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Popular Government Energy Program Seeks a Big New Twist

Energy Secretary Ernie Moniz tours Otherlab in San Francisco, an ARPA-E awardee.Energy Secretary Ernie Moniz tours Otherlab in San Francisco, an ARPA-E awardee.
Energy Secretary Ernie Moniz tours Otherlab in San Francisco, an ARPA-E awardee.Ali Sheppard, Otherlab

It’s that time of year again when hundreds of researchers, entrepreneurs, investors, and policymakers from across the U.S. flock to an expansive hotel just down river from Washington, D.C. They’re there to show off, and check out, some of the most unusual—and potentially game-changing—new energy technologies in the world like futuristic batteries, engineered microbes that make biofuels, and high-performance solar materials.

The ARPA-E Summit is meant to highlight lab research, startups, and corporate R&D projects that the Department of Energy has supported with small grants through its ARPA-E program. That program, which kicked off in 2010, gives funds to potential energy “moonshots” that are at an early stage and are highly risky, but if actually successful could be particularly important for the generation, storage, and efficient use of energy.

But for the first time since the program was created, it’s now looking to expand significantly beyond its original mandate to support moonshots. The program is hoping to create a new fund focused on supporting and growing later-stage energy technologies.

That fund, called the ARPA-E Trust, could grow its annual budget over time, until together with the moonshots, the two programs could reach a collective $1 billion by 2021. That’s about three times ARPA-E’s current annual budget ($291 million) for 2016.

The desire to expand the ARPA-E ambition partly comes out of the Paris Climate Conference, where for the first time last December close to 200 countries agreed to set goals to lower greenhouse gas emissions. During the two weeks of meetings, a handful of governments, including the U.S., agreed to attempt to double their budgets for energy research and development. The new plan for the ARPA-E Trust, and the billion-dollar budget, is one way the DOE is trying to pursue this commitment, called the “Mission Innovation” initiative.

The new pursuit puts the ARPA-E program in a unique and possibly unenviable position. The program has long been the poster child of the Department of Energy, with its focus on technology and innovation, its rigorously monitored tracks, its daring mandate, and its modest spending. The program has managed to get bipartisan support, even in years that House Republicans cried foul over the DOE giving hundreds of millions of dollars in loans to failed companies like Solyndra and Fisker Automotive.

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But its traditionally small budget also has meant that the program has had a smaller effect on the energy landscape than a much more well-funded program could have. Over its seven years of life, the program has invested $1.3 billion into 475 projects. It might sound like a lot but for comparison’s sake it’s about one-tenth of how much on-demand car Uber has raised from private investors. One of the corporate sponsors of ARPA-E this year, massive German chemical company BASF, has an annual R&D budget of 1.9 billion euros ($2 billion), or about seven times the annual budget of ARPA-E this year.

Many have called for ARPA-E to be expanded over the years. The American Energy Innovation Council, a group made up of business leaders such as Bill Gates, have been requesting that ARPA-E’s annual budget be boosted to $1 billion a year. In fact, when the program was created its own intentions were to hit $1 billion a year at some point.

But due to the impasse in Congress, and some of the politicization of the DOE’s other programs, ARPA-E’s budget has been limited since its inception. The program kicked off with $400 million in its first year, funded by the stimulus package, and has hovered between $200 million and $300 million ever since.

The big question is will the program be able to get Congress to approve the idea of its new trust and a potential collective $1 billion budget by 2021? It’s unclear. ARPA-E Program Director Ellen Williams tells Fortune: “I just don’t know. All I know is my job is to tell the story of what we’ve accomplished, what we can accomplish, and how powerful this model of doing R&D really is. If it doesn’t go this year, people can ponder it for future years.”

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It could be particularly hard to get new ideas approved in Congress in the run up to a presidential election. It could also be difficult to get the current Congress to buy into more funding for clean energy ideas in general, due to the controversy over President Obama’s Clean Power Plan. That plan seeks to limit carbon emissions from the power industry, and is meant to be enacted by the Environmental Protection Agency, essentially bypassing Congress. (The Supreme Court recently granted a stay, halting the Clean Power Plan).

The ARPA-E program could very well just continue as is, with modest funding, for more years to come. But speakers at the event will likely try to bring the issue to broader attention this week. Former Vice President Al Gore speaks on Tuesday, while Energy Secretary Ernie Moniz and World Bank Group President Jim Yong Kim take the stage on Wednesday.

Regardless of the future of the program, per usual, this year scientists and researchers are showing off their innovations throughout the week. If you stroll among the booths that detail the hundreds of projects in the program, you’ll find some nutty ideas like new designs for fusion nuclear reactors, batteries that use air, and technology that can harness the energy of dust devils.

Bill Gates recently called for thousands of new energy ideas, or “energy miracles.” “Even ones that might sound a little crazy,” he pointed out. At the ARPA-E Summit, you can find these crazy energy ideas in spades.