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PROCEEDINGS 57 Keynote Innovation and the Clean Energy Challenges Eric Toone Advanced Research Projects Agency for Energy (ARPA-E) Dr. Toone began by saying that starting the new Advanced Research Projects Agency for Energy (ARPA-E) reflected the fact that energy was “one of most challenging issues of our time.” He offered a review of the history of energy use, which he said is “a history of modernity; the two are indistinguishable.” Even more surprising, he said, is “how short that history is.” Modern life had not yet begun as recently as the first half of the 19th century in America, when most people worked in agriculture; in 1830, 70 percent of the population did so. The work was back-breaking, with 56 hours of hand labor required to farm an acre of wheat which produced about 15 bushels. With no artificial light, the farmer’s day began at dawn and ended at dusk. The household heat came from wood, and transportation was provided by animals. While a few emigrated to new regions, most people seldom traveled more than 50 miles from where they were born. In that year, per capita GDP in 2011 dollars was less than $5,000. Per capita energy use was about 10 million BTUs, almost all of which was used for heating and cooking. Artificial light was among society’s greatest needs, he said. By the middle of the 19th century, whale oil had emerged as the lighting source of choice. But the resource was finite; whales quickly became scarce, and fleets had to travel ever farther to find new stocks. Whale oil became unaffordable for most people, and by 1860 the industry was in severe decline. A new technology was required. That industry had already begun. By 1846, Adam Gatsner, a Canadian geologist, had demonstrated that a liquid he termed kerosene could be distilled from coal. This means of extraction was not economical, but in 1851 Samuel Card developed a process for extracting kerosene from oil and began selling it as “carbon oil.”

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58 BUILDING THE ILLINOIS INNOVATION ECONOMY The last piece of the fossil fuel puzzle was an abundant, affordable source of oil. Oil seeps had been observed for many years in Pennsylvania, and in 1859 a well was drilled at one of these sites in Titusville, providing a revolutionary solution. John Rockefeller was involved almost from the beginning, and in 1870 he and his friend J.D. Flagler organized Standard Oil Company. Standard Oil quickly became the largest company in America and then in the world. The ready availability of cheap, clean, dependable light changed the world in ways hard to imagine today. With access to artificial light the work day lengthened and productivity increased. New forms of energy enabled cooking and new diets. The amount of artificial light used by the average American rose from about 5 kilolumens at the end of the 19th century to an average of 60 megalumens today, a 12,000-fold increase. Gross domestic product began to rise just as rapidly, and almost from the beginning of the fossil fuel industry, the two values rose essentially in lockstep. Other innovative forces were at work. Several inventors, beginning with Sir Humphrey Davy at the beginning of the 19th century, had experimented with the idea of producing light by passing electric current through a filament. But none of these techniques was viable until 1879, when Thomas Edison illuminated devices by passing current through a carbon filament that was isolated in a vacuum. At that point, electric light became a practical reality and kerosene prices plunged. Over the second half of the 19th century, oil was still used primarily for the production of kerosene, while gasoline was treated largely as a waste product. But many inventors saw the possibilities of other uses, especially in transportation. In 1908 the first Model T rolled off the assembly line, the first time an affordable gasoline engine was use to power transportation. By 1914 a model T took only 93 minutes to create on Henry Ford’s assembly line, and only 20 years after the introduction of the first Model T, 18 million of them were registered in the United States. A parallel interest grew in using oil to power airplanes, and in 1903 the Wright Brothers made this happen for the first time at Kitty Hawk, North Carolina, initiating the era of air transportation. By the time Lindbergh crossed the Atlantic in an airplane, air transport based on cheap and abundant energy became the new norm. Cheap oil also changed both the motivations for and the means of war. Immediately before World War I, Winston Churchill made the fateful decision to transform the energy source for the fabled British fleet from coal to oil. This decision had profound consequences. The first was to enable a much quicker Allied fleet, with savings in weight, space, and required manpower. Indeed, at the end of the war, Lord Curzon, the British foreign secretary, suggested that the allies had ridden to victory on a wave of oil. A negative consequence, however, was that Great Britain had huge domestic supplies of coal—but no oil. Without it, the British faced profound logistic and supply issues. These led to increased activity in the Middle East, with enduring consequences.

