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U.S. Energy Research Faces a Potential Roadblock

July 7, 2017
Concerns persist regarding federal energy-research funding, which could dry up if the U.S. budget as presently constituted gets enough votes to pass.

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Federally funded basic research in energy sciences would be eliminated if the current proposed U.S. budget is adopted. To counter this possible loss, several executives from major U.S. companies have pressured Congress to at least maintain the federal support for basic energy research under ARPA-E, the Advanced Research Projects Agency-Energy. If ARPA-E is eliminated, it would set the U.S. energy industry back at least 20 years and relinquish U.S. technology leadership to other countries.

An article in the June 9 edition of the Washington Post and Los Angeles Times authored by Steven Mufson headlined the energy research dilemma: “Execs protest plan to cut basic energy research.” The article said that a group of business leaders sent a letter to the House and Senate urging them to maintain basic research funding on energy. The letter was signed by “14 senior figures from the business world.” The letter said that Congress should “invest in America’s economic and energy future by funding vital programs in energy research and development at the Department of Energy.”

Among the 14 companies whose executives sent the letter were American Gas Association, American Air Liquide Holding, Clean Line Energy, Consumer Energy Alliance, Exelon, Lockheed Martin, Nuclear Energy Institute, Pacific Gas & Electric, Pioneer National Resources, Shell Oil, Southern Co., and the U.S. Chamber of Commerce.

According to Mufson’s article, the current administration has proposed massive cuts in research, including a 35% overall cut in science and energy innovation. The administration has also proposed elimination of the $400-million-a-year ARPA-E program.

The business leaders emphasized that the ARPA-E programs “provide a blueprint for smart federal investments in high-risk, high reward technologies that boost our competitiveness by keeping America at the forefront of global energy technology research.”

The current administration’s response was that research and development can be done by the private sector without federal assistance. Obviously, this administration doesn’t understand the nature of basic research; their only concern is the amount of money projected for the endeavor (which is minuscule compared to the proposed defense budget). There is virtually no way the private sector can come close to duplicating what ARPA-E has accomplished.

A congressionally mandated report points out that “one of ARPA-E's strengths is its focus on funding high-risk, potentially transformative technologies and overlooked "off-roadmap" opportunities pursued by neither private firms nor other funding agencies, including other programs and offices within DoE.”

Only a federally funded program can provide coordinated direction and guidance toward achieving specific goals that impact energy applications. Research programs in the private sector would be in many uncoordinated directions and geared primarily to benefit the specific company involved.

Besides private companies, ARPA-E also includes universities that can’t afford to undertake energy programs on their own. Let alone the fact that universities provide a major talent pool of innovative scientists.  Plus, innovative startups may have the talent, but without government support, they would not have the necessary budget for a high-risk research program. In fact, many small companies can’t afford to do basic research because they’re preoccupied with making products that can be sold in order to keep cash flowing. Basic research is typically the realm of major large corporations that are willing to make the resulting long-term investment.

ARPA-E empowers America's energy researchers with funding, technical assistance, and market readiness. Its rigorous program design, competitive project selection process, and active program management ensure thoughtful expenditures. ARPA-E Program Directors serve for limited terms to ensure a constant infusion of fresh thinking and new perspectives.

ARPA-E Programs

ARPA-E’s SWITCHES (Strategies for Wide-Bandgap, Inexpensive Transistors for Controlling High-Efficiency Systems) program sought transformational advances in wide-bandgap (WBG) materials, fabrication, and device architectures. ARPA-E’s goal in this program is to foster development of high-voltage (1200 V+), high-current (100 A), single-die power semiconductors. Upon ultimately reaching scale, they would have the potential to reach functional cost parity with silicon power transistors while also offering breakthrough circuit performance.

In another program, ARPA-E sought a new generation of ultra-high energy density, low-cost battery technologies capable of providing sufficient performance and cost to enable widespread deployment of long all-electric range plug-in hybrid EVs (PHEV-100+) and all-electric EVs. This would provide an opportunity for the U.S. to gain technology and manufacturing leadership in the emerging EV battery market.

