This Friday is Manufacturing Day, when more than 2,500 manufacturers (and counting) will open their doors and show the world what modern manufacturing looks like. When it comes to energy and the environment, modern manufacturing and the solutions we provide are the key to solving the many challenges that confront us.
The good news is that we’ve come a long way already. Disruptive technologies have already changed the way we produce and use energy and will continue to do so in the future. Hydraulic fracturing and horizontal drilling unlocked vast natural gas resources and changed the face of manufacturing in America. Advanced technologies like battery storage, demand-side management, electric vehicles, small modular nuclear reactors and many others will almost surely do the same.
It’s great to talk about those transformational technologies, and while a competitive market is generally the best way to encourage their development, the reality is that both the public and the private sector have roles to play. For instance, government can play a positive role in support of the research and development (R&D) of alternative energy sources or technologies at a pre-commercial stage. There is also an important federal role to be played in basic R&D of new high-risk energy efficiency and waste minimization technologies in energy-intensive industries, particularly where private-sector incentives may be inadequate.
That brings us to the Advanced Research Projects Agency – Energy (ARPA-E), a 10-year-old program that has found itself in the middle of a debate over the role of federal spending on energy R&D programs. Manufacturers have long supported ARPA-E, which we believe is a valuable program to fund high-risk, transformational energy technologies that the private sector may not yet be ready to invest in. The Department of Energy reports that, since 2009, ARPA-E has provided more than $1.5 billion in financing to more than 580 projects. Fifty-six of those projects have formed new companies; 68 projects have partnered with other government agencies to further development; and 74 projects have attracted more than $1.8 billion in follow-on funding.
The National Academy of Sciences (NAS) recently completed an assessment of the program and concluded that ARPA-E has been successful and deserves a longer timeline to pursue its statutory mission. The NAS found that ARPA-E “has the ability to make significant contributions to energy R&D that likely would not take place absent the agency’s activities.”
Several case studies bring this point home. ARPA-E funding helped enable a company called Smart Wires to develop a device that clamps onto existing transmission lines and controls the flow of power within the lines. This is an area of major need for manufacturers, who demand always-on electricity despite a rapidly changing power grid. ARPA-E’s funding allowed Smart Wires to build prototype devices and deploy them for testing. Since this successful test round, Smart Wires has undertaken several rounds of successful fundraising, including $30.8 million in 2015 to bring its PowerLine Guardian product to commercial production.
ARPA-E provided partial funding for a company called 1366 Technologies to develop a novel silicon wafer manufacturing process that could dramatically reduce the cost (and increase the durability) of solar panels. Not only did this company succeed, but the product developed ultimately replaced the leading technology options that had received venture capital funding. ARPA-E’s funding allowed 1366 Technologies the freedom to pursue the basic science that helped lead to commercialization of this technology.
Finally, ARPA-E provided funding for Harvard University to develop slippery surface technologies that yielded extreme energy savings in many industrial settings. After two years, the research had progressed well enough to enable the launch of a startup company, SLIPS Technologies, Inc. (STI), to broadly commercialize the technology. STI was launched in October 2014 with venture capital financing led by the venture capital arm of chemical manufacturer BASF Corporation.
The National Association of Manufacturers supports legislation to keep ARPA-E funded and operating at a high level. In the Senate, Sens. Lisa Murkowski (R-AK) and Maria Cantwell (D-WA) included a provision reauthorizing ARPA-E in their comprehensive energy bill, the Energy and Natural Resources Act of 2017 (S. 1460). In the House, Rep. Eddie Bernice Johnson (D-TX) has introduced the ARPA-E Reauthorization Act of 2017 (H.R. 3681), which contains similar language to the Senate provision.