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PROCEEDINGS 59 The link between energy and prosperity became steadily stronger for reasons that today seem obvious. By the turn of the 20th century, the percentage of the American labor force in agriculture had fallen to 41 percent and, by the end of World War II, to less than 7 percent. The productivity of the American farm rose just as quickly. The acre of wheat that took 56 hours of labor to grow in 1830 and produced 15 bushels now took three hours of labor and produced 30 bushels, a 50-fold increase in productivity. By the middle of the 20th century most workers were employed not in farming but in manufacturing. Electric lighting rather than the rising and setting of the sun controlled the amount of daylight. Heating came not from firewood but from oil or coal, and people traveled by car rather than horse or foot. Construction of the modern highway system meant that Americans could travel from coast to coast. Per capita energy use rose three-fold over the first half of the century, and GDP per capita grew at the same rate. In the second half of the century those trends accelerated as more innovators saw the true potential of cheap and abundant energy. By 1980, six of the world’s 10 largest corporations were oil companies. Today, although less than 2 percent of the American work force is involved in agriculture, the United States feeds a large proportion of the world. Energy use and prosperity continued to rise in lock step throughout the century, and access to cheap, abundant energy increased real per capita GDP by five-fold in a single century. While those trends brought unimaginable opportunities, problems lurked just beyond the horizon. The resources we depend on—primarily oil, coal, and natural gas—are finite. “We can have a reasonable debate on whether those fossil resources will last 50 years or 200 years,” said Dr. Toone, “but they are finite. And extraction of that resource has real consequences. We can again debate what fraction of global warming is anthropogenic, but it is undeniable that the extraction and use of fossil resources has real environmental consequences.” The push to a new energy future, he said, must also address long- standing global inequities. While the application of energy has led to prosperity, it has done so unevenly. With less than 5 percent of the world’s population, the United States has for many decades consumed about a quarter of the world’s energy. Not surprisingly, the United States also generates about a quarter of the world’s GDP. But one-quarter of the inhabitants of the planet have no access to energy services—“and have never seen an on-off switch.” A much larger fraction has sub-optimal access to energy. “Growth in the so-called BRIC countries in the coming decade,” he said, “and in the developing world over longer periods will place massive new pressures on our finite resources.” At the same time, he said, as we pull away from the current fossil-based energy economy, we feel “an incredible pull to a new future. There can be no doubt that our energy economy will be rebuilt.” In the same way the energy revolution that began in the second half of the 19th century rebuilt every aspect of the American economy, the coming transformation will reconfigure both the American and the global economies. “Make no mistake, this transformation will

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60 BUILDING THE ILLINOIS INNOVATION ECONOMY happen. There will be winners and there will be losers. Choosing to sit it out is a choice, but you can’t choose not to participate.” Against that backdrop, he said, the ARPA-E was created in 2007. The impetus for the creation of the agency came from the National Academies’ Rising Above the Gathering Storm25 report. That report, which recommended the creation of a new energy agency modeled broadly after the DARPA, was delivered to the Congress in 2006. The new agency was created under the Bush Administration in 2007, and received its first funding in spring 2009 under the Obama administration, a bolus of $400 million in Recovery Act funding. To date the agency has disbursed over half a billion dollars to 180 projects, universities and companies, and in 2012 was scheduled to obligate $275 million in funding. ARPA-E, he said, differs from most federal funding agencies in its mission of seeking to identify and support “over-the-horizon” technologies with the potential to transform some aspect of energy science or engineering. The agency’s job is not to improve existing technologies, he said, or to drive them along their natural price or learning curves. “That is important,” he said, “but it’s not what we do. We try to identify fundamentally new technologies. Our job is to start fundamentally new learning curves.” In addition, the agency does not continue funding these new technologies long enough to know if they will be disruptive enough to displace existing technologies from the marketplace. The job is to give the market place a range of choices and new technology opportunities, “some of which will scale and some will not. So we’re willing to take on a lot more risk than other funding agencies. When we look at a proposal, the first question we ask is not will this work, but if it worked, would it matter. Then we manage that risk through close and intensive program administration.” President Obama announced the first solicitation of ARPA-E, which was very broad in nature. It resulted in 3,500 pre-proposals, which were winnowed to 320 full applications and ultimately to 37 projects that were selected and funded “across the entire energy landscape.” The first round made investments in energy storage, biofuels, efficiency, carbon capture, solar fuels, vehicle technologies, renewable power, waste heat capture, and water. A total of $151 million were invested, in amounts ranging from $500,000 to $9 million. The “canonical” ARPA-E award is for $2 to 3 million to be spent over a three- year period. After the first solicitation, he said, the agency fell into a pattern of focused investments in specific technology areas. This, too, was different from the strategies of other federal agencies in that ARPA-E does not have line items for particular areas. Instead, the agency invites “the very best technologists and scientists from the private sector and academia to Washington for a period of 25 National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, Washington, DC: The National Academies Press, 2007.

