Mission Innovation Roundtable
Colleges and Universities
Friday, March 18, 2016
2:30 pm
Secretary’s Conference Room (7E-069) and via Webinar
Kevin Knoblach
Chief of Staff
U.S. Department of Energy
College and University Stakeholder Meeting
Implementation Planning
March 18, 2016
The Need for Innovation
The Linkage of Innovation to Economic Growth
• The 2016 Economic Report of the President notes that ½ of the growth in productivity between 1948-2014 came from improvements in total factor productivity associated with innovation.
• A recent study of the U.S. manufacturing sector estimates that much of the aggregate total factor productivity growth from 1992 to 2002 came from innovation.
The Linkage of Public R&D Investment to Innovation
• The American Energy Innovation Council (AEIC) noted that: “Public investment is critical to generating the discoveries and inventions that form the basis of disruptive energy technologies. Private companies cannot capture the full economy-wide value of new knowledge and thus systematically underinvest in research and development relative to the benefits it produces.”
• AEIC concluded “The costs of RD&D are tiny compared with the benefits. But today’s investments are simply too small; they will not offer an expanded range of economic, security, and environmental options in the future.”
• AEIC recommended a tripling of government investment in energy R&D. The President’s Council of Advisors on Science and Technology endorsed this.
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• 60% of the world’s population (and the top 5 most populous countries)• 67% of the total greenhouse gas emissions and nearly 75% of the CO2 emissions from electricity• 70% of global GDP• 85-90% of all government investment in clean energy R&D
Mission Innovation: Global Scope
Diverse Electricity Generation Portfolios:• 4 countries generate 60-92% of electricity from hydro• 6 generate 30-91% from natural gas (UAE 98%)• 6 generate 40-76% from coal (China, 76%, India, 74%,
Australia, 68%, Indonesia, 49%, Germany, 46%, US, 40%)
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United States
Canada
Mexico
Brazil
Chile
NorwaySweden
UKFrance
Germany
ItalySaudi Arabia
India
ChinaJapan
Indonesia
Australia
UAE
South Korea
Denmark
Mission Innovation
5-Year Doubling
Breakthrough Energy Coalition
committed to Expand
Investment into Earlier Stages of
Innovation Through
Commercialization
Expand the Innovation Pipeline
Breakthrough Energy
Coalition
Venture Capital
Institutional
Investors
Businesses
• 20 countries, (80% of Global Clean Energy R&D,) will seek to double funding over 5 years
• U.S.: Double investment from $6.4B in FY 2016 to $12.8B
• DOE: $1B (21%) increase from $4.8B to $5.9B in FY 2017
DOE
Other Federal
Agencies
19 Other Countries
MISSION INNOVATION
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Support U.S. economic and environmental objectives; enable U.S. role in expanding global markets; improve global standard of living
What’s Special?
• 27 (of 28 total) investors pledging personal funds - - not currently connected to any existing investment funds (or subject to their investment thresholds)
• Investments will be at earlier stage and be end-to-end (e.g. angel investment through commercial deployment)
• BEC will invest only in Mission Innovation partnership countries
How will it operate?
• BEC’s efforts are separate from DOE; BEC will self-organize one or more investment vehicles
Interface with DOE?
• DOE will use existing mechanisms, e.g. ARPA-E T2M, Clean Energy Investment Center, OTT, National Laboratory tech transfer offices; no preferential access
Breakthrough Energy Coalition
http://www.breakthroughenergycoalition.com/en/index.html
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Dr. Franklin (Lynn) Orr
Under Secretary
Office of Science and Energy
U.S. Department of Energy
$11.6B $12.8B $13.1B $5.1B $5.3B $5.7B
$4.2B$4.7B
$7.2B
$5.9B $6.2B $6.1B
$0.7B
$0.7B $0.7B
---
$2B
$4B
$6B
$8B
$10B
$12B
$14B
FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17
$9.3B
$10.1B
$12.9B
Nu
cle
arSe
curi
ty
Nu
cle
arSe
curi
ty
Nu
cle
arSe
curi
ty
Scie
nce
Scie
nce
Scie
nce
Ene
rgy
Ene
rgy
Ene
rgy
Envi
ron
men
tal
Man
age
men
t
$6.5B$6.9B $6.8B
21st Century Clean Transportation Plan Investments
$5.8B
$1.3B
Envi
ron
men
tal
Man
age
men
t
Envi
ron
men
tal
Man
age
men
t
$11.5B
EM - Mandatory$0.67B
Science -Mandatory
$0.10B
Energy -Mandatory
$1.49B
Nuclear Security
13.1B40%
Science5.7B17%
Energy7.2B22%
Other0.7B2%
Energy7.2B22%
Environmental Management
6.1B19%
FY 2017 Budget is a 10% increase from FY 2016Builds from 8% increase achieved in FY 2016
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DOE Mission Innovation Budget
• Scope of Mission Innovation is based on the Clean Energy R&D
crosscut established by OMB
• Clean energy technology is defined as any process, product or system
of products and processes, that can be applied at any stage of the
energy cycle from production to consumption, whose application will
reduce net greenhouse gas emissions, and can meet one or more of the
following characteristics: reduced demand for water resources, reduced
waste, reduced emissions of other air pollutants, or reduced
concentrations of contaminants in wastewater discharges.
