U.S. Loses $10.4 Million After Failures in Clean-Energy Research

The U.S. lost $10.4 million on six clean-energy projects, including biofuel research at Iowa State University, that were suspended for missing performance milestones, according to the Energy Department.

Iowa State in Ames and United Technologies Corp. (UTX) of Hartford, Connecticut, were among six recipients of a combined $14.1 million for clean-energy research, Jen Stutsman, an agency spokeswoman, said today in a phone interview. The unspent cash, about $3.7 million, will be returned to the U.S. Treasury, she said.

The department’s Advanced Research Projects Agency-Energy, known as ARPA-E, since September cut projects that invested in technologies including carbon capture and nanofiber paper, Damien LaVera, an agency spokesman, said in an e-mail. ARPA-E Director Arun Majumdar said yesterday six programs were halted.

“By their very nature, these aggressive research milestones will often not ‘pan out’ despite the best efforts of recipients,” LaVera said.

Republicans in Congress have faulted the department’s oversight of its clean-energy loan-guarantee program. The department backed companies including solar-panel maker Solyndra LLC and energy-storage developer Beacon Power Corp (BCONQ). Both filed for bankruptcy protection after winning U.S. guarantees for a combined $578 million. ARPA-E is separate from the program that backed Solyndra and Beacon.

‘High-Risk Program’

“ARPA-E has been a high-risk program from the start, and the fact that several projects are not panning out is not surprising given the lack of accountability or clear direction for these dollars,” Representative Fred Upton, a Michigan Republican and chairman of the House Energy and Commerce Committee, said in an e-mailed statement.

Iowa State spent about 56 percent of $4.4 million from the U.S. for a project to create biofuel feedstock from an aquatic micro-organism. The agency also ended projects to capture carbon from coal-fired power plants, including Nalco Holding Co. (NLC) of Naperville, Illinois, which has about $500,000 left, and United Technologies, for which $403,898 remains.

The Energy Department has said ARPA-E is a “swing for the fences” effort to develop cutting-edge clean-energy technologies, and it anticipates some will fail.

“We will learn not only from projects that succeed but also from projects that ‘fail,’” according to the program’s budget request for 2013. “ARPA-E will continue to actively manage and monitor projects, and will continue to cancel projects that are not meeting their technical milestones.”

Nanotechnology, Sound Waves

The agency also ceased funding for a project to pump heat using sound waves and initiatives to use nanotechnology to make desalination plants and lithium-ion batteries more efficient. Funds remaining for those projects is $848,266.

LaVera said recipients received notice about missed milestones and were allowed a chance to get research “back on track.”

ARPA-E in September awarded $156 million for 60 energy research projects, primarily at universities including the Massachusetts Institute of Technology and the University of Florida. Eleven companies with ARPA-E projects have attracted a combined $200 million from private investors, according to the Energy Department.

President Barack Obama proposed a 27 percent increase in ARPA-E funding, to $350 million, in his 2013 budget submitted yesterday to Congress.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.