Monday, February 25, 2013

"What ARPA-E Can’t Do"

Following up on "The 2013 ARPA-E Energy Innovation Summit Starts Today".
From MIT's Technology Review:

The Advanced Research Projects Agency for Energy is highly popular, but its impact so far has been minuscule. 
At this week’s ARPA-E Energy Innovation Summit in Washington, D.C., politicians from both sides of the aisle, together with environmentalists and business leaders, will do something unusual—they’ll agree on something. They’ll all sing the praises of ARPA-E, the agency created in 2009 to fund the development of early stage energy technologies. But what could get lost in all the laudatory remarks is the fact that ARPA-E won’t solve our major energy challenges and can’t fulfill its mission alone.

That mission has always been limited. Its authorizing legislation directs it to identify promising advances in labs and give them a boost, enough to demonstrate the potential to private investors. A small company or university lab that has discovered a promising material, for example, might be funded to produce a working prototype battery or solar cell. But ARPA-E was explicitly not supposed to take over for venture capitalists in commercializing technology. The agency invests only in projects that are too risky for private investors. 

That the agency was never intended to commercialize technology is clear from its budget. Some new energy technologies will require large-scale demonstrations that could cost hundreds of millions of dollars before private investors are willing to take over. But ARPA-E’s entire yearly budget is less than $300 million, which is spread between dozens of projects. “The parts of the innovation chain that are the hardest in energy are the scaling up and demonstration phases, and that’s precisely what ARPA-E is not designed to do,” says David Victor, co-director of the Laboratory on International Law and Regulation at the University of California at San Diego....MORE