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PROCEEDINGS 61 about three years. We don’t tell them what to do, we ask them to spend some time identifying for us a ‘white space’ where the application of $30 to 40 million over a dozen or so projects might really ‘move the needle’ and start us down one of those new learning curves.” Over the past three years, ARPA-E has initiated programs in transportation, end-use efficiency, and stationary power (see BOX). These programs are supporting research in many cutting-edge technologies, including biofuels, storage of energy for transportation, storage of thermal energy for electrical uses, higher efficiency air conditioning, carbon capture and sequestration, power electronics, grid-scale storage of power for better deployment of renewables, smarter ways to distribute power across existing infrastructures, and construction of generators and engines that do not require rare earth elements. In choosing areas to support, he said, the agency begins with fundamental issues of high priority to the federal government and the nation. For example, biofuels are obviously high in priority because of their central role in enabling transportation. Rather than seeking incremental improvements for existing biofuels, however, ARPA-E addresses the issue at its most fundamental level: the process by which biofuels are created in the first place. By now it is well known that most gasolines have up to 10 percent biofuel content, and that most of this fuel is processed from corn. Less obvious CURRENT ARPA-E RESEARCH PROGRAMS Transportation BEEST—Batteries for Electrical Energy Storage in Transportation Electrofuels—Creating transportation fuels from microorganisms PETRO—Plants Engineered to Replace Oil End-Use Efficiency BEETIT—Building Energy Efficiency Through Innovative Thermodevices HEATS—High Energy Advanced Thermal Storage Stationary Power ADEPT—Agile Delivery of Electrical Power Technology GENI—Green Electricity Network Integration GRIDS—Grid-Scale Rampable Intermittent Dispatchable Storage IMPACCT—Innovative Materials and Processes for Advanced Carbon Capture Technologies REACT—Rare Earth Alternatives in Critical Technologies Solar ADEPT—Solar Agile Delivery of Electrical Power Technology

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62 BUILDING THE ILLINOIS INNOVATION ECONOMY is the larger context in which we have achieved this early means of producing a biofuel. That context is the fact that the only energy input to planet Earth is solar radiation. Over millions of years, most of the Earth’s plants have learned to absorb the photons of solar energy and capture some of its energy by the complex but effective process of photosynthesis. Some of this stored energy is used immediately by the plants themselves and organisms that feed on them; some is buried and gradually converted to petroleum. The energy locked in petroleum is now being converted rapidly by refineries from the viscous raw form to the easy-flowing, high-energy liquid fuel that can be stored in tanks and used to power vehicles. The fact that photosynthesis can achieve this remarkable feat of storing solar energy in the form of chemical bonds is truly remarkable. However, our energy-hungry modern world is impatient with the low efficiency of photosynthetic conversion. The job of Dr. Toone’s colleagues at ARPA-E is to speed up the natural process. “At some level,” he said, “the name of the game is to imagine that the corn or other plant that converts photons is a black box. We want to maximize the efficiency of what goes on in that box, which is the conversion process. How do we do that?” If a farmer plants an acre of land in Texas with one of the North America’s highest-yielding energy crops, he said, such as sorghum, the land would produce about 12 dry tons of biomass a year. This biomass has a heating value of about 8,000 BTUs per pound, which seems remarkable. Viewing that process from the point of view of efficiency, however, reveals that the energy captured in those chemical bonds represents only about 1 percent of the radiation falling on the acre of sorghum—about the amount that would arrive every three days. Nor does this percentage include many factors that reduce the efficiency of the process, such as the costs of growing the crop, harvesting it, moving it, and converting it to a product. Including those costs, the efficiency of