETES Act, however, remained unfunded until the stimulus package was passed in 2009. In a supplemental report in 2010, NAS emphasized that our "ability to compete for quality jobs in the global economy has continued to deteriorate in the last five years" calling for sustained investment in education and basic research to stem the tide. Since then, ARPA-E has generally been less politicized than other DOE initiatives that support clean energy innovation and thus received significantly increased appropriations funding from Congress when EERE did not.

Our Forecast

Despite the Program's bipartisan foundation and increased funding over the past five years, ARPA-E's strong ties to the Obama Administration's climate change efforts and recent scrutiny from the Government Accountability Office, DOE Inspector General, and House Science, Space, and Technology Committee staff regarding private sector investments associated with ARPA-E's current portfolio all put the program at risk. Indeed, there is a decided lack of attributable success when only 45 out of the 500 projects awarded to date – by ARPA-E's own admission – have garnered private sector funding totaling slightly more than 1.25 billion. This increased scrutiny of ARPA-E's track record, along with its perceived alignment with the Obama Administration's climate change agenda, may represent an existential threat if the program resists realigning with its original statutory objectives.

Other DOE Programs Update

Loan Programs Office (LPO)

By contrast with other program offices at DOE, the LPO has received its funding authority to issue loans for the commercial development of innovative energy and vehicle technologies through appropriation bills in 2007 and 2009, and this funding authority remains available until committed. Indeed, LPO's Title XVII Program has more than $24 billion in loan authority remaining, while its Advanced Technology Vehicles Manufacturing (ATVM) Program has more than $16 billion remaining. For the Title XVII Program, LPO issues loans ranging from several million to more than $1 billion for advanced fossil, advanced nuclear, renewable energy, distributed and energy efficiency projects that employ "new or significantly improved technology." For the ATVM Program, LPO issues loans for advanced "ultra-efficient" vehicle and/or component manufacturing.

While both programs are actively soliciting quality applications across all technology areas, the LPO has received no shortage of negative attention over the years. A small number of notable bankruptcies have put the LPO in the crosshairs – despite the failure rate being only approximately 8 percent. The Republican-controlled Congress has unsuccessfully tried to rescind ATVM funding on several occasions. ATVM has also been accused of playing favorites with clean-energy loans and rejecting the loan application from a carmaker trying to make a "clean" SUV. For all of these reasons, LPO officials have become increasingly risk averse, requiring applicants to now demonstrate a product sales pipeline prior to even entering due diligence. There also appears to be an increasing reluctance to issue loans to any early-stage companies, especially in ATVM.

While we believe the LPO likely will remain intact in a Trump Administration – especially given its statutory underpinnings – we anticipate this trend toward requiring ever more stringent risk mitigation strategies to continue. We also anticipate an increased appetite to promote the advanced fossil and nuclear components of the program, which have a combined $21 billion in existing authority. The renewable energy, distributed energy and energy efficiency components of the program will likely not see its $4 billion in authority increase but may still garner some administration support as part of an "all of the above" energy strategy.

Office of Fossil Energy (FE)

FE is the federal government's lead office for coal, natural gas and oil exploration and development. By contrast with EERE's $2.069 billion in funding, FE received just $632 million for FY 2016. Currently, FE oversees approximately 600 research and development projects in advanced fossil fuel resource development and manages the U.S. Strategic Petroleum Reserve. In recent years, the Republican-controlled Congress has demonstrated a clear appetite to increase funding for this office, authorizing more than was requested by DOE. We believe that this office may shift away from its priority of supporting carbon mitigation efforts toward technology development that would enable further fossil fuel resource development.

Office of Electricity Delivery and Energy Reliability (OE)

OE is the federal government's lead agency for all matters pertaining to the delivery of electricity. OE funds research and development into innovative solutions for storing and delivering electricity. The office also seeks to identify and prevent potential weakness in electricity infrastructure that could lead to large-scale power outages. By contrast to EERE's $2.069 billion and FE's $632 million, OE received $206 million in funding for FY 2016. Given that OE was created statutorily in 2005, the office is likely to remain in place in a Trump Administration. Its current focus on helping integrate renewable and distributed energy may be altered to more broadly focus on energy resiliency as well as the hardening of transmission and distribution infrastructure and other grid support solutions in an economic manner. Even with this change, grid solutions that deploy energy storage are likely to remain attractive, thereby still assisting renewable energy generation.


1. ALLGOV. "Office of Energy Efficiency and Renewable Energy." Accessed Nov. 28, 2016.

2. Department of Energy. FY 2006 Congressional Budget Request. Vol 3. Feb. 2005.

3. Office of Energy Efficiency and Renewable Energy. "About Us." Accessed Nov. 28, 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions