Nuclear a Major Focus in Trump’s Latest Budget Request—and 8 Other Takeaways

Credit to Author: Sonal Patel| Date: Wed, 12 Feb 2020 00:23:04 +0000

The post Nuclear a Major Focus in Trump’s Latest Budget Request—and 8 Other Takeaways appeared first on POWER Magazine.

Yucca Mountain, the 1987 Congressionally appointed deep geologic repository for spent nuclear fuel (SNF), may be officially dead; transmission assets held by the Tennessee Valley Authority (TVA) and three Power Marketing Administrations (PMAs) will be put up for sale; and hundreds of millions of dollars in unobligated balances for flagship programs like the Advanced Research Projects Agency-Energy (ARPA-E) will be canceled. Those are just some prominent power sector–related proposals from President Trump’s newly released fiscal year (FY) 2021 budget request.

Though it slashes funding for the Department of Energy (DOE) to $35.4 billion—by 8.1% from the 2020 enacted level of $38.5 billon (but increases it by 3.5% compared to the 2020 requested amount)—the Feb. 10–issued 2021 budget request seeks to bolster key national priorities, Energy Secretary Dan Brouillette told reporters in a call. “Notably, almost all the increase in funding will go towards the nuclear stockpile and infrastructure modernization,” the newly appointed DOE head said. “In addition to nuclear security, the president’s budget request reflects a much broader message emphasizing national security … because as we have stated in the past, our energy security is national security.”

But the nation is “energy secure,” Brouillette claimed. The U.S. is now the world’s largest producer of oil and natural gas; it is the “world’s second-highest generator of wind and solar energy”; it is “leading the world in carbon emission reductions”; and “for the very first time, at least in my lifetime, we’re set to be a net energy exporter.” That’s why, he said, the budget “underscores the importance of maintaining that energy independence.”

Following are some of the most notable “asks” in the budget. These aspects are significant because they point to the Trump administration’s most significant energy priorities over the short term.

A Uranium Reserve to Respond to Competition from Russia and China. In a notable effort, the DOE put in a $150 million request to establish a new “uranium reserve” to assure availability of domestic uranium “in the event of a market disruption.” Brouillette told reporters the measure responds to a “need for domestically produced uranium.” Pressed for what the measure would entail, he said it will likely involve “the conversion of uranium,” but then noted more details will emerge over the next two weeks.

“The bottom line is that the president has chosen to put the U.S. back into the nuclear game around the world,” he said. “We’re going to be in the process of challenging the Russians, challenging the Chinese, all around the world as they move into these countries and begin to develop nuclear reactors, begin to develop entire infrastructures around, not only the nuclear industry, but the electricity industry as well. What you’re seeing in the president’s budget is the very first step that we will take to put the U.S. back into this competitive game.”

No Specifics on Nuclear Waste Management—but it Suggests Alternatives to Yucca Mountain Will Be Explored. The DOE’s budget request, which follows a Feb. 6 tweet by President Trump that essentially expressed opposition at the long-delayed Yucca Mountain nuclear waste repository in Nevada, also markedly—though murkily—seeks to overcome an impasse on the disposal of SNF. The budget request notes the Nuclear Waste Fund—a U.S. Treasury account collected via a fee charged to ratepayers by nuclear generators since 1983—contained $40.4 billion at the end of 2019. That figure is slated to grow to $44 billion in 2021. The budget requests $28 million (a marked increase over the $3 million requested last year) for the Interim Storage and Nuclear Waste Fund Oversight program, whose main objective is to “contribute” to the safe and secure management of 84,000 metric tons of SNF stored in pools and casks in 35 states.

DOE Undersecretary Mark Menezes, who told reporters the agency is “strongly committed” to its legal obligation to manage and dispose of the nation’s nuclear waste, suggested the measure will include making “substantial progress” at all the DOE’s major cleanup sites and implementing a “robust interim storage effort,” as well as research and development (R&D) on “alternative technologies for the storage, transportation, and disposal of nuclear waste.” Pressed by a reporter to provide some specifics about how the administration plans to circumvent the agency’s decades-long politically prompted paralysis on SNF storage, Brouillette added that to bolster its efforts, the DOE plans to “work” with governors and policymakers, as well as private industry, to “find solutions—that may turn out to be on an interim basis—but we’re going to find solutions to this important problem.” Menezes then remarked: “I do believe that the president will authorize the interagency process to convene a deliberative process so that we can come up with some creative solutions consistent with our obligations under the [Nuclear Waste Act], so, we look forward to kicking that off.”

Big Bucks for Some Advanced Nuclear Projects. The DOE also asked for $3.1 billion to boost “energy independence” and “innovation” for fossil fuels, renewables, and nuclear energy. The biggest chunk of that effort—$1.3 billion—will go to the Office of Nuclear Energy. The DOE asked for $295 million to fund the experimental Versatile Test Reactor (VTR), a first-of-its-kind fast reactor that could help the private sector develop and demonstrate new technologies. The DOE has suggested the VTR could be operational by 2026, but it could cost between $3 billion and $6 billion to build. The proposal also provides $112 million to the Reactor Concepts RD&D (research, development, and deployment) program, $20 million to the Advanced Reactors Demonstration program, and $187 million to the Fuel Cycle R&D program. At the same time, it allots nothing to the Small Modular Reactor (SMR) Licensing Technical Support program (even though one SMR developer is making tangible progress for the first-of-its-kind licensing), and it nixes funding to the Supercritical Transformational Electric Power Generation Program, as well as to the STEP supercritical carbon dioxide project, which raises questions about that program’s future. Finally, it also eliminates funding to the International Nuclear Energy Cooperation program.

