How can governments invest in and direct energy technology innovation? Lessons from ARPA-E

Harilal Krishna and Arunava Majumdar

Chapter 16 in Handbook of Energy Innovation, 2026, pp 309-319 from Edward Elgar Publishing

Abstract: Governments can play a pivotal role in accelerating and directing the trajectory of innovation in selected domains through mission-oriented industrial and innovation policies. The competence, organization, and integrity of public policy institutions in charge of these strategies are often seen as critical to their success. Advanced Research Projects Agency-Energy (ARPA-E) is a notable example of one such public organization—a grant-making entity within the United States Department of Energy. ARPA-E is a mission-oriented research program focusing on innovative, early-stage energy research and development with practical technology applications. ARPA-E was designed to address the long-term, high-risk barriers in developing and deploying advanced energy technologies. In its brief existence of just over a decade, ARPA-E has made significant strides toward fulfilling its mission. The agency's supported projects have given rise to 166 new companies and 1187 patents, all while attracting over $13.5 billion in private-sector follow-on funding. These impressive outcomes must be considered alongside ARPA-E's original goals and the funding it has thus far disbursed, making it crucial to ascertain whether and how ARPA-E has facilitated innovation and identify best practices. This chapter examines ARPA-E's organizational and operational features and outcomes to help inform and improve future mission-oriented energy-innovation programs.

Keywords: Clean Energy Industrial Policy; Energy Technology Innovation Policy; Mission-oriented Institutions; Research and Development Funding (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035310401
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