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5 Adequacy and Balance of the Partnership Included in the previous chapters is an assessment of the status, progress, and barriers facing the various technologies that are under development by the U.S. DRIVE Partnership, which has evolved from its predecessor, the FreedomCAR and Fuel Partnership. Overall, technical progress has been steady and, in some cases, impressive. This chapter focuses on the adequacy and balance of the Part- nership, including a review of and comments on budgetary resources and levels of effort expended toward each of the major budget line items. In the three previous National Research Council (NRC) reports (NRC, 2005, 2008, 2010), the NRC reviewed the funding for the FreedomCAR and Fuel Part- nership and the allocation related to that funding between hydrogen-related and non-hydrogen-related activities. Generally speaking, those earlier reviews con- cluded that the balance between technologies was largely appropriate. However, in the NRC (2010) Phase 3 report, it was noted that major shifts in emphasis and funding had occurred in the most recent 12 months. Those shifts and their continuation are explored in this chapter. Since the beginning of the Partnership (U.S. DRIVE and its predecessor) and even earlier during the Partnership for a New Generation of Vehicles (PNGV) program, the NRC reviews have recommended government support emphasiz- ing long-term, high-risk, high-payoff technologies. It was and is the view of the committee that this is an appropriate expenditure of government resources. However, recent economic conditions, including the need for government support to prevent the collapse of two major automobile manufacturers, influence what the committee and the government consider “appropriate.” It is still believed by the committee that support for precompetitive research on long-term technologies 144

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ADEQUACY AND BALANCE OF THE PARTNERSHIP 145 such as the enablers for hydrogen to become a viable transportation fuel and the fuel cell research and development (R&D) leading to affordable hydrogen fuel cell vehicles (HFCVs) is important and should be continued. At the same time, the committee continues to agree that government support for technologies that have impact both in nearer and longer terms, especially those that could transfer some of the required transportation energy from petroleum to biofuels or to the electric grid, is also appropriate. Historically, hydrogen-related activities represented approximately 70 per- cent of the DOE funding supporting technology development. This emphasis was consistent with the recommendations of prior NRC reports (e.g., The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs [NRC/ NAE, 2004]) and the U.S. Department of Energy’s (DOE’s) Hydrogen Posture Plan: An Integrated Research, Development and Demonstration Plan (DOE, 2004). It was also consistent with continuation of President George W. Bush’s commitment to the funding of the first 5 years of the FreedomCAR and Fuel Partnership. However, as discussed in the NRC (2010) Phase 3 report, early in 2010 all initial funding requests for hydrogen-related activities for vehicles were withdrawn (although subsequently reinstated). The reasons given for this were that four major breakthroughs were required to achieve commercialization of HFCVs, and it was deemed highly unlikely that all four could be simultane- ously achieved. The four major hurdles cited were the sustainable production of hydrogen, effective distribution, onboard hydrogen storage, and reliable low-cost fuel cells. The NRC (2010) Phase 3 report noted that these four challenges are indeed huge, but also stated the belief that the other two possible pathways to achieving the ultimate Partnership goals of significant reduction of petroleum use and of emissions—namely, vehicles using biofueled internal combustion engines (ICEs) and highly electrified vehicles (e.g., plug-in hybrid electric vehicles [PHEVs] and battery electric vehicles [BEVs])—also face major challenges. The NRC Phase 3 review concluded that research on all three pathways deserved continued fund- ing for the immediate future (see NRC, 2010, Appendix B, the Phase 3 interim letter report). Since that time, the pattern of rebalancing the funding portfolio has contin- ued. The share of DOE funding devoted to hydrogen activities has dropped from an FY 2009 total of $200 million to the FY 2012 total of $104 million, as shown in Table 5-1. Over the same period, battery R&D funding in the Vehicle Tech- nologies Program (VTP) related to U.S. DRIVE Partnership efforts rose from $69 million to $90 million and from $23 million to $31 million for advanced combus- tion R&D (see Table 5-2). The relevant VTP budget has been steadily increasing, as shown in Table 5-2, growing from $174 million in FY 2009 to $238 million in FY 2012. As noted in the NRC (2010) Phase 3 report, other vehicle technolo- gies receiving significant funding, such as more efficient electrical components

