Bill Gates, energy execs, once again call for tripling of energy research funding

Almost five years ago a group of business leaders, including Bill Gates, GE CEO Jeff Immelt and venture capitalist John Doerr, called for a massive increase in U.S. government funding for basic energy research. This week that group released a report, its third on the topic, to look back at what progress has been made on that front, if any, and concluded that the U.S. government is still severely under funding energy innovation.
Not much progress has been made over five years in terms of increasing the amount of annual energy research funding the report noted. The Department of Energy spent a little over $5 billion in 2014, and that annual budget has been about flat since 2010. U.S. government funding on energy research peaked in 2009, with a little over $8 billion, thanks to the stimulus program.
The group, called the American Energy Innovation Council, wants the $5 billion in annual funding tripled to closer to $16 billion a year. At its current rate, the U.S. government is spending “less on energy RD&D than it does on potato and tortilla chips,” (the group used this same comparison in 2010) and far less as a percentage of GDP compared to Asian and European countries like China, Japan, Finland and Norway.

[blockquote person=”” attribution=””]This is insufficient, and it condemns future generations to fewer options.[/blockquote]

The U.S. has benefited significantly from investing in fundamental energy research in previous years. The U.S. government’s investments in gas and oil drilling and extraction technologies in the 70’s and 80’s eventually led to the recent boom in the domestic oil and gas industries in the U.S., which have completely changed the energy landscape for the U.S. The costs of this type of R&D are “tiny compared with the benefits,” said the report. Solar cells, energy storage and gas turbines have also benefited from government-supported fundamental research.

wind turbine morning

The group praised the U.S. government in other areas of energy research, noting that the DOE is a “better functioning machine now than five years ago,” and applauding the creation of the Department of Energy’s Innovation Hubs. Tweaking areas of the Department of Energy to operate more like the ARPA-E program, streamlined around industries, were a smart move, the report said.

But the overall funding levels are far from where they should be insists the group. With the unique difficulties of the energy markets, and the lack of private funding in early stage energy technology, “federal funding remains the only viable avenue of support for energy technology research and large-scale demonstration projects,” said the report.

Sunfolding, out of Otherlab, makes a plastic low cost solar tracker.
Sunfolding, out of Otherlab, makes a plastic low cost solar tracker.

So what would deployment of that $16 billion look like? Well, at least $1 billion would go to ARPA-E (up from the mostly less than $300 million its gotten per year since 2010) and more funding would go for demonstration projects for advanced nuclear power and carbon capture and storage. The Department of Energy could even find ways to fund energy innovation that isn’t entirely attached to annual appropriations, the report suggested.

Bill Gates has long called for much more energy research funding, which will help produce “energy miracles” that are needed to create low cost, low carbon energy that can increase the quality of life of populations, but that won’t contribute to climate change. Others say that the core energy technologies that can achieve this — solar panels, wind turbines, lithium ion batteries — are already here, they just need capital to be deployed.

Despite the lack of U.S. government funding for core energy R&D, I think the amount of creativity and ideas coming out of programs like ARPA-E, new incubators and funding projects, university labs, and new programs from Silicon Valley, are leading to a new renaissance around energy innovation.