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Clean Energy Innovation Policy in Congress: The Battery Innovation Act of 2011

There’s no telling what the future of new U.S. clean energy policy holds.  Congress and the White House are stalled in legislative gridlock over the debt ceiling. And clean energy programs are taking a beating in 2012 budget negotiations.  But even so, some legislators are taking it upon themselves to offer cohesive clean energy innovation initiatives that are an excellent framework for future energy policy debates.  Case in point, Senator Debbie Stabenow (D – MI) proposed the Battery Innovation Act of 2011(BIA) – a comprehensive advanced electric vehicle battery initiative. 

As it stands, affordable, energy dense batteries that can travel long distances on a single charge are a key barrier to widespread electric vehicle adoption.  And as I’ve discussed in an earlier post, the current advanced battery technology strategy at DOE is more disparate than coordinated.  So BIA is a welcomed and excellent first step in addressing this weakness in U.S. energy policy.

BIA addresses the full range of advanced vehicle battery technology development.  The most significant standout in the proposal is its focus on addressing the numerous stages of technology development.  BIA supports battery innovation from basic research through manufacturing as well as attends to the growing need for rare, but critical materials in battery production.  For instance it orders the Department of Interior to conduct a much needed analysis of the raw materials used in vehicle batteries with special attention on U.S. supply and reliance on those materials.  The reliance on rare materials, such as cerium and yttrium, in current electric vehicle battery designs puts the United States at a significant disadvantage.  China currently produces 97 percent of the these materials, meaning that without significant domestic supply or the innovation of viable substitute materials we could be trading in our reliance for foreign oil in exchange for a reliance on foreign rare materials.  This study would be in line and complementary to DOE’s critical materials strategy released late last year.

Furthermore, BIA really takes a strong stance on supporting a domestic advanced battery manufacturing base.  It requires DOE to supply competitive grants to emerging U.S. advanced battery manufacturers that want to build new factories and expand existing facilities.  This seems to be a supplement to the very successful 48(c) advanced energy manufacturing tax credit created through the Recovery Act that provided significant support (in this case through tax breaks) to clean energy manufacturers that are expanding operations and creating jobs.  The proposal goes as far as to authorize $2 billion for this new grant program.

In addition it also authorizes $40 million over four years for grants to support domestic lithium production, processing, and recycling for advanced lithium batteries.  Depending on the definition of “advanced lithium batteries,” this program could be important if recent lithium-air battery breakthroughs lead to viable and affordable next generation batteries within the next decade.  It also helps support existing supply chains that will be vitally important for next-gen batteries to quickly commercialize and enter the market.

BIA focuses on spurring next generation breakthroughs in vehicle battery storage. Current batteries add over $10,000 to the cost of electric vehicles and work for less than 50 miles per charge on average, drastically limiting the impact of electric vehicles in the automobile market.  So BIA tackles the need for a new generation of vehicle batteries that cost a lot less and travel a lot farther on a single charge in three high-impact ways. 

First, it authorizes ARPA-E – DOE’s nimble high-risk/high-reward clean technology research program – to invest in the development of a next generation, robust plug-in electric vehicle ecosystem. This includes developing breakthrough charging infrastructure, advanced batteries, and advanced drive component technologies that the private sector is unable or unwilling to develop on their own.  This would be in addition to ARPA-E’s advanced battery projects within its BEEST program and would specifically expand ARPA-E’s investments to other important breakthrough technology needs like rapid charging stations and power electronics for vehicles.

Second, it authorizes DOE to create an Advanced Battery Breakthrough Achievement Award.  Similar to the X-Prize, this competition would provide an award to the battery technology that can travel at least 500 miles on one charge and is affordable and reliable.

Third, it authorizes DOE to create an Advanced Battery Science Innovation Hub.  Currently, DOE supports three hubs – one each on solar energy, building energy efficiency, and nuclear reactor design modeling – that bring together top scientists, academics, and often times the private sector to solve vital early stage research problems. Thus far it’s been a highly successful program, so much so that President Obama wants to create three more Hubs on other high-impact research topics including one for advanced batteries.  But because of budget austerity measures in Congress, the creation of these new Innovation Hubs is in question.  Therefore, BIA would formally authorize a vital energy proposal skipped over (so far) in the 2012 budget debate and provide basic battery science support where it’s needed most.

Collaboration and coordination are a central theme of BIA. Collaboration and coordination – key characteristics of successful public innovation programs – are inherent to ARPA-E and the Innovation Hubs.  But there seems to be a lack of both in current DOE battery R&D initiatives.  So BIA goes even farther by explicitly building collaboration and coordination into its proposals.  Specifically, it requires DOE to coordinate its research, development, demonstration, and commercial activities among all programs relevant to batteries.  This includes ensuring that there it doesn’t undertake duplicative projects and leverages all existing relationships with state and local government programs. It also requires coordination among the Department’s of Energy, Transportation, Interior, and Defense to tackle key battery technology problems including the aforementioned critical materials analysis as well as on intelligent transportation systems and connectivity and the battery needs of combat troops. In particular, the proposal requires DOE to coordinate with DOD to demonstrate the use of batteries as an energy source for military installations.  This would be complementary to efforts in the DOD Energy Security Act that aim to create a DOD-DOE joint task force on alternative fuels as well create a joint alternative fuels report that includes advanced batteries.

In total, these proposals make BIA a cohesive and well thought out policy that if enacted (and fully funded) would play a significant role in not only developing breakthrough vehicle batteries and an electric vehicle market, but also ensuring that a lot of the economic benefits of these new technologies stay in the United States.  But to be clear, the bill is not perfect. While it proposes high-impact battery innovation programs it does not authorize funding to support nearly all of them.  In fact, most of the media coverage of the proposal focuses on the $2 billion advanced battery manufacturing grants when its other unfunded proposals are equally if not much more important. Needless to say the success of this proposal lies in whether and how all of its programs get funded, if at all. But at the least, Congress should use this proposal as a framework for any future energy innovation proposals. 


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