U.S. Energy Secretary Steven Chu, the Nobel Prize winner who oversaw a nearly $40 billion effort to help spur a U.S. clean energy economy, will step down after a tenure rocked by the high profile failures of some of those investments.

For the last two years Chu had been at the center of Republican-led probes of his management of the $37 billion his department received for clean energy development from the 2009 economic stimulus law.

Chu’s resignation had been widely expected. His departure, which follows similar moves by the EPA administrator and interior secretary, sets the stage for Obama to announce a new team to help lead a renewed push to address climate change.

Potential contenders for the energy post are said to include Christine Gregoire, the former governor of Washington; Byron Dorgan, former senator from North Dakota; and Bill Ritter, former governor of Colorado.

President Barack Obama on Friday lauded Chu’s service at the department.

“During his time as secretary, Steve helped my administration move America towards real energy independence,” Obama said in a statement.

Analysts have said the administration is likely to pick a successor who could either lend some business expertise to the department or someone with serious political influence to help fend off continued congressional scrutiny of the department’s energy investments.

Facing intense political attacks, Chu has defended his record, fighting off charges his department allowed politics to guide its backing of energy projects, including the failed solar company Solyndra.

The fight over Solyndra, in particular, served as a proxy for a larger battle over the direction of U.S. energy policy, with Republicans arguing that the failure of the solar company illustrated the perils of government picking winners and losers in the energy sector.

In a letter to department employees, Chu acknowledged that he faced challenges during his time leading the agency. Still, he described time leading the agency as the “greatest privilege” of his life.

“I believe we should be judged not by the money we direct to a particular state or district, company, university or national lab, but by the character of our decisions,” Chu said.

In his resignation letter on Friday, Chu said that he may remain in his post past the end of February to help the department transition to his successor.

“In the short term, I plan to stay on as secretary past the ARPA-E Summit at the end of February,” he said, referring to the annual Advanced Research Projects Agency-Energy conference that ends on Feb. 27.

(Reuters)