**Performance Evaluation**

**of the**

**Midwest Research Institute**

**for the**

**Management and Operation**

**of the**

**National Renewable Energy Laboratory**

October 1, 2005 through September 30, 2006

Performance Period

DOE Contract No. DE-AC36-99GO10337

Prepared

by the

Office of Energy Efficiency and Renewable Energy's

Performance Evaluation Board

December 13, 2006

**1.0 Science and Technology** -- MRI will establish a work environment
that fosters quality and creativity, yields innovative and high quality
scientific and technological outcomes, and results in utilization of
NREL-originated technology and knowledge.

> NREL continues to produce outstanding science and technology in
> support of the Office of Energy Efficiency and Renewable Energy's
> mission. During the period NREL enhanced EERE's mission capabilities
> through increased partnerships with the Office of Science and others
> for foundational research, research critical to the transformational
> technologies required to address our nation's energy and economic
> security challenges. NREL management's efforts to expand the reach of
> EERE's programs in support of the mission are laudable and NREL is
> encouraged to continue to identify strategically important
> contributors and form relationships that will benefit the nation.
>
> NREL science and technology programs are expected to continue to adapt
> to accommodate new DOE program directions, increased demand for market
> relevance, and new expectations for technology deployment. EERE
> program managers look forward to working with NREL to explore, define,
> and implement new directions for the EERE program in support of the
> nation's energy, economic, and environmental security goals.

This Critical Outcome is rated "Outstanding".

*1.1 Foundational Science: Develop an exceptional scientific foundation
that underpins and leads to breakthroughs.*

> *1.1.1 Preeminence in key foundational scientific areas enable energy
> innovation.*

*1.1.2 Excellence in linking basic science and applied R&D.*

*1.1.3 Scientific advances result in breakthroughs in energy
technologies.*

*Significant Achievements:*

-   The NREL Research Team has continued investigation into improved
    enzymes. Computational modeling in combination with mutational
    analysis is being used to advance our understanding of how
    cellobiohydrolases function and interact with the surface of
    biomass.

-   For advanced membranes, based upon heteropolyacids (HPAs) for
    polymer electrolyte fuel cells, NREL showed the ability to
    immobilize HPAs into a polymer-composite matrix of its design. The
    HPA-based composite polymer electrolyte membranes have shown: (1)
    effective binding of silicotungstic acids (STAs) with select
    functional silanes, (2) high Wn-STA loading, (3) high chemical
    stability (Fenton's reagent test), (4) good thermal stability (with
    reactive W12-STA), (5) good mechanical flexibility, and (6)
    promising proton conductivity (25 mS/cm at 80oC/100% relative
    humidity).

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-   NREL's Measurement & Characterization efforts continue to play a
    critical role in device engineering and development in support of
    the PV industry. NREL is recognized as world-class with unique
    capabilities in the areas of electro-optical characterization,
    surface analysis, and cell performance, measurement, and
    calibration. With limited resources in the area of Electronic
    Materials and Devices, they have developed ground breaking work in
    combinational methodologies and inkjet processing, as well as
    research in silicon films on glass.

    -   In collaboration with staff from the National Research Council
        (NRC) of Canada, NREL published a joint paper in the Canadian
        Section of the Combustion Institute. The paper provides a
        detailed analysis of experimental ignition delay data of heptane
        compared to predicted values using chemical reaction models.
        Using NREL's Ignition Quality Testing equipment to conduct
        detailed analysis, provided insight into the degree of mixing
        occurring in the spray and the local temperatures encountered.
        This paper marks a good start to the recent collaboration
        between NREL and the NRC-Canada, which will be mutually
        beneficial to the two organizations.

    -   NREL experts organized and chaired a session and panel
        discussion on the implications of NOx controls and its impact on
        ozone air quality in the United States, at the 99^th^ Annual
        Convention and Exposition of the Air & Waste Management
        Association in New Orleans, LA.  Research results were presented
        and a panel discussed the implications of upcoming
        NOx regulations and the resulting nationwide ozone dis-benefit
        that has been documented by a series of studies. In the session,
        titled "The Weekend Ozone Effect and its Implications for Ozone
        Attainment", four of the five papers presented were funded by
        the DOE Office of FreedomCAR and Vehicle Technology (OFCVT). 
        The session was the best-attended of the technical sessions
        presented at the annual meeting of the air pollution
        control community.

*Noteworthy Achievements:*

-   NREL has developed a fundamental understanding of how biomass is
    constructed via imaging and microscopy tools to allow the
    development of directed processing steps.

-   Three NREL teams continued to conduct basic research sponsored by
    DOE's Office of Science and applied R&D funded by EERE on three
    hydrogen topics: photobiology, photoelectrochemistry, and storage.
    Knowledge gained from basic research continued to guide the applied
    R&D.

-   NREL's Hydrogen Program formally began periodic internal
    presentations on its basic research on hydrogen topics to its
    applied R&D program for EERE.

-   To achieve the Solar American Initiative's (SAI) 2015 goals NREL
    has (1) made advances in the acceptor doping of ZnO which might well
    have near-term application as a transparent conducting oxide in
    thin-film solar cells; (2) developed an improved understanding of
    dye-sensitized solar cell (DSSC) physical electronics which should
    help bring DSSC devices into the commercial marketplace by 2015;
    and (3) updated the National Solar Radiation Database which should
    allow more accurate calculations of specific photovoltaic system
    performance. For the post-2015 timeframe, NREL has made
    contributions to the understanding of the materials and physical
    electronics of several types of Third Generation photovoltaic and
    photo-electrochemical devices, including improved understanding of
    quantum-dot induced multiple exciton generation (MEG) materials and
    devices. There have also been contributions, both in theory and in
    equipment development, of improved imaging techniques for
    bandgap-engineered nano-particle materials intended for use in Third
    Generation solar cells.

*Significant Deficiencies:* None*.*

*Noteworthy Deficiencies:* None.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL should continue close collaborations between the Office of
    Science and the Biomass Program (OBP) to embrace the linkage between
    fundamental and applied science. OBP envisions that NREL will
    continue to be a key participant in this collaboration effort.

-   NREL has been vital to the development of the PV industry, which in
    recent years has undergone dynamic change and significant growth --
    in large part thanks to past R&D successes at NREL. Importantly,
    this change has included the emergence of significant internal R&D
    at start-up and established companies as well as a proliferation of
    PV research at university labs around the country. With the industry
    and academic elements of the domestic PV R&D community changing
    significantly, we must now reexamine NREL's research strategy to
    assure that it will be complementary and relevant in years to come.
    Currently, NREL does not have a full multi-year research strategy,
    with associated personnel/equipment plans, that recognizes this
    changing context and that has been transparently developed with
    industry/academic collaborators.

-   During the Spring of 2007, we would like to see NREL conduct an open
    and transparent planning process that lays out technical objectives,
    research strategies, and personnel/equipment requirements. This
    process should include participation from industry, academia, and
    foreign research institutions. Also, the present lab structure at
    NREL should be reexamined to determine whether increased investments
    in dedicated labs are needed in new device areas (e.g., organic PV,
    novel quantum effects). This planning process should be conducted so
    that its results can be presented for final review and
    consensus-building at the April 2007 SETP Annual Review Meeting in
    Denver, CO.

*1.2 Technology Development and Systems Integration: Deliver technology
innovations and integrated systems-level approaches that advance DOE
program objectives.*

> *1.2.1 Programs and projects produce significant research and
> development accomplishments that positively impact the advancement of
> DOE mission and program goals.*
>
> *1.2.2 Leadership in market-relevant technology innovations
> (components, viable systems, and manufacturing processes) positively
> impacts the advancement of DOE mission and program goals.*

*Significant Achievements:*

-   NREL developed a screening method to measure feedstock reactivity to
    pretreatment conditions for switchgrass and wheat straw. This method
    would allow OBP to expand the range of potential biomass feedstocks
    and identify opportunities for biomass pretreatment conversion
    technologies that are effective but less severe and less costly than
    traditional dilute acid pretreatment.

-   Bio-oil processing & upgrading for feed in Petroleum Refineries is a
    new project involving work performed jointly by NREL, PNNL, and UOP
    to produce bio-oil, characterize it, upgrade it and finally develop
    technology (UOP) to synthesize it into \"Green Gasoline.\" The
    objectives of the project will be to develop technology and
    processing steps to allow the use of bio-oils in petroleum
    refineries.

-   With the direction and guidance from OBP Staff, NREL's research team
    worked closely with the Project Management Center (PMC) Golden Field
    Office to develop a Funding Opportunity Announcement for the
    development of a solicitation that will provide a more robust,
    highly efficient fermentation organism for the conversion of
    lignocellulosic biomass to ethanol. In FY2007, NREL research staff
    will continue collaborations with OBP and the PMC to review proposal
    and be part of the validation team after awards are made. This
    validation effort is expected to be a multiyear effort.

-   In July, in the final stages of a successful multi year R&D
    partnership, NREL helped Clipper Windpower validate the design for
    their new 2.5-MW Liberty turbine by completing a full-system field
    test. The field-testing, which took 18 months to complete, included
    power performance, loads, and noise tests. The Liberty turbine is
    the first completely new U.S.-based utility-scale wind turbine
    market entrant in nearly a decade, offering innovations that promise
    performance (a key contributor to achieving program's cost of energy
    goal) and reliability gains to make it a substantial step forward
    for wind energy technology.

-   In the final stages of another successful R&D partnership, NREL
    field-tested and helped validate the blade design for Southwest
    Windpower's new 1.8-kW Skystream turbine. The blade tests, conducted
    to IEC standards, proved the new design and chosen materials would
    exceed the 20-year design lifespan in the field. The Skystream is a
    new residential scale market entrant with revolutionary market
    potential, given its performance (key contributor to achieving the
    program's small turbine cost of energy goal), ease of application,
    and Southwest's corporate experience with volume production and
    sales.

-   In July, NREL completed a wind turbine component subcontract with
    Northern Power Systems entitled "Advanced Power Electronics for Low
    Wind Speed Turbine Applications." The subcontract resulted in a
    modular, highly efficient power electronics package that can be
    scaled for use in a wide range of wind turbines from small to
    multi-megawatt systems.

Hydrogen Production and Delivery

-   For electrolysis powered by renewable energy, NREL designed, built,
    and tested an advanced power electronics interface between a 10kW
    variable speed wind turbine and a 5 kW PEM electrolyzer. NREL
    developed hardware for and implemented a wind turbine simulator that
    can reproduce wind turbine power output up to 200 kW. NREL showed,
    through analysis, that distributed wind electrolysis can produce
    hydrogen for \$4.03/kg based on Xcel Energy wind electricity costs
    and high capacity factors.

-   For photobiological production, NREL used a new computational
    simulation method to identify the specific location of high and low
    energy barriers for O~2~ diffusion along specific pathways to the
    catalytic site of the \[FeFe\]-hydrogenase. NREL generated
    site-specific mutations at amino acid residues identified as being
    potential targets for mutagenesis in order to prevent O~2~ access to
    the catalytic site. Results obtained in FY 2006 will guide FY 2007
    efforts. By immobilizing cultures onto glass fibers and running the
    reactor continuously in the presence of a limiting concentration of
    sulfate, NREL achieved light conversion efficiencies 50% higher than
    using suspension cultures. This result holds promise for a variety
    of biological systems.

-   For fermentation, NREL performed scale-up bioreactor experiments
    using *Clostridium thermocellum* and lignocellulose prepared from
    the steam explosion of corn stover under either neutral or acidic
    conditions. H~2~ molar yields of 2.3-2.4 were measured. This
    accomplishment provides a very good H~2~ molar yield baseline from
    which to improve using a more difficult and yet less costly
    substrate. NREL also determined that biomass pretreatment conducted
    with and without acid supports fermentation equally well. The
    exclusion of acid consequently simplifies the biomass pretreatment
    process.

-   For biomass-to-hydrogen, NREL demonstrated (1) bio-oil
    volatilization by two methods with less than 10% residue, (2)
    oxidative cracking process conditions that give 80% conversion of
    bio-oil to CO on a carbon basis with only 10% conversion to CO~2~,
    and (3) oxidative cracking of bio-oil at temperatures of less than
    650^o^C.

-   For photoelectrochemistry, NREL (1) quantified corrosion resistance
    of GaPN, showing 300 hours lifetime for a 1-μm, GaPN top-cell under
    simulated water-splitting conditions, (2) designed a new tandem cell
    for PEC water-splitting based on a silicon bottom-cell and CuGaSe~2~
    top-cell, and (3) grew CuGaSe material via electrodeposition for
    incorporation of gallium without the use of high vacuum techniques.

Hydrogen Storage

-   NREL developed volumetric measurement capabilities that measure
    \~0.1 wt% hydrogen uptake on milligram-sized samples at temperatures
    as low as 77K. NREL implemented electronic control on a multi-port
    temperature programmed desorption system that can test up to four
    samples at the same time. This system provides valuable desorption
    data for samples heated under vacuum.

-   NREL performed theoretical calculations to identify new hybrid
    materials with high hydrogen sorption capacities needed to meet
    DOE's hydrogen storage system targets. In addition, advanced models
    were used to identify potential processing pathways to forming high
    performance metastable material.

-   NREL demonstrated syntheses to make metal decorated single-walled
    nanotubes and other porous carbon materials. The materials may
    provide enhanced storage of hydrogen.

Hydrogen Fuel Cells

-   For bipolar metallic plates, NREL evaluated the interfacial contact
    resistance and corrosion resistance of metal alloys/coating
    combinations for fuel cell bipolar plates. NREL developed new
    understanding of the relationship between the composition of
    coatings and corrosion and interfacial contact resistance.

