Competitiveness Case Studies - Energy

Quadrennial Technology Review 2015

Chapter 6: Innovating Clean Energy Technologies in Advanced Manufacturing

Supplemental Information

Competitveness Case Studies

Public-Private Consortia and Technology Transition Case Studies

• Carbon Capture Simulation Initiative (CCSI)

• Combustion Research Facility (CRF)

• Consortium for Advanced Simulation of Light Water Reactors (CASL)

• Critical Materials Institute (CMI)

• Joint BioEnergy Institute (JBEI)

• Joint Center for Energy Storage Research (JCESR)

• Trustworthy Cyber Infrastructure for the Power Grid (TCIPG)

• United States Advanced Battery Consortium (USABC)

QuadrennialTechnologyReview2015CompetitivenessCaseStudiesChapter6:SupplementalInformation

1. IntroductionTheenergyindustryfacespressingsecurity,economic,andenvironmentalchallenges,asdescribedinthemainQuadrennialTechnologyReview2015(QTR)reportChapter1andtheChapter1SupplementalInformationappendixAdditionalInformationonEnergyChallenges.1Commensuratewiththescaleofthesechallengesisthescaleoftheopportunityforthecleanenergyindustry.In2015,globalinvestmentincleanenergywasabout$350billion,withChinathelargestinvestor(Figure1).Further,ChinaannouncedaplaninJanuary2017toinvest$360billioninrenewableenergyby2020.2Goingforward,theInternationalEnergyAgency(IEA)projectsthat,to2040,theglobalmarketforcleanenergytechnologieswilltotalroughly$8trillionforrenewableenergysupplyand$23trillionforenergyefficiency,andthatthetotalglobalenergysupplyandefficiencytechnologymarketwilltotalover$60trillion.3ToassesstheU.S.opportunityintheseenormousglobalmarkets,thisSupplementalInformationappendixbrieflyexploressomeofDOE'sinitialanalysesofthemanufacturingcompetitivenessofU.S.cleanenergytechnologiesinglobalmarkets,andsomeoftheimplicationsofRDD&DeffortsforU.S.economiccompetitiveness.4

Figure1.Globalcleanenergyinvestment2004-2015.Source:BloombergNewEnergyFinance5

Chapters3-8oftheQTRanditsappendicesidentifyopportunitiesforenergyscienceandtechnologyRDD&Dtosupply,distribute,anduseenergymoresecurely,cost-effectively,andcleanlyinthepower,

buildings,industry,fuels,andtransportationsectors,6andtoreducetheenvironmentalfootprintofmanufacturedproductsacrosstheirlifecycles.7Clean,low-cost,stableproduction,delivery,andefficientuseofenergycanleadtoreducedcostsfordomesticmanufacturersandthereforeimprovedcompetitiveness.8Further,theRDD&DopportunitiesidentifiedintheQTRaswellasotheropportunities,ifsuccessfullydeveloped,offerthepotentialtoprovideimportantcleanenergytechnologiesforbothdomesticandinternationalmarkets.

Manyfactorsimpacteconomiccompetitiveness,includingtheavailabilityofinvestmentcapital,laborcosts,taxpolicy,currencyexchangerates,andimport/exportpolicies,tonameonlyafew,butthefocushereisonthekeyissueoftechnologyinnovation.Withglobalcompetitionformarketshareincleanenergytechnologiesandservices,cleanenergyinnovation9andcompetitivenesswillbeimportantcontributorstonationaleconomiesincomingdecades.10Indeed,theNationalAcademiesofSciences,Engineering,andMedicine’sNationalResearchCouncilnotes,“Thecapacitytoinnovateisfastbecomingthemostimportantdeterminantofeconomicgrowthandanation’sabilitytocompeteandprosperinthe21stcenturyglobaleconomy.”11Advancedmanufacturingisacriticalpartofthis.12

Energyinnovationrequiresinvestment,butasdescribedintheQTRChapter1appendix“AdditionalInformationonEnergyChallenges”,privateinvestmentincleanenergyRDD&Dmaybeconstrainedbyfactorssuchasthefollowing.

• LonggestationtimesforcleanenergyRDD&Dcanleadtolongperiodsbeforetherecanbeareturnoninvestmentforthecompanyorinvestor.

• RisksofenergyRDD&Dactivities—technical,managerial,financial,market(includingenergymarketvolatility),regulatory,policy,etc.—maybehighforacompanyorinvestor.

• AppropriabilityoftheenergyRDD&Doutputs(competitorscouldcopythetechnologyorfindalternativeapproaches)canreducereturns.

• Highcapitalcostsforsupplyingorsavinglow-margincommodityfuelsorpowercanleadtolongperiodstoearnareturn.

• Newenergyinfrastructurerequirementsmayposechicken-and-eggchallengesrequiringlargeinvestmentsoverlongperiods.

• Externalitiesofsecurityortheenvironmentareoftenun-costed,voidingthemarketbenefitsforcleanenergytechnologiesthataddressthem.

• Energymarketfailuresandfrictions—suchassplitincentivesbetweentheownerwhopurchasesequipmentandtherenterwhopaysfortheenergyused—canlimitmarketopportunities.

TheseposesubstantialchallengesforinvestorsandcontributetoverylowlevelsofprivateinvestmentinenergyRDD&Dcomparedtothatinotherimportantsectors(Figure2).13

Figure2:(a)PrivateR&Dinvestmentasapercentageofsalesforkeytechnologysectors(source:NSF14);(b)VentureCapital(VC)investmentincleanenergy(Source:AEIC15);(c)Globalearly-stagecleanenergytechnologyinvestments(Source:BNEF16).Venturecapitalfundingincleanenergyisalsolow,andhasgenerallydeclinedfromitspeak(indollars)in2008(Figure2b).RecentBloombergNewEnergyFinancedataindicatesthatearlystagecleanenergyinvestmenthasseenasmalluptickintheU.S.in2015andthroughthethirdquarterof2016,butthatearlystageinvestmentbyChinahassoared(Figure2c).Arecentreviewfortheperiod2006-2011foundpoorreturnsforventurecapitalincleanenergyandindicatedthatotherfinancialstructuresmaybebettersuitedtothecleanenergyindustryduetofactorssuchasthoselistedabove(seethetextbox“VentureCapital:TheWrongModel”17);theyalsofoundthatventurecapitalwasshiftingawayfromcapitalintensivehardwareandmaterialstowardssoftwarewheretheyhadopportunitiesmorein-linewiththeirusualapproach.

ThelowratesofU.S.privatesectorenergytechnologyR&DinvestmentdescribedaboveareinsufficienttomeetU.S.energysecurity,economic,andenvironmentalchallenges,asdescribedintheQTRmainreportChapter1andSupplemental.Toaddressthesechallenges,publicRDD&Dinvestmentisnecessary.Infact,publicinvestmentsinenergysupplyandend-usetechnologyRDD&Dhavedemonstratedlargeoverallreturnsinmanycases,includingdirecteconomicreturns,publichealthbenefits,andothers.Forexample,aretrospectiveanalysisbytheNationalAcademiesofSciences,Engineering,andMedicinefounddirecteconomicreturnsofabout20to1forpublicinvestmentinenergyefficiencyRDD&Dfortheportfoliotheyexamined.18SubsequentanalysesacrossawiderangeofenergyRDD&Dinvestmentshavealsogenerallyfoundlargeeconomicandenvironmentalreturns.19SuchpublicRDD&Dinvestmentshavecatalyzedimportantadvancesinenergysupplyandend-usetechnologiessuchasoilandgaswelldrillingtechnologyandshaleoilandgastechnologyandhavecontributedtoU.S.competitivenessintheseandmanyotherenergytechnologies.20Otherkeycountrieshaveseenthelargeopportunityforenergyandparticularlycleanenergytechnologyandarepursuingitaggressively,asnotedabove.21

