Dive Brief:

• Federal agencies looking to drive innovation and uptake of new technology in the energy sector could look to states with successful "innovation hubs," according to participants in a Tuesday panel hosted by the National Academies of Sciences, Engineering, and Medicine.

• States with consistent policy goals regarding energy and economic development and a dedication to stakeholder input have created the most successful innovation "ecosystems," according to Kavita Surana, an assistant research professor in the University of Maryland's School of Public Policy.

• The U.S. Department of Energy could benefit from innovation models pioneered by state universities, which panelists said enjoy long-term vision and funding.

Dive Insight:

How can government best promote increased innovation? Certain states and universities may have identified some key factors, according to the panel.

National data, Surana said, can be used to identify several energy innovation clusters throughout the U.S., but these hubs aren't necessarily correlated with the location of DOE laboratories. Rather, most have developed around universities with long-running goals focused on energy and economic development, she said.

Although some states enjoy advantages over others thanks to larger budgets or access to a more developed STEM workforce, Surana said her research had identified several key attributes that contributed to the development of the most successful innovation hubs, in which strong research and development programs identify promising new technologies and a thriving startup community helps to commercialize them. 

States that had clearly defined policy goals that remained stable across political administrations, had joint programs across multiple state agencies, and had identified their own regional energy strengths were the most likely to enjoy greater innovation, she said.

These innovation hubs have also worked with local stakeholders to identify industry priorities and aligned research and government funding with those priorities, Surana said.

Surana's research into state-level success driving the commercialization of new energy technologies mirrored conclusions drawn at the Massachusetts Institute of Technology (MIT) about federal policies, as presented to the panel by Scott Stern, a professor in MIT's Sloan School of Management.

"Every single actor in these ecosystems — entrepreneurs, capitalists, corporations, government and universities — views itself as a disproportionately important player stymied by other actors," Stern said. "But the evidence is clear that the most effective ecosystems operate by a stakeholder model that draws on the resources and advantages of other actors in the ecosystem."

However, the panelists agreed that for the U.S. utility sector to achieve the ambitious decarbonization goals established in recent years will require investment greater than the resources available at the state level. According to Dorothy Robyn, a senior fellow at Boston University's Institute for Sustainable Energy, participants in a series of policy workshops held this summer came to a consensus that federal energy spending would need to increase two to three times from current levels for the nation's utilities to meet these goals.

"We have dozens of utilities who have pledged to net zero ... and uniformly said existing technology will not get them there," said Rich Powell, executive director of ClearPath, later adding that, "we can't pretend that we can solve the problem in front of us with really meager investments from the federal government. The truth is we're talking about reshaping whole sectors of the economy, and when the federal government has tried to do that it has required meaningful investment in infrastructure — tens of billions of dollars."

Panelists also spoke of a need to reform the structure and culture of the DOE, which they said had become too siloed, focused on basic research, and subject to abrupt swings in policy under new administrations, which they said discouraged private investment in emerging energy technologies.

"It's very unpredictable," said Dan Reicher, a senior research scholar at the Stanford Woods Institute for the Environment, "and if you're an investor, that's the last thing you can afford."

Stern said the DOE needed to "take a page from … universities" and make economic development a higher priority than basic science. He said universities were also a better example of long-term planing and stability in terms of leadership and direction.

"Universities specifically plan to be around for a while," he said. "The federal government changes priorities faster. Key universities plan to invest in these areas for a while."