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Robert Margolis
Ph.D. Student

Science, Technology, and Environmental
Policy (STEP) Program

Woodrow Wilson School of Public and
International Affairs

Princeton University

Energy Technology R&D: Promoting Technological Innovation for Managing Global Environmental Change

While the end of the Cold War and low fossil fuel prices have decreased the level of public attention focused on energy planning, the domestic and global political challenges, and the investments needed to develop clean energy technologies have increased significantly. In this context, surprisingly little new capacity has developed to plan, initiate, and evaluate energy R&D. This research effort is pursuing four inter-linked themes on energy technology research and development policy in order to help fill this gap.

First, we have been examining the changing patterns of U.S. energy technology R&D investments by electric utilities, private industry, and the federal government during the post-WWII era. A main finding coming out of this work is that the transition to a more competitive environment in the electricity sector has resulted in a dramatic decline in the level of utility R&D funding and a shift in the focus of Utility and EPRI sponsored R&D towards achieving short-term results. Combining this with recent cut backs in energy technology R&D funding in both the public and private sectors, presents a significant threat to the innovative capacity of the energy sector as a whole.

Second, we have been examining the empirical evidence for under-investment in energy technology R&D and innovation in the U.S. and other industrial countries. There are three key findings that have emerged from this work: (a) energy technology funding levels have declined significantly during the past two decades throughout the industrial world, (b) in the U.S., R&D spending and patents, both overall and in the energy sector, have been highly correlated during the past two decades, and (c) the R&D intensity of the U.S. energy sector is extremely low. While this work makes a clear case for increasing both public and private sector energy technology R&D investments, it does not identify where those increased funds should be directed, how they should be raised, or how public funds should be leveraged, i.e., it does not identify what the proper roles of government and private industry should be with respect to encouraging and carrying out innovation in energy technologies. Thus this work helps to motivate our detailed case study research discussed below.

Third, we have been examining the impact of recent technology transfer related legislation on the total number and on the ownership of patents resulting from federally sponsored R&D, especially DOE sponsored R&D. A key finding from this research is that the total number of patents assigned to the DOE has decreased as budgets have declined; however, the total number of patents assigned to the DOE, or in which the DOE is a partner or has other financial interests, has been increasing steadily during the past decade. A similar pattern emerges when examining data on specific energy technology sub-sectors. This research indicates that both the level of R&D funding as well as government policies related to how R&D dollars are managed and spent are tremendously important. An important next step in this work is to try to gain a better understanding of how these policy changes have influenced the overall process of innovation in the energy sector.

Fourth, we are carrying out historical case studies on the process of innovation for three specific energy technologies: wind turbines, solar photovoltaics and combined cycle gas turbines. This research seeks to gain a better understanding of how the public and private sectors interact to bring about innovations in energy technologies that are environmentally enhancing. Our focus in the case studies is on three causal pathways through which government policy can influence strategic R&D decisions of firms: (a) demand-pull policies, which are aimed at creating/expanding markets for new technologies, such as production tax incentives, information dissemination, technical assistance, and market development for overseas investments; (b) supply-push policies, which increase direct investments in R&D, including public funding of R&D and R&D tax incentives; and (c) assessment activities, which develop credible information regarding current or possible future environmental impacts from products or processes, for example, linked to concerns about global climate change. This research is empirical, historical and comparative. It is being carried out in collaboration with a research team at Harvard University (see: http://ksgnotes1.harvard.edu/BCSIA/STPP.nsf/www/EnRD).

Together these research themes aim to improve our understanding of the process of technological change, in order to be able to identify appropriate policies and institutions to address emerging challenges faced by the energy sector.


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Last updated 5/14/2000

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