The Foundation for Energy Security and Innovation is now a reality: an affiliated but autonomous non-profit organization authorized by Congress to support the mission of the U.S. Department of Energy and to accelerate the commercialization of energy technologies. FESI’s establishment was a vital first step, but its value depends on what happens next. In order to maximize FESI’s impact, the board and staff should think big from the start, identify unique high-leverage opportunities to complement DOE’s work, and systematically build the capacity to realize them. This memo suggests that:
- FESI should align with DOE’s energy mission,
- FESI should serve as catalyst and incubator of initiatives that advance this mission, especially initiatives that drive public-private technology partnerships, and
- FESI should develop lean and highly-networked operational capabilities that enable it to perform these functions well.
Three appendices to this memo provide background information on FESI’s genesis, excerpt its authorizing legislation, and link to other federal agency-affiliated foundations and resources about them.
Thinking Big: FESI’s Core Mission
DOE is responsible for managing the nation’s nuclear stockpile, cleaning up the legacy of past nuclear weapons development, and advancing basic scientific research as well as transforming the nation’s energy system. Although FESI’s authorizing legislation allows it to support DOE in carrying out the Department’s entire mission [Partnerships for Energy Security and Innovation Act Section b(3)(A)], the detailed description of FESI’s purposes [Sections b(1)(B)(ii), b(3)(B)] and the qualifications specified for its board members [Section b(2)(B)] signal that Congress viewed the energy mission as FESI’s primary focus. This conclusion is also supported by the hearing testimony gathered by the House Science Committee.
“Catalyz[ing] the timely, material, and efficient transformation of the nation’s energy system and secur[ing] U.S. leadership in energy technologies,” the two pillars of DOE’s energy mission, are extremely challenging responsibilities. The energy system makes up about 6% of the U.S. economy, or about $4000 per person per year, and its importance outweighs this financial value. This system keeps Americans warm in the winter and cool in the summer, gets us to our jobs and schools, and allows us to work, learn, and enjoy life. The system’s transformation to cleaner and more secure resources must not interrupt the affordable and reliable provision of these and many other vital services.
In addition to posing daunting system management challenges, the incipient energy transition is testing America’s global technological leadership. The United States now leads the world in oil and natural gas production, thanks in part to breakthroughs enabled by DOE. But the risks imposed by the use of conventional energy resources have risen. Other nations, notably China and Russia, have taken aggressive actions to establish leadership positions in new energy technologies, such as advanced nuclear power, solar panels, and lithium-ion batteries. DOE is tasked with reclaiming these fields.
DOE’s ambitious energy mission would benefit more from FESI’s support than would DOE’s other responsibilities. The energy system, unlike the nuclear stockpile or cleanup, and to a far greater extent than basic science, lies outside federal control. To transform it and secure global leadership in key technologies, DOE will have to collaborate closely with the private sector, philanthropy, and non-profits. Strengthening such collaboration, particularly to accelerate commercialization of energy technologies, is precisely the purpose specified for FESI by Congress. [Sections b(1)(B)(ii); b(3)(B)(i)]
FESI’s alignment with DOE’s energy mission should be resilient to changes in Congress and the administration. Its authorizing legislation was sponsored by members of both parties across three Congresses and won overwhelming majorities when voted on as a freestanding bill. By law, a majority of its board members must have experience in the energy sector, research, or technology commercialization [Section b(2)(B)(iii)(III)] FESI will have difficulty building strong collaborations and thus achieving its congressional mandate unless it is seen as a long-term partner with a clear and stable mission.
Filter, Catalyst, and Incubator: FESI’s Core Functions
DOE brings many assets to its mission of energy system transformation and global technological leadership. It invests over $9 billion per year in energy research, development, and demonstration, far more than any other entity in the world. Its network of 17 national laboratories and thousands of academic collaborators converts those funds into a vast store of knowledge and opportunities for real-world impact. It possesses financial and regulatory tools that allow it to shape energy markets to varying degrees.
FESI’s responsibility – and opportunity – is to help DOE use these assets to more effectively advance its energy mission. More effective public-private partnerships to accelerate technology commercialization, including such dimensions as technology maturation, new product development, and regional economic development [Sections b(3)(B)(ii), (iii), and (v)] will be an enduring priority. But the specific use-cases and projects that FESI invests in will change as the global energy landscape does. Indeed, the dynamic nature of that landscape, along with structural constraints on DOE, is a key justification for FESI’s creation. FESI must develop processes that enable it to quickly identify and act on points of leverage that enhance the impact of DOE’s assets in a rapidly-changing system.