Hydrogen Technology Validation

-   For the Controlled Hydrogen Fuel Cell Vehicle and Infrastructure
    project, NREL created and published the first 16 of 26 composite
    data products, representing the first major technical analysis
    results from the project to be made public. NREL created new
    graphical user interface called the Fleet Analysis Toolkit (FAT) for
    automatically processing and analyzing every vehicle trip file and
    presenting the results graphically. NREL received and processed
    \>35,000 individual vehicle trips amounting to over 18 giga-bytes of
    data. NREL improved its automated MATLAB analyses for analyzing
    stack current/voltage degradation, on-road fuel economy, and on-road
    range and created many new analyses and integrated them into the FAT
    program. NREL confirmed the validity of its fuel cell stack
    degradation technique for projecting fuel cell durability by
    obtaining confirmation of results by industry.

-   For fuel cell buses, NREL collected, analyzed, and reported the
    first eight months of performance and operational data on three
    full-size, non-hybrid fuel cell buses in revenue service in the
    United States. NREL gained agreement from international fuel cell
    bus demonstration partners to share specific data on bus and
    infrastructure performance. Also, NREL illustrated the positive
    effect on fuel economy by adding a small fuel cell to a hydrogen
    fueled internal combustion engine transit vehicle --
    model/simulation work with TIAX under subcontract.

Hydrogen Codes and Standards

-   NREL coordinated DOE's efforts with several organizations to
    establish a unified international R&D effort to obtain data needed
    to create an international standard based on modifications to the
    ISO technical specification for hydrogen fuel quality.

-   Through NREL's efforts, national templates for standards, codes, and
    regulations for hydrogen vehicles and facilities, and for on-site
    hydrogen generation and stationary and portable fuel cells were
    accepted by major standard developing organizations in the U.S.,
    FreedomCAR and Fuel Partnership (FCFP), key industry associations,
    and many state and local governments as guideposts for coordinated
    development of standards and model codes. NREL continued to support
    development of standards and model codes with progress on all
    fronts.

-   NREL developed a hydrogen safety bibliographic database, helping DOE
    respond to a National Academies recommendation.

-   NREL worked with the Codes and Standards Tech Team of the FCFP to
    revise its R&D Roadmap and to coordinate efforts on R&D for fuel
    quality, integrated safety engineering, risk assessment, and
    detection and mitigation of hydrogen hazards.

Hydrogen Systems Analysis

-   NREL developed new models and analyzed near-term options for
    hydrogen infrastructure in support of DOE.

-   Assisted the Technology Analyst in bringing the Systems Analysis
    Plan to completion and signature by all four offices in the DOE
    Hydrogen Program. This milestone document/plan responds to NRC
    recommendations and sets the stage for the analysis/modeling out
    year planning, cooperation between DOE offices, and cross-cut
    analysis across hydrogen and fuel cell domains.

-   NREL Systems Integration coordinated an independent review in
    support of the technical progress and go/no-go on cryo-compressed
    tank technologies for onboard vehicular applications. To save costs,
    utilized the ongoing analysis task at ANL to provide the basic data,
    augmented by Tech Team and other experts.

-   Provided information and documents in response to the National
    Research Council review of the Hydrogen Initiative. Specifically,
    Systems Integration took the lead on developing several of the
    recommendation response items which were assembled into an overall
    Program response to the NRC.

-   The NREL Systems Integration Director and staff provided timely and
    insightful support to the Fuels Pathway Integration Technology Team.
    This is the primary Tech Team for the Systems Analysis function and
    the Technology Analyst, helping to shape future planning and
    industry input into analysis and modeling efforts.

-   NREL Systems Integration completed an initial version of the
    Macro-System Model (MSM). The initial version links the H2A
    production model with the Hydrogen Scenario Analysis Model (HDSAM)
    and the Greenhouse Gases, Regulated Emissions, and Energy Use in
    Transportation (GREET) Model. Some of the physical property data is
    transferred from the Hydrogen Analysis Resource Center (HyARC).
    Linking models together helped in understanding consistency issues.

-   The initial version of the MSM was used to compare 14 different
    hydrogen production/delivery pathways. Comparisons were made on
    minimum selling price at the pump, resource requirements, and
    emissions.

Hydrogen Systems Integration

-   Guided the DOE Hydrogen Program team through the WBS Budget
    Estimation exercise and completed the detailed scope, cost and,
    schedule information set for the EE, FE, and NE portions of the
    Hydrogen Program (FY05 through FY15).

-   Updated the Integrated Baseline in CORE^®^ with the revised set of
    technical tasks, estimated costs, and schedules. Scripts were
    developed so that the following products can now be directly output
    from the Integrated Baseline \-- WBS Budget Tables, WBS
    Dictionaries, and Microsoft Project files for scheduling and other
    project management analyses.

-   Conducted the largest and most comprehensive Annual Merit Review
    ever for the DOE Hydrogen Program. Over 160 peer reviewers were
    enlisted to provide evaluations of more than half of the Program's
    projects. Reviewer and attendee comments post-meeting indicated a
    highly successful review, with significant progress/improvements in
    the conduct of the meeting, focus on key areas, quality of
    presentations, etc.

-   NREL Systems Integration conducted independent verification of
    progress toward the following key Program Technical Targets:

    -   Fuel Cell System for Transportation -- 2005 Cost Estimate

    -   Distributed Production of hydrogen from Natural Gas reforming --
        2005 Cost Target.

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-   These were accomplished on cost and within schedule, allowing the
    results to be published prior to the end of the FY. A website area
    was added to the Systems Integration section of the DOE Hydrogen
    Program for inclusion of the final reports, providing visibility and
    transparency for these Program independent functions.

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-   NREL Systems Integration completed the following activities related
    to risk assessment and the initiation of a Program risk management
    process:

    -   Developed a revised draft of the Risk Management Plan for the
        DOE Hydrogen Program Manager and Technology Analyst.

    -   Three pilot risk assessments were generated and provided for the
        Technology Analyst and Program Manager. These were used by the
        Program during the budget development cycle, showing that the
        Program was making significant progress in using the risk
        process to add value to budget planning.

    -   NREL Systems Integration continued to provide detailed technical
        support to the EERE (Sam Baldwin-led) risk management team and
        the development of the Risk Analysis Guide.

-   An initial version of the Quality Manual, containing key Program
    processes and procedures, was assembled. With the recent EERE level
    interest in Quality Assurance within the Programs, this manual will
    give HFCIT a significant response to the emerging attention and
    requirements.

-   The configuration management and Change Control Board (CCB) process
    continued to methodically work through updates to the Multi-Year
    Program Plan (MYPP). Many sections were updated over the year to
    capture changes in R&DD understanding, recent progress, and the new
    WBS structure. Approved changes were quickly incorporated into the
    website version of the MYPP to keep it as current as possible.

-   2005 Annual Progress Report development and publication was
    successfully coordinated by Systems Integration, leading to an
    on-time delivery of this key Program document. Subsequently, process
    and format improvements were recommended and negotiated with Program
    management, with the intent of making the 2006 version even better.

-   For the selection of the new Hydrogen and Fuel Cells Technical
    Advisory Committee (HTAC), Systems Integration provided key support
    to the planning and DOE coordination efforts. Systems Integration
    had built a place-holder task into one of its industry subcontracts,
    allowing for a rapid response for logistical support to the first
    meeting of the HTAC in early October 2006.

-   The DOE Hydrogen Program website continued to be improved and
    expanded by Systems Integration. Numerous inputs from users and
    stakeholders indicate that it is an extremely useful one-stop-shop
    for Program information. Monthly change summaries were provided to
    the Program, such that all Program personnel were aware of the
    changes and additions as they are implemented.

-   When key staff personnel from one of the subcontractors left their
    company, Systems Integration pre-planned for the impact and had a
    replacement subcontract pre-negotiated and ready to execute. This
    prevented any disruption to the activities supporting the Annual
    Merit Review, Annual Progress Report, and HTAC support.

-   NREL completed a comprehensive solar technology systems analysis
    model that supports the implementation of the President's SAI. The
    Solar Advisor Model (SAM) allows potential SAI partners to
    investigate the impact of various physical, cost, and financial
    parameters to better understand their potential impact on key
    figures of merit and on the SAI 2015 photovoltaic electricity cost
    targets. This provides DOE with a critical tool to inform
    decision-making regarding its investments in R&D. In addition, SAM
    could become a standard tool for project development and systems
    integration out in industry if effectively marketed and further
    developed.

-   The NCPV and its staff have played a vital role in formulating the
    strategy for industry-led R&D under the SAI and have been highly
    supportive of procurement activities on the federal side. In
    addition, the Systems Analysis benchmarking and modeling activities
    currently being executed in coordination with Sandia are providing a
    critical contribution to Solar Program strategy and are being
    organized to provide a unique and valuable set of tools for the
    expanding PV market.

-   Plug-in hybrid electric vehicles (PHEVs) are one of the latest
    advanced vehicle concepts gaining tremendous attention for their
    potential to dramatically reduce vehicle fuel consumption. However,
    there is relatively little data on PHEVs, in particular on
    mile-per-gallon performance. CTTS' vehicle systems analysis team is
    taking a lead in analyzing PHEVs, and recently conducted a review of
    various techniques used to characterize PHEV fuel economy, the
    relative merits, and the limitations and opportunities. Next, the
    team devised a new method that combines best practices for finding
    EPA comparable fuel economy estimates. Analyzing data and developing
    this method was particularly challenging because PHEVs, compared
    with conventional vehicles, receive energy from two distinct sources
    (electricity and gasoline), therefore exhibiting widely varying per
    mile consumption based on the drive cycle considered.

-   CTTS' vehicle systems analysis team completed a FY06 milestone that
    made great strides towards objectively assessing PHEV technology.
    This milestone supports the larger DOE PHEV assessment effort and
    the President's Advanced Energy Initiative to "develop a plug-in
    hybrid vehicle with 40 miles of electric range as a means of
    changing the way we fuel our vehicles". This research complements
    activities at other national laboratories, and has been highly
    valued by the vehicle research community and vehicle manufacturers
    participating in the FreedomCAR Vehicle Systems Technical Team and
    the Electrochemical Energy Storage Technical Team. Specifically, the
    research conducted for this milestone included:

    -   Proposing improvements to the existing test procedure for
        reporting PHEV fuel economy

    -   Thoroughly exploring PHEV design space, including evaluation of
        the tradeoffs between cost and fuel consumption

    -   Applying real-world driving data to quantify impacts of travel
        behavior on the potential benefits of PHEVs

    -   Optimizing energy management strategies focusing on petroleum
        displacement.

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-   A study completed by NREL in collaboration with the National
    Biodiesel Board led to the adoption of an oxidation stability
    requirement for 100% biodiesel (B100). Adopting such a requirement
    has been a priority of the engine manufacturers and the biodiesel
    industry for several years. The engine manufacturers have stated
    that they require a stability limit in order to approve biodiesel
    blends for warranty coverage. Their other condition for warranty
    approval is the adoption of ASTM specifications for biodiesel
    blends.

-   NREL experts completed an investigation on the performance of
    biodiesel with Diesel Particle Filters (DPF), as part of a DOE
    effort to identify fuels that can displace 5% of petroleum diesel
    by 2010. Emission test results show a 25% particulate matter (PM)
    reduction for B20 without the DPF installed.  Installation of the
    DPF caused PM emissions to drop by more than a factor of 10 for
    petrodiesel.  Use of B20 with the DPF produced an additional PM
    reduction of 67% as compared with the petrodiesel plus DPF
    configuration. Tests were conducted using 2007 certification diesel
    and biodiesel derived from soybean oil, and put in a Cummins ISB
    engine equipped with a Johnson Matthey continuously regenerating
    particle filter. 

-   NREL and the Coordinating Research Council (CRC), a consortium of
    light-duty auto makers and energy companies, completed a major new
    study assessing the impact of biodiesel on fuel system engine
    component durability. This study examined the impact of biodiesel
    blends (with biodiesel derived from rapeseed, soy, and highly
    oxidized soy oil) on fuel system elastomers, fuel injectors, rotary
    fuel pumps, and common rail fuel pumps. Results indicate that there
    is no significant impact on the durability of these components for
    B5 blends, even with highly oxidized biodiesel. B20 blends, in
    specification biodiesel, also produced no significant impact on
    durability. These results confidently indicate that high quality
    biodiesel has no impacts on engine durability.

*Noteworthy Achievements:*

-   NREL's Biomass Program Systems Integration (SI) Team continued to
    evolve the description of the bioenergy supply chain and define the
    biorefinery deployment pathways that are tied to the biomass
    resource base and to existing bioindustry market segments where
    possible and future market segments were envisioned. The bioenergy
    supply chain is the high level description of how the biomass
    industry is expected to operate and is employed as the general
    market organization of the Biomass scenario model. The biorefinery
    pathway architecture was presented at or included in the Program
    Peer Review, the 30x30 workshop with industry, and the update of the
    OBP MYPP. The pathway architecture plays a key role in describing
    the Program mission in a way that integrates technology development
    with the commercial marketplace and therefore also for defining the
    Program Integrated Baseline.

    -   NREL developed a computer program that allows rapid comparison
        of various innovative geothermal cycles and completed analysis
        of the performance of existing geothermal power conversion
        cycles and advanced cycle designs. NREL also developed and used
        a computer model to show the advantages of evaporative
        enhancement of air-cooled condensers for binary cycles and
        presented this information to industry at the Geothermal
        Resources Council Annual Meeting. This task was concluded at
        DOE's direction as part of the potential close out of the
        Geothermal Technologies Program (GTP).

