Oct 3 -- The U.S. Department of Energy (DOE) Office of Manufacturing & Energy Supply Chains and Office of Policy have issued a Request for Information (RFI) to inform how the Defense Production Act (DPA) authority provided to DOE through Presidential Determinations could best be used as a tool to accelerate manufacturing and deployment of clean energy technologies to bolster national defense, tackle climate change and environmental injustice, and improve employment opportunities and broader economic prosperity for Americans.
The technologies covered by this DPA RFI include: transformers and electric grid components; solar photovoltaics; insulation materials; and electrolyzers, platinum group metals, and fuel cells for clean hydrogen. Electric heat pumps are not included in this RFI. Section 30001 of the Inflation Reduction Act appropriates funding, $250 million of which DOE plans to use in support of the domestic manufacturing of electric heat pumps. Comments specific to electric heat pumps should be reserved for a forthcoming DOE announcement focused specifically on the use of these IRA funds; however, stakeholders focused on electric heat pumps are welcome to respond in this RFI to general questions about the use of DPA authority.
The stakeholder input will inform DOE on designing potential DPA actions that help to scale up clean energy in ways that strengthen national defense, lower fuel prices, ramp up domestic clean energy industries, create family-sustaining jobs, build economic prosperity, slash climate pollution, and benefit (and avoid harm to) communities—all in the fastest possible timeframe.
Responses to the RFI must be submitted no later than 5 PM (ET) on November 30, 2022. Only electronic responses will be accepted.
This request for information (RFI) seeks input from all stakeholders involved or interested in the use of DPA Title III authority for transformers and critical electric grid components; solar photovoltaics; insulation materials; and electrolyzers platinum group metals, and fuel cells for clean hydrogen. DOE seeks information on how DPA Title III tools may be used across the full supply chain, including raw materials, processed materials, subcomponents, final products, end-of-life material recovery and recycling, and deployment. Additionally, DOE seeks information on ways in which DPA actions may impact and benefit local communities and provide opportunities to invest in the American workforce. The stakeholder input will inform the Department on designing potential DPA actions that help to scale up the domestic supply of electric grid and clean energy technologies in ways that strengthen national defense, which include improving grid reliability, and maintaining and protecting critical energy infrastructure, while ensuring lowering fuel prices, ramping up domestic clean energy industries, creating family-sustaining jobs, building economic prosperity, slashing climate pollution, and benefiting (and avoiding harm to) communities—all in the fastest possible timeframe.
DOE’s ability to undertake DPA actions for these technology areas is subject to subsequent appropriations. DOE is seeking feedback through this RFI on general use of DPA Title III authority for securing electric grid and clean energy supply chains and strengthening the domestic energy sector industrial base, as well as specific input on possible DPA investments in the future pertaining to four of the five energy technology areas covered by the President’s June 6 announcement.
DPA eligible technologies covered in this RFI:
Transformers and electric grid components: The United States relies in part on foreign sources for several electric grid components, and wait times for critical grid components such as transformers have recently become significantly longer, up to 2 years or more. One factor contributing to this is the limited material options for the distribution transformer industry, as it is solely reliant on grain-oriented electrical steel (GOES), in addition to limits on manufacturing capacity. As increasing extreme weather places unprecedented stress on the grid, supply chain reliance and delays represent an immediate threat to national defense and energy reliability. Over the long-term, the electrification of buildings, transportation, and industrial processes will mean further demand for electricity, and for transformers. Increases in domestic production of transformers and electric grid components may be necessary to meet U.S. climate goals, defend against cyber-attacks, and maintain critical infrastructure in the face of increasing extreme weather and expansion of the grid. DOE is specifically interested in investing in domestic production and workforce support for both efficient distribution transformers and associated production materials. IRA and BIL will accelerate demand for transformers, other grid components, and the materials used to make them through efforts to modernize the nation’s grid and enable electrification. Grid component manufacturers may also compete for the extended 48C clean manufacturing investment tax credit. DPA resources could specifically target the domestic production of transformers, amorphous steel, and grid components needed to secure, expand, and modernize the nation’s grid.
