Current:Home > NewsThis Week in Clean Economy: ARPA-E’s Clean Energy Bets a Hard Sell with Congress, Investors -FutureFinance
This Week in Clean Economy: ARPA-E’s Clean Energy Bets a Hard Sell with Congress, Investors
View
Date:2025-04-12 13:11:32
In the labs of young startups and universities, researchers are fine-tuning groundbreaking fuel technologies and “out-innovating” other countries in the race to make clean energy.
That, at least, was the picture the Department of Energy wanted to convey at this week’s third annual ARPA-E Energy Innovation Summit. The event is an expo of high-risk energy inventions backed by DOE, held mainly for would-be investors.
This year it doubled as an appeal to Congress to save ARPA-E, DOE’s Advanced Research Projects Agency-Energy, which is running short on money.
At the Gaylord Convention Center near Washington, D.C., where the summit was held, Silicon Valley startup Envia Systems unveiled an electric car battery that costs half as much as lithium-ion cells and travels three times farther on a charge. California’s Makani Power test-flew a mockup of its airborne offshore wind turbine, which generates electricity at low wind speeds while tethered to land via cable. Michigan State University showed off its wave disc engine, an alternative to the internal-combustion engine that increases mileage to 100 mpg in gas-engine and hybrid cars, and produces 90 percent fewer emissions compared with today’s models.
All three projects received money from ARPA-E, once pitched as a “Marshall Plan” for energy. Since 2009 the fledgling agency has awarded more than $520 million in research grants to about 180 projects that promote American innovators in areas ranging from more efficient solar cells and air conditioners to grid storage for renewables.
The goal is to form a incubator for transformative technologies, so startups and labs can attract scale-up venture capital and private equity funding. DOE says 11 ARPA-E projects have lured a combined $200 million in private investment, five times what DOE put into them.
Yet the agency, which was created by the 2009 stimulus, is in a pickle. ARPA-E got a $400 million jumpstart in 2009—and it received a combined $455 million in the 2011 and 2012 budgets—but its funds are quickly drying up.
While Pres. Obama requested $350 million for ARPA-E in his 2013 budget proposal, it comes at a time when Congressional Republicans have promised to slash the amount of taxpayer dollars going into new energy technologies. Many soured on such programs after Solyndra, a solar startup backed by a $528 million DOE loan, went bankrupt. This week news broke that Abound Solar, a Colorado solar firm that won $400 million in DOE loan guarantees, was firing 280 people and abandoning plans for a second factory. Some analysts see signs of trouble for two other loan winners, Fisker Automotive and SoloPower.
At the summit, DOE brought in high-profile personalities to shore up support for ARPA-E, including Bill Clinton, Bill Gates, former Walmart CEO Lee Scott and Susan Hockfield, president of the Massachusetts Institute of Technology. All argued that projects nurtured by ARPA-E—which is modeled after a Department of Defense program that helped create the Internet and GPS systems—could change the global energy landscape if given a significant amount of time and funding.
“It would be a terrible mistake” not to “invest even more money in ARPA-E,” said Bill Clinton during a keynote address Wednesday.
It’s a tricky sell. Even ARPA-E’s staunchest proponents admit that many of its projects could flop. Last month DOE said that nearly 35 projects, about 20 percent of the program, are struggling, the New York Times reported. Since September DOE has canceled six ARPA-E projects that won a combined $14.1 million. (The Treasury got $3.7 million of that back, a DOE spokesperson told Bloomberg.)
None of this surprises Bill Gates and his fellow ARPA-E supporters. “The failure rates are going to be well over 90 percent,” Gates told the summit on Tuesday. “This is a very complex set of technologies, so we need literally thousands of companies trying these technologies so we can get the 10 or 20 that [make it.]”
In reality, even if Congress funds ARPA-E, it’s private investment that matters most in the end. Investors can bankroll the factories that “moonshot” technologies need to deploy, and their appetite for these projects appears to be waning, the Wall Street Journal reported on Wednesday.
