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DoD: A Model for Energy Innovation?

May 29, 2012

Recently, the Clean Air Task Force and our colleagues at The Consortium for Science, Policy and Outcomes at Arizona State University, assessed the opportunities and challenges at the U.S. Department of Defense for accelerating a national and even global transition to advanced and clean energy technologies.

Building on background papers, a workshop, new research, and a previous project that articulated foundational principles for federal energy innovation policies, this report identified the sources of DoD’s success in fostering new technology that can be applied to both civilian energy innovation efforts and future defense-related energy efforts.

Unlike most other agencies, including the Energy Department, the Pentagon is the ultimate customer for the new technology it helps create, spending some $200 billion each year on R&D and procurement. The implications of DoD’s role as customer have not been widely appreciated, as:

  • DoD, uniquely in government, supports multi-year, billion-dollar “end to end” innovation efforts that produce technology that is continuously tested, deployed and refined on bases and in the field, providing real world feedback that leads to increases in performance and reductions in cost. By contrast, most of the federal government’s civilian energy innovation efforts involve research loosely connected at best with the few commercialization efforts that it supports.
  • DoD and its contractors know how to bring together multiple innovations to achieve system-level advances leading to big performance gains (examples range from nuclear submarines to unmanned aircraft to large-scale information systems). This systems approach is precisely what is needed to advance clean energy technologies.
  • Relatively stable, multi-year funding allows the Pentagon to pursue “long cycle” innovation that is necessary for large, capital- intensive technologies and supports a highly capable contractor base that can respond to changing national security demands.
  • The Pentagon’s scope and budget has allowed it to experiment with new and creative innovation tools such as the well-known Defense Advanced Projects Research Agency, which has produced extraordinary technological breakthroughs; and the Environmental Security Technology Certification Program, which develops and demonstrates cost-effective improvements in environmental and energy technologies for military installations and equipment.
  • Because of DoD’s size and demands for performance and reliability, it is unique among government and private sector organizations as a demonstration test-bed. Smart-grid technologies and advanced energy management systems for buildings are already poised to benefit from this aspect of the Pentagon’s innovation system.
  • DoD has collaborated effectively with other federal agencies, including the Department of Energy and its predecessors (for example, to advance nuclear energy technologies). Continuing competition and cooperation between DoD and DOE will spur energy innovation. 
DoD’s innovation capabilities can enhance U.S. national security, improve U.S. international competitiveness, and spur global energy restructuring and greenhouse gas emissions reductions.

At the same time, while providing enormous opportunities to develop and test energy efficiency technologies and small scale distributed energy appropriate to forward bases, the Pentagon is unlikely to become an all-purpose hub for advancing all categories of clean-energy technologies, because its energy innovation activities will be sustainable only where they can support the nation’s defense capabilities.

Therefore, many other large-scale technologies that are of great importance to improving the environment, such as carbon-free central station generation or zero carbon transportation, may not as easily fit with DoD’s mission. Possible exceptions might include small modular nuclear reactors that can be used for producing independent, non-grid power at military bases, or, conceivably, zero-carbon liquid fuels other than anything resembling current generation biofuels. 

In any case, the challenge for military-led energy innovation is to further define and delineate avenues for improved clean-energy performance that are linked to the national strategic mission. History shows that when such linkages are strong, DoD’s innovation capabilities are second to none.

But perhaps the more important lesson from this work is that a serious American program of civilian energy innovation could profitably look to Pentagon history for clues about how to succeed. Stable and significant funding; “end to end” thinking on long innovation cycles; procurement of advanced energy technology at commercial scale as well as research and testing; and institutional experimentation and diversity using multiple institutional channels – these have been important reasons that the United States has the most lethal and effective military arsenal in world history. If we’re serious about maintaining American superiority in the energy technology domain, some of this “defense innovation DNA” needs to be replicated or adapted to meet the challenge.

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