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EREN NETWORK NEWS -- February 6, 2002
A weekly newsletter from the U.S. Department of Energy's (DOE)
Energy Efficiency and Renewable Energy Network (EREN).
<http://www.eren.doe.gov/>
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Featuring:
*News and Events
          President's Budget Supports Efficiency, Renewable Energy
          Budget Includes Tax Incentives for Renewables, CHP, Hybrids
          Alliant Energy Seeks Renewable Power Sources for Iowa
          DOE Awards More Than $500,000 for Metal Casting Research
          Explosion at FuelCell Energy Plant Delays Shipments
          New Energy Corporation Retracts Claim of Solar Contract

*Energy Facts and Tips
          EIA Issues U.S. Renewable Energy Maps

*About this Newsletter


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NEWS AND EVENTS
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President's Budget Supports Efficiency, Renewable Energy

President Bush released his administration's proposed
$2.13 trillion federal budget for fiscal year (FY) 2003 on
Monday. Although the budget emphasis is on the war on
terrorism and U.S. homeland security, the budget maintains
funding for energy efficiency and renewable energy
programs, while providing new tax incentives to encourage
the use of these technologies (see second story below). See
the full budget on the White House Web site at:
<http://www.whitehouse.gov/omb/budget/fy2003/>.

The proposed overall budget for DOE's Office of Energy
Efficiency and Renewable Energy (EERE), which funds this
newsletter and the EREN Web site, remains nearly steady,
increasing about 0.8 percent above FY 2002 funding levels.
Funding for renewable energy programs increases 5.5 percent
in the budget, with significant funding boosts for hydrogen,
hydropower, and solar building technology research and
development, as well as for programs that encourage
renewable energy use on Indian reservations and internationally.
However, the research budget for concentrating solar power
technologies suffers a cut of 86 percent.

Overall funding for energy efficiency programs decreases by
about 1.3 percent. The largest change is a budget increase
of 25 percent for the Federal Energy Management Program,
which helps the federal government reduce its energy use.
EERE estimates that the combined energy efficiency and
renewable energy programs, which cost about $1.3 billion
per year, will save the country between $76 billion and
$125 billion in energy costs by 2020.

See EERE's "Budget-in-Brief" on the EREN Web site at:
<http://www.eren.doe.gov/budget/budget_summary03.html>.

See also the "Renewable Energy Resources" and "Energy
Conservation" sections under the "Detailed Budget
Justifications" heading of DOE's budget request, posted at:
<http://www.mbe.doe.gov/budget/03budget/index.htm>.

In his announcement of the DOE budget, Secretary of
Energy Spencer Abraham specifically noted that the
proposed budget will support the President's commitment to
double funding for the Weatherization Assistance Program
over the next 10 years, and will provide roughly $150 million
for FreedomCAR, which aims to develop the infrastructure
and technologies needed for hydrogen-powered fuel-cell
vehicles. See the DOE press release at:
<http://www.energy.gov/HQPress/releases02/febpr/pr02016.htm>.

The administration's proposed budget is only the first step in
the budget process. Both the House and Senate will now
start working on a series of bills to set a budget and appropriate
funds. For FY 2002, for instance, the President's budget
originally proposed cutting funding for EERE, but as shown
in the budget documents cited above, funding for FY 2002
ended up higher than the previous year's funding. See the
news about last year's proposed budget in the April 11,
2001, edition of the EREN Network News at:
<http://www.eren.doe.gov/newsletter/archives/2001/apr11_01.html>.


Budget Includes Tax Incentives for Renewables, CHP, Hybrids

The President's budget for fiscal year 2002 includes
$9.1 billion in tax incentives over 10 years to encourage the
use of renewable energy, combined heat and power (CHP)
systems, and energy-efficient vehicles.

For power producers, the budget includes a new 10-percent
investment tax credit for qualifying CHP systems, an
extension of the tax credit for landfill methane power plants,
an extension of the production tax credit (PTC) through
2005, and an expansion of the PTC to include more biomass
energy facilities. The PTC provides renewable power
producers with a tax break of 1.5 cents per kilowatt-hour (in
1992 dollars, adjusted for inflation) and was formerly
applicable only to electricity produced from wind power,
poultry waste, and biomass power produced from dedicated
energy crops.

The PTC expired in December, leading to a slowdown in the
wind energy business. For example, Vestas Wind Systems
A/S shifted 1,200 employees to half-time work in January,
with the expectation that the slowdown will continue for
12 weeks. See the Vestas press release at:
<http://www.vestas.com/nyheder/presse/2002/UK/fond20020124_UK.html>.

The budget also includes a tax credit for the average
American -- people that install solar hot water or solar
electric systems on their homes would earn a tax credit of
15 percent of the cost of the systems, including installation.
The credit has a maximum of $2,000 per person for solar hot
water systems and another $2,000 per person for solar
photovoltaic systems.

