Energy R&D Is Essential to Any Great Country

Bill Gates is taking on another global challenge: “Reliable, affordable energy for the world.” On December 11, the richest man in the world announced yet another commitment to effecting radical change. It’s called Breakthrough Energy Ventures (BEV). Together with fellow investors, Gates is betting that private money can help create “a carbonless future” by spurring breakthrough technologies around the world.

BEV has made a commitment of $1 billion over 20 years with an investment fund described as “patient, flexible, and committed to the guiding principles of the Breakthrough Energy Coalition.” BEV investments will be “guided by solid research as well as by market priorities.”

Given Gates’ prior financial support for nuclear power company TerraPower’s traveling wave reactor technology, some have speculated that nuclear energy will be a beneficiary of BEV funds. However, while Gates has been noncommittal about nuclear, he has said there will be a focus on renewables, storage, and transmission.

Public R&D Financing Is Foundational

There’s no question that private investment in energy sector research and development (R&D) is important, but Gates acknowledges private money can’t achieve success alone. BEV’s website says, “Public support continues to be crucial in providing the foundation of basic research that unlocks private investment in company-building and industry creation.”

Corporate R&D commitments to basic research come and go because they are driven by short-term shareholder return calculations. Private sector initiatives also may lack easy access to research facilities and staffs. Government—that is, publically funded—R&D on the other hand, is able to sustain long-term projects at universities, national labs, and elsewhere. Of course, such projects should be accountable to receive continued funding, but visionary programs committed to substantially new breakthroughs require reliable financial and institutional support. That sort of stability is also necessary to attract top human talent—for which there is steep, global competition.

Current Budgets Are Insufficient

Recent U.S. budgets for energy-related R&D increased from 2015 to 2016, as well as in the 2017 budget request. That includes the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E), whose budget increased from $291 million in 2016 to $500 million in 2017. (Watch for my online reports from the ARPA-E Summit at the end of February, posted at powermag.com.) Additionally, beginning in November 2015, the U.S., Canada, and Mexico, along with 19 other countries and the European Union, have made a “Mission Innovation” pledge to double public funding for clean energy R&D over a five-year period in support of “economic growth, energy access and security, and an urgent and lasting global response to climate change.”

But even these latest increases aren’t enough. A December report by the nonpartisan technology think tank Information Technology & Innovation Foundation (ITIF), showed that, despite increasing budgets, the U.S. ranks only 11th in energy R&D investments as a percentage of gross domestic product. China spends three times as much as the U.S.

The authors say that, “Asian countries, in particular, have vaulted to the forefront of global trade in clean energy technology,” and China in particular, “is the world leader in the production of solar panels, batteries, and wind turbines, and it is quickly taking the lead in next-generation nuclear power and technologies to capture carbon. The United States is losing this race because Asian countries are out-investing it and dictating the terms of competition, often flooding the market with low-cost, unimaginative products.”

The ITIF report makes several recommendations to the new president and Congress, including increased support for programs like ARPA-E that fund “end-use driven research programs.” Basic science is crucial to breakthrough discoveries, but there also needs to be a game plan for applying those discoveries to commercially viable technologies. We don’t, for example (in my view), need another “novel” approach to converting solar energy into electricity that relies upon materials that will never be economic at scale. We do need simple, cheap, reliable carbon capture and use technologies to make the world’s fossil-powered plants part of the near-term and medium-term solution to climate change.

Government funds were instrumental in developing nuclear power and fracking technologies, which led to early American dominance in those fields. In ways large and small, public money has supported every aspect of today’s power sector, from prime mover technologies to environmental controls, and the innovation needs continue to evolve.

Science Is Not Democratic or Republican

When it comes to power sector leadership, the path is clear: It’s forward, not backward. Other nations are investing in next-generation technologies that buyers around the world want today. “Old coal” technologies are being challenged globally on economic, emissions, and climate change grounds. To help coal and gas plants continue to supply needed baseload generation in many parts of the world, cleaner—but also cheaper and more reliable—technologies need to be introduced. It bears noting here that ARPA-E’s mandate to advance high-impact energy technologies that are too early for private sector investment (including carbon capture) has enjoyed bipartisan support since it was introduced under President George W. Bush.

In a December interview with E&E News, Gates said he told Donald Trump in November (before Trump chose Rick Perry for energy secretary) that energy and climate change provide a “chance for American leadership” and that there’s a lot of opportunity for innovation generally and that energy can “provide a lot of return” on the right type of research. He told E&E that his next conversation with Trump would emphasize the importance of federal clean energy research as well as its impact on jobs and exports.

Because the power industry relies on innovative technologies to keep electricity reliable and increasingly clean, I urge you to tell your representatives in Congress that supporting increased energy R&D budgets is important to this keystone industry—and to all Americans and American businesses, which rely upon the services power provides every day. ■

Gail Reitenbach, PhD is POWER’s editor.

PWR_010117_SOP_GReitenbach