Energy Ingenuity: ARPA-E Drives Innovation Through Public-Private-Sector Partnerships

The United States is jockeying for leadership in the global clean energy economy. But in the areas of innovation and entrepreneurship, U.S. success is unmatched. One important reason is the government grants directed to the private sector and academia to develop cutting-edge ideas for advanced energy technologies. That competitive advantage was in full view during a briefing Sept. 19 at the Russell Senate Office Building, where the Advanced Research Projects Agency-Energy announced $66 million in new grants to 33 projects in 18 states. The briefing included a panel discussion on the importance of public/private-sector partnerships—to which many of these ARPA-E grants were awarded—for the United States to maintain its edge in the global clean energy economy.

Our research shows that innovation and entrepreneurship are significant competitive advantages for the United States,” said Phyllis Cuttino, director of The Pew Charitable Trusts' clean energy program, who moderated the briefing. “In 2012, the United States attracted 78 percent, or $4.3 billion, of venture capital and private equity financing globally for clean energy technology.

APRA-E, housed in the U.S. Department of Energy, helps link entrepreneurs and innovators to create the public/private-sector partnerships that are the foundation for innovation. ARPA-E has funded more than 285 projects since its creation in 2007 and spurred the formation of numerous start-up or spinoff businesses.

Representative Doris Matsui (D-CA) said: “ARPA-E sparks scientific discovery for tomorrow's technology. Many ARPA-E projects have created new companies and attracted private-sector funding.”

Stephen Hoover, CEO of Parc, a Xerox company, agreed: “Government funding is necessary for innovation and early stage technology development. The private sector can push the boundaries and commercialize new technology while managing risk.” Parc received an ARPA-E grant to develop a diagnostic probe to improve the efficiency of sorting light metal scrap and reduce the waste of typically discarded materials.

Bart Gordon, a partner with the law firm K&L Gates and a former Tennessee congressman who helped establish ARPA-E through the America Competes Act in 2007, explained: “ARPA-E brings a sense of urgency to developing new advances in energy innovation. It is a model for other areas of government.”

Pew and other organizations are working to preserve research and development funding—and in the long term, to increase the federal investment for energy innovation. The United States dedicates $5 billion annually to energy R&D, significantly less than the approximately $80 billion for defense and $32 billion for health R&D.

There is bipartisan consensus that a stronger commitment to clean energy technologies is needed. Experts at the American Energy Innovation Council, Brookings Institution, and American Enterprise Institute have repeatedly called for federal investment of $16 billion to $25 billion a year in energy R&D to spur new private financing.

Cheryl Martin, ARPA-E deputy director, added: “The United States' ability to take a suggestion and turn it into innovation and new technology is unparalleled. Strategic partnerships between federal and state government with the private sector and academia create new energy options and underscore the importance of transformational energy innovation."