How does the Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E) manage the risks associated with funding cutting-edge energy technologies with uncertain outcomes? During today's OnPoint, Cheryl Martin, acting director at ARPA-E, discusses lessons learned from failed projects, the agency's funding plans moving forward and the importance of public-private partnerships in bringing new technologies to commercialization. Martin also talks about upcoming project investments for carbon capture and storage and battery storage.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Dr. Cheryl Martin, acting director at the Department of Energy's Advanced Research Projects Agency for Energy, more commonly known as ARPA-E. Dr. Martin, thank you so much for coming on the show.
Cheryl Martin: So glad to be here to chat with you today.
Monica Trauzzi: Dr. Martin, ARPA-E is tasked with jump-starting energy technologies in an ambitious way. Many of the projects you fund have an uncertain outcome. So how do you manage the risk associated with that uncertainty?
Cheryl Martin: So, ARPA-E's mandate is the development and deployment of transformational energy technologies, so we're supposed to really swing for the fences, so to speak, right? And so when we select a program area to work on, we set a metric of probably value and cost might be the best way of describing it, so performance metric and a cost metric. And we ask all the bright minds across America to come up with ideas on how to get that. And we'll select maybe 10 to 12 ideas going after that same objective. We'll fund them all, and with them we set milestones every quarter over the three-year period we're funding them, and we meet with them every quarter and look at how they're doing.
And so you're managing risk, then, across a whole bunch of projects in an area of high importance, and so we know they won't all work. Science will get in the way. It won't make sense on a cost basis, but along the way you learn things and you know how to ask the next question. Sometimes you combine things, but it's actually, I think, a really effective way of getting a lot of thought in an area.
Monica Trauzzi: I know one of the things you discussed at your most recent summit was the integration of private funding. How critical is private funding to the projects that you're working on in order to get them across the finish line to that point of commercialization?
Cheryl Martin: It's critically important. I mean, we're starting pretty early stage, pretty far back in the pipe with these ideas, some of which people will say, "That's crazy; it won't work." But we work with the project teams over the three years. Many of our projects have corporate partners with them, so it might be a university and a small corporation or a university and a large corporation, so we bring that together from the beginning so that that information from the market can be present in the project, and people get to have a relationship over the three years.
So oftentimes a partner on the project will help move it forward, but then we also bring outside groups, so if we're in the auto sector we'll get lots of the automobile companies to be looking at these projects over time. So what becomes impossible becomes plausible, and all of a sudden they think, "Well, hey, that's working. I can get my management behind helping to move it to the next step." So we actually follow that quite closely and look at how that's happening over time.
Monica Trauzzi: What do the failures look like, though, and what do you learn from those failed projects?
Cheryl Martin: Well, I think you said the key thing; What do you learn, right? Failing would only be not to act on what we know, so when we realize that we're up against a technical problem that can't be solved, we stop the project. That's a great thing about ARPA-E, right? So we're not just running projects where we all know it's not going anywhere, so we've had university projects. We've had big companies say, "This isn't working." We agree and we just stop the project and then focus in on the ones that are working to move them forward. So, the real knowledge is in the acting on what you know and acting quickly. Fail fast. Take what you know and move to the next step.
Monica Trauzzi: So ARPA-E is in its fifth year. You recently held your fifth summit. What is next for the agency? What can we expect?
Cheryl Martin: Well, I think the first five years were setting it up, getting the first rounds of projects through. I think we're starting to see some really tremendous signs of success, right? We have 24 startup companies from the technologies that we've funded. We have about 16 of the projects that have gone on to partner with other government agencies, other parts of DOE, the Department of Defense, to do that next-stage sort of -- you might consider that test bed in order to get the demonstration of data and scaling that they'll need to be commercially viable. And then we've had -- I think it's 22 projects we put $95 million into have gotten $625 million of follow-on funding.
We also have probably four projects that have preliminary commercial sales. So I'm really excited to see already at five years those types of metrics, so I think as we look forward, we'll see more projects actually moving into commercial sales. I think we're continuing to see more and more interest from utilities, large companies, other parts of the innovation ecosystem value chain in helping to move these projects forward. So it becomes much bigger than ARPA-E.
Monica Trauzzi: And you recently announced $30 million in funding for solar technology. What are your expectations for where that technology is going and how your agency can actually influence the pace and direction?