Solar photovoltaics (PV): Solar PV is the largest source of U.S. clean electricity generation capacity and the cheapest new electricity source in many regions of the country, but domestic production does not meet current or projected demand. The vast majority of global PV manufacturing and assembling is currently concentrated in China, presenting ongoing concerns for our long-term energy security. The Inflation Reduction Act incentivizes domestic manufacturing of specific solar module components, from polysilicon production through final assembly, and generates demand for U.S. solar products through domestic content provisions in the clean electricity investment, production, and consumer tax credits. Solar PV component manufacturers may also compete for the extended 48C clean manufacturing investment tax credit. IRA does not provide targeted support for certain elements of the solar supply chain, such as solar glass, polymeric filler sheets, junction boxes, or frames, and domestic manufacturers may still have difficulty accessing rapidly deployable upfront capital or equipment, particularly in manufacturing of products like ingots, wafers, and cells. DPA tools could complement the Inflation Reduction Act and other government efforts to speed up and diversify domestic production and deployment of PV module and solar system components.
Insulation: By reducing building and home energy needs for heating and cooling, insulation slashes energy usage and costs and can reduce reliance on fossil fuels. U.S. domestic production and installation of insulation are insufficient to fully retrofit the roughly 50% of U.S. homes that have outdated and inadequate insulation. Retrofitting older homers in cold climates can reduce building energy use by more than 50%. The Inflation Reduction Act super-charges demand for insulation in retrofits and new buildings in the residential, commercial, and industrial building segments. Insulation manufacturers may also compete for the extended 48C clean manufacturing investment tax credit. DPA resources could help U.S. manufacturers scale up the needed insulation supply and accelerate installation of insulation upgrades in homes and qualified buildings to meet burgeoning demand and reduce fossil fuel reliance, particularly in cold climates where fossil fuel usage is highest.
Clean hydrogen: Hydrogen is an emerging technology with potential to decarbonize growing sectors of the economy, such as chemicals production and steelmaking. Given this potential, many countries, including China, Japan, and Germany, are investing heavily in supply chains for hydrogen and fuel cell technologies. The Inflation Reduction Act makes unprecedented investment in clean hydrogen deployment through a new hydrogen production tax credit, building on clean hydrogen infrastructure investments unlocked by the Bipartisan Infrastructure Law. Hydrogen component manufacturers also may be eligible for the extended 48C clean manufacturing investment tax credit. Development of domestic production capacity for these components will strengthen U.S. competitiveness and advance progress toward climate goals. DPA tools could mitigate demand-side risk by guaranteeing offtake for hydrogen and fuel cells. Additionally, sourcing of critical materials from domestic sources could reduce geopolitical risks. For example, fuel cells and electrolyzers rely on platinum group metals (PGM) sourced from a small number of countries, such as South Africa and Russia. DPA resources could help establish strong domestic supply chains for electrolyzers and fuel cells, including scaling recycling of PGM catalysts.
Electric heat pumps are not included in this RFI. Section 30001 of IRA appropriates funding, $250 million of which DOE plans to use in support of the domestic manufacturing of electric heat pumps. Comments specific to electric heat pumps should be reserved for a forthcoming DOE announcement focused specifically on the use of these IRA funds; however, stakeholders focused on electric heat pumps are welcome to respond in this RFI to general questions about the use of DPA authority.
RFI announcement:
https://www.energy.gov/mesc/defense-production-act-request-information and
https://www.federalregister.gov/d/2022-22004
RFI:
https://www.energy.gov/sites/default/files/2022-10/Full%20DPA%20RFI%20-%20Final%20Version_v2%2022-09-30.docx
News release:
https://www.energy.gov/articles/doe-seeks-input-how-defense-production-act-could-support-national-security-strengthening