U.S. Energy Agency Plans To Take On Tesla’s Battery Business

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Tesla, which recently forayed into energy storage, may soon get a run for its money by a wing of the U.S. Department of Energy which is focused on breakthrough technologies, said the unit’s director, Ellen Williams. She said her agency has helped accelerate many high-risk projects based on technologies that can overpower even Tesla’s batteries.

Better than Tesla

In an interview, Williams said that Advanced Research Projects Agency-Energy, or ARPA-E, which funds projects meant to transform energy markets, has made huge strides on next-generation batteries, which have the potential to make electric cars and renewable energy cheaper and more accessible.

“What Musk has done that is creative and important is drive the learning curve. He’s decided to take an existing, pretty powerful battery technology and start producing it on a very large scale,” she said. “But it’s not technology innovation in the sense of creating new ways of doing it. We are pretty well convinced that some of our technologies have the potential to be significantly better.”

ARPA-E was launched with a budget of $400 million in 2009 with an objective of funding the most cutting-edge technologies. President Barack Obama’s requested budget for 2017 is expected to raise the allocation to $1 billion over the five years.

ARPA-E’s budget and projects

ARPA-E is set to get a big boost from Mission Innovation, which was launched last year at the United Nations Climate Summit in Paris by the U.S. and 19 other countries. Over the next five years, the governments have pledged to double spending on clean energy’s research and development. The United States will increase its overall energy research and development budget to $12.8 billion by 2021.

Apart from energy storage, ARPA-E’s research projects include using robots and drones to help develop more sustainable sorghum-based biofuels and make heating and air-conditioning systems more efficient by using sensors. The agency is funding projects in all 50 states.

Tesla’s battery division made a profit in the fourth quarter and has helped lower the losses from the company’s auto business. Tesla’s Powerwall batteries store energy that homes and small businesses generate with solar panels. The Powerpack model, which does the same thing, is designed for large commercial facilities.

On Wednesday, Tesla shares closed up 1.07% at $188.34. Year to date, the stock is down by over 21%, while in the last year, it is down by over 7%.

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