Renewable Energy and Energy Efficiency Incentives: A Summary of Federal Programs

Lynn J. Cunningham
Information Research Specialist

Beth A. Roberts
Information Research Specialist

Energy is crucial to the operation of a modern industrial and services economy. Recently, there have been growing concerns about the availability and cost of energy and about environmental impacts of fossil energy use, especially global climate change. Those combined concerns have rekindled interest in energy efficiency, energy conservation, and the development and commercialization of renewable energy technologies.

Many of the existing efficiency and renewables programs have authorizations tracing back to the 1970s. Many of the programs have been reauthorized and redesigned repeatedly to meet changing economic factors. The programs apply broadly to sectors ranging from industry to academia, and from state and local governments to rural communities.

Since 2005, Congress has enacted several major energy laws: the Energy Policy Act of 2005 (EPACT 2005; P.L. 109-58); the Energy Independence and Security Act of 2007 (EISA; P.L. 110- 140); the Energy Improvement and Extension Act (EIEA), enacted as Division B of the Emergency Economic Stabilization Act (EESA; P.L. 110-343); and the American Reinvestment and Recovery Act (ARRA; P.L. 111-5). Each of those laws established, expanded, or modified energy efficiency and renewable energy research, development, demonstration, and deployment (RDD&D) programs. The Department of Energy (DOE) operates the greatest number of efficiency and renewable energy incentive programs. The Department of the Treasury and the Department of Agriculture (USDA) operate several programs. A few programs can also be found among the Departments of Transportation (DOT), Labor, and Housing and Urban Development (HUD).

This report describes federal programs that provide grants, loans, loan guarantees, and other direct or indirect regulatory incentives for energy efficiency, energy conservation, and renewable energy. For each program, the report provides the administering agency, authorizing statute(s), annual funding, and the program expiration date. The appendixes provide summary information in a tabular format.


Date of Report: March 22, 2011
Number of Pages: 58
Order Number: R40913
Price: $29.95

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China and the United States—A Comparison of Green Energy Programs and Policies

Richard J. Campbell
Specialist in Energy Policy

China is the world’s most populous country with over 1.3 billion people. It has experienced tremendous economic growth over the last three decades with an annual average increase in gross domestic product of 9.8% during that period. This has led to an increasing demand for energy, spurring China to add an average of 53 gigawatts (gw) of electric capacity each year over the last ten years to its power generation capabilities.

China has set ambitious targets for developing its renewable energy resources with a major push of laws, policies, and incentives in the last few years. The wind power sector is illustrative of China’s accomplishments, as installed wind power capacity has gone from 0.567 gw in 2003 to 12.2 gw in 2008, and China surpassed the United States in 2010 with over 41 gw of installed wind power capacity. Notably, however, approximately one-third of that capacity is not yet connected to the power grid. Plans already exist to grow China’s wind power capacity to 100 gw by 2020. A similar goal exists for the solar photovoltaic power sector which China intends to increase generating capacity from 0.14 gw as of 2009 to over 1.8 gw by 2020. A hold on large and medium-scale hydropower project development has been lifted, with a virtual doubling of hydropower capacity planned. Most recently, China pledged ahead of the Copenhagen talks in 2009 that 15% of total energy consumption will come from non-fossil fuel sources by the year 2020. The 12th Five Year Plan will encompass 2011 to 2015, and will further formalize the link to green energy with specific deployment goals and investment. China recognizes that developing its domestic renewable energy industry and building its manufacturing capacity will help it meet energy demands at home and win advantages in future export markets.

The key piece of legislation in recent years for advancing renewable electricity in China is the Renewable Energy Law of 2005. The law was designed to “promote the development and utilization of renewable energy, improve the energy structure, diversify energy supplies, safeguard energy security, protect the environment, and realize the sustainable development of the economy and society.” Renewable energy is subsidized by a fee charged to all electricity users in China of about 0.029 cents per kilowatt-hour, and was originally based on the incremental cost difference between coal and renewable energy power generation.

However, energy efficiency and conservation are officially China’s top energy priority. These are considered the “low-hanging fruit” in the quest to reduce energy use and cut demand. Energy conservation investment projects have priority over energy development projects under the Energy Conservation Law of 1997, with government-financed projects being selected on “technological, economic and environmental comparisons and validations of the projects.” China is the world’s largest market for new construction, and new building standards have been in development since 2005 with national energy design criteria for residential buildings. In the power generation sector, many smaller, less efficient coal-fired power plants have been closed.

