Clean Energy Innovation in the US: insights for the UK (part 2)

04 Sep 2019

Author

Anna Watson is a EPSRC-funded research student at the Science Policy Research Unit (SPRU) in affiliation with the UK Energy Research Centre.

Clean Energy Innovation in the US: insights for the UK

 

Part 2 | Building successful innovation organisations

In July I represented UKERC at the ARPA-E Innovation Summit, a gathering of over 2000 people spanning the US energy innovation system.

ARPA-E is the Advanced Research Projects Agency- Energy, a publicly funded innovation organisation that for ten years has supported risky energy projects ranging from prototype to full scale deployment and commercialisation.

The organisation has an impressive track record. Since 2009, ARPA-E as spent $2bn supporting over 800 projects. These projects have gone on to receive $2.9bn in follow-on funding and resulted in the formation of 76 companies.

Innovate UK’s new approach to the Energy Revolution aims to move from technology-push to market- pull by creating the business models required to move a technology through the innovation chain. The approach of ARPA-E in driving energy innovation from prototype to toward commercial deployment could hold clues on how to achieve this most effectively.

Below I explore three potential lessons from ARPA-E for the UK energy innovation organisations.

1.      Strong collaboration at all stages of technology development

ARPA-E works with many other publicly funded partners to support technologies from applied research to commercial deployment.

This includes the Department of Energy (DOE) Offices of Energy Efficiency and Renewable Energy (EERE) and Science, several national laboratories including the National Renewable Energy Laboratory and National Energy Technology Laboratory and multiple universities, either directly or via technology centres, such as the Center for Power Electronics Systems at Virginia Tech.

This enables ARPA-E to build partnerships and consortia appropriate to the development stage of a technology and so successfully supporting it through the valley of death and beyond.

This approach was discussed in a keynote by Dr Jennifer Holmgren, CEO of Lanzatech, who shared how ARPA-E had supported the organisation with $250mn over 8 years to take the technology from lab to demonstration. Lanzatech have worked with Virgin Atlantic since 2011 and supplied the sustainable ethanol for the world's first commercial flight powered by biofuel.

 
 
2.      Focus on successful commercial deployment

ARPA-E has a team ten of Technology to Market Advisers, comprising experts drawn from the private sector that work alongside the twenty Programme Directors to deliver projects.

An Adviser at the Summit discussed with me his involvement in developing project stage-gates, where certain commercial mile-stones need to be reached by a technology for funding to continue. His role also involved identifying skills gaps within companies and bringing in correct expertise.

This process is seen as key in securing follow on funding after ARPA-E funding runs out, which is viewed as a core organisational metric of success. Former Director, Dr Cheryl Martin highlighted that being able to demonstrate consistently to Congress that projects have attracted additional funding and are continuing to be developed ensures that the organisation is viewed as valuable.

 
 
3.      Entrepreneurial and adaptive

On a panel reflecting on ten years of ARPA-E, former director Dr Arun Majumdar discussed the initial excitement around launching a new organisation with real mission and purpose.

ARPA-E was built to be lean, with a flat management structure that aims to be owned by the community in which it operates. Each Director is only able to serve a term of two years, adding urgency to their leadership. Over the ten years this has enabled great diversity and fast learning.

Processes that had accumulated within the organisation are open to scrutiny and review. For example, Dr Cheryl Martin found that an 8-month gap could occur between receiving phase 1 and phase 2 funding that placed firms under a lot of pressure, and so introduced an automatic funding transition.

The organisation aims to view project failure as a learning opportunity, however it was acknowledged during the panel that certain projects could have been cut sooner- but this is all part of the learning process.

This approach and flexibility is made possible by ARPA-E's 'Island-Bridge' relationship with congress, where it is able to operate as a stand alone organisation that feeds directly into the Secretary of Energy.