Bullish on Advanced Coal Systems and Carbon Capture. If approved as requested, the Office of Fossil Energy Research and Development will get a moderate $731 million, the bulk of which would be designated to its Advanced Energy Systems and Carbon Capture, Utilization, and Storage programs. However, the DOE scales back tremendously on its Natural Gas Technologies program (cutting funding from $51 million asked for last year to $15 million), as well as for “unconventional” fossil energy technologies.

Especially of note is that the Transformational Coal Pilots program, the DOE’s flagship program to develop near-term cost-competitive coal technologies, will get no funding, though the DOE asked for $20 million last year. The budget request makes clear that its focus will rest on “early-stage, high-risk” power systems and components that “address challenges of reliability and resiliency, and improve the efficiency of existing and new units.”

DOE Proposes to Sell Federally Owned Electricity Assets. Also notable is the budget’s repeated proposal to sell federally operated transmission assets owned by TVA and three PMAs: Southwestern Power Administration, Western Area Power Administration (WAPA), and Bonneville Power Administration. It notes: “It is long past time for the Federal Government to divest infrastructure that can be more efficiently maintained by the private sector or local partnerships.” The budget also proposes to authorize the PMAs to charge rates “comparable” to those charged by for-profit, investor-owned utilities, “rather than being limited to cost-based rates, for electricity,” a measure the Trump administration called a “commonsense shift that lessens the burden on the Federal taxpayer.” Finally, the budget also proposes to repeal WAPA’s emergency borrowing authority, which Congress authorized in a 2009 law to help it build or fund new projects that deliver or help deliver power generated by renewable resources.

However, the measure was immediately criticized by the American Public Power Association (APPA) and the National Rural Electric Cooperative Association (NRECA). The trade organizations that represent public power and cooperatives across the nation pledged to fight it, noting Congress has rejected the Trump administration’s attempt to get it passed for four years. The groups noted that the PMAs “provide millions of Americans served by not-for-profit public power and rural electric cooperative utilities with cost-based hydroelectric power produced at federal dams. PMA rates are set to cover all generation and transmission costs, as well as repayment, with interest, of the federal investment in these hydropower projects. None of the costs are borne by taxpayers. Similarly, TVA provides affordable electric power to public power utilities and rural electric cooperatives serving ten million people in seven states at no cost to taxpayers.”

Cuts to All EERE Programs, but Support for Energy Storage. The Office of Energy Efficiency and Renewable Energy (EERE), meanwhile, could see cuts to all programs, especially those relating to renewable electricity. The DOE requested $1.4 billion for EERE, but only $270 million for its renewable programs, which compares to $576 million received in 2019. The cuts come even though, as DOE Undersecretary Mark Menezes noted on Monday, more than 75% of new capacity that will come online this year will be renewables. In an effort to bolster grid reliability and resiliency, the DOE will instead work to push storage technology development, and it has asked for $97 million to fund the Energy Storage Grand Challenge. But while he said the cross-cutting program is necessary to “achieve breakthrough technologies to complement the work we have been doing to try and build grid-scale storage to help facilitate the integration of a more flexible grid with renewables,” the DOE budget lines suggest the funding is confined entirely to EERE’s Vehicle Technologies program (which has no other allotted funding).

Trump Administration Proposes to Cancel Several Loan Guarantee Programs. Notably, however, the 2021 budget request eliminates the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, an Obama-era initiative that provided loans to automobile and vehicle part-makers to produce advanced technology. It also cancels the remaining $4.3 billion in remaining emergency-designated, appropriated credit subsidy.

As significantly, the DOE’s Loans Programs Office (LPO) also proposes to eliminate Title 17 loan guarantees, including the Section 1703 loan guarantee program, which has provided backing for renewable energy systems, advanced nuclear facilities, coal gasification, carbon sequestration, energy efficiency, and other projects. The program, for example, was the financial backbone to provide $12 billion in loan guarantees to the Vogtle expansion—the only nuclear plant under construction in the U.S.—including up to $3.7 billion guaranteed last year. “The FY 2021 Budget proposes to permanently cancel the approximate $161 million in remaining credit subsidy and all authority to guarantee loans appropriated in prior appropriations acts,” the request says. But as with the ATVM program, the DOE plans to maintain portfolio monitoring capabilities.

DOE to Halt ARPA-E. Advanced Research Projects Agency-Energy (ARPA-E), which Congress established in 2007 to help advance high-potential, high-impact energy technologies that are too early for private sector investments, will also see debilitating cuts. The program has since 2009 provided $2 billion in R&D funding for more than 800 energy projects. While the DOE requested $21.3 million for administrative expenses related to overseeing the program’s obligations until September 2022 (as required by Congress), the proposal requests cancellation of $332 million in unobligated balances.

Big Boosts for Cybersecurity, Artificial Intelligence, and Quantum Computing. The DOE’s newly opened offices of Cybersecurity, Energy Security, and Emergency Response (CESER) and Artificial Intelligence and Technology Office (AITO), meanwhile, gained some funding. If approved as submitted, CESER would get $185 million for grid cyber funding, while AITO would get $259 million to improve the robustness, reliability, and transparency of Big Data and AI technologies, as well as quantification and development of software tools for DOE mission applications. The DOE also seeks to allocate $248 million for quantum information science.

According to Brouillette, these initiatives are crucial to America’s leadership in “industries of the future.” As DOE Undersecretary for Science Paul Dabbar explained to reporters, the boost in funding will be important in “progressing scientific research to remain globally competitive.” The efforts could allow DOE to establish two to five national quantum information science research centers to conduct basic research to accelerate scientific breakthroughs in quantum information science and technology, as well as providing funds “as the first steps to establish a dedicated national quantum internet,” Dabbar said.

Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine)

 

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