photosynthesis—“solar photons in, liquid fuel out”—is really only a few tenths of a percent. Researchers at ARPA-E are optimistic. Early fundamental research into the metabolic processes of organisms, especially vascular plants, algae, and bacteria, has shown that the diverse biological life forms on Earth harness energy in many ways aside from photosynthesis, some of them highly efficient. This diversity of strategies is so great, he said, that the “surface has not even been scratched.” For example, a still-unknown number of organisms occupy ecological niches where they do not have access to reduced carbon or sunlight.26 Many of them make use of hydrogen, ammonia, reduced metallides—or even grow directly on electric current as “electrofuels,” using pathways other than the 26 Most autotrophs, or “primary producers,” transform the energy of sunlight into protein, carbohydrates, fats, and other complex molecules that provide food for it, and for many animals that feed on them. Many others, however, make use of the energy in inorganic compounds of the Earth’s crust, such as hydrogen sulfide, ferrous iron, and ammonium, as reducing agents for biosynthesis or chemical energy storage.

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PROCEEDINGS 63 familiar Calvin cycle that describes the photosynthetic process of carbon fixation. Until recently, none had been carefully studied as potential sources of biofuels. Under ARPA-E, this is a major current emphasis. For example, the small chemical company OPX Biotechnologies, of Boulder, Colorado, is engineering a microbe that can produce biodiesel-equivalent fuel from carbon dioxide and hydrogen under ARPA-E’s electrofuels program, and has calculated that it is 10 times more efficient than photosynthesis.27 Liquid fuels are not the only transportation emphasis at ARPA-E, he continued, the second being its extensive research on vehicle electrification. While two commercial vehicles—the Nissan Leaf and the Chevrolet Volt— successfully came to the U.S. market in the year 2012, he said, current technology still faces fundamental problems. The primary basic research challenge is to store enough electrical power for adequate distance of travel, which he called “range anxiety.” For example, the Leaf is an all-electric vehicle that uses lithium-ion batteries and has a published range of a little over 100 miles. But this figure does not include the power that must be set aside for the heating or air conditioning that drivers expect. Unlike an Internal combustion engine, which provides essentially unlimited heat at no cost, an all-electric vehicle must give up some of its power to heat the passengers. Similarly, an air conditioner on any car requires considerable power. These combined needs of heating and AC reduce the range of an all-electric vehicle to about 50 miles. There seems to be little hope that lithium-ion technology can overcome this challenge. The fundamental problem, he said, is that this technology delivers only about 60 watt-hours per kilogram, with a theoretical limit around 200 Wh/kg. By contrast, gasoline stores about 14,000 watt-hours per kilogram. “If I asked the smartest chemists in the world to come up with the ideal storage medium for transportation,” he said, “it would be gasoline.” To deal with this problem, he said, the ARPA-E BEEST program, Batteries for Electrical Storage in Transportation, was funding research in a number of new technologies. The first is metal-air batteries. Lithium-air batteries, for example, have a theoretical energy density maximum approaching 11,000 Wh/kg, close to that of gasoline. Considering how much of the energy in gasoline is lost as waste heat, he said, these batteries could have even a higher practical energy density than the 14,000 Wh/kg of gasoline.28 A major barrier in developing the lithium-air battery is that its electrodes must be protected from water. One of the companies in the current BEEST program, PolyPlus, is currently developing, in collaboration with Corning, just such an electrode “with tremendous promise for the development of metal-air batteries.” In the area of stationary power generation, he said, which accounts for about 65 percent of the energy used in our society, an urgent challenge is to 27 . 28 The Li-air battery, first proposed in the 1970s, gain their high energy density by using oxygen from the air instead of storing an oxidizer internally.

