Reforming Mission Innovation

Key Actions to Ensure Efficiency, Accountability and Success for the United States

By Spencer Nelson

Introduction: Mission Innovation Activities 2015-2018

Mission Innovation (MI) is an initiative by 22 countries and the European Commission to increase collaboration on clean energy research and development (R&D). The initiative was launched in 2015 by the United States, France, India and a coalition of business leaders led by Bill Gates known as the “Breakthrough Energy Coalition.” The initial focus was to “double clean energy R&D funding within 5 years.” Baseline committed funding in 2016 was $14.8 Billion USD, with a collective goal of $30 Billion USD by 2021.¹

Mission Innovation Nations

MI’s activities are organized by a Secretariat that is currently based in the UK (though much of the original organizing work was conducted from the U.S. Department of Energy, with an inaugural 2016 meeting held in San Francisco). The Secretariat coordinates with member countries to organize the annual Mission Innovation Ministerial (MIM), as well as helping organize the activities of the Innovation Challenges. The 3rd annual MIM was held the week of May 22 in Malmö, Sweden and attended by U.S. Deputy Secretary of Energy Dan Brouillette and other high-level DOE officials. The MIM serves as a high-level gathering for government representatives to report on energy R&D progress and successes.

MI has no legally binding component² and is instead intended to be a voluntary cooperation program to advance R&D and reduce the cost of clean energy technologies. The U.S. clean energy R&D baseline in FY16 was $6.4 billion and conducted or supported by 12 federal agencies. DOE represented 75% of that baseline amount.³ At the time of the launch, the U.S. committed to increasing its investments from $6.4 billion to $12.8 billion. Under the current Administration and Congress, direct clean energy R&D funding at the DOE has increased by over $600 million since the baseline was set in FY16, the second largest increase in R&D after China.⁴

While overall global clean energy funding since the start of MI has grown by approximately 22% and has so far been on track to meet the final target,⁵ it’s important to note that this can be a bit misleading. In some countries the spending initially reported in the baseline was significantly lower than actual energy R&D spending, allowing a certain amount of gaming of the system.⁶

Global Mission Innovation Funding

MI has since expanded beyond a commitment to increase R&D funding and now includes other ways to make R&D more effective and transfer innovation to the private sector. One of the core activities of MI is technology-specific R&D collaboration between nations. These working groups are the primary benefit of any engagement with MI, offering useful research collaboration and eventually technology export potential. Seven different “Innovation Challenges” have been established under MI, including:

Smart Grids
Off-Grid Access to Electricity
Carbon Capture
Sustainable Biofuels
Converting Sunlight
Clean Energy Materials
Affordable Heating and Cooling of Buildings⁷

Each of these “Innovation Challenges” has one or more countries leading on coordinating activities. Each Innovation Challenge has begun organizing workshops and technology development roadmaps, which are intended to eventually lead to more successful R&D outcomes.

Trump Administration Precedent: Enhancing the Clean Energy Ministerial

While the current Administration has been assessing its position in MI, it has been much more engaged in the sister effort called the Clean Energy Ministerial (CEM), an international clean energy deployment initiative that has been operating for 8 years. Unlike MI’s research focus, the activities of the CEM have largely included coordination of data and best practices for the deployment of various clean energy technology areas, historically with a focus on intermittent technologies such as solar and wind energy. Energy Secretary Rick Perry has recently pushed for reforms within CEM to also support nuclear and clean fossil energy technologies. At the CEM meeting in May, the U.S. launched new initiatives on nuclear energy and carbon capture to ensure that these technologies are justly recognized for their global clean energy benefits. The U.S. is a leader in the development of both nuclear and carbon capture and inclusion of these technologies in CEM will result in new business opportunities for American companies. There has already been significant attention on these new initiatives, with 15 of 25 CEM members nations expressing interest in participating in the nuclear effort alone.⁸

Nuclear and Carbon Capture Take The Global Stage at the Clean Energy Ministerial (CEM)

A Vision for Future U.S. Mission Innovation Engagement

In a manner similar to CEM, the DOE could play a crucial role in improving MI for better innovation outcomes, baseload clean energy technologies and for American interests.

To that end, there are four key improvements that can be made to improve MI:

1. Outcomes/Goals-Based Structure: MI would benefit from removing the end goal of “doubling clean energy R&D funding,” and instead moving towards performance-based goals on either a country or technology-specific basis. Without a focus on tangible outcomes it is possible that money will be shifted around without producing viable results. One option is to elevate the seven (or potentially more) Innovation Challenges as the primary means of cooperation. Each of the Innovation Challenges should have a clear final research goal that can be used to measure success. For example, the Converting Sunlight Innovation Challenge could set a goal “to enable technologies that produce fuels at $3 per gallon of gasoline equivalent from sunlight within 10 years.” This would be a more precise change from its current vague mission “to discover affordable ways to convert sunlight into storable solar fuels.” Technology R&D programs and roadmaps distributed among each of the participating countries could be created for each challenge, as well as intermediate goals.