Acompetitivecleanenergyindustryalsodependsonastrongprivatesectormanufacturingbasethatisefficientinenergyuse,productionprocesses,andcosts.Withoutthisbase,thecompetitiveadvantagegainedthroughtechnologyinnovationandtheassociatedlearninggainedthroughmanufacturinginnovationmaybecompromised.Inrecentdecades,theU.S.haslostgroundinmanufacturingoverall.AsafractionofU.S.GDP,manufacturingdeclinedfrom27%in1957toabout12%by2013,22theoverallU.S.tradedeficitinmanufacturedproductstallied$7.5trillionfrom2000to2013,23andtherehavebeenlargejoblosses,24allduetoavarietyoffactors.Incontrast,Germany,acountrywithahigherwageinmanufacturingthantheU.S.(anaveragehourlycompensationof$45.79versus$35.67fortheU.S.),25hasretainedmanufacturingat22%ofGDP.26ContinuedinnovationincleanenergyRDD&Dwillbea

“VentureCapital:TheWrongModel”“CleantechcompaniescommercializinginnovativescienceandengineeringwereespeciallyunsuitedtotheVCinvestmentmodelforfourreasons.First,theywereilliquid,tyingupcapitalforlongerthanthe3-5yeartimehorizonpreferredbyVCs,becauseworkingoutthekinksinnewscienceistimeconsuming.Second,theywereexpensivetoscale,oftenraisinghundredsofmillionsofdollarstobuildfactories,evenwhilethefundamentaltechnologywasstillbeingdeveloped.Third,therewaslittleroomforerrorbecausethesecompaniescompetedincommoditymarketswithrazor-thinmargins—againstcheapsiliconsolarpanelsorabundantoilandgas—makingitdifficulttoinvestinR&Dwhilealsooperatingaleanmanufacturingoperation.Finally,thelikelyacquirers—utilitiesandindustrialgiants—wereunlikelytoacquireriskystart-upsandaversetopayingapremiumforfuturegrowthprospectswhentheydidinvest.Formostcleantechstart-ups,thismeantthatthesalepricecouldn’toffertheoutsizereturnsinvestorsneeded.ThesefactorsconspiredtocostVCinvestorshundredsofmillionsofdollarsbeforelearningwhethertheircleantechbetshadachanceofsuccess—anorderofmagnitudegreaterthantheequivalentsoftwareexperiment.”BenjaminGaddy,VarunSivaram,FrancisO’Sullivan,“VentureCapitalandCleantech:TheWrongModelforCleanEnergyInnovation”,MITEnergyInitiativeWorkingPaper,July2016.

criticalcomponentofU.S.competitivenessinthehugeglobalmarketsforenergytechnologynotedabove,andtheuseofadvancedenergytechnologiestoprovideclean,cost-effective,reliableenergysuppliesisabasiccontributortoU.S.manufacturingcompetitivenessbroadly.

Tobetterunderstandtheworldwidemanufacturinglandscapeincleanenergytechnologies,DOEinitiatedcompetitivenessanalysesofseveralimportanttechnologyareas,asdescribedbelow,whichmayprovideinsightsonRDD&DapproachesthatmayhelpstrengthenU.S.cleanenergymanufacturingcompetitiveness.TheseDOEanalyses,aswellasasignificantandgrowingbodyofworkintheliterature,identifiedanumberofmarketchallengestothedemonstration,scale-up,andadoptionofcleanenergytechnologies.27,28Forexample,China-basedsolarphotovoltaic(PV)manufacturersgainedanadvantageduetoseveralfactors,includingaccesstoscale-upcapital,thedevelopmentofandaccesstoarobustsupplychain,andothers.29

ManufacturersinAsiahavedominatedlithiumionbattery(LIB)production.Theseincumbentshavegainedsignificantexperiencebuildingbatteriesforconsumerelectronicsapplications.Theybenefitfromanadditionalcompetitiveadvantagederivedfromamaturesupplychainandanexperiencedworkforcethatsupportstheconsumerelectronicsbatteryindustry,andinsomecases,somemanufacturersmayreceivevariousotherdirectandindirectsupports.30Thefocushere,however,isontechnology-relatedfactorsthatmayimpactU.S.manufacturingcompetitiveness;issuesintradearethepurviewoftheU.S.DepartmentofCommerce,theUnitedStatesTradeRepresentative,andothers.

Todate,DOEhascompletedtheevaluationofthemanufacturingcompetitivenessoffivecleanenergytechnologies.Theseanalysesseektobetterunderstandtechno-economicdriversassociatedwithmanufacturing,butcannotcaptureallmanufacturingcompetitivenessfactorsthatmayaffectanygivenfirm.ThesestudiescanrevealopportunitiesforRDD&Dtostrengthenmanufacturing,lowerlaborcostdisadvantages,andreduceenvironmentalandothercosts,andcanalsohelpevaluatewhereRDD&Dmighthelpimprovetechnologicalaspectsofcompetitiveness,butdonotexaminemacroeconomiccompetitivenessfactorssuchascurrencyexchangeratesorexplicitorimplicitsupports.31

Thefollowingbrieflyexaminesseveralmeasuresofnationalcompetitivenessandtheroleofenergy,followedbyadiscussionofresultsandlessons-learnedfromtheaforementionedcompetitivenessanalyses.TheremainderofthisappendixreviewscasestudiesofU.S.manufacturingcompetitivenessinphotovoltaics(PV),windturbineblades,lithiumionbatteries(LIB),light-emittingdiodes(LEDs),andcarbonfiber,anditconcludeswithabriefdiscussionofRDD&DopportunitiesthatmighthelpstrengthenU.S.manufacturingcompetitivenessincleanenergytechnologyaswellasfurtheranalysisthatwouldhelpbetterunderstandtheseissues.

1.1 CompetitivenessofCleanEnergyTechnologiesinGlobalMarketsTherearemanydefinitionsandmeasuresofcompetitiveness(Table1),butacommonthreadistheproductivitywithwhichanationutilizesitsresources,measuredbythevalueofgoodsandservicesproducedperunitofitsresourceinvestment.32

Table1.Competitiveness:Asamplingofdefinitionsandmeasures.

DefinitionsandMeasuresofCompetitiveness Source“TheUnitedStatesiscompetitivetotheextentthatfirmsoperatingintheU.S.cancompetesuccessfullyintheglobaleconomywhilesupportinghighandrisinglivingstandardsforAmericans.”

Porter&Rivkin33

“America’sinternationalcompetitivenessisbasedonitscapacitytoinnovateandmanufacturenewservicesandhigh-technologyproducts.Furthermore,thefundamentalmeasureofcompetitivenessisqualityjobs.”

RisingAboveTheGatheringStorm.34

“Competitivenessisthecapacitytobeattractivetobusinessesandtosimultaneouslycreateamorewidelyprosperoussociety.”

ThomasKochan35

“Competitivenessinasectorcanbedefinedasthe“capacitytosustaingrowththrougheitherincreasingproductivityorexpandingemployment.”

McKinseyGlobalInstitute.36

“Competitivenessisthesetofinstitutions,policies,andfactorsthatdeterminethelevelofproductivityofacountry.”

WorldEconomicForum(WEF)37

“Whencountriesarecompetitive,havea“setofinstitutions,policiesandfactors”thatareconducivetoproductivitygrowth—thenbusinessesarepositionedtogrowandbeeffectivecompetitorsagainstotherdomesticandforeignfirms.”

