Background: Transforming U.S. Energy Innovation Report

A Report with Recommendations for Improving Energy Innovation in United States

NOTE

Transforming U.S. Energy Innovation can be accessed here: http://belfercenter.ksg.harvard.edu/publication/21528/. A policy brief based on this report can be accessed here:http://belfercenter.ksg.harvard.edu/publication/21527/.

Background of Report

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 ERD3 project began in 2008 with three primary goals:

To develop a methodology for assessing opportunities in energy research, development, and demonstration (ERD&D) investment and to produce a set of comprehensive recommendations for the U.S. administration's investment in ERD&D;
To prepare an annual analysis of and set of recommendations for the Department of Energy's ERD&D budget, including, but not limited to, climate-change-related technologies; and
To understand the private sector's current role in the carrying out and funding of ERD&D and in the drawing of conclusions about effective structures of public-private undertakings, areas of opportunity, and strategies for international cooperation in energy technology innovation.

Over the past three years, the ERD3 project has worked to develop and to implement a methodology for designing an expanded portfolio of federal ERD&D activities; has investigated the role that the private sector and public-private partnerships play in energy innovation in the United States; has identified ways to improve the effectiveness of public energy innovation institutions; and has analyzed how the U.S. government could improve the effectiveness of its international collaboration efforts on energy innovation. This research was informed by interviews, surveys, modeling exercises, and literature reviews.

In addition to this report, the members of the ERD3 project evaluated the U.S. federal annual spending on energy research, development, and demonstration. This effort built on earlier efforts of the ETIP group, which has been monitoring the federal ERD&D expenditures for more than a decade.

Transforming U.S. Energy Innovation contains the project's final analysis and recommendations on how to transform U.S. energy innovation.

This report will be released on Tuesday, November 22, 2011, at the American Association for the Advancement of Scoience (AAAS) headquarters in Washington, D.C., during an event co-sponsored by Harvard Kennedy School’s Belfer Center and the AAAS.

Introduction to the Executive Summary: Transforming U.S. Energy Innovation

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. A dramatic increase in the pace of energy innovation is crucial to meet the challenges of:

Energy and national security, to address the dangers of undue reliance on dwindling supplies of oil increasingly concentrated in some of the most volatile regions of the world and to limit the connection between nuclear energy and the spread of nuclear weapons;
Environmental sustainability, to reduce the wide range of environmental damages due to energy production and use, from fine particulate emissions at coal plants, to oil spills, to global climate disruption; and
Economic competitiveness, to seize a significant share of the multi-trillion-dollar clean energy technology market and improve the balance of payments by increasing exports, while reducing the hundreds of billions of dollars spent every year on importing oil.

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 United States 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. Efficiently utilizing government investments in energy innovation requires understanding the market incentives that drive private firms to invest in advanced energy technologies, including policy stability and predictability.

The U.S. government has already launched new efforts to accelerate energy innovation. In particular, the U.S. Department of Energy is undertaking a Quadrennial Technology Review to identify the most promising opportunities and provide increased coherence and stability. This report offers analysis and recommendations designed to accelerate the pace at which better energy technologies are discovered, developed, and deployed and is focused in four key areas:

Designing an expanded portfolio of federal investments in energy research, development, demonstration (ERD&D), and complementary policies to catalyze the deployment of novel energy technologies;
Increasing incentives for private-sector innovation and strengthening federal-private energy innovation partnerships;
Improving the management of energy innovation institutions to maximize the results of federal investments; and
Expanding and coordinating international energy innovation cooperation to bring ideas and resources together across the globe to address these global challenges.

For information on the ETIP research group, click here>

For information on ETIP’s ERD3 project, click here>

The full report, Transforming U.S. Energy Innovation, will be available on the ETIP website on November 22, 2011.