3
Strategies for Acceleration: Leveraging and Learning from the Department of Defense
The workshop’s third session examined how the U.S. Department of Energy (DOE) can better leverage the U.S. Department of Defense (DoD) as a source of user pull and take advantage of DoD’s strengths as an innovator in areas where military and civilian energy technology requirements are aligned. Dorothy Robyn, Boston University, set the stage by describing DoD’s approach to technological innovation, and briefly highlighting areas where DOE’s innovation system could be improved. In his framing remarks, John Deutch, Massachusetts Institute of Technology (MIT), elaborated on the agencies’ differing motivations for research and development (R&D) activities. Jeffrey Marqusee, National Renewable Energy Laboratory (NREL), discussed how DoD’s robust R&D pipeline and established end market can be used to usher new technologies over multiple valleys of death. Richard Carlin, Office of Naval Research (ONR), drew on his experience in ONR to cite examples of programs accelerating demonstration, deployment, and scaling using established models for success. Thomas P. Bostick, U.S. Army (retired), spoke about military requirements as the driver for innovation and accelerating the development of sustainable solutions. Norman Augustine, Lockheed Martin (retired), proposed the creation of a nonprofit bridge organization to facilitate the private sector in conducting large-scale demonstrations. Following the presentations, Robyn directed questions and moderated discussion among the presenters.
DOROTHY ROBYN
Nonresident Senior Fellow, Boston University Institute for Sustainable Energy
DoD is the largest consumer of energy in the country, opened Robyn, and it invests heavily in energy research, development, testing, and evaluation (RDT&E). Although DoD’s $1.6 billion-a-year investment in energy RDT&E is driven by military requirements, there is considerable alignment with civilian clean energy needs, including thin-film solar, advanced batteries, long-term stationary storage, microgrids, and wide-bandgap semiconductors. Moreover, DoD is a powerful engine of technological innovation with structural advantages DOE lacks. Most important, explained Robyn, DoD has a customer—the military—which serves to discipline the RDT&E process. And as a demanding, data-driven customer, DoD obsessively demonstrates and tests new technology and provides feedback to the technology developer. DoD also has a substantial procurement budget and a willingness to pay a premium for performance, Robyn said. These sources of “user pull” are what make DoD such a successful innovator. They are also the missing ingredient in DOE’s innovation system, which is categorized much more by “technology push.” Despite their overlapping priorities and their complementary approaches to innovation, DOE does relatively little to leverage DoD’s investments in energy technology or take advantage of its strengths as an innovator. Robyn characterized this as a “huge missed opportunity.”
JOHN DEUTCH
Professor Emeritus, Massachusetts Institute of Technology
Deutch explained that DoD’s technology-based efforts have had a significant positive effect not only on U.S. military posture but also on the domestic economy and on key technologies upon which we depend. ARPANET (the foundation of the modern internet), digital communication, and microelectronics are all examples of core technologies developed by DoD that made their way into the industrial base. Deutch continued that the purpose of R&D in DoD and in the energy sector is quite different. In DoD, R&D is targeted on mission effectiveness and force protection. In DOE and in the private sector, R&D aims to provide new technology that will perform desired functions with increased effectiveness in an environment where prices in the marketplace determine success.
Even though the motivating purposes for R&D vary, there are opportunities for learning between the departments, said Deutch. Many of the operational priorities for DoD and the private sector overlap, and in many
contexts DoD has successfully separated the decision-making process for managing technologies from other departmental operations. Deutch also noted that there are opportunities to learn from DoD’s testing and evaluation (T&E) process. However, DoD often focuses on demonstrating the survival of systems in combat operations, which is quite different from testing done in the commercial sector to determine a technology’s viability. For this reason, techniques may not transfer seamlessly from DoD to DOE, Deutch said. He observed that DoD has the ability to utilize its significant budget to advance technology development that benefits other agencies or the private sector. Long-term, large-scale cooperation—such as developing micronuclear power for use by deployed units or biodiesel fuels for combat aircrafts—may not transfer directly, but subscale technologies that support a variety of different applications have the potential to make broad impacts. While there are many opportunities for cooperation, there are also limits to what cooperation can be expected to achieve.
JEFFREY MARQUSEE
Senior Research Advisor, National Renewable Energy Laboratory
New partnership between DoD and DOE can be an important element of a broader strategy to bring energy technologies to market more quickly, Marqusee began. DoD offers a large market for new energy technologies and, as an R&D enterprise, is well suited for the challenges of transitioning energy technologies from the laboratory. There is considerable overlap between DoD’s energy technology needs for the warfighter and civilian clean energy technology needs. Moreover, DoD’s innovation system is well suited to advancing clean energy technology in both the military and civilian sectors.