DepartmentofCommerce38

“Competitivenessismeasuredbyproductivity.Productivitydependsbothonthevalueofanation’sproductsandservices,measuredbythepricestheycancommandinopenmarkets,andtheefficiencywithwhichtheseproductscanbeproduced.Productivitysupportshighwages,astrongcurrency,andattractivereturnstocapital—andwiththemahighstandardofliving.”

TheGlobalCompetitivenessReport39

“Thetruedefinitionofcompetitivenessistheabilityofaregiontoexportmoreinvalueaddedtermsthanitimports.” Atkinson40

Theavailabilityoflow-costenergysupplieswithintheU.S.cancontributetoamarketadvantageforU.S.manufacturers,especiallythoseproducingenergy-intensiveproducts,suchaschemicalsorforestproducts.Forexample,duetolow-costnaturalgas,thechemicalsindustryincreasedethyleneproductioncapacitybyapproximately33%between2008and2012,andmanufacturersintheU.S.wereestimatedtorealizecostsavingsofmorethan$11billionannuallyfromlowerfeedstockandenergycosts.41Increasesinethyleneproductionalsoimpactadiversemixofdownstreamproducts,especiallythosewithhighembodiedenergy,suchasadhesives,coatings,andplastics.

Manufacturingcleanenergytechnologiesforglobalmarketsofferslargeopportunities,asdescribedabove,withtheIEAforecastingover$60trilliontobeinvestedinenergytechnologyto2040,andBloombergNewEnergyFinancetrackingroughly$350billionofinvestmentincleanenergytechnologyin2015(Figure1).TheIEAforecaststhatglobalenergydemandwillgrowabout37%by2040,withmostgrowthoutsidetheOrganizationforEconomicCooperationandDevelopment(OECD)(asseeninQTRFigure1-5).42

1.2 ImportanceofCompetitivenessinCleanEnergyManufacturingThemanufacturingsectormakesanimportantcontributiontotheU.S.economy,accountableforabout12.3%ofU.S.GDP.43ThemanufacturingsectorsupportsU.S.economicgrowthandU.S.employment,providingwell-paidjobs–21%morethantheaveragehourlycompensationinprivatesectorserviceindustries.44Themanufacturingsectoralsoprovideslargeemploymentmultipliereffects:each

manufacturingjobsupportsanadditional1.6jobs,andeachadvancedmanufacturingjobsupportsasmanyas4.9otherjobs.45ThemanufacturingsectoralsocontributestotheNation’sexports.46

Onaverage,over30%ofU.S.manufacturingfirmsreportedaninnovationbetween2008and2010comparedtoonly13%forotherU.S.businesses.47NationalScienceFoundationdata,amongothers,indicatesthatU.S.manufacturingfirmsdemonstratealmostthreetimestherateofinnovationasU.S.servicesfirms.48

Ithasbeenwelldocumented49thatacompetitivemanufacturingsectorcontributestosustainedeconomicgrowthandenergysecurity.Researchisalsofindingthatthereareimportantfeedbacksfrommanufacturingtotheinventionanddiscoveryphases.50ManufacturingstrengthistightlylinkedtotheinnovativepotentialandcompetitivenessofnationsviaR&Dinvestments,andmanufacturingaccountsfor70%ofU.S.privatesectorR&Dinvestment.51Manufacturingalsohelpssustainandbuildanindustrialcommons,atermthatdescribestheecosystemofcomplexandenduringpartnershipsamongmanufacturers,universities,technicalcolleges,firms,researchinstitutes,financingentities,andotherlinksinthesupplychain.52AnexampleisGermany’sindustrialcommons,whichiscomprisedofsuppliers,tradeassociations,industrialcollectiveresearchconsortia,industrialresearchcenters,FraunhoferInstitutes,universities,industrycollaboratives,andtechnicaladvisorycommittees.53AnotherexampleisthebiomedicalanddrugresearchecosystemconcentratedinBostonstimulatedbytheregionalknowledgenetworkscomprisedofuniversities,biotechnologyfirms,andrelatedequipmentandserviceproviders.54ASupplementalInformationappendixforChapter6,“PublicPrivateConsortiaandTechnologyTransitionCaseStudies”,describeseightexamplesofU.S.public-privateconsortiaandtheirtechnologytransitionactivities.

Theiterativeinnovationcyclebetweenengineeringandproductionisresponsibleforarangeofbreakthroughtechnologies.ResearchfromtheMassachusettsInstituteofTechnology’s(MIT’s)study“ProductionintheInnovationEconomy(PIE)”hasindicatedfirmsareincreasinglyrecognizingtheconnectionofproductionwithdevelopmentanddesign.55

2. ResultsofCurrentManufacturingCompetitivenessAnalysisRecommendationstoexaminemanufacturingcompetitivenessofU.S.cleanenergytechnologiesarenotnew;forexample,theCongressionalOfficeofTechnologyAssessment(OTA)recommendedthatCongressconsiderdirectingtheDepartmentsofCommerceandEnergytoexpandeffortstobetterunderstandspecificstrengthsandweaknessesoftheU.S.RDD&Dsystem,including“…scale-upofmanufacturingthatcapturessignificanteconomies-of-scaleandlearning.”56WhileDOEincludedcompetitivenessfactorsinsometechnologyevaluationsinthepast,ithasrecentlyinitiateddetailedmanufacturingcompetitivenessanalysiscasestudiestobetterinformassessmentsofcleanenergytechnologiesinaglobalcontext.Informedbytechnology-andprocess-basedcostmodelling,includingthatpublishedintheliterature,57theanalysismethodologyconsidersthecostsofproducingcleanenergyproductsintheU.S.comparedtoothernations.Otherfactorssuchasavailabilityofinvestmentcapital,availabilityandrequirementsoflow-costlabor,policy,easeoftransportation,andsupplychainsarealsoconsidered.Themethodologyalsoincludesanassessmentofcompetitivenessfactors,andhowcompetitivenessischangingindomesticandglobalmarkets.5859Thistypeofmanufacturing

competitivenessanalysisoffersadditionalinformationtobetterinformRDD&Dtechnologyroadmapsandinvestments,andidentifieseffortsneededtoaddresskeybarrierstoU.S.cleanenergymanufacturingcompetitivenessintheglobalmarketplace.

DOEhassupporteddevelopmentofananalysismethodologyandtheconductofmanufacturingcompetitivenessanalysesofseveralcleanenergytechnologieswithparticipationfromleadingindustryexperts.60Theseanalysesincludeglobalsupplychainandtradeflowoverviews,comparativecostassessments,strategicfactors,andsensitivityanalyses.Theanalysesincludeanassessmentofpublishedmarketstudies,findingsfromdetailedbottom-upcostmodelingofdifferentregionalproductionscenarios,andanoverviewofqualitativefactorsthatcaninfluencefactorylocationdecisions.Costmodelsarebasedondetailed,bottom-upaccountingofthetotalcosttomanufacture;costscapturedincludeallcapital,fixed,andvariablecostsineachregionalproductionscenario.Theanalysesidentifykeytrends,costconsiderations,andothermarketandpolicydevelopmentsthatcaninfluencemanufacturingofcleanenergytechnologies.61ForDOE,thefindingsofthesecasestudiesonmarketchallengesfacedinthesesectorscanhelpinformfutureRDD&Dfunding.