In contrast to China, some argue that the United States does not have a comprehensive national policy in place for promotion of renewable energy technologies, with some observers saying that the higher costs of renewable electricity are not conducive to market adoption. However, for both countries, the reasons for increasing the use of renewable energy are diverse, and include energy security, energy independence, cleaner air, and more recently anthropogenic climate change, sustainability concepts, and economic development. Creating new, higher quality jobs could reasonably be said to be primary drivers of policy goals in both the United States and China.


Date of Report: March 30, 2011
Number of Pages: 29
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Energy and Water Development: FY2011 Appropriations

Carl E. Behrens, Coordinator
Specialist in Energy Policy

The Energy and Water Development appropriations bill provides funding for civil works projects of the Army Corps of Engineers (Corps), the Department of the Interior’s Bureau of Reclamation, the Department of Energy (DOE), and a number of independent agencies.

Key budgetary issues for FY2011 involving these programs may include the following:

• the distribution of Corps appropriations across the agency’s authorized planning, construction, and maintenance activities (Title I);
• support of major ecosystem restoration initiatives, such as Florida Everglades (Title I) and California “Bay-Delta” (CALFED) and San Joaquin River (Title II);
• alternatives to the proposed national nuclear waste repository at Yucca Mountain, Nevada, which the Administration has abandoned (Title III: Nuclear Waste Disposal);
• several new initiatives proposed for Energy Efficiency and Renewable Energy (EERE) programs (Title III); and
• funding decisions in DOE’s Office of Environmental Management.

Funding for FY2010 Energy and Water Development programs is contained in H.R. 3183, which the House passed July 17, 2009. The Senate passed its version of H.R. 3183 July 29. The conference committee issued its report (H.Rept. 111-278) September 30, and the House passed the conference bill October 1, and the Senate October 15. The President signed the bill October 28 (P.L. 111-85).

President Obama’s proposed FY2011 budget for Energy and Water Development programs was released in February 2010. On July 15, 2010, the House Appropriations Subcommittee on Energy and Water Development approved a bill to fund these programs. In the Senate, the Energy and Water Development subcommittee approved a bill on July 20, and the full Appropriations Committee reported out S. 3635 (S.Rept. 111-228) on July 22. On September 30, the Senate and the House passed H.R. 3081 (P.L. 111-242), a continuing resolution that funded government programs at the FY2010 level through December 3. H.J.Res. 44 (P.L. 112-4) amended P.L. 111- 242 extending funding through March 18, 2011, and reducing funding levels for a number of Energy and Water Development programs. On March 11, H.J.Res. 48 was introduced. It would extend funding through April 8. The President signed the bill (P.L. 112-6) on March 18.

On February 14, 2011, H.R. 1 was introduced, continuing funding through the rest of FY2011 at the FY2010 level, but with many specified exceptions in which funding was reduced. On February 19 the House passed H.R. 1 by a vote of 235-189. In the Senate, S.Amdt. 149 was offered as a substitute for H.R. 1, continuing funding through the rest of FY2011 but with fewer funding reductions. On March 9 the Senate rejected both the House-passed version of H.R. 1 and the S.Amdt. 149.


Date of Report: March 21, 2011
Number of Pages: 59
Order Number: R41150
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Outer Continental Shelf Moratoria on Oil and Gas Development

Curry L. Hagerty
Specialist in Energy and Natural Resources Policy

Moratoria measures for the outer continental shelf (OCS) establish bans or restrictions on oil and gas exploration and development in federal ocean areas. With some exceptions for marine sanctuaries and monuments, no portion of the federal OCS has a permanent moratorium on oil and gas leasing and development. While some areas are under temporary development bans, such as suspensions or moratoria directed by either legislative or executive powers, most of the OCS is free of such restrictions and is considered permissible for offshore leasing activity.

Aspects of moratorium policy (either establishing or lifting temporary bans on oil and gas exploration and development) are derived from legislative and executive powers to direct offshore leasing activities. A shift in both legislative and executive moratorium policy during the 111th Congress signaled an end to measures that had banned development in some OCS areas since the early 1980s. Legislative moratoria enacted annually by Congress for about 27 years as part of the Department of the Interior appropriations acts expired on September 30, 2008. In areas where OCS leasing restrictions were changed, some preliminary oil and gas leasing activity has commenced, but no lease sales have been held.