-   Uncertainty of gearbox life expectancy remains one of the most
    difficult and costly problems the wind industry faces. NREL
    initiated industry collaboration in July to characterize the nature
    of gearbox problems. In addition to characterizing the gearbox
    problems, workshop participants defined a campaign to address the
    problems jointly under a multi-lateral industry-driven test program
    at NREL.

-   To support offshore wind energy development, NREL, in cooperation
    with AWS Truewind, is producing validated offshore wind resource
    maps for priority regions up to 50 nautical miles offshore. The
    regions include the east coast areas from Maine to northern Florida,
    the western Gulf of Mexico, and the Great Lakes

    -   For hydrogen delivery, NREL incorporated reviewers' comments and
        updated and expanded information into Version 1.1 of the
        Hydrogen Delivery Components model and Version 1.0 of Hydrogen
        Delivery Scenario Analysis Model.

    -   NREL led a team that launched DOE H2A Analysis Web site, which
        provides the latest information about program activities as well
        as the production and delivery models and case studies.

    -   NREL developed modeling tools to assess the cost of producing
        hydrogen. NREL completed and released current, advanced, and
        longer-term case studies for a variety of technologies,
        including biomass, coal, natural gas, nuclear,
        wind/electrolysis, ethanol, and methanol.

    -   Papers, publications, presentations -- NREL advanced DOE's
        program with over 80 presentations at meetings, eight keynote
        talks, and over 20 peer reviewed publications. NREL staff
        members were co-organizers of seven conferences.

-   In CSP, NREL distinguished itself in 2006 by understanding the
    hydrogen seepage problem in trough receivers, developing a thermal
    storage project with APS with analysis showing the impact of
    technology improvements on LCOE, refinement of VSHOT, providing
    resource assessment and analysis to the WGA solar task force and SW
    utilities (e.g APS, SCE, PG&E), and cooperating with DOE in
    developing the MYPP, AOP, and EPAct report. In addition, NREL worked
    collaboratively with Sandia.

-   In SHL, NREL had excellent interaction with industry (e.g. analysis
    that supported Fafco design), excellent systems analysis integrating
    solar into homes, good support of the NAHB-RC report on Zero Energy
    homes, excellent cooperation in MYPP, AOP, worked well with other
    labs, and made a very good transition to a lower budget maintaining
    a positive attitude in the face of a zero DOE budget request.

-   NREL contributed in the successful development of the Test and
    Evaluation Management Plan to support the Solar Program Solar
    America Initiative*.*

-   In III-V multi junction thin films, NREL has provided significant
    assistance to industry in helping them achieve performance records
    for commercial size cells. In the areas of PV Manufacturing and
    University and Exploratory Research NREL is providing key technical
    support to subcontracts which are doing innovative work . In
    addition, NREL's reliability testing capabilities at NREL represent
    a valuable tool for industrial commercial development with the staff
    providing unique expertise to technology developers about
    acceleration parameters and mitigating engineering approaches.

*Significant Deficiencies:* None.

*Noteworthy Deficiencies:* None.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL should work closely with Solar Program staff to ensure
    understanding of the program's cost structure and allocation of
    resources.

-   With the likelihood of an increased budget in FY2007 and a fast pace
    goal for 2012, a more robust implementation effort is required from
    NREL to facilitate the tracking of accomplishments and milestones,
    which will help keep the Project Management Center and Office of the
    Biomass Program informed of all major activities or changes.

    -   The Science and Technology element of the GTP has concluded at
        NREL pursuant to DOE's intent to close out the GTP therefore
        there are no GTP items of program interest or concern for the
        next performance period.

-   NREL should work closely with the DOE Golden Field Office to
    transfer subcontracting from NREL to the Program Management Center
    (PMC). Within the photovoltaic subprogram, subcontracts in the thin
    film partnership, PV manufacturing R&D, university high performance
    and university future generation projects should not be renewed, and
    all existing subcontracted work brought to successful conclusion as
    soon as possible.

*1.3 Technology Utilization: Transfer NREL-oriented knowledge and
technology.*

> *1.3.1 Partnerships created result in transfer of important NREL
> technologies.*
>
> *1.3.2 Use of NREL knowledge and practices removes barriers to the use
> of EE and RE technologies.*
>
> *1.3.3 A robust strategy to support market viability is developed and
> implemented.*

*Significant Achievements:*

-   NREL has launched an Innovation Management System to provide more
    effective reporting, assessment, and advancement of innovations that
    will improve the alignment of patent strategy decision making with
    business strategy. This new system will encourage reporting of
    innovations earlier, and will involve examination of commercial
    potential of the innovations from the earliest stages of innovation.
    The process will involve the inventors, patent experts,
    commercialization experts, and will evaluate whether to publish,
    patent, or develop the innovation further.

-   NREL has worked to establish the framework for the Clean Energy
    Innovation Center, a "virtual incubator", in Golden, Colorado. The
    Center will support Front Range technology-based and entrepreneurial
    small businesses and provide access to NREL's facilities. The
    expected impact will be to stimulate the growth of clean energy
    companies in the Front Range region.

-   Since 2003 NREL and Dupont have worked together to significantly
    bring down the cost of fermenting complex sugars in biomass to
    ethanol at a higher yield. This project started with an experimental
    approach and it is leading its way toward the preparation of a scale
    up and demonstration run in 2007. In 2006, Dupont and NREL worked to
    specify the equipment for the scale-up of pretreatment,
    saccharification and fermentation.

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-   NREL successfully closed out the award-winning research it performed
    in partnership with BNL and industry to perfect and prove the value
    of polyphenylene sulfide (PPS) coatings for use in geothermal
    applications and documented its work in a final report. Concluding
    field tests involved PPS-coated pipeline components at CalEnergy's
    Salton Sea operations and PPS-lined carbon steel heat exchanger
    tubing at Ormat's binary geothermal power plant at Mammoth Lakes,
    California. Industry (Curran and Sons, Houston, TX) has
    commercialized the product under the trade name Curralon.

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-   NREL is working with the Western Area Governors Association (WGA)
    and the Clean and Diversified Energy Advisory Committee (CDEAC) to
    identify and remove barriers to help achieve the WGA's goal of 30 GW
    of clean power by 2015. In 2006, NREL provided CDEAC with a set of
    wind supply curves based on extensive wind map GIS data, paired with
    GIS transmission data. The resulting report submitted to WGA by
    CDEAC contains a series of recommendations designed to meet the
    goals of the 30 GW initiative.

-   The impact of wind turbines on civilian and defense radar systems
    has impacted the schedule of wind energy projects. To address the
    situation, NREL is working with DOE and INEL staff, AWEA, the
    Federal Aviation Administration, and the Department of Defense.
    Their efforts have freed up the development of about 1,000 MW of
    wind projects.

-   NREL is working with industry to improve transmission access,
    develop new transmission, and reduce the impacts of wind
    integration. Two studies conducted in 2006 examined the impacts of
    wind energy at the 20% integration level. The Wind Integration Study
    in Minnesota examined the impacts of wind variability on power
    system operation in the Midwest. NREL is also working with Xcel
    Energy in Colorado on a study to assess the technical and economic
    impacts of adding a significant amount of wind generation to its
    energy portfolio.

-   To enable WAPA to integrate wind energy into their electric power
    system operations training program, NREL supplied WAPA with a wind
    farm simulator that successfully simulated power delivery to the MPS
    grid from a time series file of real wind farm data for a 50 MW wind
    farm.

-   NREL established Cooperative Research and Development Agreements
    (CRADAs) with Purdue University and Florida International University
    to advance research on hydrogen production by photobiological and
    fermentation processes.

-   NREL established new working relationships with the University of
    Nevada at Las Vegas and at Reno to provide technical leadership and
    research on congressionally directed projects on hydrogen generation
    by photoelectrochemistry.

-   NREL established a CRADA with Xcel Energy for a major study of
    wind-electrolysis. Xcel is providing about \$1.2 million in hardware
    which is approximately double the DOE/NREL contribution. This
    project consists of one 100-kW wind turbine, two 5-kW PEM
    electrolyzers, one 50-kW alkaline electrolyzer, hydrogen
    compression, storage, and a 60-kW hydrogen internal combustion
    engine

-   NREL continues to provide leadership in guiding the DOE's
    Carbon-materials Center of Excellence. Interactions among members of
    the Center advanced the development of promising materials beyond
    what would have occurred by individual investigators.

-   NREL further developed its collaborative technical relationship with
    all four automobile-energy teams involved in the technology
    validation project by giving presentations to each team and showing
    detailed results from NREL's analysis of their vehicle and
    infrastructure data.

-   NREL supported the creation and operation of the Hydrogen Utility
    Group (HUG), a group of electric utilities. The HUG is an important
    mechanism for the electric utility industry to interact with DOE.

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-   Despite limited industry funding, NREL provided excellent technical
    support to Solargenix resulting in improved and more cost effective
    concentrator support structure designs that reduced the weight by
    20%, simplified the optical alignment, and increased the optical
    accuracy. They also did an excellent job coordinating trough
    industry meetings and keeping troughnet up to date.

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-   Federal Sites Screened for Renewable Potential. NREL applied
    enhanced screening tools to identify promising Federal sites for
    renewable deployment. Promising sites were visited and included in a
    large ESPC procurement co-managed by NREL and the Defense Energy
    Support Center (DESC). Knowledge base not yet available from private
    sector sources.

-   Energy Savings Audits Respond to Presidential Directive. NREL
    provided Energy Saving Expert Teams (ESET) for specialized audits of
    Federal facilities. The teams are highly knowledgeable in energy
    efficiency measures, renewable energy opportunities, identification
    of operations and maintenance measures and advanced
    metering/measurement methodologies. NREL teams work in collaboration
    with private sector contractors and other DOE National Laboratories
    to assess 28 large Federal sites which account for nearly 10% of all
    natural gas consumption at Federal facilities. The Presidential
    directive required a fast response and NREL supported DOE by
    engaging the private sector as a partner and implementing an
    approach to the ESET audits that yielded more than studies. Through
    NREL's involvement, two audits resulted in utility energy savings
    contracts; and NREL trained several utilities on energy contracting
    and corrected ESET deficiencies through those third-party financed
    contracts.

-   NREL Sets the Standard for Sustainability NREL made significant
    progress toward an onsite biomass heating project implemented under
    ESPC. Working closely with GO, an initial feasibility assessment of
    a wood fuel biomass combustion project utilizing Front Range forest
    thinnings and wood waste was completed. During FY06, the energy
    services company (ESCO) was selected, the initial proposal process
    was completed, and the Notice of Intent to Award was issued. Initial
    operation is expected for the 2007-2008 heating season. This project
    is expected to stimulate the market for further installations of
    this type, use the ESPC innovative financing mechanism, and displace
    some 75% of NREL's natural gas use.

-   NREL exceeded all of its FEMP Joule metric goals for FY06. In
    alternative finance NREL assisted 14 projects to contract award,
    totaling \$120 million in investment (10 ESPC for \$113 million, 4
    UESC for \$7.5 million). The NREL contribution helped FEMP meet 100%
    of its \$80 to \$120 million Joule metric. NREL supports many other
    awards through training and technical support. For example, the Navy
    estimated that \$30 million of its UESC awards in 2006 benefited
    from FEMP UESC training workshops in which NREL provided technical
    expertise.

-   NREL has provided significant support to the Secretary of Energy's
    "Easy Ways to Save Energy" campaign by providing timely, creative
    communications vehicles to enable delivery of energy savings
    assessments and other energy savings information.. These include:

    -   Being the lead on "Energy Matters," the flagship communication
        vehicle of the Industrial Technologies Program (ITP), providing
        current, critical information on ways to save energy in the
        industrial sector.

    -   Taking editorial responsibility for the ITP E-Bulletin, a
        monthly electronic update of activities within ITP relevant to
        saving energy in industry.

    -   Providing communications support for "Save Energy Now," (SEN)
        ITP's component of the Secretary's campaign. This includes very
        quick response the requirement to communicate the availability
        of SEN to potential candidates for assistance. A measure of the
        success of NREL's efforts was the fact that DOE was able to
        select 200 candidates for assistance from more than 600
        applicants.

        -   NREL received a 2006 Environmental Protection Agency (EPA)
            Climate Protection Award on May 17. The award recognizes
            efforts in exceptional leadership, innovation, dedication
            and technical achievements in protecting the climate. This
            resulted in great public recognition of DOE, NREL, and CTTS'
            vehicle ancillary load reduction (VALR) team, and
            demonstrates a successful partnership between government
            agencies. NREL is the first DOE laboratory to earn this
            honor. The award highlights specific accomplishments
            including:

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    -   NREL was one of seven EPA Climate Leaders Partnership to set and
        successfully meet a greenhouse gas emission reduction goal.

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-   NREL greatly contributed to the EPA Mobile Air Conditioning Climate
    Protection Partnership. The research conducted by the VALR team to
    reduce mobile air conditioning fuel use was a major factor in NREL's
    winning the award.

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-   NREL recently completed a compressed natural gas (CNG) engine
    development project as part of the Next Generation Natural Gas
    Vehicle (NGNGV) program in collaboration with Mack/Volvo Powertrain,
    Sturman Industries, and Southwest Research Institute. The project
    demonstrated that a CNG engine can meet 2010 emission requirements
    with a brake thermal efficiency approaching that achieved by a
    diesel engine. A project objective was to demonstrate 2010 emission
    level requirements using stoichiometric combustion and a three-way
    catalyst. The emission levels far exceeded the requirements. A
    second project goal was to quantify the efficiency improvement
    enabled by the Sturman hydraulic valve actuation (HVA) system. The
    HVA system was used to eliminate throttling losses and allowed for
    the use of a higher geometric compression ratio piston to achieve
    higher efficiency. Compared to baseline operation, the HVA system,
    once optimized for efficiency, is expected to improve fuel economy
    by about 6%.

