The Outlook for Energy

An ARPA for Energy Is Greeted With Enthusiasm


For years, science policy players have had a bad case of DARPA envy. The Defense Dept. agency has long funded breakthrough research deemed too risky for industry to tackle on its own. So why not create a civilian version to jump-start technologies crucial to American competitiveness? One passionate advocate has been scientist Steven Chu. He succeeded in getting Congress to authorize a DARPA-like agency for the latest hot area of research—energy—in 2007, though Congress didn't provide any money for it then. But after he became President Barack Obama's Energy Secretary, Chu finally got the Advanced Research Projects Agency-Energy off the ground in March with $400 million from the stimulus package.

The nascent agency, which is housed in the Energy Dept., still has no director or permanent staff. But that hasn't stopped it from soliciting research proposals. It's been flooded with thousands of applications, with ideas ranging from super-high-efficiency solar cells to new battery materials. San Carlos (Calif.)-based LiveFuels, for instance, is asking for several million dollars to develop a process to grow algae for fuels in the Gulf of Mexico. Energy professor Daniel G. Nocera of the Massachusetts Institute of Technology has sent in an application for a project splitting water into hydrogen and oxygen using sunlight and a catalyst. The resulting hydrogen could be used to make electricity.

Proponents say ARPA-E's dollars will help technologies bridge the chasm between basic research and commercial development. "It fills a major gap in R&D," says Rafe Pomerance, president of the nonprofit Clean Air-Cool Planet. The private sector is already pouring billions of dollars into clean-energy technologies, but companies tend to bet on things with a high probability of success, notes venture capitalist John Denniston, partner at Kleiner Perkins Caufield & Byers. The government can take more risks. "If the government doesn't do it, it won't be done in the U.S.," Denniston says. Plus, says Nocera, researchers and startups often prefer to avoid the pressure for relatively quick returns that comes with venture capital money.

The Energy Dept. has big expectations for the new agency. The ARPA-E money "could put us on the path to a clean-energy future," says Steven E. Koonin, Under Secretary for Science at the Energy Dept (BP).

Will ARPA-E work? "There's no guarantee that it will," warns Jane A. Alexander, former DARPA deputy director who headed a Clean Air-Cool Planet project on the new agency. Former House Science & Technology Committee Staff Director David Goldston worries that its mission is too unfocused—and that congressional pressure to get fast results may steer it away from the most daring research. The key will be structuring the program to buck the typical government research culture by rewarding risk-taking.

With the first awards not due until late July, it's too soon to gauge ARPA-E's effectiveness. But critics who have seen the proposals are impressed. "They are terrifically good," concedes one skeptic.
Craig is a reporter for BusinessWeek in Washington, D.C.

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