Advanced Research Projects Agency-Energy Arpa-E Budget for 2012

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Arpa-E Budget for 2012 is just the kind of creative transformational-energy research the DOE is trying to support through its Advanced Research Projects Agency-Energy (ARPA-E). First funded in 2009, the 21-employee agency is a critical part of the Obama Administration’s response to the specter of a tripling in global energy demand by 2025. Explicitly modeled on the Pentagon’s storied counterpart, the Defense Advanced Research Projects Agency (DARPA), ARPA-E functions as a funding agency that supports the most promising breakthrough-research proposals coming out of universities, corporations, and nonprofits, as well as from its network of 17 national labs.

The grants target early stage technology, nurturing proof-of-concept units into pilot stages and later, into demonstration projects backed by venture capital. Since opening shop, ARPA-E has awarded $363 million to 121 projects. Thirty-nine percent went to universities, roughly a third went to startups, and the balance went to large businesses (20 percent), national labs (5 percent), and nonprofits (3 percent). A fourth round of funding announced in April offered an additional $130 million in five new program areas. Despite its promising start, ARPA-E had to “fight like hell” to survive, says Van Atta, winning just $180 million for fiscal 2012 after the Administration requested $550 million.

Van Atta says the long fight for new energy technologies to reach successful commercialization is in some ways more formidable than the struggle confronting defense-related technologies. The latter can find critical support in robust Pentagon procurement or specific military services, while DOE has no comparable means of nurturing new technologies. It does support several, far smaller pools of money, including the $2.5 billion Loan Guarantee Program funded by stimulus money in 2009. That program is likely to be effectively extinguished in September, unless Congress finds money to fund the proposed Clean Energy Deployment Administration, essentially a nonprofit bank for renewable technology.

The idea behind the guarantees is to push companies past the so-called Valley of Death before new technology is considered safe enough for private capital. Even at that point, “new energy technologies have to perform the technology equivalent of parachuting into the Normandy battlefield,” note Van Atta and his co-author, William Bonvillian, director of MIT’s Washington office. “There is already a technology-economic-political paradigm that dominates the energy beachhead that must be overcome.”

Fortunately for Ingersoll, General Compression may not need further help from Uncle Sam. In early June the company closed a $54.5 million round led by Northwater Capital Management in Toronto. That’s helping to launch a pilot project in Texas undertaken with ConocoPhilipps (COP), which is also an investor. US Renewables Group, Duke Energy (DUK), and Serious Change are also partners. The pilot will start at 2MW, the output of the average wind turbine — enough to power 200 homes at peak demand — but should be able to go up to 1,000MW, the power of two conventional coal-fired power plants, says Ingersoll.