-   NREL, with support of DOE-subcontracted Electric Power Research
    Institute (EPRI), developed a test procedure and cycle for testing
    batteries under typical PHEV driving cycles. Based on the Sprinter
    van PHEV, EPRI developed a cycle consisting of three parts: a charge
    depleting section, an HEV charge sustaining section, and a recharge
    section. This cycle was used by the EPRI's testing lab (Southern
    California Edison) to evaluate the degradation of a NiMH pack (by
    Varta) and a Li-ion pack (by Saft) under PHEV cycling. This is the
    first time such data has been produced for battery cycling under
    PHEV operation. Initial results indicated that the battery
    degradation is lower than expected.

-   NREL researchers performed an analysis of Saft\'s liquid cooled
    42V lithium-ion prototype.  The research team used computational
    fluid dynamics models to evaluate the design of Saft\'s liquid
    cooled module and gave recommendations on areas of
    improvement.  Saft incorporated the recommendations in their final
    design and provided a new module to NREL for test and evaluation.
     Researchers assessed the thermal performance of the module
    under continuous charge/discharge cycles and found that the cell
    temperatures rose less than 7C, acceptable for most driving
    conditions.  Furthermore, the temperature variation between cells
    within the module was less than 2^o^C ---an excellent result
    considering the aggressive power profile applied to the module.

-   The CTTS vehicle systems analysis team developed a novel
    implementation approach for route-based or adaptive controls of HEVs
    and began incorporating the strategy into the Powertrain System
    Analysis Tool (PSAT). This progress helps the team with critical
    research to realize tangible fuel efficiency improvements at minimal
    incremental cost, while increasing vehicle GPS data collection and
    drive cycle analysis capabilities. The milestone significantly
    extends the team's capacity to perform detailed control strategy
    implementation and modification in PSAT. A milestone report was
    delivered to DOE on this HEV route-based control strategy.

-   Web users continued to turn to the Alternative Fuels Data Center
    (AFDC) and Clean Cities Web sites as *the* source of information on
    alternative fuels and advanced vehicle technologies.  There were
    about 9 million total page views received by these Web sites during
    FY06, an increase of 80% from FY05.  The Web sites are driven by
    NREL-developed databases and include technical publications,
    incentives and laws, vehicle specifications, fueling station
    information and maps, industry contacts, and other project and
    technical data. In response to stakeholder interest, the Web sites
    are continually enhanced.  In FY06, NREL created an Ethanol Portal
    that brings all key ethanol information, documents, and links into
    one easy-to-use Web site.  Additionally, several key databases are
    updated regularly.  State incentives are updated annually, refueling
    stations are updated weekly, and contacts are updated as new
    contacts are received.

-   Engineers at the Renewable Fuels and Lubricants Lab (ReFUEL)
    completed a thorough study of the fuel economy, emissions, and
    performance of a medium-duty hybrid electric truck, in support of
    NREL's Advanced Heavy Hybrid Propulsion Systems (AHHPS) Project.
    Results show fuel economy improvements ranging from 47%-49% for the
    prototype truck. The data collected is being used to improve Eaton's
    modeling capabilities and optimize the hybrid control strategy for
    the next phase of vehicle development. The prototype vehicle was
    tested on the WVU-City and CILLC test drive cycles on ReFUEL's
    heavy-duty chassis dynamometer.

-   ReFUEL is a state-of-the-art test facility for advanced fuels in
    heavy-duty engines and vehicles and advanced heavy hybrid vehicles.
    In partnership with DOE, the AHHPS Project focuses on increasing the
    fuel efficiency of heavy trucks (Class 3-8) and buses by as much as
    100%, and improving their emissions to meet the EPA's 2007-2010
    emission standards. Overall, AHHPS-developed technologies are
    projected to save more than 20 million barrels of oil in 2010 and
    250 million barrels of oil in 2020.

-   Upon request, NREL's new technology impacts project leader presented
    results of a recently competed Gasoline/Diesel PM Split Study to the
    nine-member California inspection/maintenance (I/M) Review
    Committee, who is responsible for implementing and evaluating
    California's motor vehicle inspection/maintenance program. The study
    results demonstrated the impact and contribution of smoking vehicles
    on Los Angeles' air quality. This study helped the State of
    California to decide to implement changes to its I/M program, so
    that they can test vehicles for particulate matter emissions as part
    of the state's Smog Check program.

*Noteworthy Achievements:*

-   With significant assistance from NREL's Legal Council, the
    Technology Transfer Organization negotiated a Work for Others (WFO)
    Agreement with the California Energy Commission to further research
    in Distributed Energy Research. This program, when completed, will
    result in \$20 million of WFO Agreements between CEC and NREL over 6
    years. This WFO leverages resources from both organizations. CEC
    funds will be used to support research while NREL provides technical
    support to CEC in the award and administration of contracts for
    distributed energy. Collaborative work between CEC and NREL has been
    encouraged by DOE and this model could potentially be used for
    agreements with similar organizations.

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-   NREL\'s performance in consistently providing superior communication
    support to EE has resulted in renewed recognition by EE of the
    laboratory\'s value in this area. Some specific examples: (1) The
    laboratory\'s web, publication, event and workshop support to the
    Solar Decathlon, which received high praise from EE. (2) The Save
    Energy Now campaign, in support of the Industrial Technologies
    Program, which earned a prestigious Silver Quill award from the
    International Association of Business Communicators. (3) Finally,
    NREL\'s invaluable support during the lengthy and difficult
    transition to an outside contractor for the EE web site, which made
    a strong statement to EE about the laboratory\'s expertise,
    dependability and relative value.

-   NREL's media relations program resulted in an exceptionally high
    volume of coverage in national news media during the past year,
    including *The New York Times*, *Wall Street Journal*, *Chicago
    Tribune*, *Los Angeles Times*, *Washington Post*, CBS, NBC, CNN,
    Fox, PBS, NPR, History Channel, Discovery Channel, National
    Geographic Television, *Time*, *Newsweek*, *U. S. News & World
    Report*, *Fortune*, *Business Week*, *Popular Science*, *Popular
    Mechanics*, *the Economist*, *Scientific American*, and the
    Associated Press. Although the increased coverage was driven in part
    by events, including President Bush\'s visit, the employee layoffs
    in the spring, and the prominence of energy issues on the news
    media\'s agenda, much of the credit must also go to the
    laboratory\'s solid news media strategy implemented consistently
    over many years.

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-   With the change in management of the Office of Technology Transfer,
    NREL has demonstrated an increase in research and commercial
    licenses for patents in the PV, biomass and hydrogen areas and an
    increase in the number of technology partnership agreements,
    particularly CRADAs and WFOs, in areas such as biomass, solar
    energy, and energy efficiency. The management change has not only
    increased the number of tech transfer transactions, but it has
    emphasized a focus on accomplishing DOE's mission to commercialize
    renewable energy technologies.

-   NREL engaged in a joint effort with the Institute for Electrical
    Engineering of the Chinese Academy of Sciences to support China's
    rural electrification program, collaborating in developing a design
    tool that provides guidelines for off-grid renewable energy system
    designs, and for cost-based tariff and finance schemes to support
    them. Additionally, NREL began collaborating with India's Ministry
    of Non-Conventional Energy Sources in the areas of (1) standards and
    testing of solar thermal and photovoltaic systems, (2) development
    of concentrating collectors, and (3) energy efficient buildings, all
    in support of the US-India Energy Dialogue. These collaborative
    efforts further DOE's mission to remove barriers to the use of
    renewable energy technologies and give NREL and DOE's EERE programs
    international recognition for their work.

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-   The NREL Biomass Systems Integration (SI) Team prepared Biorefinery
    Deployment Pathway descriptions that included biofuels production
    potentials to establish a common vision and information foundation
    for participants in the 30x30 Workshop. The SI team also gave a
    presentation during the introductory session summarizing the
    biofuels potential from feedstocks included in the Billion Ton
    Study,

    -   NREL designed, developed and tested a spiral-wound, circular
        heat exchanger fin for air-cooled condensers that can provide up
        to 17% more heat transfer than plain fins at the same fan power
        while maintaining sufficient strength for commercial
        applications. NREL worked with McElroy Corporation on this
        design and tested several other innovative concepts as well. The
        work was documented and transferred to industry in a final
        report, and the task was closed out at DOE\'s directive as part
        of the potential close out of the GTP.

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-   NREL's Wind Powering America (WPA) staff provided outreach and
    technical support for the Natives Renewables Energy Summit held in
    Denver in November, the USDA Rural Utility Service's Electric
    Engineering Seminar, and the 2006 TechAdvantage Conference. As part
    of the technical support provided to Native Americans, WPA hosted a
    Wind Energy Applications Training Symposium (WEATS) in August that
    provided training on wind energy fundamentals for both large and
    small wind energy applications.

-   Wind Powering America staff organized and provided technical support
    for the 5th Annual WPA State Summit in Pittsburgh, Pennsylvania. The
    event was aimed at giving key program partners the tools they need
    to move wind forward as an option at the state and local level.

-   NREL partnered with the Minerals Management Service to staff the
    discussion panels and gave technology briefings at public meetings
    around the United States as required for the Program Environmental
    Impact Statement that MMS must complete as a prelude for developing
    offshore development regulations. NREL also joined with MMS in 2006
    to lead a major joint industry project to evaluate the differences
    between API and IEC design standards in terms of their application
    to the design of offshore wind turbine generators in U.S. waters.

-   A CRADA between NREL and ITI Energy will investigate the loads and
    stability of a multi-megawatt wind turbine installed on an offshore
    floating barge platform. This CRADA is an opportunity to leverage
    the common interests of both ITI and DOE in exploring deep water
    offshore wind deployment.

-   Two NREL engineers traveled to McMurdo Station, Antarctica, in
    December to provide Raytheon Polar Services with the technical
    support they needed to evaluate its telecommunications hybrid power
    system. Raytheon sought NREL's assistance in evaluating the
    possibilities for extending the life of the wind turbine system and
    increasing its efficiencies or replacing it with a new system.

-   Wind Powering America staff coordinated and shipped exhibit
    materials to 17 events in 11 states and Washington, D.C. and
    provided handout materials for 11 State Wind Working Group events in
    9 states.

-   Understanding the wealth of international technical expertise in CSP
    in general and troughs in particular, NREL has taken the leadership
    role in bringing together researchers from around the world to
    exchange technical information on cutting edge trough and thermal
    storage designs. These meetings have resulted in R&D leveraging
    opportunities that may save millions of dollars in Federal
    investments and accelerate the implementation of low-cost technical
    solutions by the U.S. CSP industry.

-   NREL provided noteworthy support during the Market Transformation
    (MT) strategic planning process. NREL helped provide the technical
    and market analysis necessary for DOE to develop a robust MT
    strategy in a new area under the SAI to further market viability for
    SAI developed technologies. The process include task force
    membership input and development of presentations during two
    regional Technical Exchange Meetings. NREL support was critical in
    the support of these meetings.

-   NREL stepped forward to chair the SRCC Standards Committee when the
    former head at Sandia stepped down and has been very constructive in
    organizing the solar water heating market expansion workshop planned
    for January 2007 in California.

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-   NREL has developed the Hybrid Optimization Model for Electric
    Renewables (HOMER), a micro power optimization software program to
    help policy makers compare conventional, renewable, and hybrid
    distributed generation technologies in applications ranging from
    village power, to isolated grids and cogeneration. This web-based
    program has been accessed in184 countries with over 13,000 hits.

-   Partly because of a DOE/NREL study, China's Renewable Energy Law
    came into effect at the beginning of 2006. The law outlines general
    principles which are then detailed in implementing regulations. The
    NREL DOE contribution was especially significant in the Chinese
    government's recognition that policy-making is an iterative process.
    They have established 'trial' measures for pricing that may be
    reviewed and revised. For example, current implementing regulations
    give biomass a \$0.03/kWh subsidy. NREL has made available a
    computer tool to support system design and tariff selection for
    renewable energy projects under China's rural electrification
    program.

-   NREL's update of the WIP Website brought it into compliance with
    EERE guidelines.

-   NREL's administration of the Technical Assistance Program for State
    Energy Offices earned kudos from the states as "exemplary service to
    the states" and a highly effective mechanism of accessing laboratory
    expertise in support of state energy policy and program design.

-   NREL provided expert review of tribal feasibility studies for new
    conservation and energy efficiency projects. NREL has completed a
    series of training courses jointly sponsored with the Dept of
    Interior on renewable energy technology, economic, and energy
    planning, resulting in greatly enhanced capacity in tribal
    authorities in this area. NREL helped launch a tribal weatherization
    initiative between the Department of Housing and Urban Development,
    the Department of Interior and the Department of Energy.

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-   Through NREL screening actions for renewable projects at Federal
    sites and NREL's in depth understanding of project financing new
    approaches are being developed to bring advanced renewable
    technologies into financed projects at Federal sites.

-   NREL is an active participant in FEMP's Technology Identification
    and Validation Program Initiative and providing technology screening
    and validation technical services to accelerate innovation into the
    Federal market place.

*Significant Deficiencies:* None.

*Noteworthy Deficiencies:* None.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL needs to better clarify its vision and intent regarding State
    outreach activities, policy analysis, and communications support to
    R&D efforts. At this time, it is unclear if NREL believes these
    functions to be core capabilities of the lab or simply ad-hoc
    activities to be conducted only if requested/funded by DOE. These
    and other crosscutting functions need NREL leadership and cannot be
    solely supported by individual technology programs.

