The United States and the world need a revolution in energy technology—a revolution that would improve the performance of our energy systems to face the challenges ahead. In an intensely competitive and interdependent global landscape, and in the face of large climate risks from ongoing U.S. reliance on a fossil-fuel based energy system, it is important to maintain and expand long-term investments in the energy future of the U.S. even at a time of budget stringency. It is equally necessary to think about how to improve the efficiency of those investments, through strengthening U.S. energy innovation institutions, providing expanded incentives for private-sector innovation, and seizing opportunities where international cooperation can accelerate innovation. The private sector role is key: in the United States the vast majority of the energy system is owned by private enterprises, whose innovation and technology deployment decisions drive much of the country's overall energy systems.

The United States needs a revolution in energy technology innovation to meet the profound economic, environmental, and national security challenges that energy poses in the 21st century. Researchers at Harvard Kennedy School undertook a three-year project to develop actionable recommendations for transforming the U.S. energy innovation system. This research has led to five key recommendations for accelerating U.S. energy innovation.

The report, Transforming U.S. Energy Innovation, released on Nov. 22, 2011,is the result of a three-year energy research, development, demonstration, and deployment (ERD3) project of the Energy Technology Innovation Policy (ETIP) research group at Harvard Kennedy School's Belfer Center for Science and International Affairs. The ERD3 project was funded by a grant from the Doris Duke Charitable Foundation to produce and promote a comprehensive set of recommendations to help the U.S. administration accelerate the development and deployment of low-carbon energy technologies.

Charles (Skuk) Jones, a research fellow with the Energy Research, Development, Demonstration and Deployment Policy project (ERD3) of the Belfer Center's Energy Technology Innovation Policy (ETIP) research group, discusses investments in innovation, his time on a U.S. Naval nuclear submarine, and the future of alternative energy with communications intern Lucia Cordon.

Charles (Skuk) Jones is a research fellow with the Energy Research, Development, Demonstration and Deployment Policy project (ERD3) of the Belfer Center's Energy Technology Innovation Policy (ETIP) research group. He researches financing of alternative energy innovation.

This analysis provides an overview the Department of Energy's fiscal year 2011 energy research, development, demonstration, and deployment (ERD3) budget proposals, and lays out actionable recommendations to strengthen the effort.  Overall, the report concludes that the 7 percent requested increase in applied energy research, development, and demonstration funds, while welcome in a time of budget stringency, remains well short of the sustained investment likely to be needed to meet the energy demands of the 21st century.

The United States needs to transform the way it produces and uses energy. This will require the improvement of current technologies and the development of new ones. To achieve the maximum payoff for public investments in energy technology innovation, the United States will need to improve and better align the management and structure of existing and new energy innovation institutions, and better connect R&D to demonstration and deployment. In this policy memo, the authors discuss three general and important recommendations for thinking about different initiatives, and we discuss the merits and challenges of current and new institutions, and the remaining gaps in the U.S. energy innovation system.

The Obama administration and the 111th Congress face enormous challenges and opportunities in tackling the pressing security, economic, and environmental problems posed by the energy sector in the United States and worldwide. Improving the technologies of energy supply and end-use is a prerequisite for surmounting these challenges in a timely and cost-effective way. This article is adapted from the executive summary of the Belfer Center Energy Technology Innovation Policy (ETIP) report, "Tackling U.S. Energy Challenges and Opportunities," by Laura Diaz Anadon, Kelly Sims Gallagher, Matthew Bunn, and Charles Jones.

ETIP’s Energy Research, Development, Demonstration & Deployment (ERD3) Policy Project has developed recommendations for energy innovation in the United States. These recommendations lay out a comprehensive strategy for investment in energy innovation, new approaches to managing the effort, and policies for moving new technology into the marketplace.