For the past two years federal government support for energy storage technology has been unprecedented. The government has invested billions of dollars in all facets of the advanced battery supply chain, from basic research in advanced materials to full scale mass manufacture of battery systems. It is sobering to remember that only two years ago, advanced battery technology was starved for funding and the United States had largely abandoned development of this critical technology to other nations.
It is also sobering to remember that substantially all of the money comprising this investment has come from the same place: The unprecedented stimulus package embodied in the American Recovery and Reinvestment Act of 2009 (the “ARRA”). As with any good party, however, the ARRA funds are coming to an end. While there is every reason to believe that the Obama Administration will do what it can to continue support for the U.S. advanced battery industry, the federal government’s resources and ability to provide financial support in the future will be extremely limited. The U.S. advanced battery industry and the federal government must start planning for the post-ARRA era.
Because the resources of the federal government are likely to be sharply limited in the years ahead, substantial future funding for advanced battery research and development must come in some form from private industry. Two years ago there was little prospect of that. Advanced large format batteries were an early stage technology with no commercial products and an uncertain market. While many small companies and venture capitalists searched the market for opportunity (and for funding), the big players in the United States largely stayed on the side lines. Early stage venture is generally neither an interest nor a strength of America’s leading industrial corporations.
But the most important contribution the ARRA may have made to the advanced battery industry is that it took it from an early stage technology to a technology that is at an early stage of commercialization. Although mass market demand for advanced battery technology has yet to develop, there are today real products in the market and the development path for energy storage technology is far less speculative than it was two years ago. In short, it is just about time for the big guys to start coming in. When they do in earnest, the U.S. advanced battery industry will change dramatically.
One of the strengths of large U.S. corporations is their historic willingness to work together collaboratively on basic precompetitive technical challenges that are common to the industries in which they compete. The semiconductor industry is a case in point. Since 1982, the Semiconductor Research Corporation has served as a research consortium, funding precompetitive directed research at more than 250 universities on behalf of its member firms. Member firms receive preferential access to the intellectual property created and access to the faculty and students involved in the funded programs. The industry-directed nature of the research ensures that funding goes exactly where industry believes it will do the most good. Government funds are used to leverage capital provided by the private sector rather than to pursue independent projects that are unsupported by any business entity seriously interested in its commercialization.
If major U.S. corporations make a major push into stored energy technology, the model of collaborative, industry-directed research program supported by limited government grants could well be the way that the momentum in energy storage technology created by ARRA-appropriated funds can be maintained. The government has done its part in helping the industry mature to the point where major corporations may be willing to fund research that they can commercialize within a reasonable period of time. Those major companies that stand to benefit from energy storage—advanced material companies, auto companies and utility holding companies–should now come together and organize to take energy storage technology investment to the next stage and ensure that the opportunities that the ARRA has created are not lost.