• Mission Innovation base consists of RD&D elements of existing DOE
programs, but not deployment
• FY 2016 government-wide base is $6.4 billion; DOE base is $4.8 billion
(75%)
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DOE Mission Innovation Budget $ millions
FY 2016 FY 2017 % Increase
TOTAL Mission
Innovation
% MI TOTAL Mission
Innovation
% MI TOTAL Mission
Innovation
EERE 2,073 1,406 67.8% 2,898 2,108 72.7% 39.8% 49.9%
OE 206 153 74.4% 262 177 67.5% 27.3% 15.5%
FE 632 533 84.3% 600 564 94.0% -5.1% 5.8%
NE 986 862 87.4% 994 804 80.9% 0.8% -6.7%
ARPA-E 291 291 100.0% 350 350 100.0% 20.3% 20.3%
SC 5,350 1,577 29.5% 5,572 1,853 33.3% 4.1% 17.5%
TOTAL 9,538 4,823 50.6% 10,676 5,857 54.9% 11.9% 21.4%
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Examples of Building on Successful Applied R&D Programs
• Super Truck II
• New Desalination Hub
• New NNMI
• 2 new advanced carbon capture FEED studies (oxy combustion, chemical looping)
• 2 new advanced carbon capture pilot plants (post combustion, including natural gas)
• Upgrades to ATR and TREAT research reactors
• Downselect to final candidates for FORGE
• Synthetic biology foundry
• Low GWP HVAC R&D
• Offshore wind R&D consortium
Mission Innovation Portfolio
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Dr. Cherry Murray
Director
Office of Science
U.S. Department of Energy
Examples of Building on Successful Science Programs
• 5 new EFRCs
• Increased funding for 3 existing BRCs; plans for new competition in FY 2018
• Expand National Laboratory user facilities operation to 100% of optimal use
• Expanded multi-year exascale computing initiative
Mission Innovation Portfolio
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Dr. Ellen Williams
Director
Advanced Research Projects Agency - Energy (ARPA-E)
U.S. Department of Energy
• Path to $1 Billion as recommended in the National Academies of Science ‘Gathering Storm’ Report that led to the formation of ARPA-E
• Combination of increased annual appropriations and proposal for 5-year mandatory spending authority
• Growth will build on ARPA-E’s proven model:
- for accelerating high-potential, novel technical approaches to address existing and emerging US energy challenges
- for supporting technology development that is too early stage for private sector investment and moving it toward readiness for private sector investment
- of an operational approach that emphasizes nimble assessment and rapid execution
• Discretionary appropriations will support expansion of core activities:
- Expand dynamic portfolio of focused investments
- Supplement highly successful existing projects to advance investment readiness
• Mandatory spending will add a coordinated focus on innovations to overcome technological barriers in introducing emerging technical advances into commercially viable application:
- Technical challenges in Manufacturability and Scale-up
- Integration of Multiple Technical Advances to Create New Functionality
- Innovation through cross-sector and cross-disciplinary integration
- Technological Innovation to Drive the Creation of New Business Models
Expanded ARPA-E
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Jetta Wong
Director
Office of Technology Transitions
U.S. Department of Energy
Mission Innovation Portfolio
New Clean Energy Technology Crosscutting Initiatives
• National Laboratory Small Business Partnerships –Expansion of EERE small business voucher pilot program across all clean energy
technologies and laboratories ($20M)
• National Laboratory Energy Technology Innovation Accelerators–Provide clean energy entrepreneurs with seed funding, technical support, and
access to lab researchers and capabilities; modeled after LBNL Cyclotron Road Partnership ($25M)
• Regional Clean Energy Innovation Centers–Establish regionally-based innovation centers focused on regional innovation
capabilities, needs and opportunities ($110M)
–Encompass all clean energy technologies, with priorities set on a regional rather than federal level
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Melanie Kenderdine
Director
The Office of Energy Policy and Systems Analysis
U.S. Department of Energy
Regional Clean Energy Innovation Partnerships
Regional Clean Energy Innovation Partnerships
Three Key Issues
Rationale for regional-level innovation initiatives
Number of regions, and method for establishing regions
How partnerships should be formed within each region
and how they should function
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Rationale for Regional-Level Innovation Initiative
• The National Research Council’s 2012 Report, Rising to the Challenge, articulated the rationale:
“Historically, federally funded R&D has not been connected to state and regional industrial development. Bridging that gap can create the local talent and technology base needed to convert these U.S. investments into domestic companies, industries, and jobs.”
