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Energy Innovation at the Department of Defense: Assessing the Opportunities

Published: March 2012
File Size: 2,576 KB

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In recent years, driven by the demands of combat in Iraq and Afghanistan, as well as looming budgetary stress, the United States Department of Defense has increasingly focused on the ways in which energy affects its operations and the opportunities to improve its performance through the development and adoption of innovative energy technologies and practices.

Many observers see in this new focus exciting opportunities in the intersection of two powerful forces within one institution: the most potent engine of technological innovation in human history, and the unparalleled energy demands of national defense. DoD's historical record on energy innovation is extraordinary, and there is reason to hope that important advances might come from a renewed effort in this area. But there also appear at present to be significant limitations upon the scope and scale of DoD's likely influence on technological advance that can contribute to the nation's energy infrastructure as a whole, and particularly to the development and deployment of low-carbon energy systems that might affect the rate of climate change.

This report explores the landscape of these questions: What are the innovation models that have proven successful at DoD, and how might they be applied to develop and commercialize clean energy today, either within DoD itself or in other federal agencies?

To better understand this landscape, the report first provides an overall synthesis of key issues surrounding energy innovation at DoD, and then presents four papers that explore distinctive perspectives and elements of the DoD innovation process. As a whole, we hope the report adds up to a richly detailed analysis of specific institutional attributes of the DoD innovation system that seem relevant to the energy innovation challenge. Can policymakers successfully apply these lessons and capabilities to the context of the nation's civilian energy needs?

Key attributes of innovation at DoD identified in our report include:

  • The strategic value of end-to-end research, development, demonstration, and deployment of technological systems; and specifically, DoD's focus on testing, evaluation, and continual systems improvement;
  • The powerful effects of large and sustained procurement programs that are closely tied to the department's innovation capabilities;
  • The proven effectiveness of two very different but highly effective innovation models: the widely extolled Defense Advanced Research Projects Agency, and the Strategic Environmental Research and Development/Environmental Security Technology Certification programs; and
  • The importance of DoD's relations with commercial firms, and the related ability to guide and assess the effectiveness of its innovation activities in the context of its mission performance.

Limitations

Despite the apparent potential for progress in linking DoD to energy innovation in light of these attributes, there are also real reasons to question how much, or how easily, DoD's innovation capacity can or will be applied to the energy challenges that are most relevant to our national and global environmental goals. DoD offers important institutional lessons, and models for innovation driven by the defense mission—but lessons and models that may not always translate easily to the energy context.

DoD's ability to house supply and demand under one roof, and to produce lasting improvements in complex systems over time, driven in part by large, sustained procurement programs, is nearly unique—and unlikely to be widely reproduced in the energy and climate context. There are significant constraints upon what DoD is likely to do directly in this area; the department is unlikely to become an all-purpose engine of energy innovation. Instead, it must be assumed that DoD innovation efforts will focus on technologies that are most likely to contribute to the military's mission. The extent to which these technologies have the potential to catalyze innovation relevant to large-scale reduction of global greenhouse gas emissions remains to be seen. An important open question in this regard is the degree to which DoD will see zero carbon baseload energy generation for its fixed installations as an area worthy of investments. For example, the development and deployment of advanced nuclear reactor designs such as small modular reactors is one potentially important opportunity to advance both military and civilian interests.

Challenge

One challenge for policymakers concerned about energy and climate, then, is to maximize the ways in which DoD can contribute directly to progress on key energy-related technologies in ways that advance, or at least do not impede, the security mission. But policymakers must also think seriously about the ways in which the DoD innovation model can be applied beyond its institutional borders, and about what the DoD experience suggests with regards to the prospects for other proposals to enhance our national energy innovation systems.

Indeed, the principles that have animated successful innovation systems in the past appear increasingly clear—and are often absent from current discussions about energy innovation policy. The military-industrial complex that allowed America to win the Cold War was not built on a system of balkanized, technology-specific budgetary line-items and individual, disconnected institutional capabilities. Rather, it was a complex, highly integrated, multisectoral innovation ecosystem. Is it conceivable that we could move toward such a model for energy innovation?

DoD is doing a lot to advance energy innovation, and should continue to do so—but we must also be realistic in our expectations for the ultimate outcome of these efforts, unless greater attempts are made to consciously align DoD's efforts with larger national goals and resources, or unless institutions outside of DoD are able to re-create some of the key attributes of the defense innovation system.

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