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146 TABLE 5-1  Fuel Cell Technologies Program Funding Distribution, FY 2009 Through FY 2012 FY 2009 ($) FY 2010 ($) FY 2011 ($) FY 2012 ($) Fuel Cell R&D 80,067,500 75,608,830 41,916,000 43,622,000  Rescission 0 0 0 188,000   SBIR and STTR 2,232,500 1,873,170 1,084,000 1,190,000 TOTAL FUEL CELL R&D 82,300,000 77,482,000 43,000,000 45,000,000   Production and Delivery R&D 10,000,000 14,601,000 17,521,000 16,918,000  Rescission 0 0 0 94,000   SBIR and STTR 0 399,000 479,000 488,000 TOTAL PRODUCTION AND DELIVERY 10,000,000 15,000,000 18,000,000 17,500,000   Hydrogen Storage R&D 57,823,000 31,149,000 14,601,000 16,918,000  Rescission 0 0 0 94,000   SBIR and STTR 1,377,000 851,000 399,000 488,000 TOTAL HYDROGEN STORAGE R&D 59,200,000 32,000,000 15,000,000 17,500,000   Technology Validation 14,789,000 13,005,000 8,988,000 8,986,000   SBIR and STTR 211,000 92,000 12,000 14,000 TOTAL TECHNOLOGY VALIDATION 15,000,000 13,097,000 9,000,000 9,000,000   Safety, Codes and Standards 12,237,500 8,653,000 6,790,000 6,938,000   SBIR and STTR 262,500 186,000 210,000 62,000

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TOTAL SAFETY, CODES AND STANDARDS 12,500,000 8,839,000 7,000,000 7,000,000   Systems Analysis 7,520,000 5,408,000 3,000,000 3,000,000   SBIR and STTR 192,825 148,000 0 0 TOTAL SYSTEMS ANALYSIS 7,712,825 5,556,000 3,000,000 3,000,000   Manufacturing R&D 4,480,000 4,867,000 2,920,000 1,944,000   SBIR and STTR 519,675 133,000 80,000 56,000 TOTAL MANUFACTURING R&D 4,999,675 5,000,000 3,000,000 2,000,000   Market Transformation 4,747,000 15,005,000 0 3,000,000   SBIR and STTR 0 21,000 0 0 TOTAL MARKET TRANSFORMATION 4,747,000 15,026,000 0 3,000,000  Education 4,200,000 2,000,000 0 0   SBIR and STTR 0 0 0 0 TOTAL EDUCATION 4,200,000 2,000,000 0 0 FUEL CELL TECHNOLOGIES TOTAL 200,659,500 174,000,000 98,000,000 104,000,000 NOTE: Acronyms are defined in Appendix E. SOURCE: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. 147

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148 REVIEW OF THE RESEARCH PROGRAM OF THE U.S. DRIVE PARTNERSHIP TABLE 5-2  FY 2009 Through FY 2012 DOE Vehicle Technologies Program Budget Distribution and Estimated Funds for Projects Related to U.S. DRIVE (or FreedomCAR) and 21st Century Truck Partnership (21CTP) Goals (New Structure-Prior Years Comparable) ($ thousands) FY 2009 FY 2010 FY Comparable FY 2009 FY FY Comparable FY 2010 2010 FY FY 2011 DOE Budget Approp. Freedom 2009 2009 Approp. Freedom 21- 2010 Structure with SBIR CAR 21CTP Other with SBIR CAR CTP Other Batteries and elec. drive technol. Tech Val 0 0 0 0 Energy Storage R&D 69,425 69,425 0 0 76,271 76,271 0 0 APEEM 17,358 17,358 0 0 22,295 22,295 0 0 SBIR/STTR 2,713 2,713 2,839 0 2,839 B&EDT Total 89,496 86,783 0 2,713 101,405 98,566 0 2,839 Vehicle sys. simula. & testing (VSST) 21,126 18,210 2,916 0 43,732 38,232 5,500 0 SBIR/STTR 298 298 596 596 VSST Total Adv. combus. eng. R&D 21,424 18,210 2,916 298 44,328 38,232 5,500 596 Combus. and Emission Control 35,089 22,647 12,442 0 47,239 28,817 18,422 0 SS Energy Conversion (formerly Waste Heat Recovery) 4,568 2,780 1,788 0 8,748 6,221 2,527 0 SBIR/STTR 1,143 0 0 1,143 1,613 0 0 1,613 Adv. Combus. Eng. R&D Total Materials technol. 40,800 25,427 14,230 1,143 57,600 35,038 20,949 1,613 Propulsion Materials Tech. 10,742 5,882 4,860 0 12,989 7,344 5,645 0 Lightweight Materials Technol. 22,374 22,374 0 0 30,652 30,652 0 0 HTML 5,670 0 0 5,670 5,662 0 0 5,662 SBIR/STTR 1,117 0 0 1,117 1,420 0 0 1,420 Materials Technol. Total Fuels technol. 39,903 28,256 4,860 6,787 50,723 37,996 5,645 7,082 Adv. Petrol.-Based Fuels 5,808 3,475 2,333 0 6,780 3,961 2,819 0 Non-Petrol.-Based Fuels & Lubes 13,751 9,720 4,031 0 16,641 11,463 5,178 0 SBIR/STTR 563 563 674 674 Fuels Technol. Total 20,122 13,195 6,364 563 24,095 15,424 7,997 674

