Testimony to the House Appropriations Committee on Strategies for Energy and Climate Innovation

In testimony before the House Appropriations Subcommittee on Energy and Water Development, ITIF argued innovation is critical to combat climate change. The recent National Academies report on accelerating decarbonization finds that “deep decarbonization is technically feasible, but proactive innovation is essential.”

Fortunately, bipartisan support for clean energy innovation is surging. Over the last four years, this committee has overseen a 40 percent increase in clean energy R&D programs at the Department of Energy (DOE). The recently passed Energy Act of 2020 includes the legislative priorities of more than one hundred members of Congress and provides the first reauthorization of DOE programs in more than a decade.

As the committee considers how to implement the Energy Act, it must wrestle with questions about the scale and scope of DOE’s programs. ITIF’s hope is that this testimony can be useful as the committee begins consideration of fiscal year 2022 appropriations.

The testimony covers three core points:

1. Greater federal investment in innovation is essential to address climate change and boost U.S. competitiveness in clean energy.
2. Prioritize funding to research, development, and demonstration (RD&D) and deployment programs around 10 critical decarbonization needs.
3. Diversify the innovation portfolio (by technology, innovation stage, federal agency, research performer, and geographic region) to maximize the effectiveness of federal investments.

Top 10 Decarbonization Priorities for RD&D and Deployment Programs

1. Clean manufacturing and industrial decarbonization, including electrification of process heat, hydrogen applications, and carbon capture for industrial sources such as cement and steel;
2. Advanced vehicles and transportation systems, including battery and fuel cell electric vehicles, DC fast chargers, vehicle lightweighting, efficiency technologies for medium- and heavy-duty vehicles;
3. Energy efficient and net-zero energy buildings, including advanced heat pumps, solid-state cooling, alternative building materials, high-performance windows, and grid-integration;
4. Clean electricity generation, including advanced nuclear reactors, thin-film solar PV, floating offshore and high-altitude wind, run-of-river hydropower, and enhanced geothermal systems;
5. Zero- and low-carbon fuels, including sustainable biofuels, hydrogen from electrolysis or biomass gasification, ammonia, and synthetic hydrocarbon fuels;
6. Grid modernization technologies, including long-duration grid-scale energy storage, power electronics, and digital technologies that enable grid integration of buildings and vehicles;
7. Carbon capture, use, and sequestration (CCUS), including the Allam cycle for natural gas power generation; and carbon capture for industrial sources such as cement and steel;
8. Carbon dioxide removal / negative emissions technologies, including direct air capture and storage (DACS), carbon mineralization, and bioenergy with carbon capture and storage (BECCS);
9. Clean agricultural systems, including fertilizer management, precision agriculture, soil carbon storage, and biotechnologies to enhance carbon storage; and
10. Foundational science and platform technologies, including advanced materials, electrochemistry, quantum computing, genomic sciences, 3D printing, smart manufacturing, and machine learning.

Principles for Diversifying the Federal Innovation Portfolio

1. Match the funding portfolio to critical decarbonization needs. As federal funding ramps up, increases should be targeted to under-resourced sectors, particularly the end-use sectors (manufacturing, buildings, and transportation) and crosscutting technologies such as clean fuels and CCUS.
2. Support all stages of the innovation pipeline, particularly technology scale up and commercialization. Demonstration projects and market formation are needed to complement technology R&D.
3. Marshal the full capacity of the federal government. DOE should collaborate with other agencies where missions overlap, particularly DOD and NASA for dual-use technologies (e.g. high-density batteries, fuel cells, advanced solar, advanced nuclear and microreactors, and smart grids).
4. Expand collaborations with external research partners at universities and in the private sector through public-private partnerships such as the energy innovation hubs and the Manufacturing USA institutes.
5. Partner with state and local governments to support regional innovation. Federal facilities, from National Laboratories to Manufacturing USA institutes, should work with state and local governments to cultivate regional innovation clusters.
6. Set predictable long-term funding targets. The federal government should commit to a high-level funding roadmap, to reduce volatility in energy innovation funding.