People buying hybrid electric vehicles would also earn a tax
credit of up to $4,000, with the amount determined by both
the performance of the hybrid system and the vehicle's fuel
economy. When fuel-cell vehicles become available, they'll
earn an even higher tax credit -- at least $4,000 and up to
$8,000, depending on the vehicle's fuel economy.

And fuel producers don't get left out of the equation -- the
budget also proposes extending the tax credit and excise tax
exemption for ethanol and methanol from renewable
sources.

See pages 71-73, 80 and 99 (PDF pages 75-77, 84 and 103)
of the "Analytical Perspectives" section of the President's
budget at:
<http://www.whitehouse.gov/omb/budget/fy2003/>.


Alliant Energy Seeks Renewable Power Sources for Iowa

Alliant Energy announced in late January that it plans to add
enough renewable energy generating capacity in Iowa to
produce up to 150,000 megawatt-hours of electricity per year
-- enough to meet the annual power needs of more than
20,000 households. A wind power plant that produces power
one-third of the time would require a capacity of about
50 megawatts to generate that much electricity. The
company serves 464,000 electric customers in Iowa, and
intends to add the renewable power capacity by the end of
2003. The company has posted a request for proposals on
its Web site; proposals are due by April 2nd. See the Alliant
Energy press release, with a link to the request for
proposals, at:
<http://www.alliantenergy.com/news/news.php?issueID=237>.


DOE Awards More Than $500,000 for Metal Casting Research

DOE announced last week its award of $533,328 over three
years to a technical consortium, headed by the University of
Michigan in Ann Arbor, for research into ways to improve the
casting of light metal alloys. By studying how heat is
transferred between the mold casting and the metal, the
researchers hope to develop lighter, stronger, and less-
expensive molds. One aim of the research is to reduce the
amount of scrap and reworked materials in the aluminum
mold and die casting industry by eight percent. The
projected energy benefits in the metal casting industry alone
over the next ten years are estimated to be 36.6 trillion Btu
-- enough energy to power all the homes in Arkansas for a
year. See the DOE press release at:
<http://www.energy.gov/HQPress/releases02/febpr/pr02015.htm>.


Explosion at FuelCell Energy Plant Delays Shipments

An explosion racked the production line of FuelCell Energy's
manufacturing plant in Torrington, Connecticut, on January 14th,
slightly injured five employees. A buildup of solvent fumes
caused the explosion on the company's new "tape casting"
line, which is used to manufacture fuel cell components. The
company emphasized that the explosion was not caused by
hydrogen, nor was it caused by the operation of one of its
fuel cells.

FuelCell Energy has continued to assemble fuel cells at the
facility since the explosion, but is expecting delays of four to
six weeks in its fuel cell shipments. The company shut down
both tape-casting lines as a safety precaution, but expects to
restart the older line in mid-February. The new tape-casting
line was recently installed at a cost of $1.7 million. See
FuelCell Energy's Form 8-K filing with the Securities and
Exchange Commission (used to make investors aware of
any significant company events) on the company's Web site at:
<http://www.fce.com/site/investor/press/releases/2002/01_31_02.html>.


New Energy Corporation Retracts Claim of Solar Contract

New Energy Corporation announced last week that it had
mistakenly claimed to have a contract to deliver solar
electricity to Teixeira Farms of Santa Maria, California, and
that in fact no such contract exists. The company now claims
to have purchase orders from Distributed Power Systems for
the installation of four solar electric systems, each with a
generating capacity of one megawatt. The original story was
covered in the January 9th edition of the EREN Network
News:
<http://www.eren.doe.gov/newsletter/archives/2002/jan09_02.html>.

Since January 18th, the trading of New Energy stock has
been suspended by the U.S. Securities and Exchange
Commission over "questions involving the adequacy and
accuracy of public disclosures," in particular, "the value of
certain power generation contracts, the existence and size of
certain purchase orders for solar chips and its partner's
relationship with the Los Angeles Department of Water and
Power." Last week, Stratos Research, LLC, an investment
research firm, announced that it had suspended coverage of
New Energy and had removed its research report on the
company from its Web site, due to concerns that the report
"may contain factual errors." See all of the relevant press
releases by selecting "Press Release" on the New Energy
Web site at: <http://www.newenergyco.com/>.


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ENERGY FACTS AND TIPS
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EIA Issues U.S. Renewable Energy Maps

DOE's Energy Information Administration (EIA) completed a
new regional series of renewable energy maps last week.
The Renewable Energy Map series includes maps of each of
the nine U.S. census divisions, plus individual maps of
California, Alaska, and Hawaii. The maps attempt to indicate
all renewable energy resources in each region, and also
show the location of all renewable energy power plants with
a net summer capacity of 1 megawatt or more. See the EIA
Renewable Energy Maps at:
<http://www.eia.doe.gov/emeu/reps/remap/contents.html>.


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newsletter, please contact the editor, Kevin Eber, at
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