Progress in Energy Innovation, Development, and Deployment

Belfer Center experts are putting their research to work to foster changes in government and industry alike to push forward these energy technologies.

In 2011, the Energy Technology Innovation Policy research group (ETIP) at the Belfer Center produced a seminal report entitled “Transforming U.S. Energy Innovation,” which was geared toward influencing energy policy and practice around the world. The report, born of the Energy Research, Development, Demonstration & Deployment policy project (ERD3), had four primary findings:

•   Increased investments of energy research, development, and demonstration—from $5–10 billion a year—could produce great economic and environmental benefits to the United States.
•   Energy prices have a very high influence on private sector energy investment and innovation.
•   Major research institutions (like National Laboratories) could be more effective in producing innovation.
•   The U.S. is finding stiffer competition in energy technology markets abroad.

The paper and its findings signaled change for national energy innovation programs around the world, as increasing costs and dwindling supply put pressure on traditional energy markets.

Armed with their findings, ETIP scholars have met with and advised governments on developing intelligent, long-term investment strategy for energy innovation. Science, Technology, and Public Policy Director Venkatesh (Venky) Narayanamurti has been working with governments in India, China, and Africa through the National Academy of Engineering, while ETIP Director and STPP Associate Director Laura Diaz Anadon is providing innovation advice to Mexico.

Diaz Anadon recently returned from Mexico, where she advised the under secretary of energy and the technology director at the Mexican counterpart to the National Science Foundation on the creation of a fund to develop new technologies. The fund’s managers used ETIP’s findings to shape their investments.

“They are realizing that oil is not going to last forever, so they need to develop other ways of creating competitiveness and reducing environmental impact.”

‘Competitiveness’ is becoming increasingly important over time, as other world players begin to make claims in the still-nascent alternative energies markets. Fossil fuel-dependent China, for example, has become a world leader in both production and deployment of wind and solar technologies, investing record-high amounts in domestic innovation programs which continue to reduce cost in the market at-large.

In the U.S., increased investment in energy development has persevered against the stiff opponent of a stagnant economy and a tight federal budget. In the recent budget request, both ARPA-E and the Energy Innovation Hubs, two major institutional innovations created under former Energy Secretary Stephen Chu, have been expanded and allocated more funds.

“These programs seem to be gaining traction,” said Diaz Anadon, while adding that there has been much less progress on the deployment of a demand-side policy, which would have the greatest effect in influencing the investments of the private sector.

“If coal and gas continue to be very cheap and don’t represent the environmental cost of emissions, it will be harder for other technologies to compete. Given that it is cheaper to invest on the research and development side than in market-creation policies, I think that’s where things will happen in the short-term.”