2.1 PhotovoltaicsToanalyzemanufacturingcosts,theNationalRenewableEnergyLaboratory(NREL)developedabottom-upmodelforwafer-basedsiliconPV.NRELvalidatedthismodelwithextensiveanonymizedindustryfeedbackandreview,andsoughtinputsonhistoricalandfuturefactory-locationdecisionsfromtheperspectiveofamultinationalcorporation,withparticularattentiononChina.62Throughthisapproach,NRELquantifiedtheconditionsofChina'sPVpriceadvantageduringthestudyperiod,examinediftheseconditionscouldbereproducedelsewhere,andevaluatedtheroleofinnovativetechnologyonpotentialfutureglobalmanufacturingcosts.63TheanalysisindicatedthatthepriceadvantageofaChina-basedfactoryrelativetoaU.S.-basedfactorywasdrivenmainlybyChina’sabilitytoaccessscale-upcapital(asopposedtothecostofcapital)andtoachievelargeeconomies-of-scaleandrelatedadvantagesincludingthedevelopmentofandaccesstoarobustsupplychain,contributingtoapriceadvantage,atthetimeoftheanalysis,of$0.22/W,asseeninFigure3.64ThePVindustryhasadvancedrapidlysincethisanalysis.PVinstallationshavenearlydoubledsince2011,to57GWin2015,andcostshavedroppedasshowninFigure3b.However,thereremainlaborcostandsupplychain—materialsandequipment—advantagesforChina.

Figure3a.ComparisonofU.S.andChinesePVmanufacturingcostsin2012.BasedonNREL’sbottom-upmodelforwafer-basedsiliconPV,neitherindigenousfactorssuchaslowlaborcostnorregionalincentiveswereprimaryfactorsinChina’shistoricalpriceadvantage.Theanalysisassumes2-GWperyearChinesePVfactory(23%)anda500-MWU.S.factory.Source:Goodrich,etal.65Credit:Energy&EnvironmentalScience

Figure3b.ManufacturingcostsandsustainablepricesforstandardsiliconPVmodulesasofAugust,2015,showingthecostbreakoutbyactivityformajorPVproducingcountriesandregions.NotethedramaticpricereductionsfromFigure3atoFigure3b.Source:66FigureCredit:CleanEnergyManufacturingAnalysisCenter,JointInstituteforStrategicEnergyAnalysis,NationalRenewableEnergyLaboratory.

Figure3c.U.S.vsurbanChinasiliconPVmoduleproductioncostdifferencebyfactor,asdeterminedbyongoingNRELcostanalysis,2015.TheUnitedStateshadanadvantagewithlowcostelectricity,butChinahadanadvantagewithlowcostlaborandsupplychaincostadvantagesformaterialsandequipment.Source:67FigureCredit:CleanEnergyManufacturingAnalysisCenter,JointInstituteforStrategicEnergyAnalysis,NationalRenewableEnergyLaboratory.

ChinaandTaiwanaccountedforabout40GWofglobalPVmoduleproductionin2015,upfromroughly0.05GWin2004.Regionalincentives,includingprovincialsubsidies,taxholidays,andlow-costdebt,mayhavebeenkeyenablersforthisrapidscalingbyChinesePVmanufacturers,andscalecanbeanimportantfactorindrivingcostsdown.68Ofcourse,thepriceadvantagecouldbedisruptedbytechnologyinnovations,whereU.S.firmscouldhaveanadvantage,iftheinnovationcouldbemanufacturedandmarketedatscale.69However,intensepricecompetitionfromabroad,whetherdrivenbymanufacturingadvantagesorthelackofalevelplayingfield,reducesmarginsandtheabilityofU.S.companiestoinvestinR&D.From2009through2014,some112solarenergycompanies,primarilyintheUnitedStatesandtheEuropeanUnion,wereidentifiedasbankrupt,closed,oracquiredbycompetitorsundersuboptimalconditions.70WithoutdomesticmanufacturingofsolarPV,thebenefitsofscalinganddevelopmentofrobustsupplychainsarelost,andtheaccompanyingmanufacturinginnovationofnextgenerationsolartechnologiesmaybecompromised.

FactorsthatimpedeprivateinvestmentincleanenergytechnologyRDD&DaresummarizedaboveandbrieflyexaminedintheQTRChapter1SIappendix,“AdditionalInformationonEnergyChallenges”.Public-privateRDD&Dsupportcanthenhelpaddressthisprivateinvestmentshortfallinordertoprovidesubstantialcleanenergybenefitsforthepublic.71Thisisdonewithhighleveragebyrequiringcost-sharingoftheresearch,ensuringstrongprivateengagementandinvestment;andthemostimportantRDD&Dcanbeidentifiedandefficientlydevelopedthroughcompetitivesolicitations.AreasofRDD&Dincludeadvancingthebasicmaterialsandtechnologies,improvingmanufacturingprocesses,

supportingindependentperformancevalidation,assistingmanufacturingscale-up,addressingbalance-of-systemcosts,andothers,asdetailedelsewhere.72TheseactivitieshelpdrivecostsdownandmakethecleanenergybenefitsofPVmorebroadlyavailabletothepublic;theymayalsohelpthecompetitivenessofU.S.manufacturing.

2.2 WindTurbineBlades

BackgroundDOEconductedamanufacturingcompetitivenessanalysisofwindturbinetechnology.Overthepastdecade,significantwindmanufacturingcapacityhasbeenbuiltintheUnitedStatestocaptureanincreasingdomesticmarket.73ThecostmodelwasdevelopedbyNRELincollaborationwithexpertsfromSandiaLaboratories,withvalidationbyindustry,tounderstandthefactorsimpactingthemanufacturingofwindturbinetechnologytomeetthisdemand.74ThecostmodelincorporatedinsightsfrompastDOE-fundedprogramsliketheWindPartnershipsforAdvancedComponentTechnology,75inadditiontomorerecentNationalLaboratoryledeffortssuchastheCleanEnergyManufacturingAnalysisCenter,76andothercollaborativeworkwithindustry.Theanalysisalsoincludedanoverviewofqualitativefactorsthatcaninfluencefactorylocationdecisions.77

FindingsTheanalysisindicatedthatthemanufacturingcosts,ascalculatedatthefactorygate,varyregionally,dependingonthematerialandlaborcost,withlaborcostbeingthemostsignificantfactor.Thecostofcapitalalsoinfluenceddisparitiesinfactorygateprices,buttoalesserextentthanmaterialsandlabor.Inaddition,asthebladesizeincreases,thelaborcostsbecameasmallerproportionoffactorygatepricewhiletransportationconsiderationsbecamemoresignificant(Figure4a).78Asbladesizeshavegrown,sohavethechallengesforshippingandlogisticsduetotheadditionaltransportcomplicationscausedbytunnels,overpasses,andavailableturningradiusareasFigure4b).79

Figure4a:Costcomponentsofwindturbinebladesastheyaremadelarger.Notethatthelaborcomponentbecomesasmallershareofthetotalasbladelengthincreases.Source:CleanEnergyManufacturingAnalysisCenter,JointInstituteforStrategicEnergyAnalysis,NationalRenewableEnergyLaboratory.80

Figure4b:Transportofan80-meterbladetoa7-MWtestturbineinScotlandillustrateslogisticschallenges.Source:USDOE81

Formanufacturersoflargewindturbinecomponentssuchasthewindbladeandtowers,proximitytoendmarketsisakeyconsideration,asevidencedbytheinfluenceofmanufacturingcostsandtransportationonfactorylocationdecisions,asindicatedbythescenarioanalysisshowninFigure5.ItisworthnotingthattheanalysisfoundthatMexico’scloseproximitytotheU.S.andgoodrailconnectionscouldreducetransportcostscomparedtoChinaandBrazil,leavingitwithapotentiallaborcostadvantage.Arangeofqualitativefactors,likepolicyuncertaintyandeaseofdoingbusiness,alsoinfluencesdecision-making.82

