A new report finds that ARPA-E, the Energy Department program that supports cutting-edge energy technologies, is succeeding at what it was created to do under the George W. Bush administration — even as the current administration seeks to zero out its funding.
On Tuesday, the National Academies of Sciences, Engineering, and Medicine (NAS) released the results of a joint study that finds ARPA-E is meeting the goals of the 2007 law that created it, and doesn't need to be reformed or overhauled to keep bringing new energy technologies to market.
While the six-year period covered in the study wasn’t long enough for ARPA-E to have accomplished all of its mandated goals, and “it’s too early to expect that it’s revolutionized the world of energy,” the study’s key findings indicate that “it’s moving forward and in the right direction,” Dan Mote, president of the National Academy of Engineering, said in a Tuesday press conference in Washington, D.C.
ARPA-E’s initial $400 million budget, part of the 2009 American Recovery and Reinvestment Act, was followed by $180 million in 2011, $275 million in 2012, $251 million in 2013, and $280 million in 2014 and 2015, bringing its total budget to just under $1.5 billion. With that money, the agency has funded hundreds of R&D projects, from universities and DOE labs to private-sector players both large and small. Technologies that have received ARPA-E funding range from energy storage and electric vehicles to semiconductors and software.
These projects, in turn, have collectively won $1.8 billion in private follow-up funding, or a 20 percent margin on initial investment, according to the latest data. More than 50 projects so far have developed into startups, and 68 have moved to other government agencies. Some of the ARPA-E companies we've covered include grid power electronics startups Smart Wires and Varentec, gallium arsenide semiconductor startup Transphorm, advanced inverter maker Ideal Power, and grid analytics software startup AutoGrid.
Pradeep Khosla, chancellor of the University of California at San Diego and chair of the study, noted in Tuesday's press conference that ARPA-E is funding research that “no other funder was supporting at the time, and is now leading to technologies entering the commercial market.”
While some ARPA-E grant recipients had already been privately funded, most of that investment had been for more preliminary research, Khosla noted. In any case, ARPA-E’s efforts to de-risk new technologies sometimes came into play in funding startups that were unlikely to find next-stage capital in the private markets.
Part of ARPA-E’s success lies in the flexibility given to it under the COMPETE Act, which allowed the program to move quickly to fund projects without excessive bureaucracy, said Eric Landree, the RAND Corporation research director in charge of reviewing the agency’s operations and organization. The study recommended that ARPA-E keep three-year terms for program directors, and that Energy Secretary Rick Perry continue offering the same level of support for the program.
The study comes at a time when ARPA-E’s very existence is in question. The Trump administration’s proposed 2018 budget calls for eliminating funding for the agency, along with a host of other DOE programs that support climate change research, clean energy development and efficiency. Trump proposed to eliminate ARPA-E a second time, even after his first proposal to gut the program in the 2017 budget saw pushback.
To be sure, the president's latest budget request is widely expected to face significant challenges and changes in Congress, where ARPA-E has support from lawmakers in both parties. In the 2017 budget talks, Congress ultimately gave ARPA-E a $15 million funding boost.
Still, the Trump administration has avenues outside of the budget process to hamper ARPA-E’s mission. Earlier this year, DOE officials stopped funding for several ARPA-E grant-winning projects and instituted a gag order on program managers to prevent them from updating grant awardees on their project status. While the freeze was lifted in May, DOE has also put a hold on clean energy small business innovation grants. It has suggested eliminating a $36 million annual budget for the Office of Energy Policy and Systems Analysis, a group that’s critical to keeping DOE’s R&D in line with public policy needs.
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