12.11.2009

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Updates

On December 7, 2009, the U.S. Department of Energy (DOE) invited applications to be filed for the second round of grant funding under the Advanced Research Projects Agency – Energy (ARPA-E) grant program.  In this round, the DOE invites applications to be filed for projects in three specific areas: (1) batteries for use in hybrid-electric and electric vehicles; (2) carbon capture technologies, and (3) "electrofuels," which are liquid fuels produced from biological organisms that can convert carbon dioxide and electricity into fuel without using photosynthesis.

To compete for these ARPA-E funds, an applicant must submit a concept paper by January 15, 2010.  DOE will review the concept papers and then give the applicant a written response that either "encourages" or "discourages" the filing of a full application.  Applicants have 31 days from the date of DOE's response to file a full application.

This Update describes the eligibility requirements, evaluation criteria, application process steps, intellectual property and data rights provisions, and other important aspects of this funding opportunity.  It also highlights several key differences between the first round of ARPA-E grants and the current round, including greater flexibility for foreign-owned applicants to apply for funding.

The ARPA-E Program

The goal of the ARPA-E program is to promote "transformational" energy research and development projects – those projects with the potential to achieve technological breakthroughs or to bring breakthrough technologies to market. 

In the American Recovery and Reinvestment Act (ARRA), Congress appropriated $450 million for this program.  Of that amount, DOE made available $150 million in the first application round.  In that round, DOE received more than 3,500 concept papers and selected only 37 projects for funding – about 1% of the applicants.  The selected projects covered a wide range of technology types, from algae-based biofuels to a new high-efficiency wind turbine. 

Consistent with the research and development focus of this program, the funding levels for ARPA-E grants are relatively modest, generally ranging from $3 million to $5 million.  At this level, an ARPA-E grant should be viewed as a tool for funding a discrete research project, not for making a large-scale capital investment.  Other programs, such as the DOE's Loan Guarantee program, are better-suited for applicants that need funding to develop energy-generation or manufacturing plants at a commercial scale.

The Second Round of ARPA-E Grants

In the first application round for ARPA grants, DOE invited applications for a wide range of energy-related research projects.  In the second round, DOE has taken a new approach.  The three funding opportunity announcements (FOAs) issued in this round focus on specific areas that DOE believes have the potential for transformational advances in energy technology.  This section of our Update describes the types of projects that are eligible in this round, as well as other important aspects of the application process in this round.

Who can apply? 

The FOAs are open to "any type of capable technology research and development entity," including companies, universities, non-profit entities, research foundations and consortia.  Federally Funded Research and Development Centers (FFRDCs) can serve as lead applicants, but only as part of a consortium or other teaming arrangement, not as a sole applicant. 

In a significant departure from the first round, these new FOAs allow foreign-owned companies to be lead applicants.  (In the first round, foreign-owned companies were prohibited from being lead applicants and could only participate as members of a team led by a U.S.-owned company.)  To apply in this round, a foreign-owned company must be incorporated in the U.S.  It also must comply with the full range of requirements applicable to any applicant, including the requirement that a minimum of 90% of the work must be performed in the United States.

What types of projects are eligible?

The three FOAs invite applications in the following areas. 

  • Batteries for Electrical Energy Storage in Transportation (BEEST).  This FOA is focused on the development of "advanced energy battery chemistries, architectures, and manufacturing processes" for an electric-vehicle battery system with high energy density and low cost.  To be eligible, the system must (1) have a mass density that exceeds 200 Wh/kg, (2) have a volumetric density exceeding 300 Wh/liter, and (3) have system-level costs at $25/kWh or less.  The DOE will award grants in two categories under this FOA:
        • "Proof of Concept Seedling" Category.  Projects in this category involve high-risk, high-reward technologies, which are "highly speculative" and have not yet achieved proof-of-concept.
        • "Advanced Device Prototyping" Category.  Projects in this category would involve "early stage device prototyping" and "optimization of battery technology concepts" for technologies that have already achieved proof-of-concept.  Projects involving "small scale demonstration of manufacturing scale-up feasibility" will also be considered in this category.
  • Innovative Materials and Processes for Advanced Carbon Capture Technology (IMPACCT).  This FOA is focused on the development of "materials and processes for CO2 capture" that can be applied to new and existing coal-fired power plants and have the potential to lower dramatically the cost and energy-loss involved in capturing CO2.  The FOA defines two areas of interest:
        • #1:  Materials.  This area of interest ("Enabling Materials for CO2 Capture") focuses on the materials used in capturing CO2. It is further divided into two sub-areas:

                • #1A: Catalysts.  This sub-area focuses on the development of catalysts that are "inexpensive, effective, and stable in flue gas."
                • #1B: Robust Materials.  This sub-area focuses on the development of advanced materials that "can survive the high temperatures and multiple caustic contaminants" in flue gas.
        • #2: Processes.  This area of interest ("CO2 Capture Processes") focuses on development of processes that "will dramatically reduce current parasitic power requirements" associated with the capture of CO2 from flue gas.  Current technologies consume 22% to 30% of the electricity generated by the facility.  DOE seeks processes that capture most of the CO2 in the flue gas, while consuming much less power.
  • Electrofuels. This FOA focuses on "non-photosynthetic autotrophic production of infrastructure-compatible, energy-dense liquid fuels."  This type of process would produce liquid fuel – e.g., diesel, jet fuel or high-octane gasoline – from CO2 and electricity through the use of "novel biological organisms."  The organism must be "robust and capable of being cultured and maintained at a commercial scale." 

