A Tech Transfer Push at the Energy Department

February / March 2008 By: Tom Michael Volume 6 Number 1

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The Office of Energy Efficiency and Renewable Energy at the Department of Energy wants venture capitalists to know it is open for business. Over the past year, the office—€”or EERE as it most commonly called—€”has hired several new leaders with private sector experience to help the agency move its government-funded technology to the marketplace.

Two of those new leaders—€”Paul Dickerson, chief operating officer, and Michael Bruce, senior financial advisor—€”recently spoke with Innovation about their efforts to make DOE more aggressive in its approach to technology transfer.

"The federal government has a reputation, whether deserved or not, of being slow to move and not very transparent," Dickerson, formerly of the U.S. Chamber of Commerce, said. "I think they are finding our office to be quick to move and to be much more market focused than it's ever been."

To that end, EERE late last year created an Entrepreneur in Residence program. The program brings entrepreneurs, sponsored by venture capital firms, into three DOE laboratories to help develop plans to commercialize clean technology. The entrepreneurs, who will be selected in early 2008, will help develop plans to commercialize new clean energy technologies, and identify those technologies that best exploit market potential and meet the DOE's mission of developing more clean and reliable energy.

Under the pilot program's rules, each entrepreneur must be sponsored by an established venture capital firm that has at least $10 million available for energy efficiency and renewable energy technology investment. The sponsoring firm must also have an overall fund size of at least $100 million. DOE will award grants of $100,000 to help support entrepreneurs in residence at each of the three national laboratories.

"We hire scientists (historically at DOE), we don't hire entrepreneurs," Dickerson said. "We've found that these brilliant researchers were often not the best entrepreneurs, nor were they paid to be. Rather than try to retrain them we've decided it's best to try to bring in people with that commercial expertise, and that's why we set up an Entrepreneur in Residence program." The first labs selected for this ambitious new program are Sandia in Albuquerque, Oak Ridge in Tennessee and of course, the National Renewable Energy Lab in Golden, Colo.

That's why Dickerson said he has also set aside time each week to have four to six meetings with entrepreneurs and CEOs, and inform them of how to better take advantage of DOE's cutting-edge science.

"We educate them on how to compete for some of our funding and how to better deal with our nation's laboratories," Dickerson explained. "It is critical that our DOE staffers keep their fingers on the pulse of the market and equally important that we give CEOs and entrepreneurs a chance to peek behind the curtain of the federal government and spot opportunity," Dickerson said. He said currently the best opportunities for entrepreneurs and startups are in the realm of energy efficiency.

"Your lowest hanging fruit is efficiency," he said. "Right now as a nation we remain fairly inefficient. There are great opportunities to adopt new technologies and not only is it the right thing to do, it pays for itself. And with renewables there is great promise there, especially with biofuels, wind and solar."

In recent years, Congress—€”frustrated by what many members have viewed as missed opportunities to create jobs and bolster the U.S. economy—€”has tried to get the Department of Energy to be more proactive in bringing in industry to determine where technology spin-offs could occur. "For the entire time I've been in the Senate, tech transfer has been one of the most difficult activities the labs are charged with doing, and one of the most difficult to achieve," Senator Pete Domenici of New Mexico told Innovation last year.

The Energy Policy Act of 2005, authored in large part by Domenici, required DOE to hire a technology transfer coordinator to oversee the mission across the DOE complex, not just in EERE. The position was finally "filled" when DOE Secretary Samuel Bodman added the title to the existing responsibilities of Ray Orbach, who heads the DOE's Office of Science.

"We want it to be taken very seriously," Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee and another chief architect of the Energy Policy Act of 2005, told Innovation last year. "I think it needs to be a priority."

One of the traditional hurdles to successful tech transfer at DOE is the fact that much of the science conducted there is classified and sharing it isn't an option. But Michael Bruce said there is much work that needn't be walled off from the private sector.

"We certainly don't want to commercialize nuclear weapons research, but there is a whole different side of DOE—€”the Office of Energy and the Office of Science—€”where those issues are not as relevant," he said. "We've been working on enacting a cultural shift within the national labs to make more of a distinction."

Dickerson and Bruce each conceded that they weren't fully aware of the congressional frustration with DOE's tech transfer efforts.

"When I first came on board I was out giving speeches around the country. Everywhere I went I would hear from folks saying it was difficult to identify who the experts were in our office and how to work with us," Dickerson said.
"A lot of the venture capitalists and entrepreneurs simply didn't know about the intellectual properties the lab had developed. We hadn't done a very good job of identifying that technology and communicating it in layman's terms."

Matthew Trevithick, a partner in Venrock, a California-based venture capital firm, said that is starting to change—€”at least at EERE. Trevithick credited Bruce, Assistant Secretary Andy Karsner (who heads up EERE) and others for fostering a much more open atmosphere with the private sector.

"Andy Karsner and the team he has recruited to work with industry at EERE have put an awful lot of hustle into reaching out and building bridges to the entrepreneurial community," Trevithick said.

Tom Michael reports from Washington for Innovation.

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What Does EERE Do?

The mission of the Office of Energy Efficiency and Renewable Energy (EERE) is "to strengthen America's energy security, environmental quality, and economic vitality in public-private partnerships that: enhance energy efficiency and productivity; bring clean, reliable and affordable energy technologies to the marketplace; and make a difference in the everyday lives of Americans by enhancing their energy choices and their quality of life."

EERE leads the federal government's research, development and deployment efforts in energy efficiency. EERE's role is to invest in high-risk, high-value research and development that is critical to the nation's energy future and would not be sufficiently conducted by the private sector acting on its own.

Program activities are conducted in partnership with the private sector, state and local government, DOE national laboratories, and universities. EERE also works with stakeholders to develop programs and policies to facilitate the deployment of advanced clean energy technologies and practices.