These processes should perform three vital functions, all of which will benefit from collaboration between FESI and the national laboratory-affiliated foundations [Section b(4)(G)]. The first is to serve as a filter that helps DOE gather and sift valuable insights about the global energy landscape that the department’s leadership might otherwise miss. Information flows in a large bureaucracy like DOE are inevitably shaped by its organizational structure. The structure of DOE’s energy-focused units and the national labs is in many respects a legacy of the times in which they were established and does not map well to today’s energy system. In addition, DOE’s immense scale means that the voices of newer and less powerful players in the system, such as start-up companies and community groups, may be drowned out. Some voices of the grassroots internal to DOE and the labs may also be hard to discern at the leadership level. The Secretary of Energy’s Advisory Board helps to fill these gaps, but it is constrained by the Federal Advisory Committee Act and other laws and regulations. FESI’s flexibility, bipartisan character, and non-governmental status, bolstered by a strong relationship with the lab foundations, will allow it to recognize DOE’s blind spots, whether internal or external.
FESI should draw on this new or neglected information to perform the second function: catalyzing actionable opportunities that advance DOE’s energy mission. It can develop these opportunities (jointly, as appropriate, with one or more lab foundations) by convening a broad range of stakeholders in formats that DOE cannot effectively utilize and at a pace that DOE cannot match. For example, a group of firms in an emerging clean energy industry may identify a shared technological need that international competitors are pursuing aggressively. FESI could support these firms to articulate their need, identify DOE-affiliated assets that could address it, and rapidly assemble a public-private partnership that aligns the two. Such a partnership might have a regional focus and engage state and local governments and regionally-focused philanthropy as well. If FESI’s information filter were to pick up unrecognized obstacles to effective community engagement or lack of attention to end-user priorities, it could assemble cross-sectoral partnerships appropriate to those opportunities. The catalyst function could be particularly important for crisis response, when speed and agility are essential, and DOE’s formal processes are likely to slow the agency down.
FESI’s third core function should be to incubate and ultimately spin out the initiatives that it has catalyzed. The process of assembling each initiative will require FESI to provide basic administrative support, like internal communication and coordination. FESI should frequently go several steps further by raising seed funding for each initiative, particularly from non-governmental sources, and serving as its external champion. FESI should not, however, become the permanent home of mature partnerships. The managerial demands imposed by carrying out this function risk undermining the filter and catalyst functions. Spinning out the successes will permit FESI’s leadership to hunt more effectively for new opportunities. The destination for the spinoffs might be new or expanded programs within DOE, an existing non-profit like an industry consortium or community foundation, or a new organization.
Lean and Intensely Networked: FESI’s Operational Capabilities
FESI’s high ambition, dynamic functions, and unique institutional position determine the capabilities it will need to operate effectively. Above all, it must be plugged intensively into a broad network that spans the energy industry; DOE and the national labs; states, communities, and Congress; and philanthropy. FESI will only be able to spot what DOE could do better by having a savvy understanding of what DOE is already doing and what its potential partners want to be doing. FESI must be able to gather and interpret this information continuously at a modest cost, which puts a premium on networking.
FESI board members must be vital nodes of its network. FESI’s authorizing statute specifies that the board represent “a broad cross-section of stakeholders.” The members will hold positions that provide insights and contacts of value to FESI and should be selected to build and maintain the network’s breadth. The board’s ex officio representatives from DOE will provide complementary perspectives and connections inside the Department. FESI’s staff will only have the knowledge and resources required to do their jobs well if the entire board is active and engaged (but not micro-managing the staff).
FESI’s staff should be led by an executive director who is responsible for its day-to-day operations [Section b(5)(A)] and has high credibility throughout the energy system and with both political parties. Staff members should bring sector-spanning networks to the organization that leverage those of the board. Even more important, the staff must possess the entrepreneurial skills, and technological and market knowledge, to recognize and act on promising opportunities. Prior experience in business, social, or public entrepreneurship – building new companies, non-profit organizations, and government programs – is likely to be particularly valuable to FESI.
Running lean should be a value for a FESI and will likely be a necessity as well. The value lies in taking initiative and moving quickly. The necessity arises from the likely limits on federal appropriations for operations, which are authorized at $3 million annually [Section b(11)] and may not rise to that level. To be sure, FESI must raise resources from non-federal sources – indeed, that will be one of its core challenges. But those resources are likely to be much easier to raise if they are devoted to projects rather than operations.