“Private businesses and local education institutions and economic-development agencies are in the best position to identify opportunities, gauge competitive strengths, and mobilize wide community support for regional cluster initiatives.”
“Regional innovation cluster initiatives should be built upon existing knowledge clusters and comparative strengths of a geographic region.”
• Existing regional ecosystems in New England, the Chicago region and Silicon Valley have led the way in creating the template for regional partnerships
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DOE Support for Clean Energy R&D Proposals
DOE will consider partnership proposals that support any clean energy technology process, product or system of products and processes, that can be applied at any stage of the energy cycle from production to consumption, whose application will reduce net greenhouse gas emissions, and can meet one or more of the following characteristics:
• reduced demand for water resources,
• reduced waste,
• reduced emissions of other air pollutants, or
• reduced concentrations of contaminants in wastewater discharges.
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Partnerships as Regional Ecosystems
Scope of work for each Regional Partnership would be regionally-based, reflecting regional needs and regional capabilities
• Scope can be anywhere within the clean energy R&D space
Partnership Boards serve critical role in integrating regional issues
Partnerships can partner with collateral activities outside scope of DOE funding, e.g.
• Breakthrough Energy Coalition and other investors• Other clean energy financing entities (e.g. Green Banks)• Other related programs, e.g. education and training
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Regional Innovation Partnerships: Possible Activities
Issue R&D grants / contracts
Support regional competitions/prizes
Encourage/support regional public-private partnerships and consortia
Offer credit enhancements
Help attract private patient capital to spin off companies
Provide analysis / data, education and training, facilities, project management
Provide training infrastructure, sharing early prototypes and production facilities, assisting with startups
Regional Partnerships are not research performers, they are research coordinators!25
Regional Criteria Example Details References
Geographical continuity/linkage
Presence of Major InnovationActivity
DOE National Labs, NNMI, Hubs/BRCs, ARPA-E grants, EFRCs
DOE, NNMI
General Alignment to Market/Energy Regions
ISO/RTOs, Interconnections, NERC regions
FERC, NERC
Similarity of Energy Use and Resources
EIA state metrics, NREL renewables resource maps
EIA, NREL
Commonality of Industry/EconomicCharacteristics
Initial bin of top 100 metropolitanareas by advanced industry – e.g. service or manufacturing (additional analysis not yet complete)
Brookings: America’s Advanced Industries
DemographicsPopulation, GDP, GDP per capita (not yet complete)
Census, BEA
InfrastructureOil & gas midstream infrastructure (not yet complete)
EPSA QER datasets
Determining Regions: Notional Criteria
DRAFT - PRE-DECISIONAL - NOT FOR DISTRIBUTION26
Notional Clean Energy Innovation Partnership Regions
Northeast
Mid-Atlantic
Southwest/Central
North Central
MidwestNorthwest
West
Universities with highest and
higher research activity2Manufacturing-Oriented Services-Oriented Both Manufacturing
and Service-Oriented
Not Specialized
in Either
Metro Area - Advance Industry Base Characteristics1
1. Brookings Institution “America’s Advanced Industries” report 2015
2. Carnegie Classifications of Institutions of Higher Education 2015
3. EFRC = Energy Frontier Research Center
4. BRC = Bioenergy Research Center
5. NNMI = National Network for Manufacturing Innovation
Alaska/Arctic
Hawaii/Islands
Southeast
DOE Hub/BRC4
NNMI5
DOE LABS
EFRC3
(spatial overlap)
DRAFT - PRE-DECISIONAL - NOT FOR REPRODUCTIONEXAMPLE ILLUSTRATING POSSIBLE REGIONAL ALIGNMENT
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Biomass
Wind
Concentrating Solar Thermal
Photovoltaics
Tidal2
Wave
Hydropower
Geothermal1
Resource
Dark = Higher
Light = Lower
1 Does not
include Alaska
or Hawaii
2 Does not
Include Hawaii
Source: NREL 2006, 2012
U.S. Renewable Resources Overlay on 10 Regions
DRAFT - PRE-DECISIONAL - NOT FOR DISTRIBUTION28
Regional CO2 Sources with Access to Sequestration Options or Associated Infrastructure
DRAFT - PRE-DECISIONAL - NOT FOR DISTRIBUTION
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Most Least
Water Withdrawal Southeast, Midwest Alaska/Arctic, Northwest
Water Intensity Hawaii, Midwest Northwest, Alaska/Arctic
30Sources: EIA, 2014 data from “Net Generation by State by Type of Producer by Energy Source (EIA-906, EIA-920, and EIA-923),” October 21, 2015. https://www.eia.gov/electricity/data/state/USGS, EIA data via Maupin, M.A. et al., 2014, Estimated use of water in the United States in 2010: U.S. Geological Survey Circular 1405, 56 p., http://dx.doi.org/10.3133/cir1405
1 Includes Wind, Solar, Biomass, Geothermal
2 Includes Petroleum, Other Fossil Fuel Gases, Pumped Storage, Non-Biogenic Municipal Solid Waste, Batteries, Hydrogen, et al.
