Get Ready, Get Set, FESI!: Putting Pilot-Stage Clean Energy Technologies on a Commercialization Fast Track

It may sound dramatic, but “Valleys of Death” are delaying the United States’ technology development progress needed to achieve the energy security and innovation goals of this decade. As emerging clean energy technologies move along the innovation pipeline from first concept to commercialization, they encounter hurdles that can prove to be a death knell for young startups. These “Valleys of Death” are gaps in funding and support that the Department of Energy (DOE) hasn’t quite figured out how to fill – especially for projects that require less than $25 million.

The International Energy Agency (IEA) estimates that to reach net-zero emissions by 2050, almost 35% of CO2 emissions to avoid require technologies that are not yet past the demonstration stage. It’s important to note that this share is even higher in harder-to-decarbonize sectors like long-haul transportation and heavy industry. To reach this metric, a massive effort within the next ten years is needed for these technologies to reach readiness for deployment in a timely manner.

Although programs exist within DOE to address different barriers to innovation, they are largely constrained to specific types of technologies and limited in the type of support they can provide. This has led to a discontinuous support system with gaps that leave technologies stranded as they wait in the “valleys of death” limbo. A “Fast Track” program at DOE – supported by the CHIPS and Science-authorized Foundation for Energy Security and Innovation (FESI) – would remove obstacles for rapidly-growing startups that are hindered by traditional government processes. FESI is uniquely positioned to be a valuable tool for DOE and its allies as they seek to fill the gaps in the technology innovation pipeline.

Where does FAS come in?

The Department of Energy follows the lead of other agencies that have established agency-affiliated foundations to help achieve their missions, like the Foundation for the National Institutes of Health (FNIH) and the Foundation for Food & Agriculture Research (FFAR). These models have proven successful at facilitating easier collaboration between agencies and philanthropy, industry, and communities while guarding against conflicts of interest that might arise from such collaboration. Notably, in 2020, the FNIH coordinated a public-private working group, ACTIV, between eight U.S. government agencies and 20 companies and nonprofits to speed up the development of the most promising COVID-19 vaccines. 

As part of our efforts to support DOE in standing up its new foundation with the Friends of FESI Initiative, FAS is identifying potential use cases for FESI – structured projects that the foundation could take on as it begins work. The projects must forward DOE’s mission in some way, with a particular focus on accelerating clean energy technology commercialization.

In early April, we convened leaders from DOE, philanthropy, industry, finance, the startup community, and fellow NGOs to workshop a few of the existing ideas for how to implement a Fast Track program at DOE. We kicked things off with some remarks from DOE leaders and then split off into four breakout groups for three discussion sessions.

In these sessions, participants brainstormed potential challenges, refinements, likely supporters, and specific opportunities that each idea could support. Each discussion was focused around what FESI’s unique value-add was for each concept and how best FESI and DOE could complement each other’s work to operationalize the idea. The four main ideas are explored in more detail below.

Support Pilot-scale Technologies on the Path to Commercialization 

The higher a technology’s readiness level (TRL)—the measurement used to assess maturity—the closer it is to readiness for commercial deployment. This scale begins at “1”, the basic research phase, and ends at “9” when the technology is deemed commercially ready. There remains a significant gap in federal support for technologies trying to progress through the mid-stages of the TRL scale. Projects that fall within this gap require additional testing and validation of their prototype, and private investment is often inaccessible until questions are answered about the market relevance and competitiveness of the technology.

FESI could contribute to a pilot-scale demonstration program to help small- and medium-scale technologies move from mid-TRLs (4 through 6) to high-TRLs (7 through 9) by making flexible funding available to innovators that DOE cannot provide within its own authorities and programs. Because of its unique relationship as a public-private convener, FESI could reach the technologies that are not mature enough, or don’t qualify, for DOE support, and those that are not quite to the point where there is interest from private investors. It could use its convening ability to help identify and incubate these projects. As it becomes more capable over time, FESI might also play a role in project management, following the lead of the Foundation for the NIH.

Leverage the National Labs for Tech Maturation 

The National Laboratories have long worked to facilitate collaboration with private industry to apply Lab expertise and translate scientific developments to commercial application. However, there remains a need to improve the speed and effectiveness of collaboration with the private sector.

