DoE Spotlight: Advanced Research Projects Agency-Energy (ARPA-E)
- Mar 30, 2018 10:00 am GMTJul 7, 2018 10:29 pm GMT
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The Advanced Research Projects Agency-Energy is more often referred to as ARPA-E, which is a direct and intentional evocation of the U.S. military’s DARPA program. But where DARPA, the Defense Advanced Research Project Agency, was established by President Dwight Eisenhower to develop emerging technologies that would serve the U.S. military (successfully contributing to what would eventually become such advancements as GPS and the internet), ARPA-E was created to serve a similar role in the world of energy technologies and provide financial support for potential breakthroughs.
ARPA-E and the government’s continued funding of such high-risk but high-reward research programs has been in the news recently, so a review of where ARPA-E came from and what it has the potential to accomplish is more important than ever.
History and purpose of ARPA-E
ARPA-E was first authorized by Congress in 2007 by the America COMPETES Act, which was signed by President George W. Bush, after a report from the National Academies advised that decisive action was needed if the United States were to keep its role as the world leader in science and technology.
This new agency under the Department of Energy (DOE) was created by a bipartisan group of lawmakers with a shared vision to use the immense American talent and resources to solve the most important energy problems and questions. The first funds directly allocated to ARPA-E came as a part of the 2009 American Recovery and Reinvestment Act under President Barack Obama.
The stated goals of ARPA-E upon this initial round of funding were to support previously untested energy projects that were seen as higher risk because of their loftier vision, attempts to break from convention, and truly disruptive and transformative nature. The motivation is that many of these long-shot options for solving the world’s most significant energy crises, such as climate change, fuel shortages, and rising costs, are too risky and thus are more likely to go unfunded by typical investors in the open market.
Private investors might look upon these projects as less likely to provide a reliable return on their investment, or they may just not have the patience to wait the many years that could be necessary for the projects to pan out. However just because each of these projects individually have a more remote chance for success than the typical venture does not mean they are not worth pursuing as a whole. If a certain amount of government funds ensures that these ideas are seen through the testing and research phases, even a fraction of them working out in the end is a success because of the potential they have to be world-shaking energy innovations.
How ARPA-E works
Open Funding Opportunity Announcements (Open FOAs) are the method used by ARPA-E to solicit and select projects for funding. In this way, ARPA-E encourages projects in specific program areas that have the potential to be particularly beneficial to the nation at large in predetermined fields, whether that be generation of live grid data, advanced carbon capture technologies, engineering ways to use plants to replace oil, or any of the other many fields. Outside of these Open FOAs, ARPA-E does not accept unsolicited proposals or requests to fund already-completed projects. See the ARPA-E page of frequently asked questions to see more information on their application process.
After projects have been awarded funds, ARPA-E keeps regular contact with its grant recipients, checking in every four months or so to ensure everything is progressing as planned. Funds from ARPA-E are typically awarded as one to three year grants, though the leash is not long and it is not uncommon for funding to be pulled if and when officials determine milestones are not being achieved or a project is failing overall. Each program funded by ARPA-E is typically funded in the ballpark of $30 million, while individual projects awarded under each program have varied between $500,000 and $10 million.
The allocation of yearly funds for ARPA-E follows the same process as other government budgets, with the President setting their budget proposal to be considered and Congress usually amending or outright rejecting the budget. As such, Congress ultimately determines the level of funding for ARPA-E through annual spending bills. Over the past decade, the funding of ARPA-E has largely seen bipartisan support, receiving from Congress at least half (but usually more) of the funding requested by DOE and the Executive Branch. However the past two budget proposals for fiscal years 2018 and 2019 from President Donald Trump have proposed eliminating ARPA-E, though Congress has largely rebuffed those attempts (more on that later).
As another way to keep up with the projects being funded and enable the scientists, innovators, and entrepreneurs in the ARPA-E pool to meet and share ideas, the agency holds an annual ARPA-E Energy Innovation Summit. This yearly conference allows leaders in business, government, research, academia, media, and even potential investors to hear firsthand the work being done with ARPA-E grants and provides opportunity for the trading of insights that can further support the end goals of the individual projects (in funding, media exposure, and scientific exchange).
