April 17, 2012
A National Clean Energy Testbeds Program
In a series of policy briefs released last month by the Breakthrough Institute, we document the challenges faced by clean energy innovators and entrepreneurs working to bring advanced energy technologies from the lab to market and offer policy proposals for carrying nascent technologies across the clean energy "Valleys of Death." One detailed proposal offers recommendations for the establishment of a National Clean Energy Testbeds Program, or N-CET, which would employ public lands as dedicated demonstration sites for proving innovative energy technologies at scale.
In "Bridging the Clean Energy Valleys of Death," we provide an overview of the clean energy commercialization challenges and propose smart and efficient policy mechanisms to carry clean technologies over the Technology and Commercialization Valleys of Death. These Valleys of Death are two of the primary challenges faced by clean energy technologies, where risk and uncertainty combine with heavy capital requirements to make proving and scaling innovative technologies difficult for clean energy innovators and entrepreneurs.
Click here to read "Bridging the Clean Energy Valleys of Death: Helping American Entrepreneurs Meet the Nation's Energy Innovation Imperative."
In a companion brief, "A National Clean Energy Testbeds Program: Using Public Lands to Accelerate Advanced Energy Innovation and Commercialization," we propose utilizing public lands as dedicated clean tech demonstration sites. Technologies that have been proven at smaller scales still face considerable risk and uncertainty for full commercial deployment, and initiating a guided and efficient public demonstration program would offer significant assistance to developers seeking a bridge across the Commercialization Valley of Death. The nation has many lands (and waters) already under public management that would be ideal for such advanced energy demonstrations. It is time to put America's public lands to a new purpose: accelerating advanced energy demonstration and commercialization.
See also - "A Clean Energy Deployment Administration: Unlocking Advanced Energy Innovation and Commercialization"
The United States faces a multifaceted set of energy challenges requiring the modernization and diversi- fication of the national energy system. At home, American national and economic security is threatened by our reliance on foreign oil and an undiversified electricity portfolio. Overseas, cumbersome, fossil fuel-based energy supply chains jeopardize the safety of American military personnel. And improving public health while mitigating the risks of climate change demands cleaner energy sources. Tackling these challenges necessitates the invention, commercialization, and widespread deployment of clean and affordable advanced energy technologies that offer improved public health, energy security, and domestic energy production.
To date, the pace of advanced energy invention and commercialization has been too slow to meet this national imperative. Innovative energy technologies must overcome significant barriers to be able to enter and compete in the energy market. These obstacles have, until present, slowed and even blocked progress toward a cleaner, more secure, and more competitive domestic energy system. In particular, many promising advanced energy ventures fall victim to the "Commercialization Valley of Death"-- the funding gap that occurs as entrepreneurs seek capital to finance scale-up and first-of-a-kind commercial-scale deployment to prove the validity of their technologies in the global marketplace.
While many technologies are plagued by a Commercialization Valley of Death, the challenge is particularly acute for early-stage advanced energy technology ventures, which typically face high capital costs, technology and management risks, policy uncertainty, and thick red tape. As the US Chamber of Commerce's Christopher Guith explains:
"While clean energy projects can mitigate a majority of these risks using normal project development processes, overcoming the technology hurdle will take years if left to business-as-usual market processes. Mitigating technology risk traditionally takes years of waiting for the empirical results of a pilot project, a demonstration facility, a semi-scale facility and then a full commercial scale project. This lengthy process has resulted in multiple technologies demonstrating promising laboratory results but failing to meet national energy goals because they never reached full commercial scale."
Without innovative public policies to bridge these barriers and accelerate the pace of advanced energy commercialization, tomorrow's potentially game-changing energy innovations are at considerable risk of being trapped in this Commercialization Valley of Death and locked out of the global energy market. These persistent market barriers effectively protect today's entrenched energy technologies from full market competition while hamstringing American entrepreneurs and innovative technology ventures working to address the nation's energy challenges.
For more on these challenges, please see "Bridging the Clean Energy Valleys of Death," Breakthrough Institute, Nov. 2011.
To help overcome the Commercialization Valley of Death and foster competition and innovation in the energy sector, the Breakthrough Institute proposes the establishment of a National Clean Energy Testbeds program (N-CET). N-CET would accelerate the demonstration and commercialization of innovative clean energy technologies by making select federal lands available as dedicated technology demonstration areas. As a collaboration between the Departments of Energy (DOE), Defense (DOD), and Interior (DOI), N-CET would make select public lands available as "plug and play" demonstration zones for a number of much-needed technologies, each containing several pre-permitted "testbeds" with access to pre-constructed shared infrastructure. By reducing the barriers to full-scale demonstration, N-CET would accelerate the pace of advanced energy commercialization and move the United States toward increased energy, economic, and environmental security.
The United States has long made public lands available to help achieve shared national objectives. From homesteading and the transcontinental rail network to land-grant colleges, national forest and rangelands, and our beloved National Parks, uses of federal lands have changed throughout the nation's history to reflect the needs and values of the time. Today, through the N-CET program, America's public lands present a new opportunity to help modernize our antiquated national energy system, accelerate the commercialization of new clean energy technologies, and seed the growth of new advanced energy industries.