A Laboratory-directed Technology Maturation (LDTM) program, first ideated by the EFI Foundation, would enable the National Labs to allocate funding for technology maturation projects. This program would be modeled after the highly successful DOE Office of Science Laboratory-directed Research and Development (LDRD) program and it would focus on taking ideas at the earliest Technology Readiness Levels (TRLs) and translating them to proof of concept—from TRL 1 and 2 to TRL 3. This program would translate scientific discoveries coming out of the Labs into technology applications that have great potential for demonstration and deployment. FESI could assist in increasing the effectiveness of this effort by lowering the transaction costs of working with the private sector. It could also be a clearinghouse for LDTM-funded scientists who need partners for their projects to be successful, or could support an Entrepreneur-in-Residence or entrepreneurial postdoc program that could house such partners.

While FESI would be a practical convener of non-federal funding for this program, the magnitude of the funding needed to establish this program may not be well-suited for an initial project for the foundation to take on. It is estimated that each project would be in the ballpark of $5-20 million, and funding a full portfolio, which private sponsors are more likely to be interested in, is a nine-figure venture. Supporting a LDTM program is a promising idea for further down the line as FESI grows and matures. 

Align Later-stage R&D Market Needs with Corporate Interest via a Commercialization Consortium

Industry and investors often struggle to connect with government-sponsored technologies that fit their plans and priorities. At the same time, government-sponsored researchers often struggle to navigate the path to commercialization for new technologies.

Based on a model widely-used by the Department of Defense (DOD), an open consortium is a mechanism and means to convene industry and highlight relevant opportunities coming out of DOE-funded work. The model creates an accessible and flexible pathway to get U.S.-funded inventions to commercial outcomes.

FESI could function as the Consortium Management Organization (CMO), pictured below, to help structure interactions and facilitate communications between DOE sponsors and award recipients while freeing government staff from “picking winners.” As the CMO, FESI would issue task orders and handle contracting per the consortium agreement, which would be organized under DOE’s other transactions authority (OTA). In this model, FESI could work with DOE staff in applied R&D offices and OCED to identify opportunities and needs in the development pipeline, and in parallel work with consortium members (including holders of DOE subject inventions, industry partners, and investors) to build teams and scope projects to advance targeted technology development efforts. 

This consortium could help work out the kinks in the pipeline to ensure that successful technologies in the applied offices have sufficient “runway” to reach TRL 7, and that OCED has a healthy pipeline of candidate technologies for scaled demonstrations. FESI could mitigate the offtake risk that is known to stall first-of-a-kind projects, like financing a lithium extraction project, for example. Partners in industry and the investment community will be aligned, and potentially provide cost share, in order to gain access to technologies emerging from DOE subject inventions.

The Time is Right

This workshop comes at a prime time for FESI. The Secretary of Energy appointed the inaugural FESI board—composed of 13 leaders in innovation, national security, philanthropy, business, science, and other sectors—in mid-May. In the coming months, the board will formally set up the organization, hire staff, adopt an agenda, and begin to pursue projects that will make a real impact to advance DOE’s mission. As Friends of FESI, we want to see the foundation position itself for the grand impact it is designed to have

The above proposals are actionable and affordable projects that a young FESI is uniquely-positioned to achieve. That said, supporting pilot-stage demonstrations is only one area where FESI can make an impact. If you have additional ideas for how FESI could leverage its unique flexibility to accelerate the clean energy transition, please reach out to our team at fesifriends@fas.org. You can also keep up with the Friends of FESI Initiative by signing up for our email newsletter. Email us!

Building a Firm Foundation for the DOE Foundation: It All Starts with a Solid Board

The U.S. Department of Energy (DOE) has a vital mission: “to ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.” In 2022’s CHIPS and Science Act, Congress gave DOE a new partner to accelerate its pursuit of this mission: the Foundation for Energy Security and Innovation (FESI). As ‘Friends of FESI’ we want to see this new foundation set up from day one to successfully fulfill the promise of its large impact. 