-   NREL could work more with Zero Energy Home industry builder teams to
    support solar water heating systems in their homes

-   With support for renewable energy and energy efficiency technologies
    very strong nationally, NREL should step back and take a fresh look
    at its outreach strategy to determine if it is appropriate to the
    new environment or is still geared primarily toward convincing
    policymakers and the public of the technologies\' viability and
    value. The examination should determine if a redirection is
    necessary and, if so, whether or not changes should be made to the
    broader outreach strategy or some component, such as media
    relations, local community relations, or regional stakeholder
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-   NREL's new Innovation Management System has a great deal of
    potential to capture a larger number of NREL innovations and focus
    those efforts on commercialization, in furtherance of DOE
    programmatic goals. Training of inventors and NREL program managers
    in how to report innovations under this system will be critical to
    achieving the system's full potential and to complying with its
    contractual obligations to report inventions to DOE. Also critical
    is the need for adequate staffing to handle this new system,
    particularly the planned employment of a patent agent, to work with
    inventors to develop their innovations into robust invention
    disclosures that meet NREL's contractual obligations to disclose
    inventions and further its mission to commercialize innovations. DOE
    will monitor implementation of this system and training of personnel
    in using it.

-   It is expected that the Technology Transfer Office will negotiate
    technology partnership and licensing agreements that are consistent
    with maintaining U.S. competitiveness and that will result in the
    creation and maintenance of manufacturing capabilities and jobs in
    the United States in the field of renewable energy technologies.

    -   The Science and Technology element of the GTP has concluded at
        NREL pursuant to DOE's intent to close out the GTP therefore
        there are no GTP items of program interest or concern for the
        next performance period.

**2.0 Laboratory Stewardship -** MRI will provide leadership that
enhances the long-term viability of NREL and its value as a recognized
national and international asset.

Under the leadership of MRI and Dr. Arvizu NREL embraced a broader
mission of research, development, and deployment that will accelerate
NREL's transformation to a market-relevant institution in service of the
nation's energy, economic, and environmental security. During the period
NREL expanded its focus from its traditional applied science niche to
one that includes robust fundamental research and deployment components,
attributes critical to EERE's national commitment and heretofore
under-emphasized at NREL. NREL's increasing visibility and stature
afforded Dr. Arvizu and the NREL management team unparalleled
opportunities to provide expert and unbiased advice on energy matters to
EERE, the Office of Science, DOE's Under Secretaries, the Secretary,
Congress, and the President's staff consistent with Federally Funded
Research and Development Center obligations. NREL has pursued strategic
partnerships with a few of the nation's preeminent public and private
sector concerns, partnerships that will advance the nation's goals and
will leverage EERE's research, development, and deployment investments.
DOE is encouraged by NREL's new strategic direction and applauds Dr.
Avizu and his team for undertaking this difficult transformational
activity. While difficult, completion of NREL's transformation is
critical EERE and the nation. DOE encourages the Director to continue
the revitalization and enhancement of NREL's science, technology, and
deployment capabilities to ensure NREL's role of national leader in
energy efficiency and renewable energy matters for years to come.

This Critical Outcome is rated "High Excellent".

*2.1 Demonstrate NREL's leadership in guiding an R&D agenda that
increases the impact of renewable energy and energy efficiency.*

> *2.1.1 Ideas, analysis, and other input from NREL that influences the
> strategic direction of DOE program or business strategies as
> acknowledged by customers, stakeholders, and reviewers.*
>
> *2.1.2 Recognized as providing credible, objective knowledge that
> supports industry and informs policy and market decisions.*

*Significant Achievements:*

-   The NREL Biomass SI team further developed the biomass scenario
    modeling capability so that it was available for testing specific
    OBP-specified futures and initial independent review. The scenario
    model is the first of its kind applied to DOE technology
    development, deployment and market penetration and is expected to be
    a major tool for Program strategic analysis in the future.

-   The President's Advanced Energy Initiative, launched in February
    2006, states that areas with good wind resources have the potential
    to supply up to 20% of the electricity consumption in the United
    States. In support of that initiative, NREL researchers are working
    with the American Wind Energy Association (AWEA) and key
    stakeholders to develop an action plan to establish wind power as a
    major contributor to the U.S. energy supply.

-   NREL led a team in developing a draft DOE roadmap for manufacturing
    R&D for hydrogen technologies. NREL evaluated several public-private
    partnership models and provided recommendations to DOE for a
    partnership on manufacturing R&D for hydrogen technologies.

-   NREL provided technical support, through analysis, to DOE as it
    revised its Multi-Year Research, Development, and Demonstration Plan
    and Posture Plan.

-   NREL evaluated its progress on achieving DOE's milestone for
    hydrogen storage on pure single-wall nanotubes (6 weight percent, on
    a materials basis). Based on NREL's results and that in the
    literature, NREL provided credible technical recommendations for
    EERE's Go/No-Go decision on this aspect of hydrogen storage R&D.

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-   NREL researchers collaborated with a leading battery modeling expert
    to develop a 3-dimensional model that predicts thermal runaway of
    lithium ion batteries when the cells are exposed to high
    temperatures. NREL's initial 3-D model captured chemical reactions
    and associated heat releases for various cell designs. The model was
    applied to oven heating tests and also localized heating for
    cylindrical cells with cobalt oxide cathodes. Oven simulation
    indicated that cell size (heat transfer area per unit volume)
    greatly affects thermal behavior of a cell in oven test. Initial
    results of cell-to-cell thermal runaway propagation in a module were
    investigated. This model will be used in FY07 to help battery
    developers to design cells and models that are more tolerant under
    abuse conditions---a goal of the FCVT Program.

-   NREL and Oak Ridge National Laboratory have collaborated to develop
    a concept and find a home for the Fuels for Advanced Combustion
    Engines (FACE) project. The genesis of the project was a commitment
    by DOE to provide the same test fuels to selected teams to conduct
    research on advanced combustion engines. A parametrically designed
    suite of test fuels will allow researchers at national labs and in
    industry to have "read-across" capability to other large, public
    databases created by the DOE projects. Other DOE projects, such as
    NREL's light-duty diesel-like HCCI project, can also benefit from
    these test fuels. The project was kicked off in October, 2005, and a
    committee was put in place to help steer the project.

-   Modifications were recently made to national fleet programs based on
    EPAct 2005. These include a new compliance option that offers a more
    flexible avenue for fleets to reduce petroleum use and a requirement
    for federal alternative fuel vehicles to use alternative fuels
    instead of gasoline. NREL evaluated the respective legislative
    language, drafted a NOPR, and participated in public hearings. In
    addition, NREL staff is incorporating these modifications into fleet
    reporting systems and is developing guidance and information for
    affected fleets.

-   NREL staff drafted a Congressional report required by the
    EPAct 2005. The report addresses the issues of petroleum use in
    transportation, as well as federal, state and international
    initiatives to reduce petroleum reliance. It also reviews EPAct 1992
    programs and discusses its petroleum reduction goals, and provides
    current status and future potential of replacement fuels and
    alternative fuel vehicles.

-   The Energy Policy Act's (EPAct) 1992 goal of 30% replacement fuels
    by 2010 must be revised as required by the courts because of a
    lawsuit on DOE. The revised goal of 30% replacement fuels by 2030
    was developed based on inputs from DOE program offices and other
    published DOE data. A Notice of Proposed Rulemaking (NOPR) was
    drafted and published, and comments were solicited from the public
    and stakeholders. Once the final rule is published, a next step will
    be to evaluate whether or not private and local fleets should have
    requirements placed on them. NREL anticipates having a high level of
    involvement in this effort.

-   NREL continued to provide leadership the Laboratory Working Group in
    support of DOE's energy research and development mission. NREL is
    encouraged to continue to support this vital activity.

-   NREL's leadership in cultivating the Department of Defense (DoD)
    relationship is recognized and encouraged. NREL has provided expert
    technical advice to DoD in areas related to the Federal Energy
    Management Program and the infrastructure management. DoD is a
    high-value client for these services with substantial opportunity to
    for energy savings. NREL is encouraged to continue and expand these
    high-value relationships.

*Noteworthy Achievements:*

-   With the President's Advanced Energy Initiative (AEI) and the
    Biofuels Initiative in place, OBP asked the national laboratories,
    with NREL as the lead, for their support in developing the near and
    long term vision. NREL, together with PNNL, ORNL, INL and ANL,
    worked diligently and provided ideas, analysis and expertise in the
    creation of a "Draft 30x30 Scenario Analysis." This document
    describes the national laboratory approach on how to make cellulosic
    ethanol competitive with gasoline by 2012 and how to displace 30% of
    the 2004 U.S. motor gasoline demand with biofuels by 2030.

    -   NREL assisted DOE-GO with evaluation of innovative power plant
        proposals. One of the cycles selected was previously identified
        and championed by NREL as promising, and the DOE-GO project
        resulted in the installation of the first of two 200 kW power
        modules at Chena Hot Springs in Alaska. This power plant was
        developed by the United Technologies Research Corporation in
        partnership with DOE in the Combined Heat and Power Program. The
        plant was the first geothermal power plant in the state of
        Alaska and was subsequently selected as "Project of the Year" by
        Power Engineering magazine.

    -   NREL displayed leadership within the GTP by organizing and
        implementing workshops such as one on the geothermal resource.
        The workshop brought together numerous experts from industry,
        academia and national laboratories to address extant resource
        assessments and to expand the knowledge base via input of
        resource information not commonly available. While not a
        resource assessment per se, this workshop provided the basis to
        illustrate the vast size and diversity of the geothermal
        resource.

-   At the 2006 program peer review held in May, NREL and Sandia
    researchers gave presentations on wind technology viability
    activities. According to the report issued by the peer-review panel
    after the meeting, "The Department of Energy, industry, and the
    taxpayers are getting an excellent value on their investment in the
    Wind Program from the work being done by NREL and Sandia National
    Laboratories."

-   Two NREL wind researchers were recognized for their contributions to
    the DOE wind energy program. Brian Parsons received the award for
    Outstanding Research Achievement for his grid-integration research
    contributions to the advancement of wind energy technologies in
    support of the DOE wind energy mission. Larry Flowers received the
    Outstanding Technology Acceptance Award for his leadership, efforts,
    and actions that resulted in wind energy technology acceptance in
    key U.S. states or regions.

-   NREL began regular internal briefings between its work for DOE's NE
    Office on thermochemical reaction cycles and its R&D for EERE on
    solar-assisted thermochemical reaction cycles.

-   NREL continues to publish heavily in the archival literature and
    continues to sponsor the highly acclaimed annual Crystalline Silicon
    Workshop---an international research conference in the silicon
    materials and silicon solar cell fields.

*Significant Deficiencies:* None.

*Noteworthy Deficiencies:*

-   NREL failed to meet deadlines for several analysis tasks in support
    of Systems Analysis due to rework and errors in the calculations.
    These deficiencies occurred in the first quarter of FY2006.
    Processes and requirements were discussed in FY2006 with NREL
    management to correct these deficiencies. Following the discussion,
    NREL's performance has improved in the following three (3) quarters.

-   Some documents produced by the Systems Integration Office needed
    major revisions due to poor writing. Processes to address this issue
    were discussed and will be implemented.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL has yet to complete a satisfactory multiyear work plan to
    develop and implement a nationally-recognized geothermal analytic
    capability. NREL is the Geothermal Program's principal laboratory
    and it is critically important that this capability be developed and
    available this fiscal year.

-   The Solar America Initiative is very important to EERE's success.
    The Solar Program expects NREL management to assess the NREL solar
    program's current direction with an eye toward improving its
    technical support of the SAI. Further, NREL management must assess
    the program's long-term goals to ensure NREL produces top-quality
    research and development relevant to the nation's solar industry.

-   NREL, OBP's leading laboratory, will be counted on the support of
    the near and long term goals of the Biofuels Initiative.

    -   NREL needs to provide a comprehensive monitoring plan to track
        the performance of the power plant at Chena Hot Springs. The
        laboratory may be called upon to assist with implementation of
        the plan and verify plant performance.

-   As the Solar Program continues with the SAI, it is important for
    NREL to recognize that the quality of performance is not necessarily
    proportional to the number of research papers that find their way
    into archival journals. Rather, performance will be judged on the
    quality of direct support to the SAI for the 2015 goals, as well as
    research that supports aggressive post-2015 technologies.

*2.2 Develop, enhance, and sustain NREL's scientific, engineering, and
analytic capabilities.*

> *2.2.1 The Lab's signature core technical competencies are identified,
> and a strategy for strengthening these competencies is in place.*
>
> *2.2.2 A competency focused Human Capital Management strategy is
> implemented.*
>
> *2.2.3 A knowledge management strategy for NREL is in place.*

*Significant Achievements:*

-   With the budgetary constraints for FY2006, OBP recognizes and
    applauds the exemplary job NREL management portrayed in maintaining
    the support and team members to the appropriate capacity to continue
    with maximum performance thru the budget shortfalls.

-   OBP is very pleased with the addition of Dr. Robert Wooley to the
    Systems Integration Office. We commend NREL for adding such a
    credible and experienced professional to the Biomass Team.

-   NREL presented 20 posters and papers and staffed an exhibit booth at
    the 2006 WindPower Conference in Pittsburgh, Pennsylvania in June.
    The total number of publications since January 2006, includes 39
    conference papers, presentations, and posters; 22 fact sheets; 16
    technical reports; 4 outreach brochures; and 2 journal articles.

    -   In the face of severe budget cuts during the second quarter of
        the year due to the effects of congressionally directed
        projects, NREL worked successfully with DOE to preserve key
        scientific and technical capability for future years.

