department of energy innovation

America’s clean energy policy has gone through significant changes in the last four years: game-changing public investments in clean energy innovation, funding for ARPA-E, and the creation of collaborative science and research hubs to name a few. Nonetheless, policymakers and clean energy experts all agree that it isn’t enough to address the United States’ staggering energy and climate issues.  More aggressive policy support is required. But the federal clean energy policy debate is in such disarray that a full scale advocacy campaign is needed to simply extend one existing clean energy tax credit (the PTC) for one year. It doesn’t inspire much confidence that implementing bigger and better clean energy policy is possible anytime soon.

Yet absent new national policy, significant reforms continue under the radar. Since 2009, clean energy leaders at the Department of Energy (DOE) have undertaken the difficult task of reforming it from within, the goal being to more effectively spur the development of advanced clean energy technologies.  As President Obama’s second term starts, the reform torch is being passed to new DOE leaders driven to continue reshaping the agency.

Most recently, forward-looking officials like Assistant Secretary of Energy David Danielson and Acting Chief Operating Officer Matthew Dunne are meticulously implementing institutional reforms at the Office of Energy Efficiency and Renewable Energy (EERE) – DOE’s advanced R&D and technology demonstration office – aimed at transforming it from a stagnate, thirty year old bureaucracy into America’s premier energy research organization. While not as splashy as the big policy changes of the last four years, this quiet clean energy innovation revolution is a leap in the right direction and absolutely critical to creating a more flexible, innovation-focused DOE mission.

Re-organizing Program Offices to Build Better Research Coordination

A major criticism of DOE research programs is so-called “technology stovepiping.” Traditionally, energy research investments are sliced and diced into technology buckets that often incapacitate research coordination and limit the ability of EERE to set broader, cross-cutting technology and innovation goals. The Solar Energy Technology Office manages R&D investments in anything related to solar power. The Advanced Manufacturing Office manages investments in emerging technologies related to building a competitive clean energy manufacturing industry. And so on. All told there are ten technology programs organized into two larger offices: Energy Efficiency and Renewable Energy, each with its own Deputy Assistant Secretary.

While reducing or eliminating the perverse impacts of technology program stovepiping requires larger policy reforms from outside of DOE, EERE is re-organizing itself by energy markets to boost research coordination within the existing program structure. The old organization split transportation research programs between the two Offices: the Vehicle Technology Program was under Energy Efficiency and the Biomass and Fuel Cell Programs were under Renewable Energy, even though all three programs invested in research aimed at the same market. To rectify this, EERE is organizing the three technology programs under a new, third Office of Transportation with its own Deputy Assistant Secretary. The Office of Renewable Energy now is the Office of Renewable Power – focused solely on the electricity generation market.

On paper, these changes may not seem like much (so inside baseball!), but in practice, they help focus the goals of each research office and provide the immediate benefit of streamlining investments.  All transportation research, in particular, under a common Deputy Assistant Secretary, can operate under common goals and be coordinated in a much more efficient manner.

Applying the ARPA-E Model to Project Management

ARPA-E is considered the premier energy R&D institution within the American innovation ecosystem.  Its flexible, yet rigorous research management style is viewed as industry-leading and one of the main reasons predecessor organizations like DARPA (the Department of Defense equivalent) have produced economy-altering breakthrough technologies like the Internet – and why ARPA-E is beginning to produce its own breakthroughs after only four years of existence. As a result, EERE is implementing ARPA-E style project management reforms to boost the effectiveness of its investments.

The most important change is EERE’s renewed focus on research outcomes. Like ARPA-E, EERE is now cooperatively negotiating research milestones into its funding opportunities with its National Lab, industry, and University research partners so that its investments are geared toward technology outcomes (e.g. cheap solar panels, high performance vehicle batteries, etc.). Previously, EERE administered funding in a simpler grant-making style that took a more hands-off approach, leaving open the opportunity that research investments didn’t meet expectations or didn’t provide flexibility to move in different research directions.

And like ARPA-E, to ensure that its research investments are actively working towards successful outcomes, EERE is empowering program management to terminate projects that are not successfully meeting its goals. Managers now have a “go/no-go” authority to decide in a collaborative process with researchers whether a project is worth pursuing further. If not, terminated project dollars can then be re-allocated to more promising research within EERE.

In practice, EERE’s shift to more active program management cannot be understated. It strongly incentivizes researcher accountability, which can improve research outcomes, accelerate innovation, and ensure that public investments don’t get “stuck” funding dead-end research when more promising avenues are available. On one hand, in tough fiscal times and already contentious federal budgets, the United States needs to get the most innovation out of the research dollars it’s already investing. On the other hand, it provides a much more flexible and rational research ecosystem to allow scientists and engineers to choose the best and most promising research.

Making EERE Best in Class

The reforms being implemented at EERE can best be described as extending the splashy policies of the last four years (e.g. ARPA-E, Hubs, strengthening lab to market linkages) to the rest of DOE. Without a doubt, both sets of reforms could have long-lasting benefits.  The quiet clean energy innovation revolution at EERE is particularly noteworthy because of the central role EERE plays in spurring innovation. Its investments in R&D and technology demonstration are vitally important to developing cheap, high-performing clean energy and moving next-generation technologies closer to market. In FY2012 alone, DOE invested nearly $2.6 billion in clean energy research, development, and demonstration, largely through EERE. Getting more innovation out of those investments could significantly alter clean energy technology development in the coming years, even with federal gridlock.

Photo credit: Wikimedia Commons.

Piece originally published at Forbes.