Energy Innovation: Developing the Technologies for Decarbonization
Letter from the American Energy Innovation Council
We are the American Energy Innovation Council, 11 business and innovation leaders who share a common interest in increasing America’s commitment to energy innovation as a fundamental driver of economic growth and national security, and as a key to addressing environmental challenges. We speak as executives and innovators who, in the course of our careers, have made difficult decisions in the pursuit of building great American companies and a more innovative and stronger U.S. energy sector.
Over the decade since AEIC’s founding, the political, economic, and energy landscape has changed, at home and abroad. The need to create a low-carbon and, over time, zero-carbon energy system has become more urgent, even as our economic competitors are increasing their energy innovation investments. Meanwhile, the specter of climate change has moved from a distant threat to a problem that is exacting significant costs on people and the economy today. Fortunately, new and enhanced technologies and processes— such as large-scale energy storage, advanced nuclear reactors, the use of renewable and low-carbon hydrogen as an energy vector and transportation fuel, affordable battery electric and fuel cell vehicles, carbon capture and removal, and others—are poised to join low-cost renewable energy in transforming how the nation produces and consumes energy while upending traditional business models.
Despite recent promising technology developments, the U.S. needs far more innovation in energy to maintain a position of global economic strength, create new jobs at home, and reassert our leadership in international efforts to address environmental and security challenges. For all these reasons, the Council is today reaffirming and updating the policy recommendations we first put forward a decade ago. We believe that action on these recommendations is more urgent than ever. Specifically, we call for:
- Tripling U.S. investment in clean energy innovation to $25 billion per year;
- Funding Advanced Research Projects Agency–Energy (ARPA–E) at $1 billion annually;
- Establishing a New Energy Challenge Program to build large-scale pilot projects;
- Creating an independent national Energy Strategy Board; and
- Expanding centers of excellence with strong domain expertise.
America’s leadership in energy is at risk today. Competitors, including China, are rapidly increasing their investments in science and technology broadly, and clean energy technologies specifically, as the race for global technology leadership picks up speed. By comparison, U.S. research and development investments are sluggish. China’s recent announcement that it intends to completely decarbonize its economy by 2060 should be viewed as a new “Sputnik moment.”
Fortunately, the U.S. has important strengths and advantages in innovation, together with a track record of rising to difficult challenges. U.S. industries, universities, and national labs remain the envy of the world, and researchers from these institutions continue to lead the world in many technologies. The U.S. also has unique strengths in translating scientific and technological advances into successful products and companies.
Speaking from a business perspective, we are acutely aware of the need for balanced investments from both the public and private sectors in this area. But we also know that federal funding fills crucial gaps where the private sector cannot profitably invest, and that the U.S. government played a direct role in facilitating some of the greatest energy advances of the past century.
We are also well aware of the potential payoffs to the nation from such investments. Technology innovation improves productivity across industries and creates entirely new ones. Economists agree that innovation is the key engine of long-term economic growth and stability—it has been estimated that at least 50% to 85% of U.S. annual GDP growth can be traced to innovation.
In short, we are calling for a return to strong federal investment in energy R&D and we are committed to working with lawmakers and other stakeholders to build support for an energy innovation agenda that can help ensure our nation’s long-term economic growth, security, environment, and prosperity.