“Caterpillar to Shift Some Production to U.S.” That’s good news for American workers: 1,000 jobs are coming home from Japan. Some lucky state will win the lottery for the factory and become home base for global sourcing of Caterpillar’s small bulldozers and mini-hydraulic excavators. Interestingly, Caterpillar first developed these mini-machines to fix a distinctively Japanese problem. Cramped urban construction sites cried out for compact excavators. That friction brought on innovation, invention, and manufacturing.

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.

"The focus of the workshop was on the demonstration stage of the technology innovation cycle. Current policies do not adequately address the private sector’s inability to overcome the demonstration "valley of death" for new energy technologies. Investors and financiers fear that the technology and operational risks at this stage of the cycle remain too high to justify the level of investment to build a commercial-sized facility."

"There is broad political consensus that the current energy system in the United States is unable to meet the nation's future energy needs, from the security, environment, and economic perspectives. New energy technologies are required to increase the availability of domestic energy supplies, to reduce the negative environmental impacts of our energy system, to improve the reliability of current energy infrastructure (e.g., smart grid, energy storage), and to increase energy efficiency throughout the economy."

This paper provides an overview of water consumption for different sources of energy, including extraction, processing, and conversion of resources, fuels, and technologies. The primary focus of this paper is to summarize the consumptive use of water for different sources of energy. Where appropriate, levels of water withdrawals are also discussed, especially in the context of cooling of thermoelectric power plants.

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 technology-led transformation of the U.S. energy system that the administration is seeking is unlikely to succeed without a transformation of energy innovation institutions and of the way in which policymakers think about their design, according to scholars with the Belfer Center's Energy Technology Innovation Policy research group. They set out principles for a much-needed conversation among analysts, managers, scientists, and policymakers on how to enhance the effectiveness of these institutions."