-   During the past year, many members of the technical staff at NREL
    have been hired out to well-established and start-up companies
    within the PV sector. We view this as a very significant
    accomplishment, that signals two important points: (1) that the Lab
    has stimulated a growing industry that has need for its expert
    personnel; and (2) that the Lab is developing personnel whose
    skills/knowledge are very attractive to companies seeking advantages
    through excellence in innovation. This represents a fulfillment of
    an important element of the National Lab's role -- bringing a vital
    domestic/global renewables industry into existence.

*Noteworthy Achievements:*

-   NWTC researchers helped IEEE produce its November/December issue of
    Power & Energy Magazine on Working with Wind by contributing
    articles and reviewing/editing its content.

-   Walt Musial, Sandy Butterfield, and Bonnie Ram received certificates
    of recognition from the American Society of Civil Engineers (ASCE)
    for "Best Paper at OTC 2006." Their paper, Energy from Offshore
    Wind, was presented May 1 at the Offshore Technology Conference in
    Houston, Texas. More than 50,000 people attended the OTC, making it
    the largest oil and gas conference in the world.

-   Significant additions and capabilities were added at NREL to the
    Bioconversion and Thermoconversion user facilities that support the
    Biomass Program.

*Significant Deficiencies:* None.

*Noteworthy Deficiencies:*

-   NREL has not developed a clear operating model for the PDIL that
    would allow industry to understand its capabilities and make them
    aware of what facilities and equipment might be available to them.
    Along these lines, NREL has not sufficiently sought industry and
    external user input in defining the operational procedures for use
    of the facility, such as including procedures for protecting
    proprietary equipment, payment responsibilities for equipment
    installation and shakedown, and intellectual property ownership. We
    also believe that industry and external users were not adequately
    consulted in the development of the capital equipment plan for the
    facility to insure optimum utility of the capital equipment mix for
    these users.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL should re-examine its human capital plan and personnel
    management practices, with the objective of establishing protocols
    that will accelerate the "seeding" of industry with NREL personnel.
    These protocols should catalyze a regular turnover in technical
    staff at NREL at significant volumes (for example, 30% turnover
    every 5 years), thereby infusing industry with research talent and
    creating opportunities for new research directions in-house at NREL.

*2.3 Develop a sustainable campus to meet EERE strategic needs.*

> *2.3.1 Site and facility plans and discussions provide a useful basis
> for DOE capital investment decisions.*
>
> *2.3.2 Demonstrated progress against the goals and objectives of
> Sustainable NREL.*

*Significant Achievements:*

-   NREL continues to demonstrate leadership with the implementation of
    the Sustainable NREL Master Plan. Some accomplishments include:
    becoming the first Federal facility to obtain carbon neutrality;
    receiving an Honorable Mention Award from the Whitehouse Closing the
    Circle; DOE P2 Star Award for *Green Fleet -- Use of Alternative
    Fuels*; and *Sustainable NREL -- An Innovative Approach to EMS*.
    Exploring opportunities such as the Renewable Fuel Heating Plant is
    a great example of leadership in Sustainable Energy Implementation.

-   EERE's comprehensive FY 2006-2016 Ten Year Site Plan (TYSP) for NREL
    continues to prove itself as a valuable asset for EERE advance
    planning and NREL management of the EERE research and development
    assets at NREL. The TYSP improvements contained in this year's
    product added valuable equipment information giving EERE a basis to
    develop informed equipment decisions to support all EERE program
    research activities.

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-   NREL used General Plant Project (GPP) funds to construct a new test
    pad and upgrade electrical and water services for conducting R&D on
    electrolyzers integrated with renewable energy sources. This allows
    testing of much higher capacity electrolysis systems.

-   NREL provided DOE with technical input for the mission needs
    statement for an integrated renewable energy engineering facility.

-   NREL's Hydrogen Program secured the use of one bay for hydrogen
    manufacturing R&D in the new Process Development and Integration
    Laboratory in NREL's new Science and Technology Facility.

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-   New, in-house capability for fuel chemistry and quality testing
    allows NREL researchers to rapidly assess fuels characterization
    quality and stability studies, and also support the ReFUEL facility
    by allowing rapid, on-site measurements to be made on fuels
    undergoing testing in engines and vehicles. Using this new equipment
    also provides researchers the ability to measure important biodiesel
    parameters (triglyceride content, acid content, peroxide content,
    degradation products), as well as fuel carbon, hydrogen, and
    nitrogen content.

-   A new capability was created by CTTS' chemistry lab staff to
    quantify individual hydrocarbon and carbonyl species. These species
    are often found in low, but potentially significant concentrations
    in vehicle emissions especially during cold-start. This capability
    is being used at NREL's ReFUEL facility, and was first demonstrated
    in a school bus testing program. Preliminary results from this
    testing suggest that cold-start is the dominant source of toxic
    emissions, as expected.

-   This work is significant because DOE has encouraged NREL to expand
    in-house capability, especially in the area of speciated toxic
    emissions. The work also demonstrates the value of coordinating
    activities in the "distributed laboratory" concept that aligns the
    work at the ReFUEL emissions test facility and the Building 16
    Chemistry Lab.

-   Using NREL's investment funds, the energy storage team acquired a
    differential scanning calorimeter (DSC) and a new energy storage
    cycler. The DSC will be used to measure the thermal properties of
    materials used in batteries, particularly lithium ion electrolytes,
    cathodes and anodes. This capability is particularly useful in
    providing material data for input to the 3-D thermal abuse model
    developed by the energy storage team (discussed under Section P.I
    2.1.1). The Arbin battery cycler provides additional capacity to
    test batteries and ultracapacitors for HEV and PHEVs. In particular,
    the unit can be used to simulate real world power profiles seen by
    today's HEVs and PHEVs. In support of the FCVT program, the data
    from the cycler will be used to assess battery and ultracapacitor
    potentials to be used in today's advanced vehicles.

*Noteworthy Achievements:*

-   The Renewable Fuel Heating Plant (RFHP) project is an excellent
    example of NREL seeking opportunities for demonstration projects
    that showcase the value of renewable energy projects. Projects such
    as the RFHP illustrate initiation and creativity with regard to
    implementation of renewable energy technologies that reduce the
    amount of fossil fuel consumption. The project will result in
    offsetting 80% of the natural gas consumption of NREL's three major
    laboratory facilities.

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-   In response to the Biofuels Initiative near and long term goals NREL
    and EERE took charge in developing the expansion plans of the
    existing Alternative Fuels User Facility. When funded, the
    Integrated Biorefinery Research Facility will be critical in
    supporting OBP's 2012 and 2030 goals and will serve industry and
    academia as one of a kind facility where pilot testing for the
    production of ethanol could take place.

*Significant Deficiencies:* None*.*

*Noteworthy Deficiencies:* None.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   NREL is encouraged to explore opportunities to offset fossil fuel
    consumption with the implementation of renewable energy projects.
    Using Energy Saving Performance Contracts and Energy Saving
    Companies to aid in implementation of energy efficiency and
    renewable energy projects can be beneficial to NREL's credibility
    and image as EERE's only laboratory. The Research Support Facilities
    may provide some immediate opportunities for a project.

    -   NREL is encouraged to continue improving the Ten Year Site Plan.
        This important and pivotal document has been a great asset in
        bringing the Program capability needs together with the site
        infrastructure required to deliver a world class research
        environment. EERE is looking forward to next year's submission
        that should further bridge the gap between current equipment and
        capability needs and necessities for future research
        requirements.

-   By May 2007, NREL should develop a set of operating procedures for
    the PDIL that accommodate the needs of potential external users.
    These procedures should be clearly broadcasted across the community
    of potential users, along with an invitation for facility use. In
    parallel, NREL should validate its current proposed capital
    equipment plan within the context of the larger outward-facing
    planning process we have prescribed for completion by April 2007.
    When this plan has been validated through the external planning
    process, DOE will work with NREL to allocate the funds required to
    bring the PDIL into full operation as soon as possible. When these
    funds are allocated and a schedule for installation of equipment is
    complete, the expected capabilities should be aggressively
    "marketed" to potential external users in the industry and academic
    communities.

-   NREL's leadership in creative, energy-efficient, high-performance
    building design is well established. NREL should use its internal
    talent in all of its building design and construction efforts.

-   NREL is encouraged to assume a leadership position among national
    laboratories in the use of and promotion of energy service companies
    and energy savings performance contracts.

*2.4 MRI stewardship of NREL enhances the Laboratory's visibility and
stature and value as a corporate citizen.*

> *2.4.1 External involvement demonstrates good corporate citizenship
> and enhances NREL's reputation.*
>
> *2.4.2 Available resources are effectively utilized for conducting
> DOE's science, mathematics, technology, and engineering education
> programs, and for positioning NREL as a science education leader.*

*Significant Achievements:*

-   NREL is commended for its highly successful stakeholder outreach
    strategy, which includes initiatives on the local, state and
    national level, all working together to further the NREL and EE
    missions.

    -   One indicator of NREL's national visibility is the number of
        high-level officials who consider the laboratory important
        enough to visit. During FY06, such visitors included President
        Bush; Secretary Bodman; Deputy Secretary Sell; Assistant
        Secretary for Science Orbach; Sen. Ken Salazar (D-CO); Colorado
        Governor Owens; Rep. Bob Beauprez (R-CO); Rep. Mark Udall
        (D-CO); and a significant number of Congressional staff members,
        Colorado state legislators, and local community leaders. The
        laboratory\'s stakeholder outreach effort, carried out
        consistently over much the past decade, deserves a measure of
        credit for NREL being in this position.

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-   That same outreach effort has made NREL a highly visible force
    across the state and region and a sought-after partner for
    organizations wanting to develop a green agenda. One example is Xcel
    Energy, which has sought NREL out for partnerships on several
    levels. Another is NREL\'s work in support of the Western
    Governor\'s Association (WGA) as the WGA forged an agreement to work
    toward installing some 30,000 MW of renewable electricity across the
    region. The laboratory\'s involvement in this initiative resulted
    from its visibility and influence among a wide range of opinion
    leaders throughout the state and region.

-   The laboratory has reinvigorated its speakers bureau, and it has
    proven to be very popular, resulting in 30 speaking venues this past
    year. Such personal appearances are among the most valuable ways to
    put a \"face\" on the laboratory, develop credibility with the
    community and demonstrate the laboratory\'s value as a neighbor.

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-   Under its stakeholder outreach strategy, NREL reached out to
    non-choir audiences and opinion leaders locally and across the state
    to make the laboratory better known as a resource and to lower
    barriers between it and organizations historically ambivalent or
    even hostile toward renewable energy. Among the organizations with
    which the laboratory has developed relationships are Action 22,
    Progressive 15 and Club 20, regional groups within Colorado that
    have not traditionally had an interest in renewable energy.
    ChevronTexaco is another. The oil company is now interested in
    partnering with NREL. Other organizations where the laboratory has
    reached out and developed mutually beneficial relationships include
    the Economic Developers Council of Colorado, the Metro Denver
    Economic Development Council, and the Jefferson Economic Council.
    With the loss of staff central to initiating and carrying this
    valuable effort, however, its future is uncertain.

-   With the visit of the President to NREL we recognize the importance
    of having our efforts residing at the national laboratories. NREL
    conveys excellence as a leader in the Biofuels area.

-   The Biomass Program is always looking for venues where our experts
    at NREL could participate and spread their knowledge in this popular
    field. ORNL and NREL hosted the 28^th^ Symposium on Biotechnology
    for Fuels and Chemicals were many NREL experts participated and had
    a chance not only to present their research, but also to interact
    with other experts in the field.

-   NREL's Hydrogen Program hosted more than 50 visits during the year
    including high level delegations from India and Brazil.

-   NREL's Hydrogen Program worked supported and supervised several
    undergraduate students contributing to their education and DOE's
    program.

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-   Biodiesel research performed by NREL for the DOE OFCVT Fuels
    Technologies activity was presented in several well-received talks
    at the recent National Biodiesel Conference. Dr. Doug Lawson of NREL
    delivered a keynote address on the Weekday/Weekend Ozone study
    results to an audience of more than 2,000. Shawn Whitacre and Bob
    McCormick presented results of NREL's work on biodiesel engine
    testing, emissions, fleet evaluations, quality, and stability to
    audiences of over 400 in breakout sessions. McCormick received the
    "Eye on Biodiesel Innovation Award" for his work on the impact of
    biodiesel on NOx emissions.

-   The September 2006 issue of Motor Trend and the July 2006 issue of
    Mechanical Engineering magazines featured NREL's work in the Vehicle
    Ancillary Load Reduction (VALR) task. Some of the items covered
    include national air conditioning fuel use, the benefits of
    ventilated seats, and the results from the tests. The VALR activity
    focuses on reducing engine loads imposed by ancillary systems such
    as air conditioning, with the ultimate goal of reducing fuel
    consumption without compromising passenger comfort.

*Noteworthy Achievements:*

-   NREL's Visitors Center attracted more than 16,000 visitors during
    FY06. Among the creative approaches the laboratory used to attract
    visitors was the Smart Energy Living Expo, a two-day event that
    attracted roughly 750 visitors. Others included workshops and
    seminars during lunch hours, at night and on weekends that saw solid
    attendance on a regular basis. Still, the number of \"walk-in\"
    visitors increased by 15 percent over the previous fiscal year,
    indicating the Visitors Center is increasingly becoming an
    attraction in its own right.

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-   NREL experts were asked to participate and collaborate at the
    Biomass Program 30x30 Workshop, where leaders in the biofuels
    industry and academia got together to provide input to the Biofuels
    Initiative.

*Significant Deficiencies:* None.

*Noteworthy Deficiencies:* None.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   During the past year, NREL developed separate plans for media
    relations, regional outreach, local community relations, and
    internal communications. A separate local community-directed plan
    covers economic development coupled with encouraging the use of
    renewable energy and energy efficiency technologies. Critical to the
    laboratory\'s performance over the next year will be the
    implementation of those plans.

