Matt C. Rogers, former director of McKinsey Global Institute and advisor to the Obama transition team, was recently named top advisor underneath Steven Chu, the new Dept. of Energy head. In his new role, Rogers is tasked with overseeing both the massive overhaul of DOE allocation policies and the actual disbursement of energy-related stimulus money.
Obama and Chu are very serious about funding going out quickly and are aiming to have the first round distributed by early summer. With the economic urgency of the times, the complexities of existing application procedures, and the deluge of worthy projects in all 50 states, this challenge will be nothing short of herculean.
On Saturday at the ECO:nomics summit, Matt Rogers along with Obama's top energy advisor Jason Grumet, discussed what the next 18 months will look like for the many public and private cleantech energy projects seeking coveted funding from Obama's stimulus bill -- about $33 billion in grants and $134 billion in loans, all of which will be awarded by Rogers' team at the Dept. of Energy. He says, "Our goal is to get the money out the door quickly for good projects with unprecedented levels of transparency."
According to Rogers, there are two big hurdles that first need to be overcome -- setting a performance standard that each project will be required to uphold, and determining a prioritization for the hundreds of eligible projects. Rogers estimates this will take about 2 more months, at which point (sometime in May) the allocation of funds should begin.
The DOE has divided the general allocation of energy grants into 10 categories:
- Energy Efficiency: $5 billion
- Greening Federal Bldgs: $4.5 billion
- Renewable Energy: $2.5 billion
- Smart Grid: $4.5 billion
- Clean Coal: $3.4 billion
- Next-gen Biofuels: $0.8 billion
- Basic Science: $1.6 billion
- Batteries: $2 billion
- Advanced R & D: $0.4 billion
- Nuclear Cleanup: $6 billion
If you think you have a great energy project ready to fund, get in line. According to Rogers there is already a 2:1 ratio of applicants for available project awards. In other words, get ready for some tough competition. The Department of Energy is now in the process of setting up regional workshops to make sure that they have the "best of the best" in all 50 states, each governed by a state coordinator who will help applicants navigate the more than 150 regional programs.
Both Grumet and Rogers are aware this an unprecedented experiment and an "opportunity to show that government can work." They feel some mistakes will be made, but given the urgency of the situation it is vital to get a wide spectrum of projects going -- from small incubator projects to large at-scale power production.
The DOE will also be looking to the private sector in order to leverage the $134 billion in loans by a factor of 10, particularly focusing on mature renewables like wind and solar that can create jobs immediately and quickly fulfill the growing power needs of the U.S.