DoD’s culture and commitment to innovation supports the movement of energy technologies out of the laboratory, said Marqusee. Its approach encompasses scaling technologies beyond the research phase toward deployment. This is an opportunity area for DOE. The investments of the Defense Advanced Research Projects Agency (DARPA) and Advanced Research Projects Agency–Energy (ARPA-E) highlight the differences in the agencies’ management of R&D programs. Nearly all of ARPA-E’s funding is focused on early-stage R&D, while DARPA’s annual budget of $3 billion is split evenly between high-risk efforts in the early and late stages (including advanced technology demonstrations). Beyond funding, DoD is deeply connected to end users, focuses on future deployment, and is willing to take risks in late-stage technology development and demonstrations. Marqusee emphasized that DoD’s willingness to fail is important for advancing new energy technologies, both in early-stage R&D as
well as during development and demonstrations. An R&D partnership between DoD and DOE can help overcome the challenges that impede the development of laboratory technologies into commercial products. The DoD market also offers a unique opportunity for early adoption. Because DoD will pay a premium for performance required by mission operations, new technologies get an early foothold in a market. The military market is large enough to yield economies of scale and to support the key step of “learning by doing” to help enable technology deployment.
Marqusee listed three specific opportunities for collaboration between DoD and DOE. First, DoD often performs R&D to further develop existing commercial technologies or adapt them for military use. Commercial technology developers can then incorporate advancements into their products. Marqusee suggested that DOE can learn from this system. Second, utilizing its vast T&E infrastructure, DoD can serve as a test bed for optimizing operability, maintainability, reliability, and integration of new energy technologies. Third, in its role as an early adopter and niche customer, DoD is critical for advanced technologies moving into markets, driving down costs, and successfully commercializing. This benefits both DoD, the technology developer, and the civilian communities’ need for new energy technologies, said Marqusee.
Lightweight photovoltaic (PV) and advanced storage represent two technologies where DoD’s innovation system has the potential to accelerate development, demonstration, and deployment. However, to be successful, DoD and DOE’s interaction on energy innovation must increase in a systematic and thoughtful way, Marqusee concluded.
RICHARD CARLIN
Naval Accelerator, Office of Naval Research
Carlin explained that prior to the 2010 Memorandum of Understanding (MOU) outlining cooperation and partnership between DOE and DoD, partnerships between the agencies existed relatively informally. In the years following the MOU, DoD and DOE began to consider how to collaborate more strategically. Carlin referenced the top-down approach to collaboration that was first implemented. He suggested that it would be more successful if integrated with a bottom-up approach. Collaboration is enhanced, he elaborated, by improving the mechanics to create actionable, repeatable, strategic processes. “We need to think about how to develop joint activities, not just joint discussions,” said Carlin.
In the Naval Accelerator, the Hacking for Defense (H4D) model and I-Corps have become successful frameworks upon which many collaborative activities around R&D, validation, and scaling have been built. H4D
has been particularly successful because the model establishes a strong problem statement early on, assigns an experienced DoD staff person to each project, and develops concrete work plans around the mission (Figure 3.1).
Building on proven frameworks, ONR’s Naval Accelerator R&D programs are effectively structured to establish an end market early in the development process to accelerate deployment and commercialization. Naval Enterprise Teaming with Universities for National Entrepreneurship (NEPTUNE) focuses on bringing university research into DoD. Utilizing the H4D model, DoD acts as a customer and sponsor for university projects, with the goal of delivering a prototype within 18 months. The Naval Innovation Process Adoption (NIPA) streamlines ONR’s approach to developing new technologies through its own naval Warfare Centers and laboratories. NIPA connects teams of engineers, scientists, academics, and operators using the H4D model to expedite innovation. The Accelerated Delivery and Acquisition of Prototype Technologies (ADAPT) utilizes the Navy’s Small Business Innovation Research and Small Business Technology Transfer programs and is designed to quickly address high priority challenges in high impact areas for the naval community that are also determined to have potential solutions and dual use applications in the commercial sector. Notably, the activities are identified on the ground and in the shipyards, which helps ensure an end customer for technologies. The Energy System Technology Evaluation Program (ESTEP) is specifically designed to bring prototype and early commercial technologies onto naval installations while simultaneously training the future energy workforce.
Carlin explained that the H4D model in conjunction with engaging private capital has helped to move innovation forward, addressing defense needs while scaling through commercial development. He concluded by emphasizing that successful collaboration is likely to occur in spaces where proven mechanisms within DoD and DOE align.
THOMAS BOSTICK
Lt. General (Retired), U.S. Army
Reflecting on his service in the U.S. Army, Bostick spoke about military requirements as the driver for innovation. To power both its operations and facilities, DoD is the world’s single largest consumer of oil globally. Therefore, the need to drive innovation in the clean energy space is crucial. The United States excels at innovation during times of crisis and, while not as recognizable as active combat, the need for clean energy is a crisis, said Bostick. The seven U.S. Army Corps of Engineers labs have significant capabilities to address this challenge. The U.S. Army Engineer
Research and Development Center (ERDC) is tasked with finding solutions to the nation’s challenges related to civil and military engineering, geospatial sciences, water resources, and environmental sciences. The Construction Engineering Research Laboratory directs its research efforts toward increasing the Army’s ability to more efficiently design, construct, operate, and maintain its installations and contingency bases to ensure environmental quality and safety at a reduced life-cycle cost.
