Create Centers of Excellence with strong domain expertise.

Concentrating resources and intelligence will drive new technology development. Innovation in the energy field relies on many factors—expensive equipment, corps of well-trained scientists and engineers, strong leadership, the ability to attract the best young minds, flexibility in the allocation of research funds, and multi-year time horizons. These are all necessary for the scale and speed of innovation required. Development can slow or stall for a specific technology if its research budget is spread across a dozen national laboratories. Success requires a point of confluence for new ideas.

America’s great research universities can serve as natural homes for these Centers. National labs can also provide homes for these Centers of Excellence – they allow open access to testing equipment and partner with the private sector through Cooperative Research and Development Agreements.

One example of a university-centered Center of Excellence is North Carolina’s Research Triangle.

Anchored by three universities with significant R&D programs, the Triangle attracts major public (e.g., the National Environmental Health Science Center) and private (e.g., DuPont, GlaxoSmithKline and Burroughs Wellcome) research attention. The region features some $1.2 billion in annual research, as well as the infrastructure and skilled labor pool resulting from the critical mass of expertise. Among the most significant local accomplishments are the discoveries of the anti-cancer drug Taxol, and AZT, a drug to fight HIV-AIDS.

These concentrations can also surround the Department of Energy’s national labs. The Combustion Research Facility (CRF) at Sandia National Laboratory provides an example. With advanced equipment to analyze engine combustion conditions, the CRF has become the world leader in the field, and has made significant advances in vehicle fuel economy and vehicle emissions reductions. Its industrial partnerships have enabled American companies to lead in the truck engine business.

Federal R&D Spending in National Defense, Health, and Energy

Similar success could be had for other energy technologies. To this end, we applaud the strategic direction of the Department of Energy’s newly created Energy Innovation Hubs, which have been funded with $22 million in 2010 and $25 million annually for subsequent years. However, these hubs and additional centers of excellence need to be supported with real money—hundreds of millions of dollars, not tens of millions.

Structured along the lines described above, these centers can drive technologies down all three phases of the learning curve: funding for pilot-scale energy research will encourage breakthroughs; labs and equipment—made available to academics and private industry alike—will test the scalability of new energy technologies; and partnerships to share intellectual property will help bring technologies to market. Program managers at these centers need the power to make quick decisions in order to follow the most promising leads and abandon dead ends.

Energy Centers of Excellence should focus on a handful of specific technology areas with great promise, including solar photovoltaics, concentrated solar power, wind power, advanced energy storage, clean vehicles, transportation systems, and carbon capture and sequestration, in addition to the Energy Innovation Hubs selected by the Department of Energy for 2010 (fuels from sunlight, efficient energy buildings systems design, and modeling and simulation for nuclear reactors).

In order to function effectively and deliver results, each of these centers will require annual funding in the range of $150 million to $250 million as a part of the total $16 billion energy innovation budget.