Two years ago, the U.S. Congress created the Advanced Research Projects Agency for Energy, known as ARPA-E, at the Department of Energy, to inspire risky energy and climate related research. Till now, however, the concept hasn't gotten a dime in federal money and the Bush Administration didn't even set up an office for it.
ARPA-E's future suddenly looks a lot brighter with lawmakers agreeing on a $400 million budget for it as part of the stimulus package. The agency now also has support at the highest levels of the new Administration: The guy who invented the concept as a member of the Gathering Storm panel at the National Academies is Secretary of Energy Steven Chu. His new deputy, Sue Tierney, sat on the board of an organization  that lobbied to help make ARPA-E happen. Lawmakers hope ARPA-E will be what one staffer calls a "lean and mean" research arm of the often stodgy DOE. Description of the agency as envisioned by lawmakers follows.
From the House ScIence Committee's description of the agency:
Background on ARPA-E
In August of 2007, the President signed into law the America COMPETES Act (PL 110-69).
COMPETES codified many of the recommendations of the 2005 National Academies report, Rising
Above the Gathering Storm, including to establish an Advanced Research Projects Agency for Energy
(ARPA-E) to sponsor “creative, out-of-the-box, transformational” energy research.
ARPA-E is charged with developing technologies that:
• Reduce dependency on foreign oil;
• Improve the energy efficiency of all economic sectors;
• Reduce greenhouse gas emissions; and
• Maintain U.S. leadership in the development and deployment of energy technologies.
ARPA-E utilizes many of the same organizational elements that fostered the successful culture of innovation of DARPA at the Department of Defense. ARPA-E offers a significant shift for the Department of Energy (DOE), both for the research it conducts and how it conducts that research.
• ARPA-E will leverage the intellectual capital of the nation’s universities, commercial, industrial, and investor communities, and the national labs to pursue high-risk, high-reward research that neither these entities nor DOE would pursue on their own.
• ARPA-E will have the flexibility to sponsor R&D that spans multiple stages, from basic research to commercialization, and in areas that are otherwise too cross-cutting or multi-disciplinary to fit into the current DOE system.
• ARPA-E will be an independent entity within DOE with a flat, non-bureaucratic management structure. The ARPA-E Director will report directly to the Secretary of Energy, and no other program within DOE will report to ARPA-E.
• The ARPA-E Director will have flexible hiring authority to recruit the best and brightest program managers from outside of government at competitive salaries and for limited tenures of 3-5 years to ensure that fresh ideas and talent circulate through the program.
• ARPA-E Program Managers are given extraordinary autonomy and resources to pursue high-risk technological pathways, quickly assemble research teams to “crash” on projects, and start and stop projects based on performance and relevance. ARPA-E projects will not be subject to the traditional peer-review system.
As recommended by the National Academies, ARPA-E funding should be seen in the context of expanding overall energy R&D investment to a level that begins to meet the scale and complexity of the challenge. First year funding should approach $300 million, and quickly ramp-up to $1 billion in subsequent years.
If ARPA-E has substantial and consistent funding, and it is implemented as envisioned in COMPETES, the long-term results for the U.S. will be:
• Advanced technologies that transform how we harness, use, and conserve energy.
• A much larger and more diverse community of energy researchers and technology developers, providing the foundation of a vibrant new sector of the U.S. economy.