If successful, it would have a transformational impact on the rate and scale of deployment of long-range PHEVs and all-electric EVs, as well as promote U.S. technology and manufacturing leadership in advanced batteries for electrified vehicles. The table lists the organizations involved in the program called BEEST (Batteries for Electrical Energy Storage in Transportation).

ARPA-E’s primary focus is development of advanced battery chemistries, architectures, and manufacturing processes. It hopes to achieve EV battery system-level energy densities exceeding 200 Wh/kg (mass density) and 300 Wh/liter (volumetric density) at system-level costs of $250/kWh or below. The ability for proposed battery technologies to achieve system-level target metrics on a number of other key performance parameters is significant, but of secondary importance. It is ARPA-E’s belief that the required—and ambitious—energy density and cost metrics for widespread adoption of EVs represent the most significant challenges and emerging technology opportunities facing battery technology development for EV applications today.

Since 2009, ARPA-E has funded approximately $1.3 billion through 30 focused programs and three open-funding solicitations to more than 475 projects. Of those, 206 are now alumni projects. ARPA-E’s project teams cumulatively have published 1,104 peer-reviewed technical papers that have been cited 13,518 times, and have been awarded 101 patents. Many teams have successfully leveraged ARPA-E’s investment:

  • 36 have started new companies.
  • 60 have continued their technology development with other government support.
  • 45 have cumulatively raised $1.25 billion in publicly reported funding from the private sector to bring their technologies into commercial applications.
  • Some programs have aided military applications.

Paul Bledsoe, an energy consultant, said that a 2016 Energy Department study found that R&D investments totaling  $12 billion between 1976 and 2012 at the “Office of Energy Efficiency and Renewable Energy yielded net economic benefits to the U.S. of $230 billion (in inflation-adjusted dollars) with an annual return on investment of 20%.”

ARPA-E Progress Report

The ARPA-E is making progress toward achieving its statutory mission and goals, says a new congressionally mandated report by the National Academies of Sciences, Engineering, and Medicine. ARPA-E has funded research that no other funding source was supporting at the time, according to the report, and the results of some of these projects have received follow-on funding from private and other public sources for various technologies.

The agency cannot reasonably be expected to have completely fulfilled its goals given so few years of operation and the size of its budget, the report says. The development of new energy technologies usually requires decades of effort, and decades also must usually elapse before there is evidence that innovations are truly transformative.

The report offers recommendations to guide ARPA-E in building upon its early success, urging the agency to continue its flexible management approach and risk-taking culture, to develop a framework for measuring its impacts, and to streamline its reporting processes.

"ARPA-E has made significant contributions to energy R&D that likely would not take place absent the agency's activities," said Pradeep Khosla, chair of the committee that wrote the report and chancellor of the University of California, San Diego. "We hope our report's recommendations will benefit the agency and the nation as ARPA-E continues to evolve and improve its operations."

While the full market impacts of ARPA-E-funded technologies will not be seen for years, some intermediate outcomes are evident now, the report says. One quarter of the supported project teams or technologies have received follow-on funding for continued work. Roughly half of supported projects have published the results of their research in peer-reviewed journals, and about 13% have obtained patents. All of these are positive indicators for technologies on a trajectory toward commercialized products.

ARPA-E is, in many cases, successfully enhancing the economic and energy security of the United States by funding transformational activities, white space (novel or underexplored technology areas that are unlikely to be addressed by the private sector or other federal research programs), and feasibility studies to open up new technological directions and evaluate the technical merit of potential directions, the report says.

Importantly, at this early stage, the committee found no signs that ARPA-E is failing to deliver on its mission and goals, on a path to failing, or in need of reform. In fact, according to the report, attempts to reform the agency—such as applying pressure for ARPA-E to show short-term successes rather than focusing on its long-term mission and goals—would pose a significant risk of harming its efforts and chances of achieving its mission and goals.

