By Mark Bergen
Before June, I will admit I had never heard of ARPA-E. Have you? The Department of Energy wing, formed in 2009, is charged with investing in new approaches to power energy. Its model agency is DARPA, the wacky Defense unit that birthed many things (GPS, advanced aircraft, the internet) that are now central to the technology industry.
ARPA-E has poured money into R&D research and companies in solar power, semiconductors and lithium-ion batteries, which power electric cars. It also funded Makani, a wind energy project using a portable “kite” (more like a small plane), before Google bought it in 2013.
I learned of ARPA-E when I started to write about Makani. Then I learned that, in May, President Trump’s proposed budget axed ARPA-E entirely.
Trump also pulled from the Paris climate treaty and moved to boost oil and coal industries, while stripping funds for renewable energy. Tech execs jeered the Paris decision. They buy loads of solar and wind to power their data centers. They often pay lip service to the benefits of green energy, a very big market with little of tech’s signature disruptions. And they all have balance sheets that put the ARPA-E budget ($300 million) to shame.
With the President walking away, will big tech lean in to green energy?
Unlikely. Making a profitable business in renewables is a taxing ordeal. Of the big internet companies, Alphabet (née Google) has arguably gone the farthest. It once had a sizable investment portfolio in renewable projects and a division, called Access and Energy, with a slew of adjacent efforts; it hired the first ARPA-E director. The division is just ‘Access’ now; that director left Google; and the investment portfolio has largely dried up. Makani is one of several efforts to produce new green technology that have been canned or still linger in limbo.
As we reported here, the reasons are complicated. Some fault the company’s newer focus on fiscal restraint. Some fault its hubris. But a bigger force may be a market shift that has made competing energy sources like oil and natural gas cheaper. Those economics have crushed plenty of younger companies.
Alphabet’s X “moonshot” lab, where Makani sits, is still trying. It has a small team working on newfangled fixes for climate change. One of those, an effort to make cheaper geothermal home heating tech, recently spun out as its own company, Dandelion. Astro Teller, the head of X, told Bloomberg News that other projects from his “moonshot factory” — self-driving cars and drones — would reduce wasted energy on roads and in commerce.
Of course, Alphabet doesn’t disclose its budget details. So we don’t know if the ambitious tech giant is any more effective at backing new clean tech than the U.S. government. A recent report from a national research arm claimed that ARPA-E has done well, netting around 20 percent margin on its early, risky investments.
Still, a House committee voted to follow Trump’s budget and nix the agency. A week later, however, a Senate committee voted to keep it intact.
And here’s what you missed in global technology news:
Google faces a manifesto problem. A male engineer at Google wrote a lengthy internal screed against the company’s gender and racial diversity efforts. Over the weekend, a huge backlash followed. Several employees publicly condemned the memo, but others said (privately) that the author had support from coworkers. Google’s new VP of diversity, in a statement to the company, said Google did not endorse, promote or encourage the ideas in the memo.
Honda goes at it alone. Toyota and Mazda announced a large joint investment in a new plant focused on electric vehicle production and the connected car. That puts pressure on Honda’s solo strategy. An executive said its talks with Alphabet’s self-driving unit Waymo are progressing.
And the Apple Watch goes at it alone. The iPhone maker is working on a new version of its smartwatch that works with cellular networks, making it untethered from the iPhone for the first time.