Arun Majumdar Made ARPA-E an Energy Innovation Leader

Last week saw the unfortunate news that Dr. Arun Majumdar will resign – effective June 9 – from the U.S. Department of Energy, where he has served as the head of the Advanced Research Projects Agency-Energy (ARPA-E) since October 2009. His departure is a “big hit for energy innovation policy,” ITIF’s Matt Stepp commented (subscription article) to Politico, because Dr. Majumdar “bridged the bipartisan consensus around ARPA-E, which is a tough thing to do especially in tough budget times…Arun was the clean energy’s version of Neil deGrasse Tyson in how he speaks about astronomy and the need for space exploration. Arun was kind of our guy for that.” As Dr. Majumdar prepares to return home to California, it is a fitting time to assess ARPA-E’s work thus far and prospects for the future.

Although just barely three years old, the agency has provided $521.7 million in grants to more than 180 projects located in 34 states, across 12 very diverse program areas. The agency has also helped encourage private investment – 11 of the projects funded by ARPA-E to the tune of $40 million have leveraged more than $200 million in follow-up private funding. There is little question that Dr. Majumdar has helped make ARPA-E a leading force for energy innovation in the country, if not the leading force. “Pound for pound, dollar for dollar, it’s hard to find a more effective thing the government has done than ARPA–E,” as FedEx chairman and CEO Fred Smith put it at the agency’s 2012 summit. In fact, the annual energy innovation summits have become a near mandatory event for entrepreneurs, investors, policymakers, thought leaders, and other stakeholders in the clean energy space. It’s worth noting that in addition to showcasing 126 ARPA-E funded technologies, 29 technologies that the agency did not fund were on display as well, which is a telling indication of the agency’s role in promoting and advancing clean energy innovation.

ARPA-E’s investments are already starting to flower – Envia Systems, which announced the development of a breakthrough lithium-ion battery earlier this year, was one of the agency’s early awardees. PolyPlus, another recipient of an ARPA-E grant, has also made progress in developing an innovative lithium-air battery prototype. Similar news is expected in the years to come, as many breakthrough energy technologies take time to reach market viability. “There are natural things about the energy sector that are going to make it, because of the gigantic capital involved and the nature of technologies, a lot slower than the IT revolution,” Bill Gates has observed. “The IT revolution is the exception that’s kind of warped people’s minds about how quickly things can work.” And this includes potentially greater technological leaps in electric vehicle battery technologies, utility scale energy storage, power electronics, building efficiency, and high-efficiency solar power.

But even with early successes, private sector support, an already lean budget, and high-social-impact investments, ARPA-E is the target of fiscal hawks. The FY2013 Energy and Water Appropriations bill approved by the Senate Appropriations Committee cuts the agency’s budget by 10 percent relative to the Obama administration’s request of $350 million while Congressman Paul Ryan’s “Pathway to Prosperity” plan, which was passed by the House Budget Committee, decreases the agency’s budget by $192.5 million from the President’s FY2013 request – a 55% reduction. Fortunately, even under significant scrutiny, ARPA-E has a history of bipartisan support that helps bridge even contentious political debates, as shown by its FY2012 budget getting a near last-minute increase last year.

Cross-aisle support is perhaps the strongest testament to Dr. Majumdar’s effectiveness at the head of ARPA-E. Upon his resignation, Senator Chris Coons (D-DE) noted, “As the director of ARPA-E, Dr. Majumdar has been an extraordinary ambassador for the ecosystem of innovation that will power the next generation of energy production in this country, and is certainly one of the most inspiring people I’ve met in my time here in the Senate.” Meanwhile, Senator Lamar Alexander (R-TN) remarked (subscription article), “The United States is fortunate to have attracted someone of Dr. Majumdar’s talent to launch ARPA-E. He has put together a first-class team to encourage the development of clean, low-cost energy, which will help create new jobs and a brighter future for our country.”

As Dr. Majumdar pointed out, his tenure was the product of no small personal sacrifice, as his family, including two young children, remained behind in California while he worked in DC and commuted back and forth on weekends: “This separation has been enormously difficult for my wife, who had to simultaneously manage her job, single-handedly raise our two daughters, and take care of an energetic yellow Labrador.” In that sense, he represents the best traditions of public service and ARPA-E, the nation, and the nascent clean economy were lucky to have had him.