By Timothy Gardner
WASHINGTON (Reuters) - A high-tech U.S. research agency will get $130 million for programs that could one day decrease the cost of solar power and lessen dependence on rare earth metals used for alternative energy, the U.S. energy secretary said.
The funding, which partially came from this month's federal budget deal, will go to five new programs at the Advanced Research Projects Agency-Energy, or Arpa-E.
The programs will focus on advanced biofuels, thermal energy storage, alternatives to cut dependence on rare earths, and other areas, Energy Secretary Steven Chu said.
Currently 95 percent of the world's rare earths, which are used in technologies like wind turbines and hybrid cars, are produced in China.
The budget deal for fiscal year 2011 reached earlier this month between President Barack Obama and congressional leaders included $180 million for the agency, despite the agreement's $38 billion cut to the overall U.S. budget.
"We do know without additional Congressional funds ... the program essentially would have had to have been put on ice," Chu told reporters in a teleconference.
The DOE created Arpa-E in 2007 to invest in projects considered too risky for the private sector, but that have the potential to revolutionize the energy system.
It has been mostly funded by the government's 2009 stimulus package and has directed $363 million to support 121 energy projects based in 30 states, with nearly 40 percent of projects led by universities, 33 percent by small businesses, 20 percent by large businesses.
The new funding announced on Wednesday contains a mix of money from the stimulus and the budget deal reached this month.
Arpa-e projects include trying to develop batteries that give electric cars a range of 300 miles in one charge, and making solar cells more efficient.
Earlier this month Arpa-e signed a partnership with power generator Duke Energy and with the Electric Power Research Institute to find ways to test and deploy Arpa-e projects that could bolster the electric grid.
Obama wants $550 million for the agency in fiscal year 2012, but that proposal could face a battle in Congress, which is looking to cut costs.
(Reporting by Timothy Gardner;editing by Sofina Mirza-Reid)