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ADEQUACY AND BALANCE OF THE PARTNERSHIP 149 Preliminary FY 2012 Plan—Subject to Change FY 2011 FY 2012 FY 2012 Congress FY 2011 Final Planned FY 2012 FY 2012 Request U.S. FY 2011 FY 2011 Approp. U.S. Planned Planned with SBIR DRIVE 21CTP Other with SBIR DRIVE 21CTP Other 0 0 0 0 0 0 0 0 81,549 81,549 0 0 89,934 89,934 0 0 21,614 21,614 0 0 27,806 27,806 0 0 2,972 0 2,972 3,579 0 3,579 106,135 103,163 0 2,972 121,319 117,740 0 3,579 42,647 30,047 12,600 0 47,198 34,598 12,600 0 581 0 0 581 635 635 43,228 30,047 12,600 581 47,833 34,598 12,600 635 47,239 29,500 17,739 0 49,320 30,799 18,521 0 8,748 8,000 748 0 8,707 8,000 707 0 1,613 0 0 1,613 1,764 1,764 57,600 37,500 18,487 1,613 59,791 38,799 19,228 1,764 12,989 6,108 6,881 0 12,576 5,914 6,662 $0 29,097 26,977 2,120 0 27,284 25,164 2,120 $0 5,662 0 0 5,662 970 0 0 970 1,375 0 0 1,375 1,241 0 0 1,241 49,123 33,085 9,001 7,037 42,071 31,078 8,782 2,211 0 0 0 0 0 10,692 5,835 4,857 0 17,904 9,771 8,133 0 308 0 0 308 544 544 11,000 5,835 4,857 308 18,448 9,771 8,133 544 continues

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150 REVIEW OF THE RESEARCH PROGRAM OF THE U.S. DRIVE PARTNERSHIP TABLE 5-2  Continued FY 2009 FY 2010 FY Comparable FY 2009 FY FY Comparable FY 2010 2010 FY FY 2011 DOE Budget Approp. Freedom 2009 2009 Approp. Freedom 21- 2010 Structure with SBIR CAR 21CTP Other with SBIR CAR CTP Other Outreach, deploy. & analysis (OD&A) 950 950 0 0 1,000 1,000 0 0 Adv. Vehicle Competitions 1,750 1,750 0 0 2,000 2,000 0 0 Education 0 0 0 0 Safety, Codes and Standards 0 0 0 0 Legislative and Rulemaking 1,804 0 0 1,804 2,004 0 0 2,004 VT Deployment 25,000 0 0 25,000 25,510 0 0 25,510 Biennial Peer Reviews 500 0 500 0 2,700 500 0 2,200 VMT Reduction & Legacy Fleet Improvement 0 0 0 0 0 0 0 0 SBIR/STTR 262 0 0 262 0 0 0 0 OD&A Total 30,266 2,700 500 27,066 33,214 3,500 0 29,714 Vehicle Technol. Total 242,011 174,571 28,870 38,570 311,365 228,756 40,091 42,518 NOTE: The following Fuel Cell line items were part of the Vehicle Technology Program (VTP) in FY 2009 but were transferred back to Hydrogen Fuel Cell Technologies (HFCT) in FY 2010: Tech- nology Validation, $14,789; Safety, Codes and Standards, $12,238; Education, $4,200. Shaded areas indicate a name or structure change that began with the 2011 budget request. All budgets are shown in the 2011 structure. Acronyms are defined in Appendix E. Estimated budgets were received by the committee from DOE in early 2012 and may have changed since that time. and lighter-weight materials, would all potentially benefit all future propulsion systems and are therefore judged worthwhile. The recipients of DOE’s FY 2012 funds by sector (national laboratories, industry, academia, etc.) are shown in Figure 5-1. The pattern is broadly similar to that in prior years (see NRC, 2010, Figures 5-1 and 5-2). The trend continues in the FY 2013 Office of Energy Efficiency and Renew- able Energy (EERE) budget request illustrated in Table 5-3, with hydrogen activi- ties (Fuel Cell Technologies Program [FCTP]) allocated $80 million (a reduction of 23 percent), while the VTP overall is allocated $420 million (an increase of almost 28 percent over the equivalent FY 2012 total of $329 million), including a 75 percent increase for battery R&D. Toward the end of the period covered by the NRC Phase 3 report, another major initiative related to U.S. DRIVE Partnership goals emerged. That was the American Recovery and Reinvestment Act (ARRA) of 2009 and its massive funding of advanced technologies under the umbrella of economic stimulus. This

