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Department of Defense

The Impact of Budget Sequestration on DOD Energy Innovation

The impacts of budget sequestration are slowly being unveiled to the general public. Furloughs at the Federal Aviation Authority (FAA) led to air traffic gridlock and angry travelers. Parks and national tourist sites are cutting back hours. And the Department of Defense (DOD) recently announced furloughs for 680,000 civilian employees. While these short-term impacts are painful, in particular to those losing work hours and income, sequestration is initiating cuts with negative, long-term impacts, which are not yet immediately apparent.

One area of specific concern is the potential $381 million in cuts to energy innovation investments at the DOD – a 25 percent cut compared to FY2012 levels. Since 2009, DOD has invested $5 billion in clean energy research, development, testing, demonstration, and procurement, representing almost 25 percent of U.S. clean energy funding in FY2012. DOD’s focus on clean energy innovation is important for three reasons:

  • The DOD has been the source of some of the last century’s most important breakthrough technologies, including the Internet, GPS, and microchips and it could have a similar impact on clean energy technologies like batteries and smart grid;
  • The DOD has developed its own cohesive
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Army and Solar Panels

Putting Numbers to DOD’s Clean Energy Innovation Endeavors

In March 2011, ITIF released Lean, Mean and Clean: Energy Innovation and the Department of Defense, a report detailing the ways in which DOD’s accredited and successful innovation ecosystem could be applied to the development of breakthroughs in clean energy technology. To expound further on these conclusions, ITIF – in conjunction with the Energy Innovation Tracker (EIT), a free and publicly accessible data source for federal investments in energy innovation – released a supplementary report: Lean, Mean and Clean II: Assessing DOD Investments in Clean Energy Innovation, which explores in detail the character of DOD’s investments in energy innovation by innovation stage, military branch, and technology. The report concludes that while all DOD investments are mission-oriented and are focused primarily on equipping and protecting the armed forces, commercial spillovers are plausible for advanced technologies with diverse applications.

According to the report, DOD has upped its energy innovation investments at a rate of about ten percent per year on average since FY2009, growing its total energy innovation budget to nearly $1.5 billion for FY2012. Using EIT’s data collection methodology, the report analysis is based on project-level investment documented in

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