Filling the "Missing Middle" To Scale Energy Breakthroughs

Why It Matters

Closing the missing middle is critical to translate laboratory inventions into large, low‑carbon infrastructure that can lower energy costs, improve resilience and unlock private capital at scale. Failure to bridge it risks innovations stalling or being commercialized abroad, slowing climate progress and domestic industrial opportunity.

Summary

Speakers at the Council on Foreign Relations forum argued that a persistent "missing middle" — the financing gap between early-stage invention and commercially de‑risked, project-scale deployment — is choking the scaling of energy breakthroughs. Despite a surge in climate and energy R&D and more than $2 trillion invested globally, innovators struggle to move from pilots to first‑of‑a‑kind and second‑of‑a‑kind plants because financiers balk at unfamiliar technical and commercial risks. Panelists cited higher interest rates and retreating federal support as acute headwinds and urged coordinated public, private and philanthropic tools to absorb early risk. The discussion framed the gap as solvable but urgent if electrification and energy‑security benefits are to be realized at scale.

Original Description

From Climate Realism.

A gap in private funding for companies and projects inhibits energy innovation in the United States. This “missing middle” slows or blocks technologies that could help the energy system become more secure, affordable, and sustainable, and weakens U.S. firms relative to Chinese and other international competitors. Join CFR’s Climate Realism Initiative as it launches Financing the Missing Middle, a collection of policies and strategies to help bridge that gap.

This event, and the essay collection itself, has been made possible through the generous support of the Alfred P. Sloan Foundation, under grant number G-2025-25233.

Speakers

David M. Hart

CFR Expert

Senior Fellow for Climate and Energy, Council on Foreign Relations

Vanessa Chan

Jonathan and Linda Brassington Practice Professor, Materials Science and Engineering and Inaugural Vice-Dean of Innovation and Entrepreneurship, University of Pennsylvania

Josh Prueher

Chief Executive Officer, XGS Energy

Presider

Vijay V. Vaitheeswaran

Global Energy and Climate Innovation Editor, The Economist; CFR Member

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