Current:Home > MarketsThis Week in Clean Economy: ARPA-E’s Clean Energy Bets a Hard Sell with Congress, Investors-LoTradeCoin
This Week in Clean Economy: ARPA-E’s Clean Energy Bets a Hard Sell with Congress, Investors
View Date:2024-12-23 21:04:43
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! (69)
Related
- Amazon launches an online discount storefront to better compete with Shein and Temu
- An education board in Virginia votes to restore Confederate names to 2 schools
- A gay couple is suing NYC for IVF benefits. It could expand coverage for workers nationwide
- Oklahoma death row inmate who killed a bank guard is incompetent for execution, judge says
- Vermont man is fit to stand trial over shooting of 3 Palestinian college students
- Transgender activists flood Utah tip line with hoax reports to block bathroom law enforcement
- Sewage spill closes waters along 2 miles of Los Angeles beaches
- 'It's going to be crazy': Texas woman celebrates rare birth of identical quadruplets
- Man jailed after Tuskegee University shooting says he fired his gun, but denies shooting at anyone
- North Carolina Catholic school had right to fire gay teacher who announced wedding online, court rules
Ranking
- As Northeast wildfires keep igniting, is there a drought-buster in sight?
- Taylor Swift's European Eras Tour leg kicked off in Paris with a new setlist. See which songs are in and out.
- Virginia budget leaders reach compromise with governor on state spending plan
- Adam Lambert changes pronoun to 'he' in 'Whataya Want From Me' 15 years after release
- South Carolina lab recaptures 5 more escaped monkeys but 13 are still loose
- Jimmy Johnson, Hall of Fame cornerback who starred for 49ers, dies at 86
- Storms slam parts of Florida, Mississippi and elsewhere as cleanup from earlier tornadoes continues
- Is Brock Purdy really the second-best quarterback? Ranking NFL QBs by 2025 MVP odds
Recommendation
-
Worker trapped under rubble after construction accident in Kentucky
-
Save on groceries at Ralphs with coupons, code from USA TODAY
-
Cicadas will soon become a massive, dead and stinky mess. There's a silver lining.
-
A cyberattack on a big US health system diverts ambulances and takes records offline
-
‘Emilia Pérez’ wouldn’t work without Karla Sofía Gascón. Now, she could make trans history
-
Burger King is offering free Whoppers through a buy one, get one deal for Mother's Day
-
Oklahoma death row inmate who killed a bank guard is incompetent for execution, judge says
-
2 skiers killed, 1 rescued after Utah avalanche