Restructuring the focus of MI in this way allows countries to play to their individual strengths, drives towards the actual goal of technology and provides a more useful accountability metric than funding alone. Furthermore, outcome-based restructuring will guide research activities to produce market competitive technologies that are more accessible to private-sector investors, such as the Breakthrough Energy Coalition. With clear performance-based outcomes, it is easier for private corporations (or potentially governments) to make advance commitments to purchase technologies developed by MI innovation challenges. The MI Secretariat should also look for opportunities to integrate with the International Energy Agency’s Technology Collaboration Programs to ensure no duplication of efforts.

2. Equity for Clean Resilient Technologies: Many of the current Innovation Challenges are biased towards both the power sector and variable generation technologies. But they can be improved. For example, adding nuclear power and energy storage as new Innovation Challenges would address resiliency concerns, while simultaneously combatting concerns surrounding global emission reduction benchmarks. Advances in energy storage technologies also have the potential to bolster grid reliability, reduce consumer electricity costs and improve the integration of variable renewable energy resources, such as wind and solar. Advanced nuclear has not yet been included in MI at all. And while energy storage is listed as a technology of interest for all MI nations, it does not have its own Innovation Challenge.

Another option to consider is international collaboration on low-emission or zero-emission industrial sector processes. The industrial sector is expected to grow at the same rate as the power sector globally over the next 20 years and is likely to contribute a much larger share of total emissions.⁹ There are interesting pilot projects taking place in Sweden¹⁰ and the UAE¹¹, but many interesting technologies remain in the lab.¹²

3. Ensure Accountability and Transparency: Data collection and management under the MI framework must be improved to accurately track progress and improve accountability. For example, the definitions of clean energy research, development and demonstration (RD&D) should be harmonized across the participating entities to the greatest extent possible. Some countries exclude certain types of investments, while others do not specify the categories of investment. For example, some countries include demonstration costs in their “R&D accounting,” while others do not. In order to support changing MI to an outcomes-based approach, additional reporting metrics from each country will likely be required. Some example metrics could include cost reductions by technology, rates of improvement in individual technologies and patents granted in clean energy R&D. While the “action plan” presented at the third MI Ministerial mentions additional strengthening of R&D reporting, it makes no mention of what metrics or granularity will ultimately be provided.¹³

4. Expand Participation (i.e. technology developers and engineers, and CEM): As with many international convenings, MI has been heavily focused on process, publicity and on spending increases, rather than on outcomes. The ministerial meeting largely featured government officials and academics, not private-sector entrepreneurs. Improving collaboration with investors and developers is important in bringing breakthroughs to commercial deployment. The original launch of MI was billed as a “dramatically scaled-up public research pipeline, linked to a different kind of private investor who is willing to truly put patient and flexible risk capital to work.” While the partnership with high net worth individuals through Breakthrough Energy Coalition (BEC) is a good start, it is insufficient in an outcomes-based Mission Innovation. With DOE participation and additional U.S. industry involvement, R&D goals within MI can be tailored to match industry needs. In setting performance-based targets on a country or technology basis MI countries should be working closely with private sector companies to ensure realistic technology development.

Additionally, there should be a greater focus on alternative mechanisms for overcoming the “valley of death” that many promising technologies face before commercialization. In addition to current collaboration between MI and BEC, MI could consider stronger cooperation with CEM and large corporate energy purchasers that can accelerate early demonstration and deployment. On the public side, countries may be interested in joint procurement of technologies coming out of MI funded programs to reduce overall cost. To date MI and CEM are seen as complementary but are looked at together as a potential pipeline to accelerate early deployment. On the private side, many of the early solar and wind developments were initially made possible because large corporate buyers such as walmart were willing to take a slightly higher risk on what was then early technology. Corporate purchaser consortia could be developed to commit to initial demonstrations of promising MI-produced technologies.

Conclusion

At its heart, the plan to increase focus on the role energy R&D plays in reducing emissions makes a lot of sense. Both R&D and new unrealized technologies will be required for a low-cost, pragmatic pathway to a low-emission economy. MI sets up a useful framework for international cooperation on R&D, but the initiative ultimately isn’t set up to directly realize breakthrough technology developments. By setting country and technology specific goals, rather than simply doubling spending, countries can create more efficient and effective partnerships. Making MI more technology-neutral and transparent will make it less political, more efficient and effective. Ultimately, participation in CEM and MI maximizes the United States’ R&D investments by aligning them with the needs of those around the world and further weaves the US into the fabric of the global research community.

Reforming Mission Innovation

Key Actions to Ensure Efficiency, Accountability and Success for the United States

Sources

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