Over the years, the U.S. government has spent more than $300 billion in direct expenditures on energy R&D and demonstration that have been combined with a variety of indirect financial incentives such as tax credits, loan guarantees, guaranteed purchase and even equity investments.Unfortunately, the resulting pace of innovation generated by this public investment has not been sufficient given the urgency and scale of today's energy challenge. "For more than 25 years, there has been a steady decline in public investment in energy-related R&D in the U.S.," according to Jackson and Wince-Smith. "Between 1978 and 2005, the U.S. Department of Energy budget for energy R&D dropped by more than 85 percent," they said in a statement. Ogden, Podesta and Deutch propose a new approach for energy R&D in the U.S that will set in motion an innovation revolution by the following initiatives:
- Creating an inter-agency Energy Innovation Council to develop a multiyear National Energy R&D strategy for the nation;
- Increasing the national energy R&D program budget to at least twice today's level;
- Launching a sustained and integrated energy R&D program in key areas;
- Creating an energy technology career path within the civil service; and
- Establishing an Energy Technology Corporation to manage demonstration projects.
Despite signs of a weakening economy, the credit squeeze and volatile public markets, investment in the sector is expected to persist, priming significant exit activity by 2009 and throughout 2010, then accelerating as more companies graduate through a well-fed pipeline. Investment in 2008 will likely continue to flow into wind and solar and channel out to an increasingly diverse range of sub-sectors, including next-generation biofuels and energy storage technologies.Today's soaring oil and gas prices have forced us to confront the reality of our energy circumstances. Unfortunately, how we go about addressing our energy problems is less than clear. Any fast-paced innovation and accelerated investment flows will inevitably produce winners and losers; but if we are to loosen our dependency on foreign oil and strengthen our global competitiveness, we must begin by investing and driving innovation to create new energy solutions, jobs and industries. As one IMT reader recently commented: "Blaming the president, Congress or big business doesn't accomplish anything. We are the innovators come up with innovative ideas for alternative sources of power." Resources World Energy Outlook 2007 Edition World Energy Outlook, 2007 A New Strategy to Spur Energy Innovation by Peter Ogden, John Deutch and John Podesta Center for American Progress, January 2008 Comment on the State of the Union Address and Energy Productivity from Leaders of the Energy... AllBusiness.com, Jan. 27, 2008 Energy Security for American Competitiveness National Association of Manufacturers, Feb. 14, 2007 Cleantech Comes of Age PriceWaterHouseCoopers, May 2008