1. November, 2004 Energy Technology R&D Funding

2. Key Energy Technology Investment Trends n General Trends –Overall funding in the U.S. for energy technology has declined from a high of around $6 billion in the early 1990s to around $5 billion. This is a 25 year low when viewed across a longer period of time stretching back into the mid 1980s. –While there appears to be a growing consensus in the governmental and academics committees that the U.S. is not currently investing enough in energy technologies to address future needs, funding has continued to decline –Public and private sector funding for energy technology is roughly split with public sector funding accounting for 56% of the effort and private sector funding accounting for 43% n Private Sector Funding –The private sector invests less than 1% of sales in energy R&D (estimates range from between.03 and.05 percent). This figure is well below other industries, particularly in the pharmaceutical and IT area –Funding for collaborative research organizations, such as EPRI, have declined particularly in the area of strategic, as opposed to applied, R&D –Private sector investments in energy efficiency and renewables have increased while investments in fossil fuels and nuclear have decreased n Public Sector Funding –Public sector energy research funding has declined 58 percent over a fifteen year period –Funding for fossil and nuclear energy research has declined while renewable energy has remained flat

3. Private Sector R&D Investment Drugs/Medicine Comm. Equipment Prof./Science Industry Services Transp. Equipment Industrial Chemicals Stone/Clay/Glass Products Primary Metals Energy Source:Margolis and Kammen R&D as % of Net Sales by Industry Percent

4. Government Energy R&D Budget Billion 1995 US$ Note:Government energy R&D budgets for selected IEA countries showing the difference in spending  between 1980 and 1995. Data for France before 1990 are unavailable, and while we display 1990 and 1995 data for France, this comparison likely understates the decline in R&D funding in France.  = +129% -6% -12% -32% -53% -65% -89% -58% -20%