Blog Post

Bill Gates, John Doerr: We Need $16B Per Year for Energy Innovation

Americans spend more on potato chips every year than energy investment, said Kleiner Perkins venture capitalist John Doerr at an event on Wednesday morning for the newly created American Energy Innovation Council. The group, which includes business leaders like former Microsoft (s MSFT) CEO Bill Gates, Xerox (s XRX) CEO Ursula Burns, General Electric (s GE) CEO Jeff Immelt, and Lockheed Martin (s LMT) CEO Norman Augustine, laid out a set of goals that would boost energy innovation in the U.S., including the recommendation that the U.S. needs to invest $16 billion per year into energy innovation.

The group emerged last April when Gates wrote an op-ed for the Washington Post focused on how the federal government needed to invest more in energy technology R&D. But this morning the business leaders offered four other recommendations beyond the call for more funding. At the heart of the report and recommendations is to use federal money to stimulate energy innovation.

The four recommendations, beyond the request for $16 billion, include 1). creating an independent national strategy board that would develop a national energy plan and would be filled with experts (also politically neutral), 2). create centers of excellence that would use $150 million to $250 million annually each, 3). fund the Department of Energy’s ARPA-E program (grants for early stage, high risk energy projects) at $1 billion per year, and 4). create a New Energy Challenge Program that would help move technology to the commercial stage (cross that valley of death).

In about 20 years these approaches will help deliver energy technologies that will hopefully be moving into the commercial stage, said Gates. The energy technology that is available today needs this kind of innovation to move it to the next stage, said Gates. The group noted that it would have performance metrics that would help the government implement the program effectively.

The group also expressed support of the U.S. putting a price on carbon at some point in some way, but didn’t include specifics about that in their report recommendations. As GE’s Immelt put it the government has “a policy of uncertainty right now.”

“The increase in scale is not a lot,” said Doerr. Immelt noted that it’s on the same scale as the funding for the National Institute for Health, which is a world-leading industry.

For more on cleantech financing check out GigaOM Pro (subscription required):

Cleantech Financing Trends: 2010 and Beyond

16 Responses to “Bill Gates, John Doerr: We Need $16B Per Year for Energy Innovation”

  1. Great idea, another $16 billion in government spending (chump change for these Democrats), and for a noble cause — energy! You can always count on billionaires to contribute their benevolent genius!
    Hey, if these wizards demonstrate they got the funds in advance from the fat pensions of government unionized employees, then I’m all for it. But if we all have to get a loan for $16b from the Chinese to pay for these funds (like the rest of our national debt), then NO NO NO NO.

  2. What’s so incredible to me about the X PRIZE competitions is that they encourage private innovators – entrepreneurs from already-famous engineers and already-wealthy financiers to up-and-coming kids with brilliant ideas – to really think outside the box.

    It’s just the kind of thinking we’re going to need to solve what I think will be two of this century’s biggest problems: 1) Stagnating American competitiveness at the same time that developing nations like China and India become increasingly competitive; and 2) Increasingly problematic reliance on fossil fuels.

    Grand innovators have been college kids, entrepreneurial engineers, tinkering airmail pilots. All with big ideas and the motivation to turn them into reality. The X PRIZE is an inspiring way to generate that motivation, but the government would also do well to offer greater financial incentives – R&D grants, innovation subsidies – to motivate more out-of-the-box thinking in more innovators in more garages.

  3. I think the most important stipulation is political neutrality. I agree with the group that the funding should be on par with health. The world is moving quickly towards clean energy. Consumers are recognizing that there are implications for national security. If our leaders continue to play the debating game using mercenary lobbyists and eco-politicians, we will lose our world leadership to India and China.