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How the US Can Beat China and Russia in New Energy Tech

Sept. 26, 2022, 8:00 AM

America’s energy innovation engine has been a well-oiled machine for nearly 50 years. We’re on the verge of building what could be the greatest energy technologies we’ve ever seen, but you know the saying—it’s hard to find good help.

The bipartisan Infrastructure Investment and Jobs Act funded demonstration projects authorized in the Energy Act signed by President Donald Trump in 2020. It was the biggest US Department of Energy project since the Manhattan project.

The IIJA included $27 billion for grid infrastructure and $21.5 billion for a new Office of Clean Energy Demonstrations (OCED). If done right, this investment may be our key to beating China and Russia in the race for next-generation energy technologies.

Staffing Needs

Historically, DOE has been a giant nuclear defense and science R&D agency. It has focused on building and maintaining nuclear weapons, power plants for subs and carriers, not to mention the Human Genome Project, giant particle colliders, and other world-altering innovations like quantum computing. It owns and operates the 17 National Laboratories, building and running cutting-edge science infrastructure.

The Department, however, has little experience with specific ready-for-first-deployment commercial energy technology. In an August report, the Department’s Office of the Inspector General raised similar concerns outlining risk areas such as insufficient staffing, circumvention of project controls, insufficient project oversight, and inadequate internal and recipient-level controls DOE’s team has brilliant minds and policy expertise.

But even in the applied offices, they are staffed with early-stage technology R&D funding experts, not people with experience building commercial-scale energy facilities.

The agency’s Loan Programs Office, created in 2005 to bridge new technologies with available capital, has had some incredible wins—including Tesla—but also some high-profile losses. Some projects failed simply because the right people weren’t in place to assist with the selection process. The current office has brought in leaders with deep industry experience to fill gaps and get things done.

Policy Needs

Congressional oversight to ensure these programs succeed is obvious, but there are three internal policy changes DOE could implement.

First, DOE needs to immediately hire both political and career employees with experience delivering power plants and other energy facilities on time and on budget.

That means senior energy engineers, private sector technology investment leaders, former employees of large utilities or equipment manufacturers, plant developers, corporate capital allocators, and fund investors who have depth in building commercial projects.

David Crane, former chief executive officer of NRG who was recently nominated to be Under Secretary for Infrastructure at DOE, indicates this goal is on the right track.

Second, the Department needs to use peer-review advisory boards for each technology class. For example, the Office of Nuclear Energy, when creating the Advanced Reactor Demonstration Program, assembled a blue-ribbon advisory committee of commercial nuclear experts along with investors, ensuring applicants with the best chance of commercial success were selected.

This peer review process has been used successfully by DOE’s Office of Science to review funding opportunity proposals for decades and should be looked at for all the new OCED selections.

Finally, the new OCED must have strong, defined coordination with the existing applied energy offices. These offices should provide perspective on which technologies are ready for demonstration, while OCED can focus on successful implementation—and getting the money out the door. Vice versa, learnings from OCED can feed into new R&D efforts at the applied energy offices.

Big-Picture Goals

Earthshots, the Department’s big-picture goal concept, is an organizing principle initiated with SunShot in the Obama Administration and continued as the Energy Storage Grand Challenge in the Trump administration.

It can be a useful mechanism for coordinating activity all the way from basic science to the applied programs through to the major demonstrations. We know that investing wisely in innovation pays off.

Major advances in new energy technology, from the lithium-ion battery to nuclear energy to renewables, had serious government support in their early stages—even the fracking revolution that caused the gas boom started with a total of $10 billion in research and development plus tax incentives.

There are many parts of our energy and industrial systems where we don’t yet have the cheaper, cleaner alternatives needed to build the systems of the future. But this demonstration program with accompanying incentives can help get us there.

Staffed with private industry, construction, and operations experience, we’ll be on the way to renewed American energy independence, and the next generation of technologies that could solve both the near-term global energy and geopolitical crises and longer-term emissions challenges.

If not, we’ll squander this opportunity to significantly accelerate American energy technology.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Paul Dabbar served as the Department of Energy’s fourth under secretary for Science and Energy.

Rich Powell is CEO of ClearPath, a Washington, D.C.-based nonprofit that develops and advances policies that accelerate breakthrough innovations to reduce emissions in the energy and industrial sectors.