Figure5.Analysisindicatesthatlong-distanceshippingcostscouldexceedbenefitsofmanufacturinginlowercostlaborregionsfordeploymentlocationsintheU.S.mid-west.Mexico’sproximitytotheU.S.andgoodtransportationconnectionslargelyeliminatedshippingcostsinthescenarioanalysis,leavingalaborcostadvantage.Source:JamesandGoodrich,2013.83

CurrentDOEActivitiestoIncreaseU.S.WindTurbineBladeCompetitivenessInordertomeetthedomesticdemandforcleanwindpower84withitscorrespondingpublicbenefits,DOEidentifiedapproachesthatwouldstreamlinetheblademanufacturingprocessforconventionalwindturbines.85Someexamplesofinnovationsincludenewcomponenthandlingsystemstoaidintheinstallationoflarge,cumbersomepartsand3D-projectedblueprintsthatreducethetimeforworkerstoidentifythecorrectlocationfortheinstallationoffixtures,andconnectinghardwareapproachesthatreducedcostsandimprovedtime-to-market.Theseandotheradvancesalsoenabletheconstructionoflongerbladesandtallertowers,whichcanallowthecost-competitiveplacementofwindturbinesinareaswithlowerwindspeedsbutclosertolargeurbanloadcenters,withcorrespondingsavingsinthecostanddifficultyofinstallinglongdistancepowertransmissionlines.Theseadvantagesprovidesubstantialpublicbenefits,andhavethefurtheradvantageofenhancingthecompetitivenessoftheU.S.wind-energymanufacturingsector.

2.3 LithiumIonBatteries86

BackgroundDOEhadacompetitivenessanalysisoflithium-ionbatteries(LIBs)technologydonebyleadingnationallabs,industry,andtechnologyexperts.87TheanalysiscenteredonasingleLIBtechnologythatcoupleslithium-nickel-manganese-cobalt(NMC)cathodes,withgraphiteanodes(Gr)andcarbonateelectrolytes.TheNMC-GrcombinationisrepresentativeofLIBsbeingmanufacturedfortheelectricvehicles(EV)

industrytoday.Theanalysisincludedanassessmentofpublishedmarketstudies,findingsfrombottom-upcostmodelingofregionalproductionscenarios,withvalidationbyindustryandtechnologyexperts,andanoverviewofqualitativefactorsthatcaninfluencefactorydecisions.

FindingsManufacturersinAsiahavehistoricallydominatedLIBproduction.TheU.S.had17%oftheglobalLIBmanufacturingcapacityforautomotiveapplicationsattheendof2014and7%oftotalglobalLiBmanufacturingcapacity,whileChina,Korea,andJapanaccountedfornearlyalltherestoftheglobalLIBmanufacturingcapacity(TableX).88China,Japan,andKoreahavegainedsignificantexperiencebuildingbatteriesforconsumerelectronicsapplications.ThemanufacturingprocessesdevelopedfortheconsumerproductsaredirectlyapplicabletoEVs.However,itisimportanttonotethatLIBsfortheconsumermarketpredominantlycontainlithium-cobaltoxideasthecathodematerial,whereastheautomotiveindustryhaspreferredalternativecathodematerialsduetothehighcostofcobaltandsafety-relatedconsiderations.89Theexperience,maturesupplychain,andexistingworkforcefromtheconsumerelectronicsbatteryindustrycanlargelybeappliedtoautomotivespecificLIBproductionusingthesealternativecathodematerials.Incontrast,theU.S.LIBsupplychainislessmature90,andmostU.S.cellandbatteryplantoperatorsarerelativelynewtotheindustry.91Inanefforttoincreasefactoryutilization,U.S.LIBcapacityistargetingboththeemergingautomotivemarketandstationaryenergystorageforelectricgridapplications.

LIBManufacturingCapacity(MWh)andPercentforGlobalTotalandforAutomobiles,2014*

LIBManufacturingCapacity(MWh)forAutomobiles,PlantStatus,2016*

TotalLiBManufacturing

Capacity(MWh)

ShareofTotal

Capacity(%)

AutomotiveLiB

ManufacturingCapacity(MWh)

ShareofAutomotiveCapacity

(%)

FullyCommissioned

PartiallyCommissioned

UnderConstruction

Announced

China 39,010 51 11,240 41 11,152 3,038 16,244 19,246Japan 11,978 16 5,750 21 13,623 -- -- --Korea 16,059 21 4,600 17 6,570 -- -- --U.S. 4,970 7 4,600 17 8,925 8,750 26,250 150EU 1,798 2 1,300 5 -- -- --- --RestofWorld

2,440 3 0 0 3,380 -- -- 120

Total 76,255 100 27,490 100 43,660 11,788 42,494 19,516*DataSource:BloombergNewEnergyfinance(2014)*DataSource:BloombergNewEnergyfinanceDesktopPortal,2016,ascitedin:Chung,etal.92Table2.ManufacturingCapacityforLithium-ionBatteriesCellsbyCountry/Region(2014)

MigrationofLIBManufacturingAsia’sriseasaleaderinLIBproductionisbuiltontheconsumerelectronicsindustryshiftoflabor-intensivelow-marginproductiontoAsia.93Batterycompaniesandsupplierstotheconsumerelectronicsindustry(NiCad,NiMH)thenlocatedtobeclosetotheircorporatecustomers.Thedisruptivelithiumion

suppliersfollowedanddisplacedtheincumbentbatterycompanies.TheconcentrationofLIBcellandupstreamprocessedmaterialssuppliersinJapangrewfromsustainedinvestmentsinLIBtechnologybybothconsumerelectronicscompaniesinthe1990sthatwerebolsteredbyJapanesegovernmentsupportintheformofR&Dandlowcostcapitaltoestablishmanufacturingplants.TheseinvestmentsweremadedespitethelongcommercializationcycleofLIBtechnologies,andthelowreturnsontheLIBbusinessitselfbecausethetechnologyenabledcompetitiveadvantagesinportableconsumerelectronicsendapplications–theprimaryJapanesecorporateinvestorsinthetechnologyweretheconsumerelectronicscompaniesthemselves.94KoreaandChinafollowedJapan’sleadininvestinginLIBcellandbatterypackproductionforconsumerelectronics.Korea’sconcentrationofupstreammaterialssuppliersisaresultofmorerecentgovernmentalandindustryefforts(beginninginthe2000s)tobuildupthisportionofthesupplychainwithinKorea.95,96

TheanalysissegmentedLIBproductioncostintothreecategories:processedmaterials(representing45%ofbatterypackcostfora40-milerangeplug-inhybridelectricvehicle(PHEV)andupto70%ofcostfora300-milerangeEV),electrodeandcellmanufacturing,andpackintegrationandassembly.TheU.S.iswellpositionedinthepackintegrationandassemblysegmentgiventhatthisactivitywilleitherbeconductedby(ornear)thevehiclemanufacturer.

Quantifiabledriversofcompetitivenessforelectrodeandcellproductioncanbegeneralizedintotwocategories:regionalcostdriversandfirm-specificcharacteristics.Themajorregionalcostfactorsinfluencinglocationdecisionsincludelabor,facilities(includingcapitalcost),andmaterialscosts.ThesecoststendtobelowerinChinaandKoreathanintheU.S.