What is the expected average size of the grants issued under these FOAs?

Each FOA establishes a minimum grant, a maximum grant and an anticipated average grant size.  For all three FOAs, the minimum grant size is $500,000 and the maximum grant size is $10 million.  The anticipated average grant size varies somewhat:

  • Batteries, "Proof of Concept:"$500,000 to $1 million
  • Batteries, "Advanced Prototyping Devices:"$ 3 million to $5 million
  • Carbon Capture:  $1 million to $5 million
  • Electrofuels: $1 million to $5 million

The FOAs all state that the maximum grant of $10 million would be issued only in "exceptional" circumstances.  The FOAs prohibit applicants from applying for grants of more than $10 million.

How many grants will be issued? 

The DOE has not committed to issuing a specific number of grants, or any grants at all.  The FOAs state that DOE expects to issue the following numbers of grants:

  • Batteries, "Proof of Concept:"five to 15 grants
  • Batteries, "Advanced Prototyping Devices:"five to 15 grants
  • Carbon Capture:  three to 10 grants
  • Electrofuels: five to 15 grants

What is the cost-share requirement?

The FOAs establish the same cost-share requirements.  In general, applicants must provide a cost-share of at least 20%.  There are two important exceptions:

  • For educational institutions (e.g., universities), the minimum required cost share is 10%.
  • If the ARPA-E grant is provided under a Technology Investment Agreement (TIA) rather than a standard grant or cooperative agreement, the minimum required cost share is 50%.  For more on TIAs, see below. 

What type of agreement will be used?

The DOE offers three options: (1) standard grant agreements, (2) cooperative agreements, and (3) Technology Investment Agreements (TIAs). 

The FOAs state that cooperative agreements are the "most likely" funding instrument, because of the need for substantial government interaction with the grant recipient.

The FOAs also note that TIAs offer more flexibility in several respects, including flexibility on intellectual property rights in IP generated through the grant-funded project.  Of course, as noted earlier, a TIA also has a higher minimum cost-share requirement – 50%.  If an applicant is considering seeking a TIA, the applicant should note this preference in its application.  Ultimately, DOE would determine whether a TIA would be used for the project. 

How are IP and data rights issues addressed?

The FOAs give DOE significant flexibility to accommodate the applicant's interest in protecting its intellectual property rights and data rights. 

  • The Bayh-Dole Act provides that a domestic (U.S.-based) small business, university or non-profit entity can retain title to inventions that arise from grant-funded work, as long as the United States retains a government-purpose license in that invention, as well as "march-in rights" and a U.S. preference in licensing.
  • For awardees that are not subject to the Bayh-Dole Act, the DOE states in the FOAs that it plans to issue a "class waiver" giving those applicants essentially the same rights they would have if they were subject to the Bayh-Dole Act.  The FOAs include a link to the patent waiver clause that DOE intends to include in the agreement with the applicant.
  • There is a presumption that applicants will deliver data with limited or restricted rights (rather than unlimited rights).  Under limited or restricted rights, data will be protected from public disclosure for a period of up to five years from the development of the data.
  • The FOAs allow applicants to request TIAs.  Under a TIA, DOE has the authority to alter or waive standard patent and data rights requirements.

What are the major steps in the application process?

The application process includes the following steps:

  • By January 10, 2010, the applicant must submit a concept paper.  The concept paper is six pages long (except for the battery FOA, which requires a seventh page).  The concept paper must include an abstract, a technical section, and a cost summary.  In essence, it describes the project, explains why the project has transformative potential, and explains how the project would be carried out.
  • DOE will review all concept papers, based on evaluation criteria specified in each FOA.  After that review, DOE will provide written comments to the applicant, and in those comments it will "encourage" or "discourage" the filing of a full application.
  • Within 31 days after receiving DOE's response, the applicant must submit a full application to DOE.
  • DOE will then review the full applications, based on evaluation criteria specified in each FOA for the final applications. Applicants selected for an award would then be invited to negotiate with DOE on the terms of a cooperative agreement, or some other appropriate instrument for finalizing the terms of the grant. 

How are concept papers and applications filed? 

Concept papers must be submitted via ARPA-E eXCHANGE, at https://arpa-e-foa.energy.gov/.  Before uploading a concept paper, the applicant must first register and create an account on the ARPA-E eXCHANGE site.  Concept papers are not filed via www.fedconnect.net.  Instructions for filing the full application will be provided by DOE in its response to the concept paper.

Additional Information

For additional information, please refer to our Federal Grants & Loans practice Web page, which includes a background paper with tips for potential applicants, briefing papers on the Loan Guarantee program, and an article on intellectual property rights and data rights in projects funded by federal grants.