On April 27, 2009, the Advanced Research Projects Agency-Energy (“ARPA-E”) issued its long-awaited first solicitation targeted to advance “high-risk, high-reward research” into energy technology, primarily through direct governmental support in the form of grants. Created as part of the Department of Energy (“DOE”) in the 2007 America COMPETES Act, ARPA-E has quickly become a priority for the Obama administration as part of the administration’s commitment to advance innovative clean energy technology. This first ARPA-E solicitation reflects the commitment of the Obama administration to advance new energy technologies – the solicitation provides for short and simplified applications, quick timelines, open solicitations and flexible awards adequate to the task of advancing transformational energy research.
This client advisory provides an overview of ARPA-E and its mission to develop transformational technologies that can reduce foreign oil dependence and greenhouse gas emissions. This solicitation is geared particularly to scientists, technologists and early stage ventures, focusing on practical advice for those most likely to benefit from ARPA-E’s new program.
Responses to the ARPA-E solicitation announced on April 27 may be submitted as soon as May 12 and no later than June 2. Unlike prior grant programs administered through the DOE, the ARPA-E solicitation requires submission solely of a concept paper, without administrative fees, as an initial step. ARPA-E intends to notify applicants whose submissions are found to be worthy of further consideration by July 13, 2009; those applicants will then have 31 days following such notice to submit a full application. Project awards will range from $500,000 to $10 million, although in extraordinary cases awards could be as high as $20 million. ARPA-E anticipates distributing a total of $150 million during this initial round of grants, which are expected to be awarded this year.
Modeled on the Defense Advance Research Projects Agency (“DARPA”), which has spearheaded the development of transformational defense technologies since its creation in response to the Soviet Union’s launch of Sputnik, ARPA-E holds great promise for the energy world. Indeed, DARPA is credited with spurring development of the Internet, stealth technology and the Global Positioning System. Comparable innovations funded by ARPA-E could transform how we deploy and use energy.
ARPA-E is dedicated to funding research into energy technology that has the potential to be truly transformational. Transformational energy technology is expected to shift the current energy paradigm substantially, not incrementally. To be funded, a technology must have the potential to radically:
- Enhance the energy security of the United States by developing technologies that:
- reduce the need to import energy from foreign sources
- reduce energy-related emissions, including greenhouse gases
- improve energy efficiency across the economy
- Ensure that the United States maintains a technological lead in developing and deploying advanced energy technologies.
Notably, while renewables are clearly a target of ARPA-E’s solicitation, the program is not limited to renewables funding. Transformational nuclear and, potentially, coal technologies fall within ARPA-E’s scope.
Covered Stages of Development
ARPA-E seeks to allow qualifying technologies to overcome two challenging periods in typical energy development, characterized by the uncharitable euphemism “valley of death.” More specifically, early stage awards focus on:
- Helping promising laboratory technologies make the transition to real world applications, i.e., early stage commercialization typically marked by the search for angel investor or early stage venture capital support.
Late stage awards focus on:
- Accelerating the incorporation of adolescent technologies into economically viable products, i.e., later stage commercialization typically marked by the search for private equity or project finance support.
Applicants must indicate if they are applying for an early or late stage award. The content that early and late stage applications must each contain is slightly different to reflect the different goals and evaluation criteria of the grants.
Applicants will be required to absorb a specified percentage of the costs of projects funded by ARPA-E; this percentage will range from 20% to 50%, depending in part on ARPA-E’s assessment of the extent of technology risk facing the project (the greater the risk the lower the percentage that must be borne by the applicant). Accordingly, start-up companies will need access to other sources of funding to proceed with an ARPA-E-funded project.
Other Eligibility Criteria
Consistent with ARPA-E’s mission to advance U.S. dominance in clean energy innovation, submissions are welcome from any capable research and development entity, including for-profit entities, academic institutions, research foundations, not-for-profit entities, collaborations and consortia, provided that the lead organization is a U.S. entity and a minimum of 90% of the work will be performed on U.S. soil.
This solicitation is focused on rapid deployment. Consequently, proposed projects must have a performance period shorter than 36 months to be eligible for an award. ARPA-E, in fact, has a strong preference for projects with a performance period shorter than 24 months.
To apply, applicants must submit a pre-application in the form of a concept paper via www.FedConnect.net between 8 am Eastern time on May 12, 2009 and 8 pm Eastern time on June 2, 2009. Early submission is strongly encouraged. Prior to submitting the concept paper and no later than May 26, 2009, applicants must submit a web-based cover page to receive an application control number. Concept papers for both early and late stage awards should be limited to a maximum of eight pages and consist of the following sections:
- Abstract summarizing the concept paper
- Technical section describing:
- For early stage applicants, the essence of the technical breakthrough on which the proposed applied research is based and an outline of the scope of the research
- For late stage applicants, the transformative component, system, software, hardware or other technology and the proposed research and development to mature the technology
- Mission impact statement addressing why the proposed project is transformational
- Cost summary
Only after ARPA-E has reviewed the concept paper and notified the applicant of a successful review will the applicant be permitted to submit a full application, and there is some question to whether a full application will be necessary in all cases.
ARPA-E’s website, http://arpa-e.energy.gov/index.html, contains links to the detailed funding opportunity announcement at http://arpa-e.energy.gov/keydocs.html. The legislation authorizing the creation of the ARPA-E is available at http://arpa-e.energy.gov/auth.html.
A Few Additional Thoughts
Concerns about governmental programs, particularly historic DOE programs, continue to inspire questions about ARPA-E. While ARPA-E’s eventual value will be determined by its success in funding breakthrough technologies, several of these historic concerns about the DOE warrant brief discussion, because ARPA-E is clearly being managed in a manner intended to mitigate the sources of these concerns:
- Open process. In the past, DOE process has been criticized for being enigmatic, particularly for researchers with transformational technologies. Grants often appeared to be designed for specific technologies or categories of technologies. Solicitations required extensive preparation and came at a significant up-front cost, particularly under the existing loan guarantee program. ARPA-E reflects a clear break in this tradition, with an efficient and open process that encourages a broad array of applicants and is simple and accessible for the lone inventor or small venture. Further, the absence of substantial application and processing fees in the first step encourages meritocracy.
- IP control. Invenvation by supporting IP control by inventors. U.S. rights are limited and disclosed.tors have declined government support in the past owing to concerns about technology rights. The ARPA-E solicitation does a very effective job of underscoring its interest in encouraging inno
- Timetables. Historic federal funding initiatives have been protracted, sometimes causing projects to die on the vine before funding materialized. ARPA-E, consistent with the American Recovery and Reinvestment Act of 2009, underscores a commitment to the rapid deployment of funds.
- Management. Consistent with the DARPA model, ARPA-E will be managed by a director, appointed by the president and confirmed by the Senate, who will report directly to DOE Secretary Steven Chu. President Obama has not yet designated a nominee. ARPA-E’s director will have the authority to appoint 70 to 120 scientific and professional personnel to manage ARPA-E’s programs without regard to civil service laws. ARPA-E will thus operate outside the traditional DOE bureaucracy, enabling the agency to focus on innovative research and development.
In the final analysis, a successful ARPA-E program can offer precisely what it promises – a means of advancing transformational energy technology.