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Risky energy research faces uncertain future

ARPA-E's aggressive approach to managing research wins support — but perhaps not federal dollars.

When the US energy department's new agency for high-risk, high-impact energy research announced a competition for carbon-capture technologies in December 2009, David Sholl decided to take the plunge. Sholl and his colleagues at the Georgia Institute of Technology in Atlanta had an idea for membranes that make use of a new class of porous crystalline compound to filter carbon dioxide from power-plant exhaust. A month later they had submitted a proposal to the agency, called ARPA-E (Advanced Research Projects Agency-Energy), and in April 2010 they won a US$1-million, two-year award.

The first money arrived in July, and two weeks later, Sholl says, his team got a lesson in ARPA-E's hands-on style. "They started calling and saying, 'What have you got done?'" Sholl says. "I'm used to the money-over-the-fence approach with science funding, but this is a much more collaborative sort of relationship." A year into the first round of projects funded by ARPA-E, scientists, businesses and venture capitalists say that the model is already creating a powerful ecosystem that cultivates entrepreneurial science. At least six ARPA-E projects, targeting technologies from solar power to wind energy and batteries, have already gone on to earn additional backing from venture capitalists, and President Barack Obama's administration is eager to scale up the programme. But budget cutting in Congress could stifle the agency before it has a chance to prove itself.

ARPA-E, which received its first funding in 2009, was modelled on the Defense Advanced Research Projects Agency (DARPA), famous for its development of the Internet. Like DARPA, ARPA-E seeks to identify game-changing ideas that are too radical for agencies such as the National Science Foundation. Its research managers then actively cultivate each project, unlike the hands-off approach taken by basic-research agencies.

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The approach leaves little room for serendipity, but Sholl says that it is an effective way to keep research moving and focused on a specific, commercially relevant goal. "One of the huge advantages of the ARPA-E programme is that there is a well-defined industrial target," he says. "ARPA-E is kind of god's gift to venture capital," agrees Matthew Nordan, vice-president of the venture-capital firm Venrock in Cambridge, Massachusetts. "It provides an independent yardstick as to whether something is interesting enough and whether it meets its yard posts."

At ARPA-E's second annual Energy Innovation Summit in Washington DC last week, the mood was upbeat and the speeches were inspirational, underscoring science's role in keeping the United States competitive in the global race for clean energy. But the fiscal backdrop is ominous. In Congress, Democrats and Republicans remain at loggerheads over federal spending, having temporarily averted a government shutdown last week when the House of Representatives passed a resolution that funds the government until 18 March (see page 144). Although the White House proposed a budget of $300 million for ARPA-E in the current fiscal year, the continuing resolution contains just $50 million for the agency, enough to launch at most one new research programme.

To date, the agency has committed $365.5 million to 121 projects in various fields (see 'Energy investment'). But all of that money came from the original $400-million appropriation in the economic stimulus package enacted in April 2009. Depending on how much more money comes through this year, the agency is already considering several new programmes in areas such as solar photovoltaics, the conversion of natural gas into liquid fuels, and energy technologies that reduce the consumption of water, rare-earth metals and other crucial materials. For fiscal year 2012, the administration has requested $550 million, which should allow further expansion.

ARPA-E director Arun Majumdar says that the agency is ready to move ahead once Congress resolves its funding for this year and next. But he received mixed messages from two Republican senators who attended the conference, Lisa Murkowski of Alaska and Lamar Alexander of Tennessee. Both lawmakers, while offering their support for ARPA-E, warned that Congress is in full budget-cutting mode.

The agency will soon begin making difficult choices about its first round of projects. Each project has measurable milestones, and Majumdar says that the agency will put each one on green, yellow and red alerts depending on how much progress it has made. Project managers will continue to work with the scientists to help them meet their targets, but yellow and red signal trouble if researchers don't start to make progress.

"We will help you as much as we can, but if it doesn't work, it doesn't work," Majumdar says. "Taxpayer money should not be given to things we know are not going to work."

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Tollefson, J. Risky energy research faces uncertain future. Nature 471, 145–146 (2011).

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