WASHINGTON ― David Crane is serious about deadlines. As director of the Department of Energy’s Office of Clean Energy Demonstrations (OCED), one of his first jobs was turning down requests from 12 governors ― many of them Democrats ― to extend the deadline for concept papers for regional hydrogen hubs to be funded with $7 billion from the Infrastructure Investment and Jobs Act.

“Of course, all these Department of Government Relations folks … they’re like, ‘Of course we’re going to do that,’” he recalled during a “fireside chat” at the Bipartisan Policy Center (BPC) on June 14. “I’m like, ‘Hell no! We’re not going to do that,’ and we didn’t delay. … I’m not slowing down for anything or anyone. …”

“We have $20 billion in active solicitations out there right now,” said Crane, who was CEO of independent power producer NRG from 2003 to 2015. “[For] all that money, the people will be selected by the end of the year. So, the government is moving fast. The government is moving at private sector speed. So, it’s time to put up or shut up.”

Crane had come to the BPC straight from DOE, where he had just been sworn in as the agency’s first under secretary for infrastructure, confirmed by the Senate on a 56-43 vote on June 7.  On top of the OCED, he will now also oversee the Loan Programs Office and other initiatives funded through the Infrastructure, Investment and Jobs Act (IIJA), with a special focus on industrial decarbonization.

In addition to the hydrogen hubs, OCED’s portfolio of projects includes large-scale carbon capture pilots, regional direct air capture hubs, advanced nuclear reactor demonstration projects and long-duration energy storage projects. The final applications for the hydrogen hubs were due April 7 ― again, with no deadline extensions ― and announcements on selected projects are expected in the fall, according to the latest OCED update.

Crane’s conversation with Sasha Mackler, executive director of BPC’s energy program, capped an event focused on the future outlook for U.S. energy innovation, and the work of the BPC-sponsored American Energy Innovation Council (AEIC). Launched in 2010 by Microsoft founder Bill Gates and other non-energy CEOs, the AEIC has advocated for more public funding for the research and development needed to bring new energy technologies from the lab to the marketplace.

Even with the billions for energy innovation in the IIJA and the Inflation Reduction Act, government funding can still be critical for getting emerging technologies over the “valley of death,” the gap in funding between proof-of-concept and commercialization, said Norman Augustine, former CEO of Lockheed Martin and another AEIC founding member.

“One of the problems of energy [is] once you’ve got a laboratory prototype, you’re a long way from knowing, one, that you could scale it and, two, where it’s useful, and perhaps more importantly … is it economically viable,” Augustine said, during a panel discussion on the history of the AEIC and the evolving state of energy innovation.

“The basic assumption here is that industry has got to be the ultimate user” of innovative technologies, he said. But to advance new technologies at scale and unlock private investment will require government support minus government bureaucracy, he said.

Crane sees at least part of the solution in a new approach to public-private partnerships. “We’ve introduced something I call, ‘the credo,’ where it’s transparency, it’s replicability, its urgency, it’s shared success and it’s timeliness,” he said.

The focus on speed here is meant as a message to the private sector, Crane said. “If there’s anyone … who thinks that they’ve got time to just ponder whether they want to work with the government, you are sadly mistaken.”

The energy transition is going to be private-sector-led, but “government-enabled and government-accelerated,” he said.

‘Air of Inevitability’

Crane has a history of energy industry disruption, going back to his tenure as CEO of NRG Energy from 2003 to 2015. Under his leadership, the company began closing coal plants and deployed a number of renewable energy projects, including the Ivanpah concentrated solar project, which placed thousands of reflecting mirrors and three massive solar power towers in the Mojave Desert.

Crane was fired from NRG in December 2015, after the company’s stock price tumbled 63% in 11 months — a history that provoked tough questioning from Democrats and Republicans during his confirmation hearing before the Senate Energy and Natural Resources Committee in November 2022.

