Everyone loves innovation. So it's no surprise that lawmakers across the political spectrum lined up in the nation's capital this week to praise the Advanced Research Projects Agency for Energy (ARPA-E), the energy department's innovation arm focused on promoting breakthrough energy technologies.

But will that theoretical support turn into real action when it comes keeping ARPA-E afloat?

ARPA-E was created to fund innovative energy technologies at the lab scale and help secure financing to prove their viability. Four years after getting the money to do its job, the agency has supported 280 projects across the storage, biofuels, solar, carbon capture, and electric vehicle sectors. So far, 17 of those projects have leveraged $450 million in additional financing. It's still far too early to say which projects will be successes and which will be failures.

However, ARPA-E is already facing some major constraints. The legislation that created the program will expire later this year. And with Congress still squabbling about America's fiscal future, there are questions about how much money lawmakers will be willing to devote to the agency, which some argue is already underfunded.

We sat down with Dr. Cheryl Martin, the deputy director of ARPA-E, at this week's Energy Innovation Summit to hear her thoughts on the political climate, the agency's progress so far, and what she's learned working on innovation in the public sector.

Greentech Media: Given what we know after the last four years, how successful do you think ARPA-E has been? Can we say thus far?

Cheryl Martin: It's hard to say at this point. But once something’s possible, everyone forgets about when it was impossible. When you look at the foundation of the internet, for example, it wasn’t a short process to get us to where we are today. So I think once something’s possible we lose track of those enabling things that happened.

In energy we’re looking at something that will have an impact ten years from now. So we're thinking about where we can make a difference. We start by having a conversation with everybody. And then we look at the value chains that you are going to be disrupting with a technology. Who are the players? How do they play together? Is it consolidated? Do those players pick up technologies? Do they bring them in house? We have really tried hard at the program level to ask what those levers are.

Our role is an acceleration role. We’re not going to end up at the end of three years with something in the market. That will be a rare event. But so far, we've seen a number of technologies get additional financing. And we’ve seen roughly a dozen of those either formed from universities or shells of companies where there was nothing until we funded the idea.

GTM: What are your biggest concerns going forward in this time of fiscal austerity?

CM: We have enjoyed strong bipartisan support ever since the day we were envisioned. And I think that’s tremendous. I think we’ve worked to keep that trust as we’ve brought our projects forward. The biggest worry with all of this is that we are pretty small. And it wouldn’t take much for us to get lost. I think making sure we’re an appropriate part of the broader community so that we’re not lost is the biggest thing we worry about. It's less about worrying that something specific is going to get cut, and more that we are still new and we could somehow end up on the short end of the stick.

GTM: Some have criticized the mission of ARPA-E because it doesn’t necessarily solve of the "valley of death" problem when taking something from pre-commercial scale to market readiness. And there’s a huge need to fill that valley of death. What do you say to folks who think ARPA-E isn’t filling in the needed gap?

CM: I would probably disagree with someone who said we only need to focus on the deployment side. Deployment is important. I think there are a lot of ways to get to deployment. And there’s no getting around the reality that a lot of energy technologies require a very large capital expense. It’s got to be on some kind of balance sheet. How you build that balance sheet is a very valuable question.

So what is ARPA-E’s role in this? We stay in the place where we are, which is getting that first lab-scale demonstration. But doing so in a way that engages the end of the value chain so they know what’s coming and they can give us feedback. We worry about how you get that feedback and how you track that. I really believe there are a significant amount of resources out there to move a number of these technologies forward. But you’ve got to engage them early enough in the right way to make this process more efficient. We can’t just let it be that you bring everything forward to the edge of a cliff and then wait for information about how to build the bridge. My job is to harness the best technology innovation and the best prepared innovators so that when they’re moving this forward, they’re going to have catchers for their pitch.

GTM: As we've seen at this conference, there are so many different views on why we need technology innovation in energy. Some believe we need to harness more fossil resources. Some believe we need to address climate change with nothing but renewables and efficiency. What does innovation mean to you when you look at this space?

CM: At ARPA-E, we have a very broad mandate defined by energy security, environmental security and economic security in the United States. It means we should be looking at a wide variety of technologies. We should be looking at lots of different alternatives for transportation. We should be looking at a lot of different solutions to deal with the grid and its resiliency. When we run a program, we’ll pick different technology answers to solve the problem we put in front of that group. Our mandate is looking at a lot of different options and accelerating those options to the point where people can make choices -- it’s really separate from these broader philosophical or political questions.

GTM: Do you see things differently at ARPA-E than when you were in the private sector working in venture capital?

I came to VC from a public chemical company. And then moved into government. For me, there are two themes that have always run through all of this no matter where I've been. Inventing incrementally is not incredibly valuable. It takes longer than you think and somebody will catch you quickly. So the invention itself has to be big.

And then it has to matter. Whether I was in a company where I sold products directly to customers or whether I was in venture capital evaluating these technologies, I always know it has to matter. There has to be a “there” there. So you have to constantly ask what the value proposition is going to be and who it's going to matter for. We want to teach the entrepreneurs to think about that so their innovations stand the best chance of standing at the front of the line.

In the last year and half since I’ve been in this, I've seen a lot of people getting really excited when they think about their product making an impact. I think that’s what forms this community -- that shared idea about what's possible. Not just the technology on its own, but the broad ecosystem. When I was in Silicon Valley and went to cocktail parties, everyone you talked to believed that the next person you talked with was going to help move their idea forward. It was just in the air. And I think continuing that here [at ARPA-E] will help these innovations move forward.

Tags: arpa-e, department of energy, energy technologies, innovation, policy