Yesterday the U.S. Energy Department released its first-ever "Quadrennial Technology Review," saying it wants to increase research funding for electrified vehicles and supporting infrastructure.

Its total 2011 budget was $3 billion, and the thinking by the government is it needs a faster return on its investment, so diverting a higher percentage toward electrification could engender more near-term solutions for America's pressing energy and environmental needs.

“Today, our nation is at a cross road. While we have the world’s greatest innovation machine, countries around the world are moving aggressively to lead in the clean energy economy,” said Energy Secretary Steven Chu, a Nobel-winning physicist in an introduction to the 168-page review. “We can either lead in the development of the clean energy economy or we can stand back and wait for others to move forward a sustainable energy future. For the sake of our economic prosperity and our national security, we must lead.”

This year the Energy Department again co-sponsored the EcoCar Challenge exploring ways to improve efficiency with hybrid, plug-in hybrid, electric and fuel cell technologies. Shown are the 2011 first place winners.

The Energy Department says it ought not to get too far ahead of the private sector in its research spending, and for its proposed 2013 budget looks at what it can invest in that will be feasible in the next 10 years.

"Currently DOE focuses too much effort on researching technologies that are multiple generations away from practical use," said the review, which surveyed more than 600 stakeholders in industry, academia and government.

At present, the Energy Department said it is “underinvested” with only 26 percent of its budget devoted to transportation research.

Electric vehicle research received only 9 percent, and 4 percent went toward making vehicles more efficient. The lion’s share went to advanced fuels, but the Energy Department intends to shift the balance.

For heavy-duty road trucks, the Energy Department will also focus on advanced biofuels instead of “mature” ethanol and fuels that require new fuel station infrastructure.

This year’s spending allocated 51 percent for clean electricity, and here too spending will be shifted toward projects to help upgrade the aging power grid, and make buildings more energy efficient.

Carbon capture and storage research will also continue receiving funding as this fits with existing power infrastructure. The Energy Department will also focus on engineering support for licensing a new type of nuclear reactor known as the small modular reactor .

“The Department will give priority to research on technologies that can be operated economically with low water consumption, including solar photovoltaic and wind," the review said.

At least the plan is for all of these proposed priority shifts.

Chu and other DOE officials led the review, and used its results to guide planning for a budget proposal for fiscal 2013 that will be released early in 2012.

The review is modeled on similar efforts by the Defense Department, and the proposal must go through annual negotiations between the executive branch and Congress.

On its Web site, it said the DOE-QTR was written with the purpose to “address our nation’s challenges, energy security and U.S. competitiveness.”

The review, which you can download here , defines six key strategies: increase vehicle efficiency; electrification of the light duty fleet; deploy alternative fuels; increase building and industrial efficiency; modernize the electrical grid; and deploy clean electricity.

Findings of the DOE-QTR include:

• DOE should give greater emphasis to the transport sector relative to the stationary sector.
• Among the transport strategies, DOE will devote its greatest effort to electrification of the vehicle fleet, a sweet spot for pre-competitive DOE R&D.
• Within the stationary heat and power sector, the DOE-QTR finds that the Department should increase emphasis on efficiency and understanding the grid. It states that the Department’s role as a source of information and as a convener of interested parties, two functions that are often underestimated, are unique and indispensable in advancing energy technologies.
• Finally, the DOE-QTR highlights the need for the Department to develop stronger, more integrated policy, economics, and technical analyses of its research and development activities.

“With nearly 90 percent of the energy system owned and operated by the private sector, the DOE-QTR recognizes that the Department is not the sole agent in transforming the system,” said DOE Under Secretary Steven Koonin. “Through discussions with hundreds of energy stakeholders, we have learned that, beyond our technology development activities, the Department’s unique role as a convener and source of accurate techno-economic information is a great public benefit.”

Overall, the Energy Department led by Chu has maintained an optimistic tone.

"The stakes are high for our country, and I am optimistic that we can still lead the world in technological innovation," he said.

U.S. Energy Department , Automotive News .