US stimulus funding is boosting innovation

The tab for the American Recovery and Reinvestment Act (ARRA) - one of the largest investments ever in the US economy - has been revised upward to $814 billion from the original $787 billion from 2009 through 2019, according to the Congressional Budget Office. And critics who say the current plan hasn’t worked worry that another stimulus plan might be in the works.

In the midst of the naysayers, the White House last month published its first analysis of the impact of the 2009 economic stimulus package on advances in science and health, claiming successes in funding innovation in fields such as solar power, electronic health records, high-speed rail, and new battery technologies.

“The Recovery Act is laying the foundation for a new, more robust American economy,” the report concludes.

According to the report, "The Recovery Act: Transforming the American Economy through Innovation," ARRA has helped keep the US on track to halve solar power costs and to double renewable energy generation.

The report focuses on about $100 billion invested in programmes in four areas in which so-called “game-changing breakthroughs” are being sought:

• Modernising transport, including advanced vehicle technology and high-speed rail;

• Jump-starting the renewable energy sector through wind and solar energy;

• Building a platform for private sector innovation through investments in broadband, smart electricity grids, and health information technology;

• Investing in groundbreaking medical research.

“Within three to six years, these funds will lay the seeds for emerging industries and significantly move the needle toward reshaping the face of the new American economy,” the report said. “Moreover, they will help restore American leadership in industries and sectors where academics and economists from across the ideological spectrum have agreed that America is falling behind.”

Modernising transportation

In 2009, the US had two factories manufacturing advanced vehicle batteries that power electric vehicles, and it produced less than two per cent of the world’s advanced vehicle batteries, the report said.

ARRA is investing more than $2 billion in advanced battery and electric drive component manufacturing in companies like A123 and EnerDel. The aim is that by 2012, the US expects to have 30 factories with the capacity to produce about 20 per cent of the world’s advanced vehicle batteries. At full scale, they will produce enough batteries and components to support 500,000 plug-in and hybrid electric vehicles. Of the 30 new factories, 20 will make batteries and 10 electric drive components.

Between 2009 and 2013, when 20 of the ARRA-funded battery factories will be up and running, battery costs are expected to drop by half, cutting an electric car’s cost premium in half. “Looking further into the future, Recovery Act-funded start-ups like Envia and FastCAP are pursuing technologies that could take us well beyond today’s best lithium-ion batteries,” the report said.

“This will create lighter, cheaper, and more powerful electrical energy storage devices such as batteries, allowing for better mileage, greater safety, and better acceleration - putting the US in position to build the best cars in the world.” ARRA also includes $45 million in manufacturing tax credits.

Jumpstarting renewable energy

ARRA’s “payments-in-lieu-of-tax-credits” programme is supporting more than 200 megawatts of solar projects that are already supplying power to consumers. In Pensacola, Florida, the programme has helped fund the 25MW DeSoto Solar Park, the largest photovoltaic power plant in North America with more than 90,000 solar panels.

Advanced energy manufacturing tax credits are helping solar manufacturers like FirstSolar to expand a large manufacturing plant in Perrysburg, Ohio, the report said. And loan guarantees are helping thin-film solar manufacturer Solyndra build a high-tech solar module manufacturing facility in Fremont, California, with the capacity to produce modules totaling 230MW each year. The US Department of Energy also has given a conditional commitment for a loan guarantee to support the 400MW BrightSource solar thermal project, the world’s largest such facility with about 349,000 mirrors.

ARRA also is backing the ramp-up of production of wind energy and components in the US, having provided more than $3 billion in payments-in-lieu-of-tax-credits to more than 100 wind projects in 30 states totalling 5.3GW of wind power capacity. The manufacturing tax credit programme awarded $346 million for 52 wind manufacturing projects across the country. And ARRA is backing companies like FloDesign of Massachusetts, which is developing a novel shrouded wind turbine design with advanced aerospace technology that should reduce the cost and noise of wind energy.

Building a platform for broadband, smart grid, and health IT

ARRA provided $4.4 billion to the Department of Commerce and $2.5 billion to the Department of Agriculture to increase broadband access in rural America. A combination of ARRA and private funding is expected to add 18 million new smart meters to the eight million now in use in the US. ARRA also will support the installation of more than 875 transmission system sensors that can alert system operators and help prevent minor disturbances from cascading into large outages.

In addition, ARRA is investing some $20 billion into health IT to boost advances in electronic health records, electronic prescribing, electronic care, and community health initiatives. The rise in e-care technologies, or telemedicine, will allow medical personnel to treat patients remotely, the report said.

Groundbreaking medical research

In its fourth area of focus on innovation, ARRA is funding the National Institutes of Health (NIH) to carry out research to help unravel clues to treat or prevent debilitating diseases, develop powerful new medicines, and define strategies to prevent disease.

The report points to examples of work surrounding human genome sequencing, cardiovascular disease, cancer, and autism. “As a result of these efforts, the number of complete human genomes anticipated to be sequenced in the next few years is expected to dwarf, by 50 times or so, the number of complete human genomes that have been sequenced to date,” the report said. At the same time, NIH is pursuing avenues to reduce the cost by a factor of 50 to sequence an entire human genome – the goal is $1,000. “This research could make treating cancers more targeted and more effective.”