Paths forward on energy - ARPA-E and e-DII's

In testimony to congress this past week, new energy secretary Steven Chu made the case for the administration's energy plans which include considerable increases in spending in a number of areas, and several new programs. Among the things they appear to be really trying to push is getting ARPA-E off the ground - there's $415 million allocated, but apparently a lot of resistance within the department to actually making it happen. In a companion handout for the hearing, the case for and priority areas for ARPA-E were highlighted. The handout perhaps explains why DOE bureaucrats may be resisting:

It will bring together the best and the brightest from all sectors—national labs, academia, the private sector, individual inventors—in a way that has never been done in energy research. It will give them the resources and the autonomy they need, and it will get bureaucracy of their way.

and even more ominously for old ways of doing things:

ARPA-E Program Managers are given extraordinary autonomy and resources to pursue high-risk technological pathways, quickly assemble research teams to “crash” on projects, and start and stop projects based on performance and relevance. ARPA-E projects will not be subject to the traditional peer-review system.

Replacing peer review with program manager quick decision-making requires extraordinary abilities on the part of the program managers, and hiring such good program managers will certainly be a challenge for DOE. But the whole idea here, as with DARPA in the defense department, is to give people latitude to take risks, which means they will sometimes make wrong decisions and fail. Not taking risks is also a form of decision-making that carries its own forms of failure, far too endemic in most government departments, including the Department of Energy.

Chu's sample list of ideas for "transformational" renewable research areas with or without ARPA-E sound encouraging as well:

  • Gasoline and diesel-like biofuels generated from lumber waste, crop wastes, solid waste, and non-food crops
  • Automobile batteries with two to three times the energy density that can survive 15 years of deep discharges;
  • Photovoltaic solar power that is five times cheaper than today’s technology;
  • Computer design tools for commercial and residential buildings that enable reductions in energy consumption of up to 80 percent with investments that will pay for themselves in less than 10 years
  • Large scale energy storage systems so that variable renewable energy sources such as wind or solar power can become base-load power generators

Chu's comments on fostering cooperation are excellent:

My goal is nothing less than to build research networks within the Department, across the government, throughout the nation, and around the globe. We’ll better integrate national lab, university, and industry research. [...] DOE must also improve its efforts to demonstrate next-generation technologies and to help deploy demonstrated clean energy technologies at scale. The loan guarantee program will be critical to these efforts by helping to commercialize technologies [...]

Chu's topics of risk-taking, focus on renewables, and cooperative development and deployment are areas that DOE has simply not done nearly sufficiently or well in the past. Needless to say, the past history of problems leaves the department with a lot of critics. The Brookings Institution, for instance, recently called for establishing "energy Discovery Innovation Institutes" around the country, outside of DOE, to foster just such large-scale development and deployment of new clean energy technologies. Mark Muro or Brookings argued the case again recently in this New Republic article. As Muro points out:

[...] energy-innovation research isn't even the Energy Department's primary pursuit right now—the department's budget and attention is far more tied up with managing (and cleaning up after) the country's sprawling nuclear-weapons system. What energy-research efforts do exist within DOE, meanwhile, remain fragmented and insular.

I think the e-DII concept is a good one, but I don't think the country's ready to build these things just yet. It's possible Secretary Chu will be able to transform the energy department into the kind of institution we really need to address our energy problems, and that ARPA-E and other parts of the department will be able to do what these e-DII's are proposed to. Certainly there's some moderate effort in that direction already; if Chu can focus the department more successfully it could justify a greatly expanded budget in future years to match the scale of the need.

But if DOE bureaucracy proves too entrenched and something outside the department is really needed, this e-DII concept is not at all a bad one to push for, a year or two down the road. That seems the best approach - give the new administration a chance to succeed with what they've got now, and then re-assess in 2010 or 2011 to see if progress has been commensurate to the problem.

On progress, a wonderfully encouraging sign is last year's growth in solar photovoltaic (PV) system sales - over 100% increase from 2007. The 6 GW capacity increase for the first time means world solar PV installations grew by the equivalent of more than 1 large-ish nuclear power plant (solar cells only provide 20-25% of their nameplate capacity in average electricity production, due to day/night and sun angle issues). The largest surge was in Spain (a much more logical place for solar power than Germany!) - in both Spain and Germany the markets have greatly benefited from feed-in tariff laws.

Attached to Joe Romm's post some of the comments appear to confuse feed-in tariffs with renewable portfolio standards, but the two are different in at least two major respects: (1) feed-in tariffs benefit specifically targeted technologies (like solar PV) by having different tariff rates depending on the source technology, and (2) those rates are guaranteed to the producers, rather than subject to whatever the utility decides is the market rate for electric production that meets its renewable criteria. The result is a much larger number of smaller producers under a feed-in tariff law, and much faster potential growth rates.

Closer to where I live, solar power is coming to Long Island in a big way, with a plan to triple New York state's solar power production. 37 MW would be installed at Brookhaven Lab (the local Department of Energy institution), and another 13 MW in various smaller locations around the island. We visited a number of solar homes and buildings around here last summer; clearly the technology, while still pricey, is eminently feasible on quite a large scale now. More to come, particularly if DOE's goal of reducing costs 5-fold comes to fruition.