Once fully established, FESI will be an independent 501(c)3 non-profit organization with a complementary relationship to DOE. It will raise money from non-governmental sources to support activities of joint interest to the Department and its constituents, such as accelerating commercialization of next-generation geothermal power and bridging gaps in the clean energy technology innovation pipeline. 

Judging by the success of other agency-affiliated foundations that served as a template for FESI, the potential for the Foundation’s impact is hefty. The National Fish and Wildlife Foundation, chartered by Congress to work with the Fish and Wildlife Service, for instance, is the nation’s largest non-governmental conservation grant-maker. In fiscal year 2023 alone, the NFWF awarded $1.3 billion to 797 projects that will generate a total conservation impact of $1.7 billion.

FESI’s creation is timely. As the U.S. races to net-zero, the International Energy Agency estimates that at least $90 billion of public funding needs to be raised by 2026 for an efficient portfolio of demonstration projects. For perspective, the most recent yearly budget for the entire DOE is just slightly more than half of that number. Non-DOE funding to support innovation is essential to ensure that energy remains affordable and reliable. DOE’s mission is a vital national interest, and the Department needs all the help it can get. The stronger FESI is, the more it will be able to help.

This week, Secretary of Energy Granholm took the first official step to create FESI by appointing its inaugural board. The board consists of 13 accomplished members whose backgrounds span the nation’s regions and communities and who have deep experience in innovation, national security, philanthropy, business, science, and other sectors. 

A strong founding board is an essential ingredient in FESI’s success, and we are pleased to see that its members reflect the bipartisan support that FESI has had since legislation to form it was first introduced. While non-partisan technical and market expertise is vital to make objective judgments about hiring and investments, bipartisan relationships will ensure that FESI is sustained through changes of partisan control of Congress and the presidency. 

Another key to FESI’s success will be stringent conflict of interest rules. Public-private partnerships, like those that FESI will foster, are always at risk of being subverted to pursue only private ends. It is equally important for FESI to also prioritize transparency and oversight of compliance with these rules to avoid the appearance of any conflict of interest that would undermine its progress. 

What Happens Next? 

In the coming weeks and months, the FESI board will hire a CEO and other leaders. This board will set FESI’s agenda and initial priorities, and later down the line, it will also eventually appoint its own successors. Its imprint will be long-lasting. The organizational culture the board creates will strongly influence whether FESI will make a real difference for energy, climate, science, national security, and the economy. As ‘Friends of FESI’ we are eager to see what the FESI board decides to take on first.  

To learn more about the Inaugural FESI Board nominees, check out the DOE press release here.

The Federation of American Scientists (FAS) Applauds the Newly Announced Board Selected to Lead the Foundation for Energy Security and Innovation (FESI)

FAS eager to see the Board set an ambitious agenda that aligns with the potential scale of FESI’s impact

Washington, D.C. – May 9, 2024 – Earlier today Secretary of Energy Granholm took the first official step to stand up the Department of Energy-affiliated non-profit Foundation for Energy Security and Innovation (FESI) by appointing its inaugural board. Today the “Friends of FESI” Initiative of the nonpartisan, non-profit Federation of American Scientists (FAS) steps forward to applaud the Secretary, congratulate the new board members, and wish FESI well as it officially begins its first year. The Inaugural FESI Board consists of 13 accomplished members whose backgrounds span the nation’s regions and communities and who have deep experience in innovation, national security, philanthropy, business, science, and other sectors. It includes:

Since the CHIPS and Science Act authorized FESI in 2022, FAS, along with many allies and supporters who collectively comprise the “Friends of FESI,” have been working to enable FESI to achieve its full potential as a major contributor to the achievement of DOE’s vital goals. “Friends of FESI” has been seeking projects and activities that the foundation could take on that would advance the DOE mission through collaboration with private sector and philanthropic partners.

“FAS enthusiastically celebrates this FESI milestone because, as one of the country’s oldest science and technology-focused public interest organizations, we recognize the scale of the energy transition challenge and the urgency to broker new collaborations and models to move new energy technology from lab to market,” says Dan Correa, CEO of FAS. “As a ‘Friend of FESI’ FAS continues our outreach amongst our diverse network of experts to surface the best ideas for FESI to consider implementing.” The federation is soliciting ideas at fas.org/fesi, underway since FESI’s authorization.