After nine years, these ARPA-E conferences have become a very hot ticket whenever the three-day event comes around. The conference has always been held right outside of Washington, D.C., though there has been talk about taking the show on the road and having a new location for 2019.
Projects to come out of ARPA-E
ARPA-E has been called the “special forces for science and technology,” serving projects and programs in a way that is unique from traditional grant programs and giving life to projects that likely would not have otherwise received the needed investment to see ideas through to completion. Another quote that greatly captures the spirit of ARPA-E projects compared with the typical project funded by private means comes from co-chair of the American Energy Innovation Council who noted:
Henry Ford used to say, if you asked people at that time [of the first cars] what they wanted, most of them would have said they wanted a faster horse.
ARPA-E projects are the ones trying to find out what the next ‘car’ will be, while private investment largely goes into finding how to speed up the ‘horse.’
Hundreds of projects have been funded in the name of this innovation covering a wide swath of topics. APRA-E funds a program known as Accelerating Low-Cost Plasma Heating and Assembly which is currently investigating innovative new potential fusion technologies. A project researching manganese-based permanent magnets was funded with the promise that these materials could greatly reduce the costs of wind turbines and electric cars. Recognizing the energy savings potential in the buildings sector, ARPA-E funded a project called Building Energy Efficiency Through Innovative Thermodevices that focused on reducing energy use in heating and cooling systems in unconventional ways. These projects are just a small sampling. ARPA-E Impacts, the official publication highlighting particularly successful project outcomes, is a great resource to read about some of the other achievements of ARPA-E projects.
At the 2018 ARPA-E conference, Congressman Eddie Bernice Johnson of Texas noted that over 70 companies had been formed from ARPA-E projects. Some of the projects currently underway that were showcased at this year’s conference include the following:
- Using tiny robot submarines to circulate kelp between the ocean and surface to find out if farming vast quantities of seaweed in the ocean is a feasible new type of carbon-neutral biofuel;
- Innovative systems to recycle waste heat in Navy ships into usable energy;
- Small fusion reactors that are trying to unlock the potential of a virtually limitless and clean power source;
- Wind turbine blades for offshore wind farms that break records for largest blades, enabling the capture of steadier winds that blow higher in the atmosphere; and
- Re-purposing millions of oil and gas wells already drilled and pumped dry as a new type of energy storage option, using them to store energy potential as pressurized air.
By the nature of projects being undertaken using ARPA-E funds, success for any single project would take many years to reach fruition and commercial integration (which is why they need ARPA-E funds instead of commercial investment from sources that can’t wait that long for their investment to pay off). That fact and ARPA-E having only been around for about a decade mean the world-changing breakthrough has not made its way out of the ARPA-E incubator yet. While ARPA-E does not yet have a flagship success to point to like DARPA has with their role in creating the nascent internet, which it is important to note took decades to be fully realized after DARPA first became involved, 13% of all ARPA-E projects have resulted in patents and its awardees have gone on to receive over $2.6 billion in private funding after successful time under ARPA-E. These data points signal continued success, allowing the agency to tread water with smaller but still trailblazing successes (which the National Academies have concluded have “already made significant contributions to energy R&D that likely would not take place absent the agency’s activities”) until the true transformation breakthroughs show themselves.
Because your tax dollars are funding the great work being supported by ARPA-E, the agency makes it easy for you to keep up with all of the exciting projects. All ARPA-E programs and projects are searchable on the agency’s website, even broken down regionally on a map of where the work is being done. If you’d rather read periodically about ARPA-E funded work, ARPA-E’s official blog, news feed, and newsletter are all great ways to keep up with the agency.
ARPA-E in the news today
If you’ve seen headlines regarding ARPA-E recently, hopefully you’ve been reading about some of the great projects being funded and making progress towards energy market disruption. Unfortunately the more likely reasons you’ve heard ARPA-E in the news has to do with the attempts by the Trump administration to defund and eliminate the agency.