-   With the design process for the Research Support Facility (RSF)
    underway, NREL should develop a strategy for reaching out to
    organizations, companies, and universities with a potential interest
    in the building\'s unique features and the opportunities it will
    provide for testing and showcasing products.

**3.0 Mission Support -** MRI will provide effective and efficient
management and business systems and practices that enable execution of
the NREL mission and effective stewardship of DOE assets.

NREL operational support continues to provide dependable, cost effective
service to NREL's mission organizations. During the period NREL actively
supported DOE's conversion to the new STARS financial system, served a
as a pilot for implementation of the EERE's CPS, and made a significant
amount of funding available to EERE programs through close-out of
completed procurements. NREL procurement performance met or exceeded its
DOE-established Balanced Scorecard Goals and reduced cycle-time for both
new and modified awards. NREL construction management staff completed
the Science and Technology Facility construction project ahead of
schedule, making it possible to host the Secretary and state and local
elected officials at a much heralded dedication ceremony. Significantly,
the Science and Technology Facility was completed with no serious
injuries, a testament to the unified efforts of NREL, its
subcontractors, and DOE to ensure a safe operating environment. NREL
human resource and legal support provided expert advice and service
early in the year to mitigate the institutional and personal impact of
budget-driven layoffs and other vexing problems. NREL also rebaselined
its security program to address DOE's security performance expectations.
Finally, NREL support organizations continued to deliver its services at
a very low cost, with only 30 cents of every dollar consumed in support
activities, the best among DOE laboratories.

NREL was also challenged during the period in a few support areas. NREL
computer security was unexpectedly and severely breached by a DOE-led
penetration team requiring substantial dedication of resources to
address identified deficiencies. NREL experienced physical security
challenges that, while minor in impact, raised questions about NREL's
security performance. DOE notes that NREL has risen to these challenges
and is addressing these issues.

Despite these challenges DOE is pleased to note that NREL is undertaking
a systematic and objective analysis of its business support systems in
an effort to improve support system performance. This analysis, combined
with an improved and continuous self-assessment capability, will serve
NREL and DOE well over the coming year. DOE encourages NREL to continue
on its path of critical assessment and to identify and allocate the
resources necessary to ensure a robust support operation.

This Critical Outcome is rated "Excellent".

*3.1 Deliver efficient, effective, and responsive business and
operational support.*

> *3.1.1 NREL's business process metrics demonstrate efficient and
> effective mission support.*
>
> *3.1.2 Opportunities to attract and expand high quality partnerships
> effectively are created.*
>
> *3.1.3 NREL efforts and resources are appropriately aligned with DOE
> requirements.*

*Significant Achievements:*

-   The Human Capital Management Program has been outstanding during
    this rating period. A number of significant initiatives were
    undertaken and implemented which demonstrates the National Renewable
    Energy Laboratory's (NREL) commitment to recruiting, retaining, and
    rewarding employees. The initiatives include:

    -   Managing the reduction in force caused by budget deficiencies
        and the subsequent reinstatement of staff when additional
        financial resources were provided;

    -   Supporting the major NREL reorganization to include the
        establishment of clear span of control and
        supervisory/managerial responsibilities;

    -   Reviewing and revamping the employee benefits program resulting
        in revisions to the defined contribution retirement plan and the
        healthcare plan. In both cases enhanced benefits are being
        provided to employees at a reduced cost.

    -   NREL changed its performance management cycle resulting in a
        closer tie to performance management and resulting pay
        increases. This change was managed in an exemplary manner with
        no adverse impact on employees.

    -   NREL continues to manage its salary structure to maintain an
        average five (5) percent of market salary level.

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-   MRI initiated research of various options, educated staff, and
    implemented a change to the NREL 403(b) Plan provider. These actions
    will enhance the investment options for employees, provide better
    employee financial education, lower costs and encourage employees to
    take charge of their 403(b) assets. Changes in the administration of
    the 403(b) plan are significant and will serve the lab and employees
    well in the long-term.

    -   The NREL Finance Office responded well to a number of new
        requirements imposed by DOE during this performance period.
        Responding to each of these requirements supported EERE or DOE
        Management goals. Unplanned requirements included:

        -   Compliance with OMB Circular A-123 (Internal Control over
            Financial Reporting). NREL responded in a very prudent and
            timely manner to changing guidance, and completed
            documentation and testing of all NREL High-Risk Financial
            processes;

        -   A six-month long Uncosted Balances drill mandated by EERE;

        -   Monthly reporting to EERE on obligations, costs and
            commitments at a level not supported by the DOE or NREL
            financial systems;

        -   Ongoing Corporate Planning System (CPS) enhancements; and
            development and implementation of the new BARDI (Basic and
            Applied Research & Development Integration) system; and

        -   Submission of information in a timely and coherent fashion
            to support the DOE Financial Statement Audit.

-   NREL proposed a "beyond the minimum but within the rules" pension
    contribution which resulted in long term savings to DOE. This
    recommendation to fund the NREL pension plan above the minimum
    requirement ensures the stability of its retirement obligation at a
    reduced cost to DOE.

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-   NREL Security completed the rebaseline of their Site Security Plan,
    which is based on DOE's Design Basis Threat (DBT), a current threat
    and risk assessment, and uses a graded approach. This rebaseline
    positions NREL Security for implementing all new Security
    requirements during FY07 as well as bringing the NREL Security
    Program in focus with current threats and in line with new HQ
    Security organizational changes.

-   The NREL Legal Office astutely handled highly sensitive personnel
    matters of a difficult and complex nature resulting in successful
    resolution of issues that could have had significant adverse impacts
    on NREL and DOE.

-   Even with the reduction in funding for FY2006, NREL's management was
    committed to meet the uncosted goals set by EERE's performance
    targets. NREL was able to handle effectively uncosteds for the
    Biomass Program and exceeded the requested goal in reducing uncosted
    balance.

-   NREL's Hydrogen Technology Manager participated in DOE's Basic and
    Applied Research and Development Integration (BARDI) project as a
    pilot to integrate DOE's CPS and ePMA information systems providing
    guidance from a Lab perspective.

*Noteworthy Achievements:*

-   The MRI Internal Audit Director and staff interacted candidly and
    frequently with DOE in oversight of management and financial
    activities at the laboratory. MRI Internal Audit also provided
    insight and resources for implementation of OMB Circ. A-123. This
    support played a significant role in NREL's A-123 progress and
    success.

-   During the performance period, the NREL Finance Office maintained
    efficient and effective operations in support of laboratory programs
    and also in support of NREL management needs and requirements. The
    Finance Office Director and staff provided solid support to both
    NREL and to DOE in rapidly changing times. Required financial
    reports, including all system (STARS) required feeds were accurate
    and timely.

    -   NREL's Contracts and Business Services (C&BS) organization
        continued its outstanding performance in FY06. By focusing on
        subcontract closeouts C&BS was able to deobligate \$2.5M early
        in FY06 that was returned to program for use. These funds were
        used to reduce potential layoffs early in the year. In addition,
        subcontract closeout goals were exceeded by 51 actions. This
        included the amenable closeout of the multi-million dollar
        off-shore wind subcontract with GE Wind. The closeout of this
        contract attracted significant high level DOE attention.

    -   Of the subcontracts that C&BS negotiated 41% included cost
        sharing on the part of the subcontractor, leveraging DOE's
        investment in R&D.

    -   NREL continued its efficient use of contracting manpower. The
        overall procurement cycle time has been reduced each year for
        the last three years while maintaining a cost to spend ratio
        that is within the Balanced Scorecard thresholds.

    -   The Requirements Management System (RMS) Group completed the
        requirements management database project and exceeded project
        deliverables to support compliance, performance monitoring and
        assessment. This database tracks document contract requirements
        and identifies ownership for oversight of compliance elements
        and maps policies, procedures and requirements.

    -   The RMS Group also redesigned the Policies, Procedures and Forms
        program and began implementation to address improvement
        opportunities and increase efficiencies. This redesigned program
        focuses attention on high- and moderate-risk documents and
        increases efficiencies.

    -   The RMS Group led the National Laboratories Improvement Council
        (NLIC) team comprised of representatives from other national
        laboratories to analyze contractor assurance requirements. The
        effort resulted in a succinct comparison of the different
        documents requiring contractor assurance, highlighting the many
        overlapping requirements in the documents.

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-   NREL Security provided outstanding support to the US. Secret Service
    and local law enforcement during President Bush's visit to the
    Laboratory. Many NREL Security Officers worked extended hours to
    ensure the President, his staff, and other high protocol visitors'
    had a safe and event free visit.

-   NREL's Information Services Office (ISO) maintained high network
    availability to its users and in doing so maintained a high level of
    user satisfaction. ISO processed over 24,000 work requests and
    Customer Satisfaction during this rating period was at an all time
    high. NREL completed a major upgrade to its Oracle applications, and
    by doing so, corrected several known vulnerabilities that strengthen
    the labs cyber security posture.

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-   NREL's effort to integrate quality assurance (QA) into business and
    research functions is considered noteworthy. The results include the
    increased awareness by NREL and GO management of the importance of
    QA and meeting, and in some areas exceeding, the requirements in DOE
    Order 226.1, *Contractor Assurance*. These efforts included:

    -   Development of an aggressive implementation plan for the
        Laboratory-wide QA Program

    -   Implemented quarterly status meetings to keep GO apprised of the
        progress of implementation

    -   Developed and implemented a computer-based SCI training module
        accessible by all NREL staff. The module is an excellent
        reference resource and training mechanism for
        Suspect-Counterfeit Items.

    -   Completed and submitted a total re-write of the NREL QA Program,
        which was recently approved by GO.

    -   Has established an outreach effort to provide quality support to
        all NREL organizations. This allows the organizations and QA to
        work together to conduct a needs assessment and develop a path
        forward for continuous improvement.

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-   The new DOE Standard Accounting and Reporting System (STARS)
    supports improved financial reporting for the DOE-wide financial
    statement audit under the President's Management Agenda. This
    project continued to present major challenges for financial staff at
    DOE and in the laboratories. However, NREL was very responsive in
    supporting DOE requirements for full reconciliation of financial
    data, working collaboratively with Golden and NETL to meet all HQ
    requirements.

-   NREL facilitated implementation of innovative practices to help
    establish a University collaborative relationship between NREL and
    leading Colorado research universities. These included the Colorado
    School of Mines, the University of Colorado, and Colorado State
    University. NREL utilized an existing National Laboratory Memorandum
    of Understanding (MOU) mechanism to facilitate placement of no-fee
    student interns. This increased opportunities for stronger
    university relationships while increasing educational experiences
    for the interns.

*Significant Deficiencies:* None*.*

*Noteworthy Deficiencies:*

-   During the period four items of security concern were noted. These
    incidents included unknowingly granting access to the site to a few
    unauthorized members of a visiting delegation of foreign nationals,
    allowing a foreign national subcontractor to access the site using
    false credentials, failing to question the fitness of a
    subcontractor exhibiting signs of marijuana use, and not completing
    and verifying the access package for a foreign national critical to
    program success in sufficient time to allow for clearance of the
    individual to access the site. These occurrences show a need for
    NREL to provide training, test and validate their current site
    access and related procedures, and to assess NREL's performance in
    this area regularly.

-   During this rating period, NREL was a target of the DOE Office of
    Independent Oversight Network Penetration test (Red Team) which
    resulted in significant weaknesses being identified. Five findings
    were a result of the Red Team assessment. These findings identified
    deficiencies which NREL is actively evaluating and addressing
    through the assistance of the Office of Science Site Assistance
    Visit (SAV).

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   The NREL Finance Office needs to reach out to Site Operations to
    assure the best use of available financial data. Delays in financial
    reporting of construction activities costs and the apparent need to
    reconstruct existing information must be corrected as site
    development continues. Closer ties and work between NREL Finance and
    Site Operations should enhance the use, timeliness and accuracy of
    the NREL EVMS (Earned Value Management System) for construction
    project management.

-   The NREL Finance Office needs to partner with Contracts & Business
    Services to change the system and enable a real increase in the
    number of electronic payments made by the lab.  A new effort will
    help NREL overcome any old or structural barriers to increasing the
    use of electronic payments. This should reduce paper, reduce
    paperwork, provide more timely information to management and provide
    better service to both the lab and its vendors.

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-   DOE expects NREL to complete its Security Self Assessment and
    associated corrective actions in FY2007.

-   NREL ISO needs to continue their work towards closing out the five
    findings identified during the Red Team assessment to close out the
    findings within one year of the assessment. In addition, NREL needs
    to continue to strengthen its cyber security posture by segmentation
    of the network based on the data that is processed.

-   NREL ISO needs to start focusing on their long term strategy for
    maintaining their infrastructure equipment. The strategy should
    include their planning for equipment replacement in both the near
    term and long term timeframe.

-   Internal communications within the NREL Legal Office and between the
    NREL Legal Office and the NREL Technology Transfer Office should be
    reviewed and enhanced in order to develop harmonious working
    relationships and avoid negative impacts on mission accomplishment.

-   GO recognizes that substantial effort will be required to complete
    implementation of the QA Program and a barrier to that completion
    may be limited resources.

-   The NREL Office of Security and Emergency Management implemented a
    re-organization during this period that has improved the overall
    security and emergency management posture at NREL. A dedicated
    resource to emergency management is definitely a positive step in
    improving the site-wide emergency management and is expected to
    address and improve the emergency response support responsibilities
    in the Emergency Operations Center.

-   With the increase in requested funding for the Biomass Program we
    will encourage NREL to maintain the same commitment to meet the EERE
    uncosted goal.