Inthenearterm,firm-specificcharacteristicsinfluencingcostsfavorincumbentcompaniesthathavegainedexperiencebuildingLIBcellsforconsumerelectronicsapplicationsandhaveexistingmanufacturingplantsthatcanberedirectedtomanufactureEVbatteries.Currentconsumerelectronicscellformatisfocusedonproducingsmall18650cylindricalcellsorsmallflatprismaticcellshavingacapacityof0.5-3amp-hours.However,EVmanufacturersprefermuchlargerprismatictypecells(20-60amp-hours)inordertoincreasetheratioofactive-tonon-activematerials.97

Costanalysisindicatesthatmaterialscostsdominatethetotalcellcost(Figure6).Foragivenelectrochemistry,materialscoststendtobeafunctionofcellmanufacturingcompanycharacteristics,inthatpricingisdeterminedinpartbypurchasingvolume,aswellasthenatureoftherelationshipsbetweenLIBmanufacturersandtheirsuppliers.Currently,Asianmanufacturerstendtohavewellestablished,closerelationshipswithregionallyco-locatedinputmaterialssuppliersthatappeartoconferpricingadvantagebeyondvolume-baseddiscounts.Analysisindicatesthat,afterU.S.manufacturersdeveloptrustedrelationshipsbasedonfavorableexperiencewithsupplierssuchthatmaterialpricesbecomeequalizedwithmaterialscostleaderslikeKoreaandChina,regionalfactorssuchaslaborandfacilitycostwillbecomecompetitivefactorsthatfavorlowercostregions.U.S.advantageinreducedshippingcostscanoffsetsomeoftheAsianlaborandfacilityadvantages.U.S.-basedmanufacturingalsofacesdifficultchallengesduetorelativeimmaturityoftheU.S.supplychainandmarketparticipants.98

Figure6.MaterialsarethelargestsinglecostcomponentforLIBcells.Equipment

andlaborarethenextlargestcostcomponents.99

TheseexistingrelationshipswillbelessimportantasnewlithiumionorotherelectrochemistriesaredevelopedthathavethepotentialtosignificantlyreducethecostofEVbatteriesandincreasemarketpenetrationofthesevehicles.Alargepotentialimpactcouldresultfromnewmanufacturingtechnologies,andU.S.-basedmanufacturingadvancesintheautomotivebatterymanufacturingsectorintheU.S.wouldlikelyimpacttheconsumerelectronicsbatterymanufacturing.Astheunitcost,energydensity,andpowerdensityspecificationscomeinlinewiththeEVneeds,thegainsmadeinmanufacturingelectricvehiclebatteriesbecomedirectlyrecoverableinproducingbatteriesforconsumerelectronics.

CurrentDOEActivitiestoIncreaseU.S.LIBCompetitivenessTocapturethenationalenergysecurityandeconomicbenefitsofreducingouroildependence,aswellasthecorrespondingenvironmentalbenefits,advancesareneededinbatterytechnologytosignificantlyreducethecostofEVsandincreasethemarketpenetrationofthesevehicles(QTR,Chapter8).ThepotentialRDD&DopportunitiestorealizetheseadvancesmayalsohelpU.S.-basedautomotivebatterymanufacturingcompetitiveness.ThepotentialimpactsoftheseRDD&DopportunitiesonloweringthecostsofEVsandtheirassociatedpotentialbenefitsonfutureU.S.competitivenessinthisareainclude:

• Advancedmaterialstechnologies–thesewilloffsetsomeadvantagescurrentlyheldbyestablishedforeignproducers.DOEiscurrentlysupportingR&Dinanumberofkeybatterytechnologyopportunities.

• Advancedmanufacturingprocesses–newautomotivebatterydesignsandnewmanufacturingprocessescanallowU.S.manufacturerstoentermarketsthathavebeenthedomainofAsianmanufacturerswhohaveadvantagesinsmallconsumerelectronicsbatteries,andofferthepotentialtoeclipsecompanies.Processscale-upR&Dcanhelpbridgethegapbetweensmall-scalelaboratoryresearchandhigh-volumebatterymanufacturing,andleadtoprogressinthedevelopment,validation,andcommercializationofadvancedbatterychemistries.Inorderto

increasetheyieldofLIBproduction,DOEhaseffortsunderwayfocusedonreal-timemetrologytoenablerapidqualitycontrol/qualityassurance(QC/QA)ofLIBrawmaterialsandfabricatedcomponents,aswellasacosteffectiveR&DtoolfornextgenerationLIBchemistry.

• Highlevelofautomation–large-scaleLIBcellmanufacturingplantshaveaveryhighdegreeofautomationduetothemanufacturingprecisionandqualityrequiredtomeetthedurability,life,andsafetyrequirementsofEVcomponents.Thisreducestheimpactoflaborcostdifferencestothepointwhereshippingcostscanoffsetlaborcostsdifferences.

• MarketScale-up–althoughbeyondDOE’spurview,thisiscriticalforsuccessofLIBtechnology.Factoryutilizationisafunctionofmarketdemandandakeydriverofbatterymanufacturingcost.U.S.manufacturersneedanexpandingmarketforautomotivebatteriesinordertoscale-upproductiontogeteconomies-of-scaleandtobeabletodrivedownthelearningcurve.

Teslaiscurrentlyconstructingalarge-scalebatterymanufacturingfacilityinNevadathatcanpotentiallydemonstratethatamanufacturingfacilityintheU.S.canbecompetitivethrougheconomies-of-scaleandlearning,andtechnologyadvancements.Teslaexpectsa30%batterycostreductionattributabletoeconomies-of-scaleatthisfactory.100Recentstudiesindicatethatthelearningrate(thecostreductionfollowingacumulativedoublingofproduction)isbetween6%and9%,inlinewithearlierstudiesonvehiclebatterytechnology.

2.4 LightEmittingDiodes

BackgroundDOEhasbeenassessingthecompetitivenessofLightEmittingDiode(LED)manufacturersresponsibleforproducingsapphireandsilicon-carbide(SiC)substrates,LEDdie,LEDpackages,andLEDlamps/luminaires.U.S.LEDmanufacturershaveremainedcompetitivebyintegratingacrossthevaluechaintomaximizetheirmargins.Manyofthesemanufacturersstartedasmaterialscompanies,developingstrongLEDdieandpackagemanufacturingbusinesses.Theythenexpandedtheirbusinessmodeltoincludelampandluminairemanufacturing,andmorerecently,controlsystems.Thisputsthemindirectcompetitionwithotherverticallyintegratedsolid-statelighting(SSL)manufacturerssuchasPhilipsandOSRAM.Themovetohighervalue-addedproductshastendedtooffsetthedecliningprofitmarginsfromthedieandpackages,andhasproducedsignificantrevenuegrowth.101Increasinglyintenseoffshorecompetitionwithlowlaborcosthigh-volumeproduction,however,isforcingU.S.manufacturerstomovetohigher-endproducts.102

FindingsThebenefitsofLEDlightingincludeverylonglifetimes,potentiallyveryhighefficiencies,andlifetimefinancialsavingsforconsumers.Manufacturers,however,aremostconcernedaboutminimizingpriceevenifitmeansproducingLEDswithlowerefficiencies.DOE’sfocushasbeentopartnerwithmanufacturerstoachievehigherefficienciesandimprovedcolorthroughcost-sharedR&D,anddrivecostsdowninordertoenablelargermarketdeployment.103

Manufacturingefficiencycanimpactcompetitivenessinemergingmarkets.LEDadoptioninthedevelopedworldremainssensitivetoprice,andcostscansignificantlylimituptakeinemergingmarkets.

