DOE Awards $151M for Early-Stage Green Tech

doe-logoIt’s not often that the Department of Energy gets to go far out on a limb with its investments. But that’s exactly the point of ARPA-E (Advanced Research Projects Agency-Energy) — a program funded under the stimulus package to support moonshot technologies that might be too risky for other investors. Today the DOE has announced the first round of ARPA-E grants, awarding a total of $151 million for 37 projects.

The winners in this first round include General Motors (s GM) ($2.7 million), battery materials startup Envia Systems ($4 million), ultracapacitor developer FastCAP Systems ($5.3 million), auto supplier Delphi Automotive Systems ($6.7 million), solar tech developer 1366 Technologies ($4 million), efficient designers PAX Streamline ($3 million), and several universities (for a complete list see here). In all, the funding will cover work across the spectrum of green technologies, including building efficiency, carbon capture, energy storage, fuel-efficient vehicle technologies, renewable energy, waste heat capture and water desalination.

Created in 2007, but left unfunded until passage of this year’s stimulus package, ARPA-E has $400 million to award over the next two years. The projects announced today represent just about 1 percent of the original pool of applicants. A team of 500 scientists from U.S. universities considered 3,600 preliminary proposals, and invited 300 of those teams to submit complete proposals this summer.

The DOE explained earlier this year an ideal ARPA-E applicant would have a “multi-disciplinary” technical idea that could reduce dependency on oil imports, improve energy efficiency across all sectors of the economy, reduce greenhouse gas emissions and/or give the U.S. an edge in deployment of energy technologies.

ARPA-E-Awards1The grants are meant to support ideas and technologies in these areas that are facing the “valley of death” — the place where many capital-intensive cleantech startups go to die because they can’t find financing for a critical phase of development or commercialization.

“It’s not supposed to be things that are 90 percent worked out, but more what-if kinds of things,” biochemistry professor Lawrence Wackett, who’s working on an ARPA-E project at the University of Minnesota, told the New York Times.

Many of the projects funded under this first round — particularly the university projects — are at an earlier stage than when venture capitalists step in with big investments. Stealthy startup Envia Systems raised $3.2 million in Series A funding for its work on “a new class of cathode materials” in October 2008, but that would hardly be enough to finance the company’s development, commercialization and plans for high-volume production in late 2010 or early 2011.

Getting in on the ARPA-E program gives startups like Envia Systems access to more than government funds. The DOE has said it will work with teams to develop intellectual property strategy and technical data strategies, as well as a procurement or financial assistance instrument to help manage risk once government funding for a project runs out.

According to the Times, which interviewed Secretary Chu on Friday, “Some of the ideas may be supported until they are picked up by venture capitalists or major companies.” All is not lost for the 99 percent of proposals that did not receive funding in this first round: The DOE may host a “fair” to let venture capitalists sniff them out for investment.