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U.S. Energy R&D Architecture: Discreet Roles of Major Innovation Institutions

By Brad Townsend, Erin Smith

Monday, March 14, 2016

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Innovation is the beating heart of the American economy, and nowhere is that more true than in the energy industry. While the private sector plays the dominant role in commercializing the new technologies that will reinvent the energy sector, smart federal investments should seek to address critical gaps in the innovation process.

Energy is, for the most part, a low-cost commodity product. Generally, companies wishing to offer energy services in the marketplace face high capital requirements, long lead times, and daunting regulatory hurdles—all in pursuit of comparatively modest profit margins. Not surprisingly, these challenges mean energy providers tend to underinvest in disruptive new energy technologies. Consequently, government can play a critical and appropriate role by partnering with industry to help reduce the costs of cleaner energy through innovation.

Because energy underpins every facet of modern society, the importance of ensuring clean, affordable, reliable energy is clear. As nations around the world race to muster available resources to meet that challenge, energy access, security, and environmental benefits are critically important. The economic opportunity presented by a well-functioning energy innovation ecosystem is easily in the trillions of dollars. The United States’ energy research and development architecture, housed primarily within the Department of Energy, has historically positioned the nation as a global leader in energy innovation. That position will not, however, sustain itself without an understanding and commitment from both government and the private sector to ensure the United States realizes its full potential to reap the enormous environmental, security, and economic benefits of energy innovation.

The innovation process for breakthrough technologies is often described as a pipeline, with basic research leading to applied research, followed by invention, prototyping, demonstration, and finally deployment.


The American Energy Innovation Council (AEIC) is a group of corporate leaders who came together in 2010 as a result of a common concern over America’s insufficient commitment to energy innovation. We speak as executives with broad-based success in innovation, who, in the course of our careers, have been called upon to overcome obstacles, seize opportunities, and make difficult decisions, all in the pursuit of building great American companies. We seek to share that experience as it relates to meeting the clean energy challenge.

AEIC is a project of the Bipartisan Policy Center.

KEYWORDS: DEPARTMENT OF ENERGY

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