Energy Innovation, Back in the Game

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December 20, 2016 | Alex Trembath

By Emma Brush and Alex Trembath

Energy innovation is the new old game in town, and some of our favorite players are back in the ring.

Last Monday, for instance, one year after the formation of the Breakthrough Energy Coalition, Bill Gates and co. announced the launch of the group’s formal initiative Breakthrough Energy Ventures (BEV), a fund that will invest $1 billion in commercializing advanced clean energy technologies starting next year.

Like the Breakthrough Energy Coalition, a private partnership created in tandem with the public-facing Mission Innovation, BEV will operate under the tried-and-true premise that public-private collaboration is key to both innovation and deployment. “As I’ve argued before, an investment in a true energy transformation requires governments, research institutions, businesses, and private investors to work together,” Gates wrote in his announcement of the venture. “And it’s hard to overstate how important this public commitment is.”

That’s music to our ears. Since before 2010, when we published Where Good Technologies Come From, Breakthrough has been a leading advocate of public investments in technological innovation.

BEV itself has certainly been tailored to meet the exacting needs of energy
innovation—big upfront investment to match big upfront costs, partnerships with public labs and resources for development and demonstration, a “patient” timeline for returns that are many years in the making, and strong technical management to assess technologies with the right kind of promise. But even with these strengths, serious public dollars remain indispensable. As we approach the uncertainties of a new administration, and a Department of Energy run by Rick Perry, there is definitely some cause for concern when it comes to the role Washington will play moving forward.

The old energy innovation gang, however, is back in form, and not likely to let the chance for reform and investment pass without a fight. Take Varun Sivaram, Teryn Norris, Colin McCormick, and David Hart of the Information Technology and Innovation Foundation, who released a report last week outlining specific energy innovation priorities for DOE and the new administration. The report puts forth six “Technology Missions” for DOE to pursue, including nuclear, solar, energy storage, and carbon capture, and urges “significant new funding” in energy R&D to meet the commitments laid out last year by Mission Innovation.

There’s reason to hope that the new administration will be inclined to capitalize on at least some of this opportunity. “If the Trump administration is serious about improving U.S. competitiveness,” as Norris told Vox, “surely they won’t risk forfeiting these advanced energy industries and their multi-trillion dollar markets to China.” David Ferris of E&E News also reports that Trump’s transition team has demonstrated considerable interest in commercializing the work of the national labs. And both Perry and Rex Tillerson, Trump’s choice for Secretary of State, have voiced support for energy innovation, according to Sivaram—none of which is terribly surprising considering the bipartisan support that energy innovation traditionally attracts.

Nuclear innovation, in particular, may yet thrive under this administration. It’s also making a lot of headway already; as Third Way’s updated advanced nuclear map shows, more than 50 next-gen nuclear companies are drawing attention and investment across the United States. Of course, the development and deployment of these ventures will require billions in federal support in order to succeed, as current US Secretary of Energy Ernest Moniz said to the group last week. An “aggressive innovation agenda” will be required of DOE and of the government at large, he believes, in conjunction with “strong industry and strong entrepreneurial engagement.”

Fortunately, these forces are already at work, in large part thanks to the energy innovation consensus set in motion by groups like ITIF, Third Way, Breakthrough, and the Brookings Institution—recently out with a new brief of its own, on decoupling and decarbonization at the state level. As Mark Muro and Devashree Saha emphasize in the report, energy transitions driven by innovation (i.e., coal to gas) deserve credit for much of the decarbonization we’ve seen so far. States that have increased their share of electricity generation from nuclear have also demonstrated significant progress.

As they are quick to point out, though, these victories are not nearly enough. Rather, we need from DOE increased investment in, and commitment to, clean energy RD&D if the Trump administration is at all interested in leading on energy innovation. As the ITIF report highlights, the U.S. currently lags behind 11 other countries in energy R&D spending as a percentage of GDP. Mission Innovation and the newly formed BEV are important steps forward in this regard, providing a “chance for American leadership,” as Gates told Trump last month.

The need for clean energy innovation and deployment has become increasingly clear. In the words of a recent New York Times editorial on Perry, the incoming administration can prove “doubters wrong by expanding investment in breakthrough energy technologies like advanced nuclear reactors, high-capacity batteries, and electrical grids that can better accommodate variable power suppliers. Doing so could bolster the economy, create good-paying jobs, and reduce the cost of energy”—the energy innovation consensus precisely.


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