In the past two years of proposed budgets, President Trump has recommended that ARPA-E be completely eliminated from the federal budget (as shown in the funding graphic above, the FY2017 budget proposed $20 million go to ARPA-E, but those funds were simply to oversee the existing rewards and monitor ARPA-E as it shut its doors). The rationale for cutting this funding stems from claims that ARPA-E distorts energy markets and funds research that would occur even in the absence of such funding through private investments, so an additional grant program is unnecessary. However not only would such funding elimination be catastrophic to U.S. standing in the emerging energy technology space, but even just the constant threat of ARPA-E being eliminated has already caused many tangible issues.
First, as indicated by a letter sent by the U.S. Government Accountability Office (GAO) to several Congressional panels, DOE acted unlawfully in a 2017 withholding of $91 million in appropriated funds from ARPA-E. This action was called for by the Trump administration, looking to use $45 million to manage the full closure of ARPA-E by mid-2019 and the other $46 million was asked to be completely canceled and not used for any ARPA-E projects. Despite the proposal from President Trump to eliminate ARPA-E, the funds had been legally appropriated by Congress. While the Trump administration claimed that they were withholding the funds in anticipation of Congress later making official the elimination of ARPA-E, both GAO and DOE’s internal general counsel found these actions unlawful.
From May to September 2017, these funds were withheld and limited information was provided to award recipients who were awaiting negotiations on their funding. According to GAO, this delay led to significant issues where the release of research awards may have damaged the competitive prospects of the emerging energy technologies being researched. While the funds ended up being released eventually upon threat of legal action, the postponement was not trivial as it forced projects to alter their scopes, disrupted the staffing process, and subsequently impacted end results. For example, one small company needed to lay off 2 of its 15 staff members because of the delay (with them now dealing with the increase in unemployment taxes), while a soil dynamics study missed two key months of its planting season. The fact that many of these ARPA-E funds go to supporting particularly small enterprises who are trying to do the types of things that have never been done means the threat that they were not going to receive their funding was even more consequential.
DOE officials have continued to express the agency’s commitment to supporting ARPA-E’s early-stage research, responding to GAO that they would review their funding process to minimize uncertainty. High ranking officials within DOE also agreed that, assuming that ARPA-E survives to attempted elimination from the President, some changes could and should be made to ensure the program continues to be a successful and critical cog in the energy research machine. But the message from the top of the Executive Branch does not always match the message coming from within DOE, especially when it comes to ARPA-E. Certainly helping the case to continue funding ARPA-E is the agency’s bevy of renowned and respected supporters like Elon Musk and Bill Gates, who writes that:
“If ARPA-E does for energy what DARPA did for computing and the NIH does for health, it will be one of the smartest public investments I can imagine.”
Fortunately for the supporters of innovative energy research, Congress continues to find the funding of ARPA-E a priority despite pushback from the President (although at least once, a bill in the House was passed in line with President Trump’s requests and found ARPA-E on the cutting room floor, thought it did not pass the Senate). In the spending package released by Congress on March 21, 2018, and passed into law the next day, ARPA-E funding actually increased to a record high of $353 million (along with the rest of the spending bill largely ignoring President Trump’s proposed cuts to renewable energy and early-stage energy programs). Congress isn’t the only one breaking ranks with President Trump on the importance of ARPA-E, as at the recent ARPA-E conference the parade of top government officials who advocated for the survival of ARPA-E included Secretary of Energy Rick Perry, White House Deputy Chief Technology Officer Michael Kratsios, DOE Undersecretary for Science Paul Dabbar, and principal deputy director of ARPA-E Chris Fall. Kratsios echoed the sentiment of the communities of scientists and energy transition advocates across the country by telling those in the crowd:
You here today are the innovators…I encourage you to reach out to us, the policymakers. Let us know what is holding you back. Let’s work together to discover the pathway that will transform the incredible innovations coming out of ARPA-E every day into the everyday technologies of tomorrow.
Sources and additional reading
Impoundment of the Advanced Research Projects Agency-Energy Appropriation Resulting from Legislative Proposals in the President’s Budget Request for Fiscal year 2018: U.S. Government Accountability Office