FESI has great potential to foster the public-private partnerships necessary to accelerate the innovation and commercialization of technologies that will power the transition to clean energy. Gathering this diverse group of accomplished board members is the first step. The next is for the FESI Board to pursue projects set to make real impact. Given FESI’s bipartisan support in the CHIPS & Science Act, FAS hopes the board is joined by Congress, industry leaders and others to continue to support FESI in its initial years. 

“FESI’s establishment is a vital initial step, but its value will depend on what happens next,” says David M. Hart, a professor at George Mason University’s Schar School of Policy and Government and leader of the “Friends of FESI” initiative at FAS. “FESI’s new Board of Directors should take immediate actions that have immediate impact, but more importantly, put the foundation on a path to expand that impact exponentially in the coming years. That means thinking big from the start, identifying unique high-leverage opportunities, and systematically building the capacity to realize them.”


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ABOUT FAS

The Federation of American Scientists (FAS) works to advance progress on a broad suite of contemporary issues where science, technology, and innovation policy can deliver dramatic progress, and seeks to ensure that scientific and technical expertise have a seat at the policymaking table. Established in 1945 by scientists in response to the atomic bomb, FAS continues to work on behalf of a safer, more equitable, and more peaceful world. More information at fas.org.


Resources

Building a Firm Foundation for the DOE Foundation: It All Starts with a Solid Board
https://fas.org/publication/fesi-board-launch/

FAS use case criteria:
https://fas.org/publication/fesi-priority-use-cases/

FAS open call for FESI ideas:
https://fas.org/publication/share-an-idea-for-what-fesi-can-do-to-advance-does-mission/

DOE announcing FESI board:
https://www.energy.gov/articles/doe-appoints-inaugural-board-directors-groundbreaking-new-foundation

DOE release announcing FESI:
https://www.energy.gov/articles/doe-launches-foundation-energy-security-and-innovation



Geothermal is having a moment. Here’s how the Foundation for Energy Security and Innovation can make sure it lasts.

Geothermal energy is having a moment. The Department of Energy has made it a cornerstone of their post-BIL/IRA work – announcing an Enhanced Geothermal Earthshot last year and funding for a new consortium this year, along with additional funding for the Frontier Observatory for Research in Geothermal Energy (FORGE), Utah’s field lab. 

It’s not just government – companies hit major milestones in commercial applications of geothermal this year. Fervo Energy launched a first-of-its-kind next-generation geothermal plant, using technology it developed this year. Project Innerspace, a geothermal development organization, recently announced a partnership with Google to begin large-scale mapping and subsurface data collection, a project that would increase understanding of and access to geothermal resources. Geothermal Rising recently hosted their annual conference, which saw record numbers of attendees. 

But despite the excitement in these circles, the uptake of geothermal energy broadly is still relatively low, with only 0.4% of electricity generated in the U.S. coming from geothermal.

There are multiple reasons for this – that despite its appeal as a clean, firm, baseload energy source, geothermal has not exploded like its supporters believe it can and should. It has high upfront costs, is somewhat location dependent, and with the exception of former oil and gas professionals, lacks a dedicated workforce. But there are a range of actors in the public and private sector who are already trying to overcome these barriers and take geothermal to the next level with new and creative ideas.

One such idea is to use DOE’s newly authorized Foundation for Energy Security and Innovation (FESI) to convene philanthropy, industry, and government on these issues. At a recent FAS-hosted workshop, three major, viable use cases for how FESI can drive expansion of geothermal energy rose to the surface as the result of this cross-sector discussion. The foundation could potentially oversee: the development of an open-source database for data related to geothermal development; agreements for cost sharing geothermal pilot wells; or permitting support in the form of technical resource teams staffed with geothermal experts. 

Unlocking Geothermal Energy

DOE’s Foundation for Energy Security and Innovation (FESI) was authorized by the CHIPS and Science Act and is still in the process of being stood up. But once in action, FESI could provide an opportunity for collaboration between philanthropy, industry, and government that could accelerate geothermal. 