The report also recommends that the ARPA-E director and program directors develop and implement a framework for measuring and assessing the agency's impact in achieving its mission and goals as soon as practicable. This would render the agency with greater ability to demonstrate its value and impact.

While the agency has an extensive data gathering and record keeping system in place at the project level, its system for collecting, tracking, and reporting publicly available high-level innovation metrics—publications, funding from other sources, and disclosures and patents over time—is less extensive. The agency could link data from its robust internal database of project-level metrics to program-level goals. Examples of such data include indicators of commercial and noncommercial outcomes over the short and long terms; connecting those goals to standard, observable innovation metrics; and then translating those metrics into progress toward achieving the agency-level mission and goals.

ARPA-E's program directors have been empowered to take risks in selecting projects in line with the agency's mission, and to actively manage ongoing projects, which includes altering project milestones, budgets, and timelines. ARPA-E should strive to preserve this management approach, the report says. Furthermore, ARPA-E leadership and the secretary of energy should actively work to sustain this culture.

ARPA-E is a positive agent of change in U.S. Department of Energy (DoE)  and the federal government, and its best practices are being adopted in some DoE offices, the report says. For example, the Office of Energy Efficiency and Renewable Energy incorporated several elements of ARPA-E's approach into management of its own programs, including use of a workshop to define a program, use of concept papers to screen funding applicants, and early termination of underperforming projects.  The Secretary of Energy should ensure other offices and programs within DoE continue to explore and adopt elements of ARPA-E's practices that can improve the department's operations.

In addition, the report recommends that ARPA-E reconceptualize its "tech-to-market" program, which aims to provide researchers with business and other non-technical support and advice to help ensure that projects develop with market needs in mind. The agency considers this program to be an ongoing experiment, and the challenge of developing such a program may be greater than originally thought.

The roughly three-year timeframe of an ARPA-E project is too short to expect a technology to move from concept to market. ARPA-E should reconfigure the program to account for the wide variation in support needed across programs and performers with respect to prospective funding, commercialization, and deployment pathways. For example, ARPA-E should consider making full tech-to-market plans optional, but require performers to describe potential product applications if they can prove technological feasibility.

The report also recommends that the agency streamline its reporting requirements. The "high touch" nature of ARPA-E, where program directors review progress of those performing ARPA-E projects on a quarterly basis, is a hallmark of the agency. However, since the required quarterly written reporting can be challenging, ARPA-E should consider changing the process so that it consists only of quarterly presentations to the program directors and their teams, with only fourth-quarter or annual reports providing full written details.

The study was sponsored by the ARPA-E and the Alfred P. Sloan Foundation.  The National Academies of Sciences, Engineering, and Medicine are private, nonprofit institutions that provide independent, objective analysis and advice to the nation to solve complex problems and inform public policy decisions related to science, technology, and medicine.  They operate under an 1863 congressional charter to the National Academy of Sciences, signed by President Lincoln.  For more information, visit http://national-academies.org.

ARPA-E History

In 2005, leaders from both parties in Congress asked the National Academies to "identify the most urgent challenges the U.S. faces in maintaining leadership in key areas of science and technology," as well as specific steps policymakers could take to help the U.S. compete, prosper, and stay secure in the 21st Century.

In its report for Congress, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, the National Academies called for decisive action. It warned policymakers that U.S. advantages in science and technology, which made the country a world leader for decades, had already begun to erode.

The report recommended that Congress establish an Advanced Research Projects Agency within the DoE modeled after the successful Defense Advanced Research Projects Agency (DARPA)—the agency credited with such innovations as GPS, the stealth fighter, and computer networking.

In 2007, Congress passed and President George W. Bush signed into law The America COMPETES Act, which officially authorized ARPA-E's creation. In 2009, Congress appropriated and President Barack Obama allocated $400 million to the new agency, which funded ARPA-E's first projects.

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