INDUSTRIAL TECHNOLOGIES PROGRAM
The Industrial Technologies Program (ITP) is the Department of Energy’s (DOE’s) industrial energy efficiency program,1 providing federal support for industrial research and development (R&D) for energy efficiency technologies. The ITP is part of the Office of Energy Efficiency and Renewable Energy (EERE), which is responsible for the majority of the research, development, and demonstration (RD&D) activities of the DOE (DOE, 2002).
The mission of the ITP is to decrease the energy intensity of the U.S. industrial sector through a coordinated program of research and development, validation, and dissemination of energy efficiency technologies and operating practices. The ITP aims to invest in high-risk, high-value R&D that has the potential to reduce the energy requirements of industry, but for which market barriers prevent adequate private-sector investment. Because energy is such an important input for many manufacturing industries, reducing energy requirements can lower energy costs, reduce greenhouse gases and other emissions, and improve productivity per unit of output (DOE, 2003c, p. 1).
The ITP currently funds research addressing the needs of seven energy-intensive industries, known as the Industries of the Future (IOFs). These industries are aluminum, chemicals, forest products, glass, metal casting, mining, and steel. The petroleum-refining industry is also designated as an IOF, but projects specifically directed at this industry have not yet been funded. Together the IOFs account for 75 percent of the energy consumed by the U.S. industrial sector (see Figure 1–1).
The ITP program goals are to contribute to a 25 percent2 decrease in energy intensity3 by the energy-intensive IOFs between 2002 and 2020 and to commercialize more than 10 industrial energy efficiency technologies between 2003 and 2010.4
Restructuring of the Office of Energy Efficiency and Renewable Energy
On March 18, 2002, DOE’s Assistant Secretary David Garman announced a major reorganization of the Office of Energy Efficiency and Renewable Energy. The reasons cited were an outdated focus on sectors rather than on programs; the existence of processes and systems that duplicated and conflicted
with corporate approaches; the existence of artificial organizational layers superimposed over programs, creating inefficiencies; and too many layers of management (Garman, 2002). The EERE had been organized into five market sectors5 and their 17 offices, resulting in a stovepipe culture. These stovepipes included business management processes and systems that fragmented EERE business management, while the market-sector organizations created layers on top of programs, resulting in inefficiencies (Garman, 2002).
The impetus for change had come from a variety of sources, including a National Academy of Public Administration review of EERE management completed in 2000, the President’s Management Agenda released in 2001 (OMB, 2001), and the National Energy Policy released in 2001 (NEPDG, 2001). The President’s Management Agenda called for flattening organizations to make them more responsive; focusing on results instead of process; linking budgets with performance; ending overlapping functions, inefficiencies, and turf battles; and making the most of government employees and their knowledge, skills, and abilities (Garman, 2002). The National Energy Policy directed the Secretary of Energy to review the current funding and historic performance of energy efficiency, renewable energy, and alternative energy R&D programs in light of recommendations of the National Energy Policy Development Group (NEPDG) and to propose appropriate funding for R&D programs that are performance-based and modeled as public-private partnerships (NEPDG, 2001).
In response to the National Energy Policy direction, the EERE completed a Strategic Program Review in March 2002, which concluded that EERE research had generated significant public benefits and often exhibited scientific excellence. However, this review also concluded that there were areas needing improvement, including 20 projects that should be terminated, 6 initiatives that needed redirection, a variety of programs that needed to be carefully monitored, several program areas that needed to be expanded, and an uneven application of best program practices across EERE sectors (EERE, 2002).
The EERE’s management and business model was redesigned with input from the three documents cited above (DOE, 2002). After the restructuring, 31 program offices had been consolidated into 11, and only two of five deputy assistant secretary (DAS) positions remained—one for technology development and one for business administration (see Figure 1–2). The 11 current program offices are Biomass; Building Technologies; Distributed Energy and Electricity Infrastructure and Reliability; Federal Energy Management; FreedomCAR and Vehicle Technologies; Geothermal Technologies; Hydrogen, Fuel Cells, and Infrastructure Technologies; Industrial Technologies; Solar Energy Technology; Weatherization and
Intergovernmental Grants; and Wind and Hydropower Technologies (DOE, 2002). The Deputy Assistant Secretary for Technology Development oversees all EERE program managers and regional offices, while the Deputy Assistant Secretary for Business Administration oversees all program support issues, planning, analysis, budget formulation, and the Golden, Colorado, field office (NHA, 2002).
Restructuring of the Industrial Technologies Program
The EERE reorganization resulted in a reorganization of the Industrial Technologies Program along the lines of the new EERE management and business system. The ITP mission, goals, and strategies were aligned with those of the EERE Strategic Plan, the DOE Strategic Plan, and the National Energy Policy (see Figure 1–3). In addition, several ITP programs and projects were moved from the ITP to the EERE Biomass Program, including the agricultural industry programs, the black liquor gasification project, and the new, forest-based materials effort. The ITP personnel at DOE headquarters in Washington, D.C., are now responsible for developing, managing, and evaluating technology portfolios to best achieve ITP goals and strategies. The Golden Field Office in Colorado is responsible for initiating, managing, and monitoring all ITP projects. The EERE regional offices in Atlanta, Boston, Chicago, Denver, Philadelphia, and Seattle are responsible for delivering technologies to ITP industrial partners.