As part of our efforts to support DOE in standing up its new foundation with the Friends of FESI initiative, FAS is identifying potential use cases for FESI – structured projects that the foundation could take on as it begins work. The projects must forward DOE’s mission in some way, with particular focus on clean energy technology commercialization. We have already received a wide range of ideas for how FESI can act as a central hub for collaboration on specific clean energy technologies; how it can support innovative procurement and talent models for government; or how it can help ensure an equitable clean energy transition. 

In early October, FAS had the opportunity to host a workshop as part of the 2023 Geothermal Rising Conference. The workshop invited conference attendees from nonprofits, companies, and government agencies of all levels to come together to brainstorm potential projects that could forward geothermal development. The workshop centered on four major ideas, and then invited attendees to break out into small groups, rotating after a period of time to ensure attendees could discuss each idea. 

The workshop was successful, adding depth to existing ideas. The three main ideas that came out of the workshop – an open source geothermal database, cost sharing pilot wells, and permitting support – are explored in more detail below. 

Open-source database for subsurface characterization

One of the major barriers to expanded geothermal development is a lack of data for use in exploration. Given the high upfront costs of geothermal wells, developers need to have a detailed understanding of subsurface conditions of a particular area to assess the area’s suitability for development and reduce their risk of investing in a dead end. Useful data can include bottom hole temperatures, thermal gradient, rock type, and porosity, but can also include less obvious data – information on existing water wells or transmission capacity in a particular area. 

These data exist, but with caveats: they might be proprietary and available for a high cost, or they might be available at the state level and constrained by the available technical capacity in those offices. Data management standards and availability also vary by state. The Geothermal Data Repository and the US Geological Survey manage databases as well, but utility of and access to these data sources is limited. 

With backing from industry and philanthropic sources, and in collaboration with DOE, FESI could support collection, standardization, and management of these data sources. A great place to begin would be making accessible existing public datasets. Having access to this data would lower the barrier to entry for geothermal start-ups, expand the types of geothermal development that exist, and remove some of the pressure that state and federal agencies feel around data management. 

Cost sharing pilot wells

After exploration, the next stage in a geothermal energy source’s life is development of a well. This is a difficult stage to reach for companies: there’s high risk, high investment cost, and a lack of early equity financing. In short, it’s tough for companies to scale up, even if they have the expertise and technology. This is also true across different types of geothermal – just as much in traditional hydrothermal as in superhot or enhanced geothermal

One way FESI could decrease the upfront costs of pilot wells is by fostering and supporting cost-share agreements between DOE, companies, and philanthropy. There is a precedent for this at DOE – from loan programs in the 1970s to the Geothermal Resource Exploration and Definition (GRED) programs in the 2000s. Cost-share agreements are good candidates for any type of flexible financial mechanism, like the Other Transactions Authority, but FESI could provide a neutral arena for funding and operation of such an agreement. 

Cost share agreements could take different forms: FESI could oversee insurance schemes for drillers, offtake agreements, or centers of excellence for training workforces. The foundation would allow government and companies to pool resources in order to share the risk of increasing the number of active geothermal projects. 

Interagency talent support for permitting

Another barrier to geothermal development (as well as to other clean energy technologies) is the slow process of permitting, filled with pitfalls. While legislative permitting reform is desperately needed, there are barriers that can be addressed in other ways. One of these is by infusing new talent: clean energy permitting applications require staff to assess and adjudicate them. Those staff need encyclopedic knowledge of various state, local, tribal, and federal permitting laws and an understanding of the clean energy technology in question. The federal government doesn’t have enough people to process applications at the speed the clean energy transition needs. 

FESI could offer a solution. With philanthropic and private support, the foundation could enable fellowships or training programs to support increased geothermal (or other technological) expertise in government. This could take the form of ‘technical resource teams,’ or experts who can be deployed to agencies handling geothermal project permitting applications and use their subject matter knowledge to move applications more quickly through the pipeline. 

The Bottom Line

These ideas represent a sample in just one technology area of what’s possible for FESI. In the weeks to come, the Friends of FESI team will work to develop these ideas further and also start to gauge interest from philanthropies in supporting them in the future. If you’re interested in contributing to or potentially funding these ideas, please reach out to our team at fesifriends@fas.org. If you have other ideas for what FESI could work on or just want to keep up with FESI, sign up for our email newsletter here.

