President Obama’s $29.5 billion Department of Energy (DOE) budget for fiscal year (FY) 2012 increases priority for renewable and nuclear energy technology research while cutting subsidies to fossil fuel energy. It also calls for a $1.3 billion cut to the Environmental Protection Agency (EPA).

The budget asks for $3.1 billion more than last year, necessary because it is about “winning the future,” said Energy Secretary Steven Chu as he unveiled the budget on Monday. “We need to out-educate, out-innovate, and out-build the rest of the world.”

Among budgetary increases is doubled funding for energy efficiency activities and ramped up support for renewable energy research, including $457 million for solar energy; $341 million for biofuels and biomass R&D, including a new reverse auction to promote advanced biofuels; and more than doubling investment in geothermal energy to $102 million.

The budget also includes $853 million to support nuclear energy, including research and development of a variety of nuclear technologies–specifically, small modular reactors–and $453 million for a fossil energy research and development portfolio focused on carbon capture and storage technologies. About $125 million will be spent on developing small reactors through the Reactor Concepts RD&D program–compared to $39 million allotted to the program for FY 2011.

The budget also proposes increasing funding for several of the DOE’s loan guarantee programs: It allots up to $36 billion in loan guarantee authority for new nuclear power facilities and an additional $200 million in credit subsidy to support $1 billion to $2 billion in loan guarantees for energy efficiency and renewable energy projects.

The increases will be funded through a proposed change in spending on fossil fuel energy–primarily through the elimination of tax subsidies for the oil and gas industry and a 45% cut in fossil energy research programs.

The Environmental Protection Agency gets a $1.3 billion cut (13% less than last year); funding reductions also hit aspects of a clean diesel program.

Sources: POWERnews, DOE