New Agency Puts Clean Energy on Front Burner

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The job of developing really big clean-energy initiatives is perhaps beyond the capacity of the private sector. Lacking any assurance that radically different new products will be accepted by consumers, the market provides few incentives for companies making money from their current products to take the risk to research radical new energy concepts.

And needless to say, companies that don’t have successful products on the market are not likely to have the money to invest in big ideas. Plus, government priorities don’t include developing saleable products for market.

However, countries in Europe and Asia are beginning to move ahead in clean-energy technology with the enthusiastic support of governments, and if that trend continues, the United States could see itself falling irrevocably behind.

Arunava Majumdar, the first director of Advanced Research Projects Agency-Energy, is leading a ferocious effort to make sure that doesn’t happen. The former University of California, Berkley, professor of mechanical engineering and materials science said he’d like Americans to see ARPA-E as “a beacon of hope,” that the United States can reclaim world leadership in clean energy technology, while pointing the way to real solutions to the world’s tightening energy predicament.

Last week he led ARPA-E on a big step in that direction by convening the first-ever National Energy Innovation Summit just outside of Washington, D.C.

With climate pressures mounting and the prospect of an additional 2 billion people in emerging economies clamoring for energy within the next few decades, the world will need to find some new means of satisfying demand if it is to avoid tripping the circuit breakers of climate change and conflict.

“Incremental change will not be enough to get us there,” Majumdar says.

A Sputnik moment
A 2005 National Academies report, “Rising Above the Gathering Storm,” compared the United States’ current position in clean-energy technology to the country’s position in science in the late 1950s when Sputnik boosted the Soviet Union to the head of the space race. The Soviets consistently beat the United States at the next few milestones, including the first animal, first man and first women in space.

But the United States, of course, raised the bar and became the first to reach the moon.

Behind the scenes, Congress, realizing the national security implications of falling behind in science, established the Defense Advanced Research Projects Agency to ensure the country would not be caught flat-footed again.

DARPA, as it was dubbed, proved an unparalleled success, pioneering research that brought us the Internet, GPS, and, in defense, stealth technology and untold game-changing innovations that we pretty much take for granted today.

The Gathering Storm panel recommended a similar course of action, calling on Congress to establish a new agency to do for energy what DARPA did for defense. In 2007, Congress established ARPA-E; funding came two years later.

Arun Majumdar says ARPA-E replicates DARPA’s successful management formula: low, lean, fast and bold. The organizational chart contains only two levels of authority: science-oriented program managers who oversee research projects in their respective disciplines, be they biofuels or batteries. Above them is the agency’s director, who in turn reports to the secretary of energy who, presumably, has a direct line to the president.

That streamlining, Majumdar says, gives the agency the flexibility it needs to take bold steps quickly.

“Our goal, our job, as mandated by Congress is to go for the home runs,” Majumdar said in an interview with Miller-McCune.com. “And history has told us that in moments such as this, which is a Sputnik-like moment, we need to go for some home runs because incremental things may not get us there.

“So the idea of going for high-risk, high-payoff approaches to energy technology is what we’re trying to do.”

Majumdar says the idea also is to remain unbiased in seeking solutions and not be tied to any one personal favorite technology.

The important thing, he said, is “to make sure there is payoff. We don’t want invest in a technology only because it’s high risk and there’s no oil. That’s the wrong kind of investment. We ask the question: ‘If this is successful will it be a game changer?’ And if it is, then we look at it seriously.”

In April 2009 the agency received its first appropriation of $400 million. It immediately issued a request for proposals targeting technological solutions for energy problems.

Majumdar says the response was unprecedented. Some 3,700 proposals flooded in from Americans hoping to try out their clean energy concepts; the deluge crashed an agency computer system and forced the agency to bring in additional reviewers to sort through the ideas. Reflecting the team spirit of the new enterprise, Energy Secretary Steven Chu, a noted physicist, joined in to help evaluate submissions.

Of the 3,700 concept papers, 334 of the most promising projects were selected as finalists and invited to submit more detailed proposals. And in October 2009, six months after the agency first opened its doors, 37 of America’s top-ranked innovative energy research and development projects got the word that they would share in the first $151 million in Innovative Energy grants, averaging $4 million each.

Although Majumdar said the first-round funding decisions were made “before his time,” he added, “I am so glad this was not $50,000 to 3,000 people. I think that would have diluted the effort. This is focused on the best ideas.”

And in the conference center exhibit hall one could almost feel the energy behind those ideas.

Majumdar said he “felt like a kid in a candy store” while viewing the displays and demonstrations set up by the ARPA-E grant awardees and finalists at last week’s Innovative Energy Summit.

But, he noted, it’s not the agency’s role to pick the technologies that will take off — that’s the market’s role. Unlike the defense sector, where he said the secretary of defense can go to the Pentagon “and say, ‘Thou shall buy,’ and they’ll have to buy the things that DARPA produces; the energy sector is a more market-driven economy, so one has to be compatible. Whatever we develop, it has to be cost competitive in the market.”

But, “That also gives us more options, because there can be many different kinds of buyers.”

ARPA-E’s mandate requires that every four years the agency’s leadership team step down to rotate in fresh thinking and new approaches. He said that should prove to be one of the agency’s key strengths.

“We’ll always be flexible. The idea is to be nimble, and see where the opportunities are, all around.” Majumdar said there are other parts of DOE that “make investments” in longer-term projects, and “ARPA-E will collaborate and coordinate with them very closely.”

“But our goal is to invest in those areas which can make a big impact and then move on to other things — to hand over to the private sector, or hand over to other parts of DOE, and go on and do other things.”

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