President Obama sent his 2016 budget request to Congress on Feb. 2, surely setting off a protracted battle with the new GOP majority over requests for increased spending on renewable energy initiatives and efforts to address climate change.
It is certain that the budget will not become law in its current form, and it was immediately denounced by congressional Republicans and a number of power and fossil-fuel industry groups. Provisions relating to climate change, the Environmental Protection Agency (EPA), and renewable energy are sure to be highly controversial.
Highlights related to power generation are given below.
Department of Energy
The budget request for the Department of Energy (DOE) totals just under $30 billion, a 9.2% increase over the 2015 enacted amount. This includes $5.3 billion for a variety of research and development (R&D) programs, such as advanced vehicles, energy efficiency, carbon capture and sequestration, fugitive methane emissions, and advanced nuclear energy. The DOE’s share constitutes about 75% of the total R&D funds in the 2016 budget.
The DOE’s office of Energy Efficiency and Renewable Energy gets $2.7 billion, a substantial 42.3% increase over 2015. Meanwhile, the Advanced Research Projects Agency-Energy gets $325 million, a 16% increase.
Fossil energy programs are allocated $842 million, a modest 6.4% increase, while nuclear gets $907 million, an 8.9% increase. Most of this—$560 million—is allocated to R&D. The budget restores $6.6 million in funding for clean coal technology that was cut in the 2015 appropriations.
The EPA gets an $8.6 billon request, $450 million over 2015. This includes $1.1 billion for clean air and climate change efforts, and $528 million to evaluate environmental and heath effects related to air pollution, water quality, and climate change.
The Nuclear Regulatory Commission (NRC) budget request is just over $1 billion, down a modest $27.3 million from 2015. (Most of the NRC’s funding comes from license fees; the budget’s net appropriation request is $122.2 million.) Broken out, this includes $226.7 million for nuclear materials and nuclear waste. The budget cuts NRC staffing by 140 full-time positions.
Other energy-related requests include $100 million for new renewable energy project licensing for the Department of the Interior.
Climate change figures heavily in the budget priorities. The administration’s Clean Power Plan gets a major boost with a proposed $4 billion incentive fund for states that go beyond their targets for timing and reduction in carbon emissions.
In addition, the budget requests $1.29 billion—another significant increase—to support the Global Climate Change Initiative. This request includes $500 million for U.S. contributions to the new Green Climate Fund, which will help developing countries leverage public and private finance and invest in reducing carbon pollution.
On the revenue side, the budget would make permanent a variety of clean energy incentives that the Congress has typically extended on a year-to-year basis, including the Research and Experimentation Tax Credit, the Production Tax Credit (PTC), and the Investment Tax Credit. It would, however, make some changes in these incentives, such as making the PTC refundable.
On the fossil-fuel side, it would eliminate about $4.5 billion worth of tax breaks, credits, and deductions for coal mining and oil and gas production for 2016, cuts that are projected to total about $50 billion through 2025.
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).
[This story has been updated to correct an error in the discussion of the NRC request.]