Belfer Center Home > Publications > Belfer Center Newsletter and other materials > Newsletter Articles > Preliminary Policy Recommendations for Enhancing Energy Innovation in the U.S.

EmailEmail   PrintPrint Bookmark and Share

"Preliminary Policy Recommendations for Enhancing Energy Innovation in the U.S."

Kelly Sims Gallagher (right) discusses energy challenges with newly elected U.S. Congressman Paul Tonko at the Kennedy School's annual orientation program for incoming members of the U.S. House of Representatives in December.
Martha Stewart

"Preliminary Policy Recommendations for Enhancing Energy Innovation in the U.S."

Newsletter Article, Belfer Center Newsletter, Belfer Center for Science and International Affairs

Spring 2009

Authors: Laura Diaz Anadon, Associate, Environment and Natural Resources Program, Matthew Bunn, Professor of Practice; Co-Principal Investigator, Project on Managing the Atom, Kelly Sims Gallagher, Member of the Board, Charles Jones, Former Associate, Energy Technology Innovation Policy research group, 2011–2013; Former Research Fellow, Energy Technology Innovation Policy research group, 2008–2010

Belfer Center Programs or Projects: Energy Technology Innovation Policy; Environment and Natural Resources; Science, Technology, and Public Policy


This article is adapted from the executive summary of the Belfer Center Energy Technology Innovation Policy (ETIP) report, "Tackling U.S. Energy Challenges and Opportunities," by Laura Diaz Anadon, Kelly Sims Gallagher, Matthew Bunn, and Charles Jones. The full executive summary and report are available at

The Obama administration and the 111th Congress face enormous challenges and opportunities in tackling the pressing security, economic, and environmental problems posed by the energy sector in the United States and worldwide. Improving the technologies of energy supply and end-use is a prerequisite for surmounting these challenges in a timely and cost-effective way.

Accelerating the development and deployment of advanced energy-supply and end-use technologies will require a comprehensive strategy integrating efforts from invention to deployment, including strong leadership, alignment of policy incentives, consistency of policies, and a long-term view. In the following sections we outline our preliminary recommendations for near-term actions to strengthen the U.S. effort to develop and deploy advanced energy technologies. Our analysis is continuing, and we will be publishing long-term policy recommendations later this year.

The budget recommendations in this paper are only for fiscal year (FY) 2010. They represent minimum levels based on ramping up from FY 2008 levels where such increases are most needed. They do not take into account the amounts provided in the recently approved economic recovery package.

Increase the Department of Energy (DOE) budget for energy research, development, and demonstration to $6,060 million in FY2010 (from $4,173 million in FY 2008), distributed as follows:

Basic Energy Sciences - $1,500 million

Progress in basic energy sciences is essential to developing new energy technologies.

Fossil Energy - $1,700 million

Carbon capture and storage (CCS) has been identified by most analysts as an essential component of any comprehensive plan to reduce carbon dioxide emissions worldwide. This level of funding is required to begin a series of commercial-scale CCS demonstrations in various conditions.

Electric Transmission and Distribution - $220 million

Smart grid technologies are needed to ensure reliable and efficient electricity delivery. There should be both a smart grid R&D program and regional demonstration projects.

Energy Efficiency - $770 million

Significant opportunities to improve energy performance exist in vehicle technologies, building technologies, and energy storage.

Renewable Energy - $850 million

Opportunities in the portfolio of renewable energy technologies - wind, geothermal, solar, and biomass - justify a substantial investment increase over FY 2008 levels.

Hydrogen - $220 million

There are more opportunities in fuel cell technology than are being explored, justifying a modest increase in the hydrogen programs.

Nuclear Fission - $350 million

Nuclear fission RD&D should focus on improving the factors that have limited nuclear power's potential as an energy option -- cost, safety, security, proliferation-resistance, and waste management.

Nuclear Fusion - $450 million

Fusion is a long term prospect that also advances basic science. The U.S. must meet its commitments to ITER and maintain other fusion work.

Develop, publish, and implement a comprehensive U.S. energy innovation strategy
The United States urgently needs a comprehensive energy innovation strategy that integrates the full range of policy tools throughout the innovation chain from basic research through widespread diffusion in order to maximize the efficiency and outputs of the U.S. energy innovation system.

Strengthen DOE's capacity to manage an expanded, integrated federal energy RD&D enterprise
DOE should pursue a portfolio approach with a broad set of technologies at every stage of technological development. The Obama administration should establish expanded information-sharing between different energy-innovation efforts, more effective coordination of programs with the private sector, and full integration with the national strategy for energy technology innovation.

Create mechanisms for managing both demonstration projects and high-risk, high potential R&D
Innovation at the pilot through commercialization stages requires procurement, funding, and decision rules more like that of private enterprise, to generate quality information about commercialized technology. In contrast, realizing opportunities for transformational technology requires stable, long-term funding, tolerance for risk, and the ability to learn from failure.

Encourage expanded private-sector investment in energy innovation
Entrepreneurs will react to new rules and laws by innovating. Setting a price on carbon will provoke development of innovative ways to reduce carbon emissions. Government must also elicit private-sector innovation through creating and managing effective public-private partnerships. The federal government should increase its support to private RD&D by making permanent and expanding the research and experimentation tax credit, and by providing tax credits for U.S. companies building clean-energy demonstration projects at home and abroad.

Strengthen international cooperation in energy research
The United States should expand international cooperation in energy technologies, to reduce the costs and risks of energy innovation, increase the pace of cost reductions through expanded learning and deployment, and encourage other countries to deploy the technologies developed.

Target and better coordinate incentives for large-scale deployment of energy technologies
The Obama administration should encourage deployment by setting a price on carbon and strengthening targeted incentives in particular sectors - and should integrate these incentives as one key element of the comprehensive energy innovation strategy recommended above.

The energy challenges facing the United States and the world are daunting. But with a comprehensive strategy for and investment in energy innovation, new approaches to managing the effort, and policies for moving new technology into the market, the United States can meet these challenges and seize the opportunity for leadership in energy technology.


For more information about this publication please contact the Belfer Center Communications Office at 617-495-9858.

For Academic Citation:

Anadon, Laura Diaz, Matthew Bunn, Kelly Sims Gallagher, and Charles Jones. "Preliminary Policy Recommendations for Enhancing Energy Innovation in the U.S.." Belfer Center Newsletter, Belfer Center for Science and International Affairs, Spring 2009.

Bookmark and Share

DOE FY 2011 Budget Request for Energy Research, Development, Demonstration, and Deployment: Analysis and Recommendations
By Laura Diaz Anadon, Matthew Bunn, Gabe Chan, Melissa Chan, Kelly Sims Gallagher, Charles Jones, Ruud Kempener, Audrey Lee and Venkatesh "Venky" Narayanamurti

Tranforming the Energy Economy: Options for Accelerating the Commercialization of Advanced Energy Technologies—Framing Statement
By Laura Diaz Anadon, Erik Mielke, Henry Lee, Matthew Bunn and Venkatesh "Venky" Narayanamurti

Transforming the Energy Economy: Options for Accelerating the Commercialization of Advanced Energy Technologies
By Venkatesh "Venky" Narayanamurti, Laura Diaz Anadon, Hanna Breetz, Matthew Bunn, Henry Lee and Erik Mielke

"Acting in Time on Energy Policy"
By Kelly Sims Gallagher

Events Calendar

We host a busy schedule of events throughout the fall, winter and spring. Past guests include: UN Secretary-General Ban Ki-moon, former Vice President Al Gore, and former Soviet Union President Mikhail Gorbachev.