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ADEQUACY AND BALANCE OF THE PARTNERSHIP 151 Preliminary FY 2012 Plan—Subject to Change FY 2011 FY 2012 FY 2012 Congress FY 2011 Final Planned FY 2012 FY 2012 Request U.S. FY 2011 FY 2011 Approp. U.S. Planned Planned with SBIR DRIVE 21CTP Other with SBIR DRIVE 21CTP Other 1,000 1,000 0 0 995 995 0 0 2,000 2,000 0 0 1,991 1,991 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,004 0 0 2,004 1,992 0 0 1,992 27,410 0 0 27,410 27,876 0 0 27,876 500 500 0 0 3,500 500 0 3,000 0 0 0 0 2,912 2,912 0 0 0 0 79 0 0 79 32,914 3,500 0 29,414 39,345 6,398 0 32,947 300,000 213,130 44,945 41,925 328,807 238,384 48,743 41,680 expenditure is entirely separate from the U.S. DRIVE Partnership funding, but many of its initiatives are directly relevant to technology development activities within the Partnership. Of the ARRA funds assigned to DOE, $2.4 billion was allocated to vehicle electrification, including $1.4 billion for lithium-ion battery manufacture (and $100 million for other battery technologies), $500 million for electric drive component manufacturing, and $400 million for transportation electrification. (A modest share [1.5 percent] of the DOE ARRA funds was also allocated to support fuel cell purchases for non-automotive use, and this could have an indirect benefit to the U.S. DRIVE goals.) As noted above, the ARRA-funded activities are beyond the purview of Partnership leadership or this committee, and DOE biofuel activity is also outside the Partnership, but it is nonetheless clear that taken together, VTP and ARRA funding represent a substantial emphasis on hybrid and battery electric vehicles, without concomitant emphases on the other two potential pathways to achieving Partnership and national transportation energy goals referenced above.

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152 REVIEW OF THE RESEARCH PROGRAM OF THE U.S. DRIVE PARTNERSHIP FIGURE 5-1  Department of Energy’s Office of Energy Efficiency and Renewable Energy planned program funding, by organization, FY 2012 (estimated). NOTE: IAA, Inter- agency Agreement; FOA (TBD), Funding Opportunity Announcement (to be determined). SOURCE: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. Adequacy and balance of the program depend on what the program intends to achieve and when. Reducing dependence on petroleum and reducing emissions are goals that are broad and nonspecific and not readily amenable to the setting of priorities. In that regard, engaging the Partnership’s Executive Steering Group to set clearer targets would be desirable in order to provide a framework for ranking technology readiness and for assessing the seriousness of hurdles and evaluating them against potential societal benefits over time. As an example, the National Academies’ report America’s Energy Future: Technology and Transformation (NAS/NAE/NRC, 2009) laid out a scenario of 2 to 4 percent electrified vehicles (PHEVs and BEVs) and 0 to 1 percent HFCVs by 2020, and 10 to 25 percent and 3 to 6 percent, respectively, by 2035. In order to achieve the projected volumes by 2035, significant improvements in battery performance are needed to make the vehicles attractive to the consumer. Extrapolating from current technologies without successful development of new chemistry, electric drive vehicles are more attractive than fuel cell vehicles for short-range usage, but less so for long-range travel. Thus, a large-scale replacement of petroleum usage by these alternate fuels will potentially rely on both technologies to satisfy consumer needs. It is appropriate to continue investing resources on the most impactful research in order to achieve these targets, and it is important to focus resources within each technology area on the greatest technical challenges (as discussed in Chapter 3), and also not to let the resource dwindle so far as to be unable to sustain a critical mass required to support a robust decision on any technology.