Share an Idea For What FESI Can Do To Advance DOE’s Mission

The Federation of American Scientists (FAS) is seeking to engage experts who can leverage their knowledge to propose projects and use-cases for FESI to consider. Priority use cases areas include but are not limited to:

Sample Idea

Problem

Enhanced Geothermal Systems (EGS) technology has advanced significantly in recent years, but there is a lack of accurate, public information on heat flows accessible to would-be developers.*

FESI Advantage

FESI could fund the creation and maintenance of a public platform on global heat flows and related knowledge. To do so they can leverage the expertise at DOE’s Utah FORGE experiment and Geothermal Technologies Office while also convening academics, geothermal startups, legacy oil/natural gas firms, and nonprofits.

Program Objective 

A partnership between FESI, Project InnerSpace, and Global Heat Flow to update, publish, and maintain a public database of heat flow maps. 

Activities

Successful Outcome 

Lead time from exploration/discovery to project initiation reduced by X amount. Y number of new projects or investments announced.

*This idea inspired by the partnership between Project Innerspace and the International Heat Flow Commission.

FESI >> Priority Use Cases

The Federation of American Scientists (FAS) is seeking to engage experts who can leverage their knowledge to propose projects and use-cases for FESI to consider. Priority use cases areas include but are not limited to:

1. Catalyzing problem-focused industry-led consortia. DOE has often worked on precompetitive technologies with industrial consortia. Once they are up and running, these consortia can be very productive, but their initial implementation tends to be slow and saddled by red tape. Like the Foundation for the NIH, FESI could launch consortia quickly and assist them to transition into stable, permanent relationships with DOE.

2. Supporting coordinated procurement, advance market commitments, and other sources of demand to stimulate innovation uptake. Early adoption of new technologies spurs their improvement and lowers their cost. FESI could work with DOE to identify uptake opportunities, while simultaneously collaborating with non-governmental funders who might buy down the costs. FESI’s network could become a repository of design expertise and operational know-how for demand-side energy and climate innovation policy.

3. Strengthening incentives to broaden the pool of innovators. The nation’s energy challenges demand an “all-of-society” response. The more diverse the communities that are advancing solutions (rural to urban, coast to coast), the better. Learning from the Foundation for Food and Agriculture Research, FESI could work with DOE to assess the pool of innovators and design programs, including prize competitions, to broaden it.

4. Collaborating to strengthen regional innovation ecosystems. Regions are increasingly building economic development strategies around clean energy. DOE has not had a strong regional presence in the past, but now has a Congressional mandate to build one. Working with the national laboratory foundations, universities, and other partners, FESI could convene initiatives to strengthen regional ecosystems.

5. Convening impact and venture investors. Early-stage investors have a granular understanding of the technological opportunities, competitive landscape, and commercialization challenges facing clean energy start-ups. FESI could bring this community together with DOE managers and national laboratory experts to identify promising areas for public-private partnerships as well as pitfalls that may impede participation of entrepreneurs in such efforts.

6. Piloting or expanding DOE innovation programs with non-DOE funding. DOE has fielded an array of creative programs that foster technology commercialization, such as Lab-Embedded Entrepreneurship Program, Cradle 2 Commerce, Lab Partnering Service, Small Business Vouchers, and Energy I-Corps. The demand for these programs is often stronger than federal funding can accommodate. FESI could enable donors to expand capacity, as the National Fish and Wildlife Foundation has done for federal conservation programs.

7. Responding quickly to crises. The global energy and climate situation is volatile, and crises are inevitable. As the CDC Foundation showed in its response to covid, FESI could act quickly in such situations, laying the basis for a longer-lasting response from DOE. Key activities might include public communication about the performance of the energy system and coordination with non-federal actors, especially in philanthropy and business.  

8. Enabling communities and new entrants to participate in clean energy innovation. Landmark legislation has greatly expanded DOE’s on-the-ground footprint through demonstration and deployment programs. The success of these programs depends on effective engagement with a diverse group of actors. FESI could work with partners to provide technical assistance to organizations and businesses that have not worked with DOE in the past, increasing the number and quality of such new entrants.