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Is ARPA-E Making Any Progress?

The U.S. government is investing in new energy ideas, so how much progress has it made?

In 2009, President Obama started a new energy program called ARPA-E with funds from the American Recovery and Investment Act. The program, modeled after the Defense Advanced Research Projects Agency (DARPA), is designed to help develop high-risk energy technologies to the point where investors or other government agencies can bring them to market. Here’s a look at the program’s progress so far.

Silicon wafers made by 1366 Technologies.

Steady funding

Since getting an initial $400 million six years ago, the program has received somewhere between $180 and $280 million each fiscal year ending in September, except for 2010. ARPA-E has received $280 million in the past two fiscal years, and the White House asked Congress to boost that to $325 in 2016. However, it appears that the final amount will be less than that. If current budget bills go forward, ARPA-E would receive equal or slightly higher amounts of funding compared to the past two years.

As of February, ARPA-E had invested about $1.1 billion in more than 400 projects, many of which are tied to 23 programs focused on developing specific technologies, such as energy storage and reducing the energy needed to produce metals like titanium. Each project typically lasts two or three years and might receive anywhere from a few thousand to several million dollars.

Some argue that ARPA-E’s budget, as well as energy research and development dollars in general, should be increased. The American Energy Innovation Council, a group of CEOs including Bill Gates and General Electric CEO Jeffrey Immelt, recommended in a February report that ARPA-E funding should be closer to $1 billion per year, and no less than $300 million.

ARPA-E is able to tailor its activities to its funding level because it is made up of many different program units, says Ellen Williams, ARPA-E’s director since last December. “I think that we see a balance between portfolio breadth—and early on we had a huge amount of portfolio breadth—and portfolio depth, in terms of being able to pick out some particularly successful projects and drive them forward harder,” she says. “Depending on what our funding level is, we’re constantly going to be doing that optimization between breadth and depth. And that’s part of the challenge of managing technology.”

Commercial success

Some technologies are already making their way into the market. Williams points to Arizona State University spin-out Fluidic Energy as an example. It received $3 million from ARPA-E in 2010 to develop a rechargeable metal air battery system for energy storage at the grid level. The company has found its first market overseas to use its batteries for on-site battery storage for cell towers in countries that lack reliable electricity, says Williams. Another successful ARPA-E alum is 1366 Technologies, an MIT spin-out company that has raised nearly $70 million since it started in 2008 (see “Solar Survivor”). That company received $4 million from the agency in 2009 to develop cheaper silicon wafers.

But not all projects are a success. In some cases, ARPA-E will cut funding for certain projects that don’t meet criteria or aren’t working. Twenty-three projects are classified as “canceled” on its website. One notable failed project involved the battery manufacturer Envia Systems (see “Why We Don’t Have Battery Breakthroughs”).

“We’re defining success in a lot of different ways, both in terms of the path towards commercialization of an existing project and also paying attention to the fact that, in many cases, our technologies are groundbreaking in the sense that they’re opening up a totally different way of looking at problems,” Williams says. “Even if the project itself doesn’t line up in a commercial product, we then are starting to look at where its impacts are in terms of other technical developments.”

New technologies

Even though ARPA-E is focusing more on handing off technologies to investors or customers now that the projects are more mature, it still has its ear to the ground for new technologies. The agency typically holds a workshop full of industry heads and researchers to discuss whether a new technology is feasible, and then decides whether to award funding for projects. It recently spent more than $110 million in funding for dozens of new projects focused on generating power, creating better ways to analyze the genetic makeup of plants and even new methods to produce fusion power.

The Takeaway:

ARPA-E has started hundreds of projects, some of which have been handed off to other government agencies or investors for further development. However, the impact of the overall program is hard to definitively measure.

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This article was updated on Aug. 10 to delete inaccurate information about Envia Systems.

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