Finally, FESI will need to mitigate risks to its reputation that might arise from real and perceived conflicts of interest of the board and staff as well as from the images and interests of its potential partners. A pristine reputation will be vital to maintaining the confidence of DOE, Congress, and external stakeholders. FESI should seek to reduce the cost in money and time of rigorous vetting and disclosure, but ultimately this investment is an essential one that must be borne.
Appendix 1. A Brief Prehistory of FESI
- The immediate genesis of FESI’s authorizing legislation was idea #22 in this 2016 ITIF report.
- ITIF and its partners socialized the concept beginning in the 115th Congress, including at this 2018 event, which featured Reps. Fleischmann (current chair of the House Energy & Water Development appropriations subcommittee) and Lujan (now Senator from New Mexico)
- During the same Congress, Rep. Lujan and Sen. Coons authored the first bills to authorize a DOE-affiliated foundation, which were co-sponsored on a bipartisan basis, a pattern that was sustained through the concept’s ultimate passage.
- Jetta Wong took the lead role along with me in driving the foundation initiative for ITIF during the 116th Congress (2019-2020). That work included two stakeholder workshops and extensive interview and documentary research, leading to our 2020 “Mind the Gap” report, which provides our fullest vision for the foundation’s potential role in innovation and commercialization.
- In July 2020, Jetta testified on the foundation before the House Science Committee along with Jennifer States (Maritime Blue), Farah Benahmed (Breakthrough Energy), Emily Reichert (Greentown Labs), and Lee Cheatham (PNNL)
- Our work led to an appropriations report that required DOE to sponsor a study by the National Academy of Public Administration, which was issued in January 2021. This report has a good round-up of other agency foundations, as does the 2019 CRS report on the topic
- The Partnerships for Energy Security and Innovation Act, sponsored by Rep. Stansbury and Sen. Coons in the 117th Congress, won an 83-14 vote in the Senate in 2021, passed the House in early 2022, and was ultimately incorporated into the August 2022 CHIPS and Science Act. The Act passed just after Jetta joined the administration; I partnered with Kerry Duggan of SustainabiliD for the next phase of work. Our August 2022 blog post provides a good synopsis of the effort up to the bill’s passage.
- With SustainabiliD and later with the Federation of American Scientists and with support from Schmidt Futures and Breakthrough Energy, the “Friends of FESI” focused on sustaining support for FESI and generating project ideas.
- Jetta joined the panel on FESI at the 2023 ARPA-E summit, where DOE held its first public events on FESI, and we participated in the workshop that DOE organized there.
- We responded to DOE’s RFI on FESI, along with several other NGOs. We also focused on FESI in a response to to DOE’s RFI on place-based innovation.
- We developed a set of broad use-cases and held two workshops, one on geothermal energy and the other on “fast track” commercialization.
- We worked with supporters and allies to secure FESI’s appropriation
Appendix 2. Other Federal Agency-Affiliated and National Laboratory Foundations
Numerous federal agencies have Congressionally authorized non-governmental foundations that work with them to advance their missions. The National Park Foundation (NPF) is the oldest, dating back to 1935. Anyone who wants to support a particular national park, or the system as a whole, can do so through a contribution to NPF. Similarly, donors who care about public health can give to the CDC Foundation (CDC Foundation) or the Foundation for NIH (FNIH). A 2021 report by the National Academy of Public Administration (NAPA), which recommended establishing a foundation for DOE, reviews a wide range of agency-related foundations, as does the 2020 ITIF “Mind the Gap” report and a 2019 CRS report.
As the NAPA report describes, all of these foundations leverage federal investment with private contributions to complement and supplement their agency affiliate, while guarding against potential conflict of interest. Yet, more remarkable than this commonality among is the foundations’ diversity. Each seeks to complement and supplement its partner agency, but because each agency has a different mission, structure, and functions, each affiliated foundation is unique.
FESI will likely have much in common with the FNIH. Like NIH, DOE is a major research funder that advances a critical national mission. Like NIH, DOE must rely on the private sector to turn advances made possible by the R&D it funds into technologies that make a difference on the ground. FNIH’s contributions to fighting the pandemic illustrate how having a flexible non-profit partner for an agency can advance the agency’s mission in a moment of need. Its Pandemic Response Fund and Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) partnership with NIH, private firms, other federal agencies, and allied governments, aids the search for treatments and vaccines and prepares the nation to defend against future pandemics.
