1 Offshore Wind Energy: Federal Funding Strategy and Advocacy for Offshore Wind Energy Development Presentation to the Cuyahoga County Regional Energy Task Force Hon. Kelly H. Carnes CEO,TechVision21 April 12, 2007

2 ABOUT T ECH V ISION 21 Washington DC-based consulting firm integrating business, technology and government expertise Specializing in federal R&D funding and technology policy Former high-ranking state & federal technology officials Extensive experience in alternative energy: –Former Assistant Secretary of Commerce for Technology Policy –Former Chief of Staff for White House CEQ; PNGV Executive Director –Developed successful funding strategies for various alternative energy technologies, including fuel cells, hydrogen, vehicle technologies, power generation –Worked with all key agencies: Energy, DOD, NSF, Commerce, Labor

3 Policy Environment National Energy Policy Act of 2005: –Orders DOE to develop a “wind roadmap” –DOE to establish 5 projects to demonstrate production of hydrogen at wind facilities –DOE to support relevant university research Advanced Energy Initiative: –Goal: Reduce demand for natural gas and foster alternatives for power production –Focus areas: clean coal, nuclear, renewable solar and wind energy –Wind energy research budget: FY07—$44M; FY08—$40M Legislative Initiatives

4 Democrats’ New Direction for America –Goal: Achieve Energy Independence by 2020 –Commitment: Investment in bio-fuels, geothermal, clean coal, fuel cells, solar, wind, hybrid and flex fuel vehicle technology and manufacturing –Create E-DARPA Clean Energy Act of 2007 (H.R. 6) –Eliminates subsidies for oil & gas industries –Establishes strategic energy efficiency/renewable reserve –Funds offset subsequent energy legislation –New energy legislative package by July 4 National Competitiveness Investment Act (NCIA) (bipartisan) –Authorizes doubling of NSF and DOE Office of Science budgets –Creates Council on Innovation and Competitiveness in White House –Creates Innovation Acceleration Program (8% set-aside) –Creates E-ARPA

5 Types of Federal Funding for Wind Energy Competitive, Merit-based Grant Programs –Publicly Advertised—Solicitation, Broad Agency Announcement (BAA), Request for Proposals (RFP) –Fixed Deadlines –Well-defined Program Requirements –Peer Review Cooperative Agreements and CRADAS “Unsolicited” Proposals Loan Guarantees Contracts Special Projects/Appropriations Line Items

6 Federal Wind Energy Priorities Program Goals: –By 2010, facilitate installation of at least 100 MWH in 30 states—up from 8 states in 2002 –By 2012, reduce cost of electricity from large land-based systems from base cost of $.055 to $.036 per KWH –By 2014, reduce cost of electricity from shallow-water offshore systems (up to 30 meters) from $.095 to $.07 per KWH –By 2015, expand by 5 the number of distributed wind turbines deployed in US (from 2007 baseline) Focus Areas: –Distributed and community-owned technology local power –R&D for land-based systems; “balanced” exploration of offshore wind and other emerging markets

7 Federal Wind Energy Priorities 2007—2008 Program Milestones: –Complete sea-based concept study to examine system design tradeoffs across ranges of size, configuration and available technology innovations. “SeaCon” studies will help DOE narrow the technology options it supports –Work with industry partners to assess potential of the offshore wind industry –Determine technology development strategy for offshore wind –FY08 solicitation for component technology development

8 Key Elements of Cleveland’s Federal Strategy for Wind Energy Participate aggressively in competitive merit-based grant and loan guarantee programs Seek Congressionally-directed appropriations during FY09 budget cycle—begins October 2007 Leverage Federal tax credits and incentives (and seek new ones) Recruit Federal agency champions for Cleveland Engage with industry associations Advocacy for increased wind energy funding

9 Key Elements of Cleveland’s Federal Strategy for Wind Energy Competitive Funding/Loan Guarantee Opportunities –Potential for CRADA for shallow water offshore large LWST –Facilities construction/expansion: $9B FY 08 DOE loan guarantees; $1B for new technologies for electric transmission facilities or renewable power generation systems –FY 08 solicitation planned for LWST component technology development (turbines) –USDA renewable energy systems grants and loans for rural small business/agricultural producers/some electric utilities providing services to rural communities

10 Key Elements of Cleveland’s Federal Strategy for Wind Energy Directed appropriations: –Develop pilot project not covered by competitive programs –Work with partners/appropriators –Focus on FY 09 budget cycle—begins October 2007 –$12.8 million in FY 06 wind line items at DOE Leverage tax credits and financial incentives: –current credit for electricity generated by wind—1.9 cents per kilowatt-hour; first 10 years of operation

11 Key Elements of Cleveland’s Federal Strategy for Wind Energy Recruit Federal agency champions for Cleveland: –Build relationships with key executive branch officials to drive R&D agenda and create discretionary funding opportunities –Studies underway in FY 08 will define offshore program direction beginning in FY 09 –Program funds shifting to distributed wind technology

12 Key Elements of Cleveland’s Federal Strategy for Wind Energy Engage with Industry Associations –New wind action plan due June 2007 –Joint effort of American Wind Industry Association/Department of Energy (NREL) –Could play major role in shaping Federal wind energy investment

13 Key Elements of Federal Strategy for Wind Energy Advocacy for offshore wind funding: Goal: positioning the Cleveland project with Federal agencies as representative of offshore wind’s potential for successful commercialization Key Activities: –Preparing appropriate educational materials –Briefing Members of Congress, staff, and executive branch officials –Technology demonstrations –Congressional testimony –Participate/speak at conferences and events –Positioning in speeches by public officials, reports, etc. –Opinion pieces and advertising

14 Kelly H. Carnes (202)

15 T ECH V ISION 21 SERVICES Securing competitive and discretionary funding for leading edge technology –Developing a month funding strategy –Preparing quality competitive grant applications –Building relationships with federal program managers Directed appropriations Washington representation and advocacy

16 ABOUT T ECH V ISION 21 Strong track record of results: –Kettering University Center for Fuel Cell Systems and Powertrain Integration: $6+M from multiple sources –USC Annenberg Center for the Digital Future: $3M from the Department of Defense –Council on Competitiveness: $2M for Economic Development Initiatives (EDA and NSF) –Integrity BioFuels: $.5M for plant in Indiana –SC Internet Company: $1M from DOD