Companiescanemploymanystrategiestogrowmarketshareinemergingmarkets,includingestablishingeffectivedistributionchannelsandintroducinglocalmanufacturingfacilities,butlowcostislikelytobethemostimportantfactorfortheindividualpurchasingtheproductwithefficiencyandtheassociatedpublicbenefitsdifficultfortheindividualtoascertainorevaluateandthereforeofmuchlessconcernintheinvestmentdecision.104

CurrentDOEActivitiestoIncreaseU.S.SSLCompetitivenessSincelaunchingitsSSLmanufacturinginitiativein2009,DOEhascompetitivelyawarded17SSLmanufacturingR&Dprojects,coveringmuchofthevaluechainofSSLproduction,includingprocessimprovements,manufacturingequipment,materials,testing,anddesignsforlowcost.Workhasalsoincludedflexiblemanufacturingofstate-of-the-artLEDmodules,lightengines,andluminaires,aswellasdevelopmentofmanufacturingprocessesforpracticalOLED(organicLED)panels.Otherprojectsincludedimprovingthemetalorganicchemicalvapordeposition(MOCVD)epitaxialtools,developingwaferinspectionequipment,andimprovingphosphordepositionprocesses.105Thesevariouslyfocusonachievinghigherefficiencies,improvedcolor,manufacturingscale-up,andlowercoststorealizethelargestpossiblepublicbenefit.Atthesametime,thisRDD&DcanenhanceU.S.competitivenessintheglobalLEDindustry.

2.5 CarbonFibers106

BackgroundDOE’sOakRidgeNationalLaboratory(ORNL)iscurrentlyconductingacompetitivenessanalysisofcarbonfiberanditsapplicationincarbonfiberreinforcedplastics(CFRPs)forthewindenergy,compressedgasstorage,aerospace,andautomotiveindustries.107Foreachapplication,theanalysisconsiderscompetitivenessbarriers,currentandanticipatedsupplychains,andfactorsthatinfluencemanufacturinglocationdecisions.ThegoalistoidentifykeyopportunitiesintheCFRPsupplychainwheretheU.S.canachieveormaintainacompetitiveadvantageifCFRPsaretobesuccessfullydevelopedtomeetfuturedemands.108

Findings–CFRPsforWindTurbineBladesForwindenergy,longerbladesontallertowersofferaccesstowindsfurtherabovetheearth,whichprovidehigher,steadierwindspeeds.Thisisimportanttoenableuseofwindturbinesinareaswithotherwiselowerwind-speedsthatareclosertolargeurbanloadsintheU.S.,asnotedabove.HigherstiffnessresultingfromtheuseofcarbonfibersmotivatestheuseofCFRPsforwindturbineblades.ThelighterweightofCFRPsreducesweightontheturbinehubandtower.Inadditiontotechnicalchallengesrelatedtomanufacturingcomparativelylarger-tow109industrialgradecarbonfibersforbettercompressivestrength,cost-effectivenessisamajorbarriertoU.S.marketgrowthofCFRPsforwindenergy.Withmaterials,includingcarbonfiber,contributingthelargestshareoftotalwindturbinebladecost,asshowninfigure7,pathwaystolow-costcarbonfiberaswellasalternativehigh-throughputmanufacturingmethods,suchasanautomated3-Dweavingandfiberreplacementprocesses,canimprovecost-effectiveness.110

Figure7:Costofmanufacturinga61.5metercarbonfibersparcapwindturbinebladebysupplychainlocations,asmodeledbyCEMAC.111

Findings–CFRPsforAerospaceApplicationsTheaerospaceindustryisamaturefieldofCFRPapplicationsandisthelargestsourceofcarbonfiberdemandbymonetaryvalueinadditiontobeingamajorsourceofdemandbyweighttoday.Alargeshareofaerospacecarbonfiberdemandisdrivenbypremierwide-bodyjetprojectsbyBoeingandAirbus.112CFRPisalsoimportantformilitaryaerospaceapplications.Competitivenessinaerospace-gradecarbonfibermanufacturingdoesnotrequirecollocationwithmanufacturersofcarbonfiberbasedaerospacecomponentsduetoaninsignificantshareofshippingcosttocarbonfibercost.However,ascarbonfibercompositesareusedinlargerpartsandingreatervolumes,newmanufacturingtechniqueswillberequiredthatincreasethepaceandefficiencyofproduction.

Findings–CFRPsforAutomobileApplicationsDuetohighcosts,longmanufacturingcycletimes,anduncertainsupplychains,carbonfiberusagebytheautomotiveindustryhaslargelyremainedconfinedtoultra-expensive,lowproductionvolumemodels.113CFRPsarenowattractingmuchmoreattentionbytheautomotiveindustryaslightweightingbecomesanincreasinglyimportantpathwaytoachievecorporateaveragefueleconomy(CAFE)standards.However,beforeCFRPscanachievewidespreadadoption,veryefficient,fast,andcost-effectivemanufacturingoperationsneedtobedevelopedtomeettheneedsofautomotiveproduction.Forexample,CFRPpartsrequirerelativelylongmanufacturingcycletimescomparedtoconventionalsteelstampingoperations.Oneoptionistheuseofresintransfermolding(RTM)processes,butonebottleneckisinthelabor-intensiveandcostlydryfiberpreformstepthatisrequiredbeforetheresinmatrixmaterialisinjectedintothemold.RDD&Dopportunitiesincludenewmanufacturingprocessessuchashigh-pressureresintransfermolding(HPRTM)andcarbonfiberreinforcedthermoplastics(CFRTP)thathavethepotentialtoreducecycletime,laborrequirements,andcosts.

Findings–OverallU.S.CFRPCompetitivenessAssessmentTheregionalcompetitivenessanalysesshowtheU.S.iscurrentlyinacompetitivepositionforCFRPsforthecleanenergymarketsectors.Asignificantlysmallershareofmaterialshippingcost,ascomparedtothefinalproductcost,hascontributedtoaworldwidesupplychaindistributionintheindustrytoday.FactorscontributingtoU.S.competitivenessincarbonfiberproductioninclude,forexample,lowutilitycosts(thatoffsethigherU.S.laborcosts)comparedtothoseinChinaorJapan(Figure8).Forwindenergy,proximitytothelocationofdeploymentmayaffectfuturefinal-productmanufacturinglocationsasprojectedfuturewindenergygenerationrequireslargebladesandtransportationrequirementwouldpresentcostandlogisticalchallenges,asdiscussedearlier.Factorssuchasmaturedsupplychain,anestablishedworkforce/laborpool,andregional(tax)incentiveshaveinfluencedregionalcompetitivenesstodate.Zoltek,oneofthelargestcarbonfibersupplierstothewindenergyindustry,haslocationsinHungary,Mexico,andtheU.S.,andsuppliesworldwidetomeetthedemandsofGEEnergy,Vestas,andGamesatoday.114

Figure8:Costofmanufacturing50KTowcarbonfiber,asmodeledbyCEMADandOakRidgeNationalLaboratory.115

ActivitiestoIncreaseU.S.CarbonFiberCompetitivenessU.S.competitivenesshasbeenbolsteredbyitsadvantageinskilledproductionlabor,engineeringexpertise,lowenergyprices,andbylong-termcontractswithspecificendusers,butstillfacessubstantialchallengesrequiringfurtherRDD&Dtolowercostsandimproveperformance,andtofurtherscale-upproductiontorealizeeconomiesofscaleandlearning,butfacingthechicken-and-eggproblemofhavinghighcostswithlimitedvolumebutneedinglowcoststogethighvolume.116TostrengthenU.S.competitivenessincarbonfibermanufacturingthroughRDD&Dactivities,DOErecentlyannouncedaCleanEnergyManufacturingInnovationInstituteforCompositesMaterialsandStructurestoaddressthechallengesfacedbythisindustry.117