Innovative solutions are beginning to emerge from DoD. Bostick described advancements in additive manufacturing resulting in the construction of barracks and bridges with 44 percent less concrete and 10 percent improved energy performance. A DoD-DOE collaboration will produce a fuel cell/battery hybrid truck capable of 25kW exportable energy. A waste-to-energy project at Fort Hunter Liggett turns 50 metric tons per day of waste into electricity and hydrogen. Coming out of ERDC, a hybrid power trailer results in 83 percent fuel savings. Bostick said these examples are at the margins of clean energy innovation, and we must go bigger and move faster. This will require a collaborative, interagency effort. To enable this, Bostick suggested the continuation of MOUs between DoD and DOE. He also suggested deployment of liaison officers to foster learning and collaboration between the agencies.
NORMAN AUGUSTINE
Chairman and CEO (Retired), Lockheed Martin
Despite differing energy requirements between DoD and DOE, opportunities exist for enhanced cooperation between the two agencies, as well as with the private sector, academia, and the national laboratories, Augustine said. In terms of technology transfer, Augustine reflected, “the best way to move technology between organizations is to move people between organizations.” He acknowledged this strategy is fraught with issues, such as those related to career advancement and conflict of interest, but the potential benefits of collaboration are significant.
Augustine continued that it is important to put financial resources and overall responsibility for projects in the hands of the principal beneficiary, not the performer. For example, if a project is being performed by DOE on behalf of DoD, Augustine stated that DoD should fund the project and have requisite oversight responsibility. Additionally, when moving a new concept from the laboratory to a full-scale practice developers must prove financial feasibility, which can be very costly and time consuming. It is often beyond the means and intent of ARPA-E and beyond the risk threshold of most corporations. In response to the challenge of proving financial viability, Augustine proposed the creation of an organization similar to-
In-Q-Tel in the energy technology arena. He advocated for a private, not-for-profit bridge organization, largely funded by government, with the authority to quickly award contracts and grants to facilitate large-scale demonstrations of promising energy systems on behalf of the nation. This organization would act as a facilitator enabling the private sector.
Finally, Augustine suggested using DoD facilities as demonstrators of new energy technologies. Examples might include microgrids or small modular reactors. In that regard, DOE might expand on DoD’s practice of constructing one-of-a-kind prototypes to address promising new energy concepts. This would be best accomplished outside of the standard government procurement system, said Augustine, which is designed to address low-moderate risk projects.
DISCUSSION
Following the speakers’ remarks, Robyn moderated a discussion session that covered engaging with the national laboratory complex and the private sector and the value of human capital.
Engaging with the National Laboratory Complex
Asked about the structural disincentives the national labs face to engage more with DOE and the private sector, Augustine replied that cooperation is challenged by the inherent competition for talent, recognition and budget. Further, he cited conflict of interest issues that arise from government investment in start-up companies. Marqusee added that well-meaning constraints on national laboratories can lead to unintended inhibitions on creativity. The structure of government owned/contractor operated (GOCO) partnerships limits the lab’s flexibility. Deutch underscored that restrictions on the federal acquisition process are a significant problem and will continue to constrain federal clean energy innovation until addressed.
Engagement with the Private Sector
Deutch stressed that opportunity for mutually beneficial collaboration does not only exist for DoD and DOE, but also with the private sector. Robyn recalled Augustine’s statement that the best approach to technology transfer is the movement of people. With the exception of ARPA-E, DOE primarily invests in the national laboratories, not in the private sector. Augustine and Deutch commented that industry investments are extremely difficult, and incentives may not align to support this. An energy technology corporation, or Augustine’s idea to build an
organization similar in structure to In-Q-Tel, could be a step in this direction, said Deutch.
Human Capital
What sort of governance structure would be required in a joint DoD/DOE program office, Robyn asked. Marqusee replied a top-down approach would be required to establish funding and a mission. Drawing from his federal government experience, he cited a DoD program directed by assistant secretaries from DOE and Environmental Protection Agency (EPA) as part of their core, assigned duties. This was successful because even though the funding came from DoD, the other agencies provided strong political support and dedicated staff. “The people aspect is critical to any interagency work,” he said.
Robyn asked Bostick to comment on his experience facilitating the movement of military personnel to other parts of DoD or other agencies. Bostick explained the ability to do this is invaluable, but the culture is stacked against it. He said there needs to be a systematic way to retain unique talents from the Army, encourage them to serve in other locations, and promote them accordingly.