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By Matthew Stepp on Mar 26, 2013 with no responses

Linking Research to Market: Talking Energy Innovation with ARPA-E’s Cheryl Martin

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I recently sat down with Dr. Cheryl Martin, the Deputy Director of ARPA-E, the federal government’s premier program for investing in high-risk, high-reward energy research and development. The interview covered a lot of ground and touched on different aspects of America’s energy innovation ecosystem, so it’s being published as a multi-part series, lightly edited, and broken up into cohesive topics. In part 1 of the interview, Dr. Martin took a deep-dive into the lessons ARPA-E has learned in its few short years of existence.

In part 2, we cover a pervasive issue in innovation policy: linking research and emerging technologies to market. In particular, a major concern of ARPA-E is that doesn’t have a dedicated end-user that’s going to procure emerging technologies, like DARPA has at the Department of Defense (DOD). DARPA is ARPA-E’s kindred spirit and many opine that until it gains a large-scale early adopter, its impact won’t reach that of its defense brethren because it won’t be able to bridge the technology “valleys-of-death” that plague many new innovations from reaching commercial scale.

Of course, ARPA-E’s agency home — the Department of Energy — doesn’t procure energy technologies and isn’t a strong end-user. As a result, ARPA-E has tried to address this in two ways. First, it built its own end-user relationships including a Memorandum of Understanding with the DOD and agreements with Duke Energy and the Electric Power Research Institute (EPRI). The goal is to provide research awardees with concrete avenues to test, demonstrate, advance, and eventually scale-up their innovative energy technologies.

And second, as Dr. Martin discussed in part 1 of the interview, ARPA-E begins building market relationships with awardees from the beginning, “so there can be an appropriate government handoff with things that matter to [the private sector].”

Moving forward, the question is whether more needs to be done to provide ARPA-E with dedicated end-users for its successful awardees. Is there a policy need or is ARPA-E chartering its own unique path compared to DARPA?

Cheryl Martin: We’re definitely creating our own thing separate from DARPA. But the Department of Defense itself is the largest single user of energy in the United States. So many of the things we invent matters to the DOD too. They’re a significant potential short-term and long-term customer. We spend a lot of time trying to figure out where their interests are. Where is the Navy going? Where is the Air Force going? What about linkages with the DOD’s research and testing programs at SERDP and ESTCP? Is their overlap on things we’re working on?

For example, we had a workshop where we invited 30 program managers from the various branches of DOD and DARPA. We went through our program areas and broke up into working groups to discern if what we’re doing and what they’re doing matches up or not. And, actually, the cool thing is that these working groups help breakdown siloes across the government. I think having the conversation around technologies like power electronics, smart grid, and so on, drives them to see some commonality. It feeds some of that excitement of what may be possible.

And in many ways, like the early successes with ARPA-E’s evolving relationship with industry, have there been any successes from the early collaboration with DOD as an end-user?

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Dr. Cheryl Martin, Deputy Director of the Advanced Research Projects Agency–Energy (ARPA-E).

Cheryl Martin: We’ve certainly seen some success. The Navy just picked up five projects in the air conditioning space to help move them forward. We’ve also seen this with our hybrid energy storage project we call AMPED on how to get more out of your batteries. From the beginning, before it was ever a project or a workshop, we had a conversation with the Navy about what they were thinking in hybrid energy storage. So we stay in close touch because the idea is that over the next three years our AMPED projects can hopefully fit right into their  advanced programs.

So again DARPA, because they’re in the Defense Department, had the attention and the focus of the DOD. We have to go out a little more and explore for ourselves, but we see that as an opportunity, not an inhibitor. Right now we see some pretty obvious places that we can collaborate, but since we’re small so we can adapt quickly to the changing needs and markets of the industry as well as what DOD needs. So I’m excited about working with the military that way.

The DOD does provide a natural end-user for a number of energy technologies like advanced heating and cooling, battery storage, micro-grids, and clean drop-in fuels, but it doesn’t offer a natural fit for all technologies. Do you think the military is going to be the natural path for most ARPA-E successes? What other relationships do you need to build?

Cheryl Martin: No, certainly not all technologies. But it will be a significant path because they might pick up a dozen technologies or they’re going to do a test bed at a base or something like that. So in certain areas it will make sense. The other part of your question — what else do we need? Ultimately, the bigger broader universe of public companies is really the pull that’s going to come through.

We really emphasize understanding the value chain for all the areas we’ve invested. What does the air conditioning market look like? Who makes them? How do they feed to each other? We actually parsed apart these relationships and talked to our awardees about their markets. They naturally make better connections.

I feel over time we’re getting good relationships between partners on projects. I gave the example of Enpirion partnering with Virginia Tech on voltage regulators [at the Energy Innovation Summit]. You’re seeing teams form that are multi-disciplinary and some of these relationships are taking place by just having the community develop and are asking questions like, what does the world look like when you begin to approach technological challenges in ways that nobody has thought about before? I think the other way we’re seeing collaboration — and DARPA does this — is teaming lists. In other words, we’re running a FOA [solicitation] in a space and we want to encourage multi-disciplinary teams to work together. So if you think you have the particular skill sets and you would like to work on this project with somebody put your name and skill set out there. We believe that different technical communities working together can really drive breakthrough technologies in this space.

Finally, I think you’ve got to be out there kind of stirring the pot in these different ways. We’ve tried to get out there, and I think part of my job is to be out there talking to folks saying that this can work, hearing their stories, and telling ours. This is going to move things forward. It’s not magic and it’s not going to move tomorrow, but I do feel from an innovation culture that we’re reaching tipping points. That people are starting to believe that this can work this way.