That’s largely due to timing and to the nature of the projects. Many venture capitalists invested in clean energy inventions in 2008. That year half of all cleantech deals included at least one new investor, the Journal reported. Since then, they’ve learned firsthand of the enormous risk and time commitment involved in developing cutting-edge technologies to commercialization, and have opted to wait for returns on what they have, rather than seeking new projects. Last year only 30 percent of deals had new backers.
Mix of Good and Bad News Comes in New Global Ranking
The first-ever survey, from the World Wildlife Fund and Cleantech Group, a San Francisco market research firm, found that the U.S. government spends the most worldwide on R&D for clean energy technologies, and it has the greatest number of cleantech startups and investors.
But the news is less hopeful when it comes to three other indicators: renewable energy use, strong and steady policies for encouraging clean energy generation and the amount of revenue its cleantech firms generate. Relatively low marks in these categories, among others, landed the United States a fifth-place ranking in the index.
Denmark, meanwhile, topped the list. Israel came in second place, Sweden in third and Finland in fourth.
The rankings are based on an analysis of each country’s scores in 15 different categories. In addition to things like how much countries spend on R&D and how much renewable energy they generate, the report looked at whether their electric grids can support a large amount of green power, and if they have a streamlined application process for clean technology patents. It also examined the survival rate of fledgling startups, and the percentage of total workers that are employed in the cleantech sector.
The goal of the analysis is to show investors which countries are likely to thrive in the cleantech space over the next decade, while pointing out those that are lagging. It uses data between 2008 and 2011 from third parties and the Cleantech Group. The latest government spending figures were from 2009. In that year the Obama administration alloted more than $50 billion in federal stimulus for clean energy projects over four years.
But that could change. The country is planning to broaden its cleantech focus to include new technologies by pouring $18 billion in R&D funding over the next few years, according to a Lux Research report released on Tuesday, a move that could attract U.S. and European innovators to China.
The goal is to combine foreign expertise with Chinese spending. “This will create unforeseen opportunities for Western companies,” Lux Research said via news release.
veryGood! (6214)
Related
- Rolling Loud 2024: Lineup, how to stream the world's largest hip hop music festival
- April 8 total solar eclipse will be here before you know it. Don't wait to get your glasses.
- After 'Quiet on Set,' Steve from 'Blue's Clues' checked on Nickelodeon fans. They're not OK.
- Is our love affair with Huy Fong cooling? Sriracha lovers say the sauce has lost its heat
- Pregnant Kylie Kelce Shares Hilarious Question Her Daughter Asked Jason Kelce Amid Rising Fame
- Cecily Strong Is Engaged—And Her Proposal Story Is Worthy of a Saturday Night Live Sketch
- As Kansas nears gender care ban, students push university to advocate for trans youth
- Four students arrested and others are suspended following protest at Vanderbilt University
- Macy's says employee who allegedly hid $150 million in expenses had no major 'impact'
- Italy expands controversial program to take mafia children from their families before they become criminals
Ranking
- Elon Musk's skyrocketing net worth: He's the first person with over $400 billion
- Where is Gonzaga? What to know about Bulldogs' home state, location and more
- Universities of Wisconsin president proposes 3.75% tuition increase
- High court rules Maine’s ban on Sunday hunting is constitutional
- Juan Soto praise of Mets' future a tough sight for Yankees, but World Series goal remains
- Who Are Abby and Brittany Hensel? Catch Up With the Conjoined Twins and Former Reality Stars
- Two women injured in shooting at Virginia day care center, police say
- Judge forges ahead with pretrial motions in Georgia election interference case
Recommendation
Travis Hunter, the 2
Love Is Blind's Brittany Mills Reveals the Contestant She Dated Aside From Kenneth Gorham
French lawmakers are weighing a bill banning all types of hair discrimination
SportsCenter anchor John Anderson to leave ESPN this spring
Finally, good retirement news! Southwest pilots' plan is a bright spot, experts say
Kenan Thompson calls for 'accountability' after 'Quiet on Set' doc: 'Investigate more'
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, E.T.
Insurers could face losses of up to $4 billion after Baltimore bridge tragedy