Northeast
SoutheastSouthwest/Central
North Central Midwest
West NETL
SNL
NETL
40,840 Mgal/day16,780 gal/MWh
200 Mgal/day370 gal/MWh
6,740 Mgal/day7,010 gal/MWh
17,510 Mgal/day9,340 gal/MWh
3,240 Mgal/day4,370 gal/MWh
39,890 Mgal/day20,630 gal/MWh
14,000 Mgal/day19,160 gal/MWh
35,320 Mgal/day17,410 gal/MWh
Mid-Atlantic
Northwest
Coal
Natural Gas
Nuclear
Hydroelectric Conventional
Non-Hydro Renewables
Other
KEY (GENERATION SOURCE DATA)
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2KEY (WATER DATA)Water Withdrawal for Power
Generation (Mgal/day)Water Withdrawal Intensity of Power
Generation (gal/MWh)
656 Mgal/day22,097 gal/MWh
Alaska/Arctic
Hawaii
60 Mgal/day3,130 gal/MWh
Power Generation Source/Water WithdrawalsDRAFT - PRE-DECISIONAL - NOT FOR REPRODUCTION
EXAMPLE ILLUSTRATING POSSIBLE REGIONAL ALIGNMENT
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In FY 2017, DOE could solicit and competitively select up to 10 Regional Partnerships that will:
Competitively select RD&D projects for financial assistance based on technical merit and, generally, connecting innovators in their regions with RD&D funding.
Provide analysis, data, access to federal RD&D facilities, and project management.
Support development of early prototypes. Encourage and support collaborative RD&D, regional public-private
partnerships, and consortia of innovative clean energy entities. Develop in collaboration with stakeholders regional energy innovation
roadmaps to facilitate RD&D planning and inform annual plans submitted to DOE.
Coordinate with other Regional Partnerships on best practices and technology projects relevant to multiple regions.
How Partnerships Might Work
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Suggested Design of Regional Partnerships
Not-for-profit entities (e.g. 501c(3))
Broad-based consortia• Investors; National Laboratories; other federal laboratories; state;
local; regional governmental entities; colleges and universities; non-profit R&D and Regional development organizations; private industry
Partnerships responsible for planning, management, and
coordination• No federal funding for brick and mortar • Partnerships are not R&D performers
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The Office of Congressional and Intergovernmental Affairs
U.S. Department of Energy
Brad Crowell
Assistant Secretary
and
Chris King
Principal Deputy Assistant Secretary
APPENDIX
Break through Energy Coalition 27 Investors & University of California
• Mukesh Ambani
• John Arnold
• Mark Benioff
• Jeff Bezos
• Alwaleed bin Talal
• Richard Branson
• Ray Delio
• Aliko Dangote
• John Doerr
• Bill Gates
• Reid Hoffman
• Chris Hohn
• Vinod Khosla
• Jack Ma
• Patrice Motsepe
• Xavier Niel
• Hasso Plattner
• Julian Robertson
• Neil Shen
• Simmons & Baxter-Simmons
• Masayoshi Son
• George Soros
• Tom Steyer
• Ratan Tata
• Meg Whitman
• Zhang Xin & Pan Shiyi
• Mark Zuckerberg & Priscilla Chan
Collective Net Worth: $300+ Billion35
Mission Innovation Portfolio
Regional Innovation Centers
• Large-scale multi-state regions (perhaps up to 10)
• Not-for-profit entities (preferably consortia modeled after RPSEA)
• Partnerships can include state and federal governments, universities, industry and national laboratories
• Serve as planning and funding entities; no brick-and-mortar or in-house R&D
• Broad latitude to set priorities across all clean energy technologies based on regional needs, opportunities and R&D capabilities
• Single annual DOE funding stream based on annual program plans; use of flexible funding vehicles (e.g. Other Transactions Authority)
• Capability to establish cost-sharing partnerships with the Breakthrough Energy Coalition and other federal and non-federal funding entities (e.g. State Green Banks)
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