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TABLE 5-3  Office of Energy Efficiency and Renewable Energy (EERE) Budget Summary, FY 2011 Through FY 2013 (Request) FY 2011 FY 2012 FY 2013 FY 2013 vs FY 2012 Current Enacted Request Programs ($ thousands) ($ thousands) ($ thousands) ($ Change)  (% Change) Renewable Energy   Biomass and Biorefinery R&D 179,979 199,276 270,000 70,724 35.49   Geothermal Technology 36,992 37,862 65,000 27,138 71.68   Hydrogen and Fuel Cell Technologies 95,847 103,624 80,000 (23,624) –22.80   Solar Energy 259,556 288,951 310,000 21,049 7.28   Water Power 29,201 58,787 20,000 (38,787) –65.98   Wind Energy 78,834 93,254 95,000 1,746 1.87 Energy Efficiency   Advanced Manufacturing 105,899 115,580 290,000 174,420 150.91   Building Technologies 207,310 219,204 310,000 90,796 41.42   Federal Energy Management Program 30,402 29,891 32,000 2,109 7.06   Vehicle Technologies 293,151 328,807 420,000 91,193 27.73   Weatherization and Intergovernmental 231,300 128,000 195,000 67,000 52.34 Corporate   Facilities and Infrastructure 51,000 26,311 26,400 89 0.34   Program Direction 170,000 165,000 164,700 (300) –0.18   Strategic Programs 32,000 25,000 58,900 33,900 135.60 Subtotal, EERE 1,801,471 1,819,547 2,337,000 Use of Prior-Year Balances (29,750) (9,909) 0 Cancellation of Prior-Year Balances 0 0 (69,667) TOTAL, EERE 1,771,721 1,809,638 2,267,333     NOTE: Numbers in parentheses signify the amount by which funding was reduced. SOURCE: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. 153

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154 REVIEW OF THE RESEARCH PROGRAM OF THE U.S. DRIVE PARTNERSHIP RECOMMENDATION Recommendation 5-1. The Executive Steering Group should be engaged to set targets for the U.S. DRIVE Partnership that are consistent with the objectives of reduced petroleum consumption and greenhouse gas emissions, and U.S. DRIVE should conduct an overall review of the Partnership portfolio, both for the ad- equacy of the R&D effort to achieve the targets and for focus on the mission of supporting longer-term, higher-risk precompetitive activities in all three potential primary pathways. REFERENCES DOE (U.S. Department of Energy). 2004. Hydrogen Posture Plan: An Integrated Research, Devel- opment and Demonstration Plan. Washington, D.C.: U.S. Department of Energy. Available at http://www.eere.energy.gov/hydrogenandfuelcells/pdfs/hydrogen_posture_plan.pdf. NAS/NAE/NRC (National Academy of Sciences/National Academy of Engineering/National Re- search Council). 2009. America’s Energy Future: Technology and Transformation. Washington, D.C.: The National Academies Press. NRC. 2005. Review of the Research Program of the FreedomCAR and Fuel Partnership: First Report. Washington, D.C.: The National Academies Press. NRC. 2008. Review of the Research Program of the FreedomCAR and Fuel Partnership: Second Report. Washington, D.C.: The National Academies Press. NRC. 2010. Review of the Research Program of the FreedomCAR and Fuel Partnership: Third Re- port. Washington, D.C.: The National Academies Press. NRC/NAE (National Research Council/National Academy of Engineering). 2004. The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs. Washington, D.C.: The National Academies Press.