Cheryl Martin: Absolutely. We view our role as catalytic and accelerative funding to get things to the next step. And in the case of this solar program -- we call it FOCUS. They always have abbreviations. The FOCUS program is intending to look between what people would consider to be historically photovoltaics, so the very flat panels and concentrated solar, so those big mirror fields reflected up, looking in the middle of that space to say, "Wait a minute. Aren't there other ways of thinking about this problem to get solar where you can use more of the sun's rays and have it be more dispatchable?" So you could use solar when the sun isn't shining a little bit more. And so we're hoping to, again, expand people's idea of what's possible, have solar be more useful and more ubiquitous and deal with some of the challenges, even though solar's progressed tremendously in the past several years.
Monica Trauzzi: Carbon capture and storage technology, it's a critical component of EPA's New Source Performance Standards for power plants. How does the technology get up to speed in a quick, economic way?
Cheryl Martin: Absolutely. Well, ARPA-E's role is looking at second, third, fourth generation, well out beyond the current technologies that can be implemented. We have some really exciting technologies we've funded over the past several years, things using technology from the aerospace industry to actually spin out the CO2 from a flue-gas stream or to capture it in a way that it drops out as solids, could be easily separated, so taking the whole idea of how do you make something simple to implement less moving parts, less chemicals so that you can think about these things as being readily installed.
But we're early stage, but we're really pleased that three of the projects we funded recently for a competitive solicitation with Office of Fossil Energy are going to go to the next stage of scale starting right now. So, by having our funding line up against fossil energy's funding and getting more and more of the corporate partners, we're going to be able to be as accelerative as you can for something as big as carbon capture with getting it to the market, but we're very, very excited about the projects that are looking quite promising in this space.
Monica Trauzzi: Is there a timeline that you have in mind for getting those projects to commercialization?
Cheryl Martin: Well, we launch and then you test along the way, right? The next critical thing is going to be do the scaling factors work. When they go to a real flue-gas stream, are they going to be able to see the same types of numbers we saw? And that's critical, right? You don't want to keep scaling something if those numbers don't look like they're going to be workable. And so you look at a few years in each of these stages, so we'll get there. You see that folks like Duke Energy, Southern, Tri-State, right, all these guys are stepping up and partnering on projects and looking at National Carbon Capture Center. So we're very encouraged that this will go as fast as we all can pull it through with each of us playing our own roles.
Monica Trauzzi: The electric utility sector is undergoing huge change, and battery storage is really seen as a critical component to expanding the use of renewables. Talk to me a bit about some of the projects, the battery storage projects that you're involved in, and where you see and how quickly you see that technology coming to the forefront so that it could be implemented into the grid.
Cheryl Martin: Absolutely. I think that's one of my favorite stories about what we've got. ARPA-E is invested heavily in storage because it is so important to the grid, right, whether you're thinking about integration of renewables or you're simply thinking about the robustness of the grid or its resiliency and hurricanes and other things, right? There's a lot of reasons we should all be excited about storage coming to be. We've funded a number of things. We've funded projects -- City University in New York. They take batteries like you would have historically in your flashlight that aren't rechargeable. They got the technology to be rechargeable, scaled it up into a system that can load-balance their building, and they put a spinout in Harlem called Urban Electric Power. So they're in development now to actually be in the commercial market imminently.
Another company that was formed out of technology from MIT called Ambri is taking technology -- liquid metal battery. You literally think about an aluminum smelter. We're stopping partway, and they're actually scaling up a pilot plant facility in Massachusetts as we speak, heading towards larger-scale production in 2015.
And we have a third example, a company, Primus Power out of the West Coast, and their technology's being demonstrated right now in a partnership with Raytheon and the Miramar Marine Base in California in a microgrid, solar panels, the battery storage, as well as electronic components to allow the base to load-balance itself but also have 72 hours of time if they do lose their connection to the grid. So it's very, very exciting, and then we have some further-out technologies, technologies from components that you find in rhubarb coming out of Harvard, right? They're not ready to be tested on the grid today, but they know what they need to do, and hopefully we'll be able to continue to support them in the coming years to make those a reality as well.
Monica Trauzzi: Very interesting. Thank you so much for coming on the show.
Cheryl Martin: Thank you for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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