New Industrial Technologies Program Decision-Making Model
The ITP has developed and is in the process of instituting a new decision-making model that will refine the project selection process and implement ITP strategies (see Figure 1–4). The decision-making model is based on the following steps: (1) the identification of focus areas that hold potential for energy savings in each subprogram, (2) the identification of barriers that prevent improvement in these focus areas, and (3) the determination of research and development pathways to overcome those barriers.
Focus areas for the seven Industries of the Future are identified using a wide variety of sources, including industry vision documents and roadmaps, energy and environmental profiles for the industries, and other forms of industry input. The most energy-intensive stage of each process is usually identified by conducting an energy footprint analysis.6 The areas in which the maximum potential energy savings can be achieved are then identified using a bandwidth analysis.7 Industry expertise is also fed into the decision-making process. These help principally in defining the barriers to energy efficiency; from these definitions, development pathways can be determined. To achieve the goals of the ITP program, public-private partnerships are fostered. Each subprogram issues requests for proposals designed to achieve a balanced portfolio of both grand challenge (high-risk and high-payoff) and near-term projects.
The EERE Strategic Program Review found that EERE would benefit from more systematic and rigorous application of peer review for all of its programs and major management functions (DOE, 2003b, p. vi). Recently, a wide variety of other authorities have argued that peer review practices at federal agencies need to be strengthened (OMB, 2004). In response to congressional inquiry, the U.S. General Accounting Office documented the variability in both the definition and implementation of peer review across agencies (GAO, 1999). In response to these findings, the EERE developed a peer review guide to help programs and offices establish formal peer review processes that result in intellectually fair and disinterested expert evaluation.
COMMITTEE FOR REVIEW OF THE DEPARTMENT OF ENERGY’S INDUSTRIAL TECHNOLOGIES PROGRAM
In response to the call for strengthened peer review within the EERE, the leadership of the ITP asked the National Research Council’s Board on Manufacturing and Engineering Design to assess the overall technical quality and effectiveness of the program. The board was asked to assess the new decision-making process used by the ITP to determine research directions as well as the application of this process to individual subprograms and the program as a whole. The Committee for Review of the
Department of Energy’s Industrial Technologies Program was formed (see Appendix A for committee biographical information) to undertake this task and was specifically tasked to do the following:
Evaluate the overall ITP strategic plan as contained in the Multi-Year Program Plan (MYPP), including whether the strategic plan is appropriate, has reasonable and achievable goals, and reflects the needs of the DOE and the broader U.S. industrial community;
Evaluate the technical quality and appropriateness of individual subprogram plans by reviewing both the decision-making process and each prospective portfolio, including the following: how focus areas and barriers were identified; whether appropriate data sources were used; whether the data used (studies, roadmaps, industry expertise) support the selection of focus areas and barriers; whether the focus areas and barriers are the highest priority or most appropriate related to the ITP’s mission; how the R&D pathways were determined and whether these pathways are likely to result in achieving program goals; whether the prospective subprogram portfolios are the right ones to achieve the goals of the ITP; whether there are unnecessary research areas or gaps in research; and whether there is a reasonable mix of near-, mid-, and far-term research; and
Determine the prospective value of the MYPP and planning processes, including: the likelihood that the program will achieve its goals; whether there is a good plan to carry out the program; how well the program is connected to the users, including non-ITP researchers; and the capacity to develop lessons learned for future interdisciplinary research activities.
The committee was asked to include findings and recommendations related to the quality and appropriateness of all DOE projects and programs in the ITP, including internal work, collaborative activities, and competitively sourced research, development, and analysis. While the primary objective of this review was to conduct peer assessments that provided technical advice, the committee was asked to offer programmatic advice when it followed naturally from technical considerations. The committee was not asked to make specific budget recommendations.
In early May 2004, committee members received a copy of the MYPP dated October 2003, as well as other documents describing the various subprograms and activities within the ITP. On May 19–20, 2004, the committee heard presentations from ITP personnel regarding the program. In order to evaluate the individual ITP subprograms, the ITP’s technology delivery activities, and ITP activities at the EERE regional offices, committee members reviewed the MYPP, annual reports from all of the subprograms, and additional supporting documents, as well as hearing the presentations from ITP personnel. Owing to time and resource constraints, the subprogram presentations were divided into three groups (see the meeting agenda in Appendix B), with one committee member assigned as the lead on each subprogram review and two others assigned to support the lead. The committee was able to ask program managers for specific information and request additional information. On May 21, 2004, the committee met in closed session and began the process of coming to consensus on subprogram and program evaluations. This report represents the consensus conclusions and recommendations of the committee.
ORGANIZATION OF THE REPORT
Following the background information in Chapter 1 on the context within which the ITP operates and some history of the ITP itself, Chapter 2 presents the committee’s program-level evaluations. Included are evaluations of the Strategic Plan, the overall program plan, the decision-making process, and the corporate strategy. Chapter 3 presents the committee’s evaluation of the individual subprograms that are based on the Industries of the Future, and Chapter 4 provides its evaluations of the individual crosscutting subprograms, as well as the technology delivery subprogram and ITP activities at the EERE regional offices. Chapter 5 then presents the committee’s overall conclusions and recommendations.