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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000
which the adoption of the results of DOE RD&D programs and the associated realization of economic benefits were aided by regulatory, tax, or other policies that significantly improved the attractiveness of these technologies to prospective users.
Conversely, the case studies include a number of instances in which the attainment by DOE RD&D programs of their technical goals (and the production of option or knowledge benefits) did not produce substantial economic benefits, because incentives for users to adopt these technologies were lacking. Such technologies may provide significant option and knowledge benefits, and they represent appropriate targets for DOE RD&D programs.
Recommendation. Where its RD&D programs seek to develop technologies for near-term deployment, DOE should consider combining support for RD&D with the development of appropriate market incentives for the adoption of these technologies based on an understanding of market conditions and consumer needs.
The committee’s case studies highlight the importance of flexibility in the RD&D program structure, especially the need for periodic reevaluation of program goals against change in the regulatory or policy environment, the projected energy prices and availability, and the performance or availability of alternative technologies, among other factors.
Recommendation. DOE should expand its reliance on independent, regular, external reviews of RD&D in energy efficiency and fossil energy program goals and structure, enlisting the participation of technical experts who are not otherwise involved as contractors or R&D performers in these programs.
The committee found that cost sharing between DOE and industrial collaborators frequently improved the performance of RD&D programs and enhanced the level of economic and other benefits associated with such programs.
Recommendation. DOE should maintain its current policies encouraging industry cost sharing in RD&D programs. In general, industry’s share of program costs should increase as a project moves from early-stage or exploratory R&D through development to demonstration. Policy makers should ensure that an emphasis on collaboration with industry in the formulation of R&D priorities and R&D performance does not result in an overemphasis on near-term technical objectives within the DOE R&D portfolio or in neglect of public good objectives.
The committee’s case studies suggest that an appropriate role for DOE in RD&D programs varies, depending on whether a given program is focused on exploratory research, development, or demonstration, as well as the structure of the industry (including the amount of industry-funded R&D or the presence of well-established industrial R&D consortia) within which a given technology will be deployed. The committee found that DOE RD&D programs in fossil energy and energy efficiency have developed greater flexibility and sensitivity to the needs of the relevant industrial sectors over the past 15 years. The committee applauds this trend and urges that DOE policy makers continue to explore creative and adaptive solutions to the requirements of collaborative RD&D in very diverse industrial sectors.
Recommendation. DOE should strive to build flexibility into the structure of its RD&D programs.