PROSPECTIVE

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PROSPECTIVE R D BENEFITS FRAMEWORK Robert L.
Hirsch March 4, 2002
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• This Presentation
• Academies Framework
• Need, Opportunity or Regulatory Forcing
• Goals, Targets, Markets, Competition
• Prospective Framework Elements
• Concluding Remarks

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Academies RETROSPECTIVE BENEFITS MATRIX For R
D Project Evaluation
Realized Benefits
Options Benefits
Knowledge Benefits
Economic Benefits
?
?
?
Environmental Benefits
?
?
?
Security Benefits
?
?
?
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Measuring DOE R, D D Benefits
DOE Cosponsored Product Enters the Market
What Would Have Happened Anyway (Industry/Foreign)
Benefits
Time
Variable Depending on Many Factors - Academies
Assumed 5 years Could be years to a decade or
more.
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Frame Change
Retrospective Academies Study
Prospective Todays Challenge
Foresight- Many Unknowns!
Hindsight- Most known.
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Where the Project Starting From?
1. NEED Customers did their own planning,
assessments priorities found a GAP. 2.
OPPORTUNITY Usually an idea by a technologist or
a planner. Usually requires marketing to
convince others. 3. REGULATORY FORCING A
technology that is to be regulated into the
market.
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NEEDS OPPORTUNITIES

• Goal A competitively attractive innovation.
• Questions
• 1. Why a Government Role?
• 2. Is the target Go-to-Market or Option?
• Requirement Understand the competition -
  products currently in the market how those
  products are likely to be improved in the
  intervening period.

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EXCELLENT SOURCE FOR INFORMATION ON THE
COMPETITION EIA Annual Energy Outlook Example
8000
PHOTOVOLTAICS
6000
Projected Installed Cost (/kw)
4000
GAS MICROTURBINES
2000
o
o
o
o
0
2000 2005 2010 2015 2020
Time
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EIA/AEO 2001
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New Technology Hurdles
Existing Technology Costs Known Performance
Known Reliability Known Service
Known Regulatory Known Risks Known Wastes
Known Shortcomings Known Life Known
New Technology To be of free-market interest, a
new technology must provide significant benefits
beyond what already exists. All else equal, its
costs must be gt 20 better than what exists to
overcome unknowns risks. Otherwise
Government Incentives or Regulatory Change?
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R D PROJECT REQUIREMENTS TRACKING
Need, Opportunity or Regulatory Forcing
One or More Good Ideas
High Benefit/Cost Expectation
Supporter Interest Funding
Project Completion
Project Initiation
Check Points Along the Way
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PROSPECTIVE FRAMEWORK ELEMENTS - I GOALS /
TARGETS
TARGETS
Early Use
Option
Knowledge
?
?
?
Economic
GOALS
?
?
Environmental
?
?
?
?
Security
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PROSPECTIVE FRAMEWORK ELEMENTS - II KNOWNS /
ASSUMPTIONS
Changes Today Expected
Needed for Success Compet
ition Economics Regulation Other Influences
Baseline
Scenarios?
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Concluding Remarks

• Probably involves more homework than in the
  past.
• - Know thy competition.
• - Describe thy market.
• Researchers should be heavily involved to
  better understand project challenges variables.
• Approach should be simple, intuitive,
  transparent and common across DOE.

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