Support for three national objectives coalesced in 2009, resulting in the removal of most congressional and executive constraints on oil and gas exploration and development: (1) promoting domestic energy production to improve the nation’s energy security, (2) enhancing federal revenue, and (3) spurring innovation and diversification in ocean energy technologies to help create new jobs. The shift in moratorium policy, along with two other developments—the start of federal offshore renewable ocean energy projects (e.g., offshore wind farms) and expanded oil and gas prospecting in deepwater areas—increased the responsibilities of the federal offshore energy program.

Around the world, changing ocean energy policies are affecting how nations govern offshore areas. Economic pressures and technological advances are driving changes in moratorium policy as the global search for energy reaches into deeper ocean waters. A number of countries are revisiting policies about offshore areas, and some countries are making claims to expand their reach for offshore resources. One venue for claims of this nature is the United Nations Convention on the Law of the Sea (UNCLOS). Although the United States has not ratified UNCLOS, the State Department has taken measures to address the U.S. extended continental shelf areas in a manner not inconsistent with the UNCLOS process. These measures signal changes in U.S. policies about moratorium areas.

In the aftermath of the Deepwater Horizon oil spill, the regulatory context is unsettled, and policymakers are considering many different offshore program options to restore normalcy in the Gulf region. Due to uncertainty regarding recent developments in the Gulf of Mexico, the role of moratorium policy, among other policy alternatives, is unclear. From this perspective, how or if moratorium policy will be a consideration during the 112th Congress is a matter of conjecture.


Date of Report: March 23, 2011
Number of Pages: 19
Order Number: R41132
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Keeping America’s Pipelines Safe and Secure: Key Issues for Congress

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Nearly half a million miles of pipeline transporting natural gas, oil, and other hazardous liquids crisscross the United States. While an efficient and fundamentally safe means of transport, many pipelines carry materials with the potential to cause public injury and environmental damage. The nation’s pipeline networks are also widespread and vulnerable to accidents and terrorist attack. The 2006 partial shutdown of the Prudhoe Bay, AK, oil field, and the 2010 pipeline accidents in San Bruno, CA, and Marshall, MI, have heightened congressional concern about pipeline risks. Both government and industry have taken numerous steps to improve pipeline safety and security over the last 10 years. While many stakeholders agree that federal pipeline safety programs have been on the right track, recent pipeline incidents suggest there continues to be room for improvement. Likewise, the threat of terrorist attack on U.S. pipelines remains a concern.

The federal pipeline safety program was authorized through the fiscal year ending September 30, 2010, and is currently operating under a continuing resolution. The Pipeline Transportation Safety Improvement Act of 2011 (S. 275) would reauthorize the program through FY2014.

The 112th Congress is considering new legislation to improve the safety and security of the U.S. pipeline network. The Strengthening Pipeline Safety and Enforcement Act of 2011 (S. 234) would increase the number of federal pipeline safety inspectors, would require automatic shutoff valves for natural gas pipelines, and would mandate internal inspections of transmission pipelines, among other provisions. S. 275 would increase federal pipeline safety inspectors, would require automatic or remote controlled shutoff valves on new gas pipelines, would require public access to pipeline emergency response plans, and would increase civil penalties for pipeline safety violations, among other provisions. The Pipeline Safety and Community Empowerment Act of 2011 (H.R. 22) would require automatic or remote shut-off valves for many pipelines and public disclosure of pipeline locations, among other provisions.

As Congress debates reauthorization of the federal pipeline safety program and oversees the federal role in pipeline security, key questions may be raised concerning pipeline agency staff resources, automatic pipeline shutoff valves, penalties for pipeline safety violations, and the possible need for pipeline security regulations. In addition to these specific issues, Congress may wish to assess how the various elements of U.S. pipeline safety and security activity fit together in the nation’s overall strategy to protect transportation infrastructure. Pipeline safety and security necessarily involve many groups: federal agencies, oil and gas pipeline associations, large and small pipeline operators, and local communities. Reviewing how these groups work together to achieve common goals could be an oversight challenge for Congress.


Date of Report: March 17, 2011
Number of Pages: 33
Order Number: R41536
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