*3.2 Demonstrate excellence in Infrastructure, construction, and
management.*

> *3.2.1 Laboratory space is optimized for its highest and best use.*

*3.2.2 Completion of S&TF within scope, schedule, and budget.*

*Significant Achievements:*

-   Substantial completion of the Science and Technology Facility was
    achieved on June 20, 2006, 5 months early, within cost and within
    scope of the baseline established at Critical Decision 2 enabling
    NREL to begin occupancy and laboratory fit-up to occur earlier; thus
    enhancing the program's ability to deliver on its mission goals. An
    extensive plan/schedule was enacted to enable the move-in of
    personnel and laboratory equipment (6 stages) and this plan has been
    carried out to date without incident. In addition, all laboratories
    that were vacated in the SERF due to this move were properly
    decommissioned and a plan to re-inhabit these labs has been formed.
    Additionally, NREL met all incentive fee requirements identified in
    Contract Modification 120 with respect to the Science and Technology
    Facility construction project including metrics for Environment,
    Safety, Schedule, and Cost and is on target to meet the LEED metric
    of a Gold Rating certification.

-   NREL completed a CRADA with TPI Composites involving the blade
    testing needs of the next generation of wind turbines. The CRADA
    enabled NREL to upgrade its testing capabilities from 37-m to 50-m
    blades and maintain its leadership in the full-scale testing of wind
    turbine blades. NREL was then able to help TPI test its new 45-m
    blade to IEC standards, on its new 50-m test stand. Results from the
    blade test will help TPI facilitate the certification of a wind
    turbine.

-   To provide industry with facilities capable of testing larger blades
    for the 3-5 MW wind turbine, NREL initiated a CRADA in June that
    seeks government, private, or nonprofit partners to design,
    construct, and assist in operating one or more wind turbine blade
    test facilities capable of testing blades up to at least 70 m in
    length. This innovative action is expected to provide facilities
    critically needed by U.S. industry sooner and at less cost to the
    government that constructing federally owned and operated
    facilities.

*Noteworthy Achievements:*

-   The Facility Information Management System (FIMS) was well managed
    to meet all the updating requirements for information population as
    required by DOE Order 430.1B, Real Property Asset Management. A
    program review by GO determined that NREL's system is current and
    works as designed with the maintenance program. The Condition
    Assessment Survey provided a good validation of the FIMS data and
    supports the facilities and infrastructure investment strategy at
    NREL.

-   NREL's coordinated effort to reduce the excess property inventory at
    the NWTC is considered notable. The extra efforts of the Site
    Operations Building Area Engineer, the NWTC Site Manager, the ESH&Q
    point-of-contact, and the Property Management staff resulted in a
    significant reduction in the amount of excess/disposable property
    located at the west end of the NWTC. The affects of this reduction
    are:

    -   Health -- reduced the amount of structural cover for rodents.

    -   ES&H -- reduced the impacts of a wild fire and facilitates the
        response to a wild fire.

    -   Property Management -- reduces the excess equipment inventory
        and disposes of unusable equipment

    -   Programmatic -- provided an opportunity for the wind research
        staff to evaluate the equipment for future use, dispose of
        excess equipment, and dispose of equipment that is no longer
        usable.

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-   The NREL Property Team successfully accomplished the personal
    property functions of the DOE Regional Office consolidation. NREL
    Property Management handled the incoming inventory delivered to the
    Joyce Street Warehouse from the Chicago and Seattle Regional
    offices. This involved identifying, organizing, and recording vast
    amount of items with broad variety. It should be noted that the NREL
    Site Operations Team and GO Management collaborated in sharing
    resources. NREL allowed the Golden Field Office to store the Chicago
    and Seattle property at the Joyce Street Warehouse. NREL was able to
    use furniture from the Regional Offices for the S&TF. This
    partnership resulted in a significant cost savings.

-   The NREL Property Team continues to provide outstanding support to
    the Golden Field Office on all property aspects. They effectively
    and efficiently manage property operations. The NREL Property Team
    is committed in achieving the highest standard of excellence.

-   NREL Property Team underwent a Personal Property Management
    Assessment April 24-28, 2006. The purpose of the assessment was to
    evaluate NREL\'s existing property management program. The
    assessment revealed that NREL has an approved and effective property
    management system. NREL has implemented both automated and manual
    systems to greatly augment property control throughout the life
    cycle management process.

-   NREL\'s Fleet Management Team effectively manages its program. They
    review and monitor the fleet to ensure maximum utilization of motor
    vehicles. Eighty-five percent of non-exempt vehicles are Alternative
    Fuel Vehicles (AFVs). Executive Order 13149 requires fleets to
    reduce petroleum consumption by 20 percent by FY 2008 with a base
    year of FY 1999. NREL Fleet has exceeded this requirement in FY 03,
    and has reduced petroleum consumption by 49 percent in FY 06.

-   NREL completed construction on a new 225-kW dynamometer test
    facility that will aide in the development of advanced generators
    and power electronics for small wind systems.

*Significant Deficiencies:* None*.*

*Noteworthy Deficiencies:*

-   It has been noted that many NREL construction projects have been
    designed and construction estimates prepared by subcontracted design
    and engineering firms that were significantly under priced when
    compared to actual bids received from construction contractors. This
    impacted the Laboratory's ability to award these contracts, caused
    additional rework/effort, and delayed the completion of multiple
    projects. NREL must establish procedures and practices to ensure
    that sufficient emphasis is placed on the validation of future
    estimates and that constructability analyses are performed prior to
    requesting construction proposals to eliminate the need to re-bid,
    re-scope, or attempt to provide additional funding due to estimating
    and other design errors.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   DOE remains concerned for the Research Support Facilities Phase 1
    project. Notwithstanding the funding challenges and the unknowns
    associated with the funding, the RSF must be a national showcase for
    high-performance, affordable commercial building design. Assuming
    the project is continued DOE expects NREL to approach the project
    creatively in both the design, energy use, and financing arenas. DOE
    will work closely with NREL to complete this project and to
    implement feasible financing strategies to leverage project funding.

-   Two contract disputes/claims were resolved with regard to the
    Science and Technology Facility design and construction projects.
    While the outcome of these disputes/claims resulted in favorable
    negotiations/ reconciliations, communications to and with the Field
    Office regarding NREL's handling of the issues was less than
    forthcoming, contributed to strained relationships, and required
    additional use of already scarce resources from both organizations.
    Documentation of lessons learned from these activities and a review
    and modification of current subcontract documentation/language, as
    required, should lessen the possibility of similar disputes/claims
    in future contracts.

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-   DOE is concerned that project management staffing levels are
    insufficient to handle current and planned construction projects.
    These projects are unique support and science installations
    demanding significant attention from the project management team to
    achieve the full potential of the project. Recent experience
    indicates that additional staffing may be warranted to allow for a
    more creative design process and to provide sound project oversight.

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-   In FY07 several major construction projects are likely to start
    including the RSF and the IBRF. NREL must ensure that a qualified
    contract specialist with a strong construction background is
    available and assigned to these construction projects. It is
    expected that this individual will be actively involved in all
    aspects of the projects including statement of work development,
    attendance at status meetings and any other meetings where
    contractual topics are discussed especially those that include
    control and negotiation of contract changes. This individual is
    expected to be cognizant of all aspects of the contract and to have
    authority at a minimum consistent with that of the project manager.

-   NREL needs to develop a means to capture, track, and utilize lessons
    learned from construction projects and other activities. GO would
    like to avoid future issues with any facility that would require
    correction of construction deficiencies at a period of time after
    the facility has been accepted by NREL. The Dynamometer Test
    Facility is an example. NREL's Quality Assurance Team should be
    utilized in the development and management of this action.

4**.0 Environment, Safety, and Health --** MRI will establish ES&H as a
core value to protect the safety and health of the NREL workforce, the
community, and the environment.

NREL continues to deliver superior performance as measured by standard
indicators such as Illness/Injury rates, Workers Compensation costs, and
the Office of Sciences' Days Away/Restricted Time (e.g., Lost Workdays),
a tribute to the NREL ES&H organization's staff efforts, as well as
individual efforts of NREL's Line and Staff organizations. During the
period NREL completed the Science and Technology Facility (STF) without
a single serious injury due, in large part, to NREL's coordinated
program to ensure compliance with safety and health rules and to hold
its construction contractors accountable for safety and health
performance. NREL's dedication to prevention of repetitive motion
injuries led to the identification of potential injuries and the
successful resolution of 100% of these cases without extraordinary
medical attention. NREL reviewed its electrical safety strategy, an area
in which DOE has struggled, and validated that its program was
comprehensive and mitigated electrical safety risks in its research and
support operations. Indeed, NREL sustained its leadership among the DOE
National Laboratories and comparable private industries by delivering
category-leading statistics for standard ES&H metrics.

Notwithstanding this performance DOE continues to be concerned with
NREL's ability to meet DOE's continually escalating ES&H performance
expectations. DOE recognizes the extraordinary efforts of individual
staff members and the importance of those individual efforts to NREL's
past performance success. DOE notes, however, that the upcoming year
will require major efforts in assessing and validating of the Integrated
Safety and Management System (ISMS) in support of Part 851 compliance,
in fully integrating environmental management expectations into NREL's
ISMS program and planning functions, and initiating and managing
multiple high-profile construction projects, all above and beyond the
normal NREL workload. While the efforts of individual staff are laudable
and appreciated, NREL's future success will require a comprehensive and
well-coordinated effort to anticipate DOE's expectations, and to develop
and implement the programs and procedures necessary to fulfill these
expectations across the institution. DOE stands ready to assist NREL
meeting this challenge.

This Critical Outcome is rated "Low Excellent".

*4.1 Demonstrate sustained excellence in safety, health, and
environmental protection.*

> *4.1.1 A fully integrated Environmental Management System (EMS) and
> Safety Management System (ISM) is in place.*
>
> *4.1.2 A reassessment of the Integrated Safety Management program for
> further optimization is performed.*
>
> *4.1.3 Regular Inspections and assessments demonstrate responsible
> ES&H management.*

*Significant Achievements:*

-   NREL initiated its initial (Phase 1) review of the ISM program in
    support of Part 851 compliance. The initial review identified a
    number of strengths, such as dedication to the ISMS principles, and
    a few weaknesses, such as internal assessment. NREL is pursuing a
    Phase 2 review to further review these items and to develop
    appropriate actions to support NREL's Part 851 obligations. DOE
    stands ready to assist NREL in its Phase 2 activities.

*Noteworthy Achievements:*

-   NREL experienced nine Occurrence Reporting Processing System (ORPS)
    reportable incidents during the period. None of these incidents were
    severe and only one required minor medical treatment (sutures for a
    cut), and all incidents met ORPS reporting and closeout standards.

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-   ES&H staff provided expert oversight of the STF construction
    project. During the 20 month effort (including move-in activities) a
    number of interventions were initiated and only two minor injuries
    were logged. The dedication of individual ES&H staff is noted and
    appreciated.

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-   DOE recognizes NREL's effort to defined and develop a coordinated
    Quality Assurance Program sufficient to meet the range of DOE's
    assurance requirements.

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-   NREL's institutional performance metrics continue to lead DOE
    National Laboratories and comparable private sector entities. These
    include:

    -   FY06 Injury/Illness rate was 0.54 while the comparable DOE-wide
        rate was 1.60 and the private industry rate was 1.70;

    -   100% of reported ergonomic cases were resolved without surgery
        or long-term medical treatment;

    -   Days Away/Restricted Time (DART) \[formerly Lost Workday cases\]
        was 0.18 while the comparable DOE-wide rate was 0.60 and the
        private industry rate was 0.25; and

    -   2006 Worker Compensation Costs, a measure of incident severity,
        was \$0.005 per hour worked while the comparable private
        industry cost was \$0.17 per hour worked.

*Significant Deficiencies:* None*.*

*Noteworthy Deficiencies:*

-   Integration of environmental management into NREL's planning and
    management hierarchy continues to be a challenge. The schedules for
    a number of projects, including the Research Support Facility, the
    Integrated Biorefinery Facility, and the Renewable Fuel Heating
    Plant, are dependent upon the development of defendable proposed
    actions descriptions and the public distribution of the related
    National Environmental Policy Act (NEPA) documentation to meet
    project timelines. DOE is concerned that the importance of NEPA as a
    planning tool is not fully recognized and that project schedules or
    success may be negatively impacted as a result.

-   DOE is concerned that ES&H challenges such as the NWTC Dynamometer
    bolt problem be managed in a more institutional and timely manner.
    The efforts of the NWTC Building Area Engineer and ES&H staff to
    fully define and resolve this issue were commendable and will likely
    result in a workable solution. However, resolution of this issue
    would likely have occurred more quickly had NREL fully investigated
    and bounded the scope of the problem when evidence first surfaced.

*Items of Program Interest or Concern for the Next Performance
Period(s):*

-   Certification of compliance with Part 851 is of paramount importance
    to DOE. NREL has completed a Phase 1 assessment of its ISMS program
    and is currently initiating a Phase 2 assessment. DOE expects NREL
    to address its Phase 1 findings and complete its Phase 2 assessment,
    including addressing findings, if any, in support of the May 2007
    Part 851 certification requirement. DOE stands ready to assist NREL
    in this effort.

-   DOE expects that NREL will increase the rigor, consistency, and
    coordination of its incident identification, investigation, and
    resolution program.

-   DOE continues to be concerned with the coordination of the Building
    Area Engineer (BAE) function and ES&H staff to manage ES&H risks.
    DOE believes NREL's BAE function is invaluable and encourages NREL
    to reinvigorate its BAE core.

MRI's overall FY06 performance at NREL is rated "High Excellent ".