Factors Driving R&D Investment
R&D activities into new production technologies have led to the
ability to access previously unobtainable oil and natural gas reserves
and have increased the size, scale and energy output of a host of
renewable energy technologies.
Within the energy industry, governments can play a significant role
in modulating market demand, and therefore, whether energy-related R&D and technologies have a chance to be successful at
large scale. Though this involvement is often necessary to reduce
technology and market risks, it also creates financial and timing
uncertainty for energy-related development.
The federal government, through grants, tax incentives and R&D
at DOE national laboratories and extramural academic institutions,
plays an integral and often technology-leading role in the research
directions of the U.S. energy industry, sometimes extending to
piloting, scale-up and translation-stage finance. Over the 2009-2012
period, alternative and renewable energy applications saw substantial
increases in federal technology development support (e.g., through
ARRA, ARPA-E and other DOE programs). Other government
initiatives have been designed to build market demand and make
larger-scale adoption of new technologies viable. That said, the
substantial increase in natural gas production from shale resources
has, at least temporarily, removed some of the energy price and
national energy security pressure behind in development of alternative and renewable energy technologies. In the U.S., government-supported research in these areas continues, but private early-stage
investment has waned. Elsewhere, governments are more active in
deployment of alternative energy technology (e.g., China and countries in the Arabian peninsula).
State and local governments continue to be actively involved in pro-
viding resources to build regional “energy clusters” for economic
development purposes and in the licensing and siting of major
energy projects. State governments have also enacted incentives and
energy portfolio standards and requirements that often determine
the potential success of energy production projects.
The energy industry relies on a combination of in-house development (75% of respondents) and industrial collaborations (65%),
making this level of industrial collaboration the highest among the
five technology industries examined. This may reflect the role that
EPRI and the DOE national laboratories play in convening industry
members to address significant energy-related research.
From a future technology perspective, biofuels, despite all the technological and feedstock challenges, are seen by 55% of the industry respondents as a key area for energy technology development
over the next three years. In contrast, only 28% of the industry
respondents in our previous survey felt biofuels were a key area.
Composite materials were also viewed by 55% of the respondents,
up slightly from two years ago, as a key technology area for energy-related technology development in the near future.
Energy conversion technologies (e.g., heat to electricity; Stirling engines) appear for the first time in this year’s survey, with half of the
respondents identifying this as a key development area. Four other
areas, hybrid systems (50%), fuel cells (45%), photovoltaics (35%)
and wind turbines (25%), were identified by this year’s respondents
The environmental impact of energy production is an area of
increasing R&D emphasis. These (often multidisciplinary) technology development efforts include technologies to manage and filter
hydraulic fracturing fluids, technologies for reducing emissions and
managing carbon, nuclear waste disposition and wildlife and microclimate studies regarding the impact of wind farms and utility scale
Dominated by global oil and gas
companies, including three U.S.
firms, the R&D intensity for most
energy leaders is less than 1%. The
substantial growth in PetroChina’s
R&D investment has elevated this
firm into the leadership position
reaching US$ 2. 3 billion in 2012
with all of the other U.S. and
global leaders’ R&D levels also
increasing over the 2010-2012
period. The two U.S. leaders with
much larger R&D intensities are
both developers of various energy-related technologies.
Corporate leaders in
& Chem GE
2% 4% 6% 8%
2012 Corporate R&D Intensity
Top 5 Non-U.S. Firms
Top 5 U.S. Firms
Size of Ball Re;ects Amount in US$ of R&D Expenditure
Source: Battelle/R&D Magazine, Schonfeld & Associates, European Commission-JRC/EIRI