The Foundation for Food and Agriculture Research, which is affiliated with the U.S. Department of Agriculture, is another potential source of inspiration and learning for FESI. One notable innovation made by FFAR is its use of prizes and challenges, along with more traditional competitive, cost-shared grants. To ensure technologies can scale, FFAR brings industry experts into its project design and administration. In a review of the FFAR’s progress, the Boston Consulting Group (BGC) found that FFAR’s “Congressional funding allows it to bring partners to the table and serve as an independent, neutral third party.”
Links to agency-affiliated foundations not linked above:
- Foundation for America’s Public Lands (Interior/Bureau of Land Management)
- Henry M. Jackson Foundation for the Advancement of Military Medicine (DOD)
- National Association of Veterans’ Research and Education Foundations (VA)
- National Fish and Wildlife Foundation (Interior/Fish and Wildlife Service and NOAA)
- National Forest Foundation (Interior/US Forest Service)
- Reagan-Udall Foundation for the FDA (Food and Drug Administration)
Appendix 3. Selected Provisions of FESI’s Authorizing Statute1
Partnerships for Energy Security and Innovation (42 USC 19281)
CHIPS AND SCIENCE ACT SEC. 10691. FOUNDATION FOR ENERGY SECURITY AND INNOVATION
(b)(1)(B) MISSION.—The mission of the Foundation shall be—
(i) to support the mission of the Department; and
(ii) to advance collaboration with energy researchers, institutions of higher education, industry, and nonprofit and philanthropic organizations to accelerate the commercialization of energy technologies.
(b)(2)(B)(iii)(II) REPRESENTATION.—The appointed members of the Board shall reflect a broad cross-section of stakeholders from academia, National Laboratories, industry, nonprofit organizations, State or local governments, the investment community, and the philanthropic community.
(III) EXPERIENCE.—The Secretary shall ensure that a majority of the appointed members of the
Board— (aa)(AA) has experience in the energy sector; (BB) has research experience in the
energy field; or (CC) has experience in technology commercialization or foundation operations;
and (bb) to the extent practicable, represents diverse regions, sectors, and communities.
(b)(3) PURPOSES.—The purposes of the Foundation are—
(A) to support the Department in carrying out the mission of the Department to ensure the security and prosperity of the United States by addressing energy and environmental challenges through transformative science and technology solutions; and
(B) to increase private and philanthropic sector investments that support efforts to create, characterize, develop, test, validate, and deploy or commercialize innovative technologies that address crosscutting national energy challenges, including those affecting minority, rural, and other
underserved communities, by methods that include—
(i) fostering collaboration and partnerships with researchers from the Federal Government, State
governments, institutions of higher education, including historically Black colleges or universities,
Tribal Colleges or Universities, and minority-serving institutions, federally funded research and development centers, industry, and nonprofit organizations for the research, development, or commercialization of transformative energy and associated technologies;
(ii) strengthening and sharing best practices relating to regional economic development through scientific and energy innovation, including in partnership with an Individual Laboratory-Associated Foundation;
(iii) promoting new product development that supports job creation;
(iv) administering prize competitions—
(I) to accelerate private sector competition and investment; and
(II) that complement the use of prize authority by the Department;
(v) supporting programs that advance technology maturation, especially where there may be gaps in Federal or private funding in advancing a technology to deployment or commercialization from the prototype stage to a commercial stage;
(vi) supporting efforts to broaden participation in energy technology development among individuals from historically underrepresented groups or regions; and
(vii) facilitating access to Department facilities, equipment, and expertise to assist in tackling national challenges.
(b)(4)(G) INDIVIDUAL AND FEDERAL LABORATORY-ASSOCIATED FOUNDATIONS.—
(ii) SUPPORT.—The Foundation shall provide support to and collaborate with covered foundations.
(iv) AFFILIATIONS.—Nothing in this subparagraph requires—
(I) an existing Individual Laboratory-Associated Foundation to modify current practices or
affiliate with the Foundation
(b)(5)(I) INTEGRITY.—
(i) IN GENERAL.—To ensure integrity in the operations of the Foundation, the Board shall develop and enforce procedures relating to standards of conduct, financial disclosure statements, conflicts of interest (including recusal and waiver rules), audits, and any other matters determined appropriate by the Board.
(b)(6) DEPARTMENT COLLABORATION.—
(A) NATIONAL LABORATORIES.—The Secretary shall collaborate with the Foundation to develop a process to ensure collaboration and coordination between the Department, the Foundation, and National Laboratories
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