Crane defended his record, noting that a number of independent power producers had seen similar losses at that time, and that his long experience “at the intersection of big capital and big energy projects” gave him the skill set needed at the OCED. (See Former NRG CEO Faces Tough Questions at Senate ENR Hearing.)

With confirmation now behind him, Crane next wants to push heavy industry and heavy-duty land transportation sectors to raise their ambitions and cut their timelines for decarbonization.

“When the environmentalists labeled aluminum, steel, concrete, chemicals [and] petrochemicals as hard-to-abate sectors, they gave those industries sort of an easy pass to deep decarbonization in the 2030s, not the 2020s,” he said. With $6.3 billion in IIJA funding, Crane wants to kick industrial decarbonization timelines back into the 2020s.

“We need to create an air of inevitability that these things are going to happen so that everyone’s moving in the same direction,” he said. While the industry will always have first movers and fast followers that do early projects, “we just don’t want a lot of slow-moving laggards,” he said.

Creating early-stage demand for emerging technologies, like green hydrogen, will be another challenge, Crane said. He called the IRA “pretty inspired legislation,” but noted that “it mainly sort of [incentivizes] supply, and the history of energy … is that demand formation always lags supply.”

Crane pointed to DOE’s Clean Hydrogen Commercial Liftoff report, which identifies a buildout of hydrogen infrastructure ― first hubs and then wider storage and distribution systems ― as critical for unlocking new commercial applications and, ultimately, investment.

While not providing details, Crane said this kind of demand-building is a priority for DOE, the White House and other agencies.

Global Challenges

Speaking on the panel, Tom Steyer, co-executive chair of climate-focused investment firm Galvanize Climate Solutions, sees a similar sense of inevitability forming around the deployment of clean energy in the coming decade.

Permitting, supply chains and other logistical barriers notwithstanding, solar and wind will be the dominant energy sources, said Steyer, who briefly ran for president in 2020. At the same time, emerging technologies “where we have the technologies but not the market acceptance” will be facing “the same challenges about getting to scale.”

But Steyer sees impending growth in “the level of human capability in this sector. The number of people ― whether they’re repeat CEOs, entrepreneurs, venture [capitalists], young people coming out of college, grad school or just wanting to work in these areas ― [is] fantastic,” he said.

“Companies that have the technology, but need product-market fit to scale, that is going to be so much better than people broadly know,” Steyer said. “I think it’s going to knock people’s socks off.”

Steyer stressed that U.S. energy innovation must also respond to the global challenges of less developed and emerging economies in the Southern Hemisphere, where millions of people have no regular access to electricity, emit relatively small amounts of greenhouse gases but may be particularly vulnerable to the impacts of climate change.

“We have to develop and drive down these cost curves and have technology that is available to people in those countries so that it’s a good deal for them to do clean; it’s a good deal for them to build the structures that will not emit” GHGs, he said.

402 Days

For Crane, the obstacles ahead are political, technical and temporal. With congressional Republicans and some Democrats scrutinizing every IIJA and IRA dollar DOE is spending, he said, OCED is “parsing every word” in each of the statutes.

“If it’s in the statute, we do it exactly as the statute says,” he said.

Such scrutiny, however, may run into the technical and market realities of scaling new technologies. “None of these emerging clean energy scale-ups are going to go exactly as you say; so, you’ve got to be prepared,” Crane said. Federal, state and local policy —both mandates and incentives — will be needed to create markets for new technologies.

“Not everything we’re going to do is going to work,” he said, calling instead for a “portfolio” approach to innovation and risk. “We’ve got to be prepared to try some things. … If nothing we ever do fails, then we didn’t take enough chances.”

And the clock is ticking. Speaking at Crane’s swearing-in, Energy Secretary Jennifer Granholm reminded DOE staff that they have 402 business days until the end of the current administration in January 2025.

“That puts us all on a war footing, moving at an impossible pace,” Crane said. “We’re not taking anything for granted.”