A Broken Model for Energy Change

Our Current Energy RD&D Isn’t Working

The past few weeks have seen a flurry of energy news, more than all the news from the last three administrations put together. What’s a cynical, snarky graduate student to do to keep up?

Last Monday, a high profile gathering of legislators, administration officials, and energy executives met at the Clean Energy Summit to push around hot air. Attendees included the current Speaker of the House (Nancy Pelosi), the Senate Majority leader (Harry Reid), the Current Nobel Laureate Secretary of Energy (Steven Chu), a former Nobel Laureate Vice President (Al Gore), and a blowhard oilman (T. Boone Pickens).

The consensus at this run-of-the-mill DC power lunch? We’re going to support green energy and transmission infrastructure with comprehensive federal policies and a nationwide “superhighway” for electricity. I’ll believe that when the scorched earth lobbying, the turf battles within Congress, and the grousing from state regulators all simmer down.

Like a duck being fattened for a fois gras slaughter, the recently-passed stimulus bill is about to shove funds down the throat of the Department of Energy — approximately $40 billion worth in a department that already handles $25 billion. The money is diffusing throughout all parts of the organization, from the widely vaunted energy efficiency and weatherization money ($14 billion) to renewable energy loan guarantees ($6 billion) to smart grid funding ($4.5 billion).

Of course money is also being dished out in such portions like $6.5 billion for two federal power grids to perform system maintenance and upgrades as well as $6 billion for euphemistic-sounding departments for radioactive waste cleanup (i.e. Office of Legacy Management and Environmental Management). Given that the Energy Department’s Loan Guarantee Program has yet to deliver a single cent of its nearly $100 billion worth of loans and that Secretary Chu needs new laws passed to revamp the program, how “stimulating” do you think all this money will really be?

The budget proposed by the Obama administration last week already depends on $90 billion worth of revenue from a nationwide cap-and-trade program on carbon dioxide to pay for items like tax cuts and renewable energy research. How much does our nationwide cap-and-trade program currently deliver?

Oh wait, we don’t even have one.

We do have the recently launched Regional Greenhouse Gas Initiative cap-and-trade system here in the Northeast though! So far, it’s generously produced carbon permit revenues to the tune of $140 million.

I’m not reaching when I say there’s a disconnect somewhere here. Political will, absent backbreaking compromises, is obligatory. Money is necessary, but spending it well is a requirement. To use a campaign turn-of-phrase — “hope” is not a strategy.

Much political capital and money will be spent on delivering energy research, development, and deployment (RD&D) but we cannot be but surprised when our lofty expectations are not met by the broken system we have so firmly institutionalized. How the aspects of RD&D end up being implemented will determine if a new energy paradigm is realized.

What does the current state of deploying energy innovation look like then?

Our transmission system is a jigsaw puzzle of authorities, regulations, models, governments, and utilities, all with their own agenda and gunning to keep their piece of the pie. The bulk of the work done at the Energy Department’s National Labs has little to do with energy.

When was the last time that you heard about an innovation that came out of the Department of Energy that the oil companies and staid electricity companies didn’t like?

Cap-and-trade will be birthed in such a frenzied holy war of lobbying and deal-making such that that nothing effective will be left unscathed.

How about energy development? We’ll say a prayer and move quickly past the maimed corpses of “cleantech” venture capital firms while welcoming the departure of their penchant for faddish jargon.

We’re left with energy research. Ah, research ­— the pure one, untouched and uncorrupted by such silly things like politics, or people.

We here at MIT like to imagine that we are at the cutting edge of everything. MIT, whose name rings loud and clear to distant lands, draws into its realm a highly disproportionate share of Asian tourists to clog up Lobby 7. The Institute works hard at maintaining its image of the technological elitism. (What other university has so many rules regarding the use of its painfully ugly logo?)

The MIT Energy Initiative has produced influential reports shaping a future cap-and-trade program and carbon capture and sequestration in addition to single-handedly breathing new life into the Department of Energy’s geothermal technologies program. Any Joe Six-Pack off the street would be impressed.

That’s why the MIT Energy Conference at the end of this week will be so disappointing.

The flagship energy event at the flagship technology university would be a place where one would normally expect presentations of groundbreaking research. Yet, the Energy Conference ends up as little more than a glorified networking event.

Last year’s speakers included a partner at noted venture capital firm Kleiner Perkins Caufield & Byers, John Doerr, who gave a speech and managed to refrain from crying about climate change like he did at a TED conference. Jim Rogers, CEO of Duke Energy — the nation’s third-largest corporate emitter of CO2 — did his best to persuade people that he’s serious about the threat of climate change (convincing) and that he deserves cap-and-trade permits for free to make it easy (not so convincing).

Frankly, the reason there is little homegrown substance to counterbalance such self-serving displays at the MIT Energy Conference is that hardly any groundbreaking energy research is actually done at MIT or any other university. This is where energy research fails to live up to its promise.

Unlike research in — for instance — lasers or designer drugs, university energy research lags behind that of industry and lacks the resources that large multi-billion dollar companies have at their disposal. What few potential scientific breakthroughs that universities do produce are so far from large-scale deployment that these technologies will need to be slowly nurtured toward success while being exposed to the whimsy of human affairs we call politics.

I’m not alone in my disillusionment with university energy research. Harvard’s Energy Technology Innovation Policy (ETIP) research group and the Brookings Institution have in the past few weeks released reports on revamping energy research but do little to solve the problem. Harvard’s report produced a number of maddeningly vague policy recommendations like “Develop, publish, and implement a comprehensive U.S. energy innovation strategy”. Brookings study reheats the old idea of regional research clusters between government, academia and business by simply sticking the word “energy” at the front.

Some days I worry about the future of the country and the world. The other days I read the paper so I can know what in particular to be worried about.

I do have one bit of hope: the Advanced Research Projects Agency — Energy, otherwise known as ARPA-E. Amply funded in the stimulus bill after several years of sitting idle without appropriations, ARPA-E is modeled after the Defense Department’s DARPA with the high-risk, high-reward research that produced the Internet.

ARPA-E has potential for energy innovations but probably because it doesn’t really exist yet. In this crazy world, maybe that’s really all the change we can hope for.