Feb. 25 (Bloomberg) — People attending a Washington event
this week may witness something almost unheard of in political
circles: Republicans praising a clean-energy program supported
by President Barack Obama.
The Advanced Research Projects Agency — Energy, originally
funded through the 2009 economic stimulus program, is holding
its annual summit to showcase its awardees, who collectively
have won about $770 million in government money in the past 3
1/2 years. The projects include efforts to develop a “flow
battery” to store energy, to improve the efficiency of the
electric grid, and to modify an E. coli strain that can produce
biofuels.
Where a separate, stimulus-funded $16 billion loan program
that backed Solyndra LLC has drawn withering criticism from
Republicans, the smaller sums spread over both Democratic and
Republican districts have helped Arpa-e — part of the U.S.
Energy Department — largely avoid the same level of scrutiny,
advocates say.
“Small grants to help develop promising new technologies
are a far better use of limited government funds than most of
the other energy-related funding that was embedded in the 2009
stimulus,” said Megan Moskowitz, a spokeswoman for Senator Lisa Murkowski of Alaska, the top Republican on the Senate energy
committee.
Republican Speakers
Murkowski is one of several lawmakers scheduled to speak at
the summit, which runs today through Feb. 27. Senator Lamar Alexander, a Tennessee Republican who has criticized subsides
for wind energy but favors energy-research spending, is also
speaking, as are Democratic Senators Ron Wyden of Oregon, the
chairman of the Senate Energy and Natural Resources Committee,
and Senator Chris Coons of Delaware.
Executives from General Electric Co., Google Inc. and
Siemens AG are scheduled to attend. Tesla Motors Inc. Chief
Executive Officer Elon Musk and energy investor T. Boone Pickens
will also address attendees.
Clean-energy advocates say Arpa-e can show the benefit of
using public money to support private efforts, at a time when
the partisan rift on clean energy has widened.
“Research is one of few things all parties and sectors
agree on in the energy space,” Mark Muro, a clean-energy expert
at the Brookings Institution in Washington, said in an e-mail.
Arpa-e represents, “an important meeting point for a lot of
stakeholders,” he said.
Darpa Model
The agency is modeled after the Defense Advanced Research
Projects Agency, or Darpa, which supported early research into
the Internet, among other projects.
While Congress authorized the energy version in 2007, the
program didn’t receive money until the 2009 economic stimulus
provided $400 million to be spent over two years.
Like the defense effort, Arpa-e is designed to back high-
risk, high-reward projects, through grants and with technical
expertise of staff hired from universities and investment firms
for as long as three years.
For example, Arpa-e awarded a $6.7 million grant to Ginkgo
Bioworks, a Boston company, to research how to use E. coli to
turn carbon dioxide into biofuels. The company says the process
can may be more efficient than making ethanol, which relies on
photosynthesis to grow the crops that then get turned into the
fuel.
Cheryl Martin, the agency’s deputy director and a former
executive at Rohm and Haas Co., a unit of Dow Chemical Co., said
in an interview that her mission is to move technologies to use
in commercial products.
‘Catalytic Funding’
As part of that effort, Arpa-e officials work to develop
contacts with larger companies to take over support for the
technology efforts, she said.
“Fundamentally what Arpa-e is about is the catalytic
funding of energy innovation,” Martin said in an interview at
Arpa-e’s Washington office overlooking the Potomac River. “Our
goal is to fund things well and as efficiently as we can across
that three years so that then we can have it move on to
something else. If it’s a 36-month grant, what’s going to happen
in the 37th month?”
Grants range from $250,000 to $10 million, Andrew Gumbiner,
an Arpa-e spokesman, said in an e-mail. As of November, the
agency had funded 285 projects led by government agencies,
universities and companies, according to its website.
The fact that Arpa-e employees themselves are temporary has
helped the agency avoid the bureaucratic stasis that can
befuddle research efforts in other branches of the government,
said Joshua Freed, vice president for clean energy at The Third
Way, a Washington-based group that says it promotes bipartisan
public policies.
Innovation Partnership
“It’s the little agency that can,” Freed said in an
interview. “It’s a real-world, real-time seminar on why we need
a public-private partnership on innovation.”
Freed and other Arpa-e supporters also credit Arun Majumdar, Arpa-e’s first director who has since left for Google,
for selling the program on Capitol Hill.
Arpa-e hasn’t been immune to criticism from Congress, and
the criticism could intensify as budgets get tighter. Lawmakers
including Representative Paul Broun, a Georgia Republican and
chairman of the House Science Committee’s oversight panel, have
said the program shouldn’t be funding projects that have already
received private money.
Nicolas Loris, who studies energy policy at the Heritage
Foundation, a Washington-based group that promotes conservative
public policies, said some congressional Republicans think the
agency has veered into a role best left to private investors.
Basic Research
“It needs to stick to the model of supporting basic
research that the private sector wouldn’t be doing,” Loris
said.
Arpa-e is “quickly becoming a microcosm of the larger
problems associated with the entire Department of Energy,”
Loris wrote in a blog on the Heritage website in June.
Moskowitz, Murkowski’s spokeswoman, said in an e-mail that
the tight budget would increase scrutiny for all programs,
including research funding.
Still, Murkowski “does believe that Arpa-e enjoys
relatively broad support,” Moskowitz said.
Unlike the loan guarantee program, which spread $16 billion
over 26 mostly solar- and wind-energy projects, Arpa-e has
handed out much smaller sums to technologies in more than a
dozen categories, from smart grids and thermal storage programs
to “breakthrough” biofuels.
Energy Storage
For example, Primus Power, an energy-storage company in
Hayward, California, used its $2 million Arpa-e grant to change
a critical component of its liquid battery design, increasing
its efficiency.
“We switched the design thanks to Arpa-e funding,” Tom Stepien, Primus Power’s chief executive officer, said in an
interview.
While Primus has won about $15 million in state and federal
grants, and $17 million in private financing, the Arpa-e
financing came at a critical time, he said.
“We didn’t have extra resources” to switch the design,
Stepien said.
Envia Systems, in Newark, California, used its $4 million
Arpa-e grant to improve its battery cathode. The technology,
which is being tested now by automakers, can double the range of
electric-car batteries, Atul Kapadia, the company’s CEO, said in
an interview.
Dry Well
Envia also received about $11 million in venture capital
backing prior to the Energy Department grant. But the venture
capital “well had run dry” when it got the money from Arpa-e,
he said. Investors were more interested in dot-coms that
promised quicker returns, he said.
The Envia-developed technology could be in use in cars by
2015, he said.
Smart Wire Grid in Oakland, California, won a $4.4 million
grant to develop a device to control the flow over power lines,
which would help intermittent renewable power sources like wind
and solar power travel on the grid.
The company is now working with the Tennessee Valley
Authority to test the system, Martin said.
“Current flows on path of least resistance,” Martin said.
“In order to control the grid, you have to have the ability to
move the current more pro-actively through the wires.”
Grants have also gone to companies or universities in
Arizona, Arkansas, Michigan, North Carolina, Ohio and other
states.
“They’ve done it by spreading the wealth,” said Matthew
Stepp, a senior policy analyst at the Information Technology &
Innovation Foundation, a research institute based in Washington.
“The network they’ve built is broad and deep.”
To contact the reporter on this story:
Jim Snyder in Washington at
jsnyder24@bloomberg.net
To contact the editor responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