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64 BUILDING THE ILLINOIS INNOVATION ECONOMY store some of the energy produced for times when it is needed. This is especially true for solar and wind power, renewable sources which are being deployed rapidly in many regions of the United States. He said that electricity produced by wind generators is “pretty much at grid parity”—in other words, it costs about the same as power generated by traditional sources—and in some cases even below parity. Solar energy “is not there yet, but it will be soon.” Despite this progress in generation efficiency by renewables, he said, it must still face the problem of intermittency: that is, wind and solar power function best when wind and insulation are strongest. If renewables generate more than the grid requires at these times, or more than about 20 percent of the total demand of a service region, the excess energy must be stored efficiently for when it is needed. These new forms of energy also have to be generated on a vast scale in a country that “now uses about 600 Hoover dams of electricity a day.” The GRIDS program, he said, has the goal of providing stored renewable energy from any point on the energy grid at an investment cost of less than $100 per kilowatt hour. Working with private companies, universities, and national labs, ARPA-E supports 12 projects in this field. These include the technologies of magnetic energy storage, next-generation flywheel energy storage, flywheel composite rotors, flow-assisted alkaline batteries, zinc-air energy storage, soluble lead flow batteries, and fuel-free compressed air energy storage. One example is a partnership between 24M, a spinout from MIT, and A123, a battery technology company. This project is using semi-solid flow cells that combine advantages of a battery with the power density of a fuel cell to generate “very low cost and very scalable energy storage.” The chemistry of this system resembles that of a standard Li-ion battery, but in a flow battery the energy storage material is held in external tanks. This means that storage capacity is not limited by the size of the battery itself, making it possible to add storage capacity by simply increasing the size of the tanks and adding more paste. In addition, 24M’s technique is also able to extract more energy from the semi-solid paste than conventional Li-Ion batteries, creating a cost-effective, energy-dense battery that can improve the driving range of electric vehicles or store energy for the electric grid. Another form of renewable energy of interest to ARPA-E is geothermal heat, of which the United States has enormous resources. Most, but not all, are located in the West, but virtually all share the problem of access. Geothermal sources tend to be seven to ten kilometers below the surface and (unlike petroleum reservoirs that are usually covered by soft sandstone or limestone) they are buried within basalt or granite, which does not yield to ordinary drill bits. A partnership of scientists from MIT and FORO Energy has addressed this challenge by fixing a powerful continuous wave laser29 on the front of a drill bit. The laser is able to heat and thermally fracture the rock as it descends through the rock, leaving the bit the relatively easy task of clearing away the fractured 29 A continuous wave (CW) laser, unlike the more familiar pulsed-wave lasers, emits a continuous wave of light energy.

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PROCEEDINGS 65 rock. Project engineers have used extremely high-quality fiber-optic cable to power a 50-kilowatt laser to a depth of 5 kilometers. The optical quality of the glass fiber is so high that a 10-km block of the glass would have less distortion than an ordinary window pane. “This is a truly spectacular achievement,” he said. “They have drilled through some of the hardest rock on earth at 10 times the world [speed] record with basically zero weight on the bit.” He said that ARPA-E would soon announce a series of new projects for 2012, and that the agency would be supported by $275 million in new funding. He said that one project would develop novel approaches in storing natural gas for personal rather than fleet vehicles. Although natural gas is rapidly penetrating the long-haul trucking sector, he said, its use in personal vehicles is “much more problematic.” Also, the AMPED program would be trying to develop battery control technologies that allow extraction of much more energy from existing batteries. He concluded with the news that the 2012 FOA, which was then open, had drawn “even more applications than we got the first time. This is a tremendous demonstration of pent-up demand for support in the energy space. We look forward to many successful new programs in the future.” DISCUSSION Dr. Wessner asked whether large-scale deployment of such new technologies faced regulatory and financial challenges. Dr. Toone agreed that his agency faced more challenges than DARPA, primarily because DARPA always knows that it will “market” its output to the Department of Defense. ARPA-E does not have a single customer, so it has built its own technology-to- market operation, helping its partners develop their technologies toward a market after ARPA-E support ends. That team is lead by Sherrill Martin, who has had 20 years of experience as a vice-president of Rohm and Haas and as an entrepreneur-in-residence at a leading venture capital firm. The agency consults with all partners to determine the best strategy for each, which might be another round of federal support, a joint development agreement with a large company, a venture-funded startup, or other approach. “We work hard to address these concerns,” he said.