2.6 KeyLessonsLearnedfromtheCleanEnergyManufacturingCompetitivenessAnalysesThesecasestudieshighlightmarketchallengesandcompetitivenessfactorsinfluencingmanufacturinglocationdecisions,whichcanprovideinsightforstrategicinvestmentsinRDD&Dofcleanenergytechnologies.Thiscanhelpdecision-makersunderstandtheoverallsituationfacingU.S.manufacturersinglobalmarkets,beyondwhatanyoneindividualmanufacturer,especiallyasmall,innovativenewcompany,canpotentiallydobyitself.SpecificlessonslearnedfromthePVandLIBcompetitivenessstudiesemphasizethecriticalrolesthatanindustrialcommons,maturesupplychain,andaccesstocapitalserveforatechnologytorapidlyscale-upandachieveeconomies-of-scale.118Inaddition,mostofthefivecasestudiesnotethatscale-upfinancingforproductionisaparticularproblemforcleanenergytechnologies.119Thesestudiesalsounderscoretheimportanceofaskilled,robustworkforce.Allthecasestudieshighlighttheneedforadvancedmanufacturingtechnologytoenablerapidscale-upanddrivedownproductioncosts,whileincreasingthemanufacturingefficiency(inbothenergyuseandproductionprocesses).Itisalsonecessarytopayattentiontomaterialsandcomponentsupplychaindevelopment,includingrelianceonforeignsourcesforspecificmaterialsthatareinshortsupplyintheU.S.120andthevariousassociatedrisks.Finally,thereisaneedforgeneralawarenessofcleanenergyRDD&Dactivitiesaroundtheworldtoidentifyimportantareasfordevelopment,opportunitiesforcollaboration,andcompetitivenessthreats.ItisimportanttonotethatthecasestudiespresentedinthisSupplementalInformationappendixrepresentalimitedsetfromalargerangeofenergytechnologies,includingcleanenergyandenergyefficiencytechnologies,aswellastechnologiesthatcutacrossmanysectors,(seeTechnologyAssessmentappendicestoQTRChapters3through8)thatcouldbenefitfromsimilarmarketandcompetitivenessanalyses.AdditionalstudiescouldprovidefurtherinsightintofactorsthataffectU.S.energytechnologycompetitiveness.

3. RepresentativeManufacturingCompetitivenessFactorsNeedingFurtherEvaluationThemanufacturingcompetitivenesschallengesilluminatedbytheanalysesdescribedabovecanprovideusefulfactorsforconsiderationasstrategiesaredevelopedforRDD&D.However,insightsgainedfromanalyseshavealsorevealedinformationgapsneededtobetterunderstandtheopportunitiesforcleanenergytechnologiesinglobalmarkets.Whileanalysestodatehaveconsideredemergingmarkets,supplychain,labor,criticalmaterials,industrialcommons,economies-of-scale,andtime-to-market,futuremanufacturingcompetitivenessanalysescouldbenefitfromanevaluationofadditionalfactors,suchas:

• GlobalBenefitsAnalysis.TheanalysisofU.S.-basedproductionindomesticandglobalmarketstoidentifyrisksandRDD&Dopportunitiesthatcontributetodomesticbenefitsaswellasprovidefoundationalcapabilitiesforcompetinginglobalmarketswhilealsoprovidingbenefitsforthosecountries.

• Technology/LaborDynamic.Low-costlaborhasoftenbeenarguedasaprimaryfactordrivingU.S.companiestotransferlarge-volume,low-marginmanufacturingtooffshoreproducersandfocusinsteadonhigh-end,high-marginproduction.Thisstrategy,however,hasnotworkedwellinsomecases,suchasconsumerelectronics.121Onechallengeisthat,havinghonedthemanufacturingprocess,offshoreproducersarethenabletoclimbthevaluechaintohigher-endproducts;U.S.producersarethenhard-pressedtopushback,giventhattheymayhavelost

legacymanufacturingcapabilitiesandsupplychains,anddidnotadequatelydevelopnewmanufacturingcapabilitiestocompeteagainstlow-margin,highvolumecompetitors.122Theanalysesdescribedabovefoundlowcostlaborwasanissueinsomecasesbutnotinothers.Regardless,cleanenergytechnologiesmustreducecoststobecompetitiveinU.S.marketsiftheyaretobroadlypenetratemarketstoprovidelargepublicbenefits.Thisrequiresabetterunderstandingofthedynamicsoftechnologyandlabor,suchastheimpactsoflowermanufacturinglaborcoststhroughRDD&Donflexibleautomation,designformanufacturing,andimprovedmetrologytoimproveyieldandquality,amongothers,withanemphasisonplatformtechnologiesthathavethepotentialforpervasiveimpactsonmanufacturing.123

• SupplyChainConstraints.Somecleanenergytechnologiesmaydependoncriticalmaterialsthatareatriskofbeingconstrainedbysupplychainpinchpoints.ThismotivatesanR&Dstrategyfocusedonimprovedcaptureanduseofcriticalmaterials,includingthosenowproducedassideproductssuchastelluriumwhichisasideproductofcoppermining,moreefficientuseofcriticalmaterials(e.g.,thinnerlayersofCdTeinsolarcells),andeliminationofmaterialsthataresubjecttosupplydisruptionsanddevelopmentofsubstitutematerials,includingthroughcomputationalmaterialsdevelopment(seeQTRChapter6andChapter9).124TheCriticalMaterialsInstitute(CMI)EnergyInnovationHubatAmesNationalLaboratoryistargetingtheseissues.125

• IndustrialCommons.OffshoringhaserodedtheindustrialcommonsthatenabletheU.S.tomanufactureadvancedtechnologyproducts.126Theseindustrialcommonsincludenotjustsuppliersofadvancedmaterials,productionequipment,andcomponents,butalsoR&Dknowhow,advancedprocessdevelopment,engineeringskills,andmanufacturingcompetencies,asillustratedintheLIBanalysis.Thesearelargelyoutsidethepurviewofanysinglecompany.ArecentMITstudynotesthatinnewtechnologies,suchasthoseinenergy,biotechnology,andbatteries,theremustbeacloserintegrationbetweenresearch,development,design,productdefinitionandproduction.127RDD&Dstrategiestoadvancecleanenergytechnologieswillneedtoconsiderapproachestostrengthenthisindustrialcommons,anddrivedowntheproductioncostwhileincreasingmanufacturingefficiency.128

• Economies-of-Scale.ThePVcasestudyunderscorestheimportanceofeconomies-of-scale,economies-of-learning,andsupplychainefficiencies.129Thissuggeststheneedforfurtheranalysisoftheseissuesoncostreductions,andonRDD&Dthatenablessuchcostreductions.Inaddition,theanalysishighlightedtheimpactofeconomies-of-scaletoenabledevelopmentofspecializedequipmentforhigh-throughput,high-performancemanufacturing,aswellasthelocationwheretheeconomies-of-scalearetobedeveloped.Forexample,largesingle-piecewindturbinesbladesarebettersuitedtolocalproductionbecauseofhightransportationcosts,130whereassegmentedbladesproducedinhighquantitymaybenefitfromcentralizedproduction.Finally,analysisisneededontheextenttowhichscaleisimportantingeneratinglargerrevenuesthatcanbereinvestedinRDD&D.131

• Time-to-Market.Reducingthetimerequiredtogetaproducttomarketisimportantindomesticaswellasinternationalmarkets.Itmaybepossibletoreducethecostsofdemonstrationsandscale-upbyutilizingadvancedsimulations,andtoutilize3Dprintingtechnology,forexample,toreplacesomeproductionsteps.SomeofthesemaybefoundationalRDD&Dneedsacross

industrysectors.Manysmall-tomid-sizecompaniesmaynothavetheresourcestosupportdedicatedeffortsinthesecapabilitiesandmayfindaccesstosuchcapabilitiesofparticularvalue.132

• EmergingMarkets.AsseeninQTRChapter1Figure1-5,energytechnologymarketswillincreasinglybeoutsidetheOECDcountries.Asmanycleanenergytechnologiescanrealizesignificanteconomies-of-scaleandeconomiesoflearning,theextenttowhichU.S.producerscanremaincompetitivewithoutbeingsignificantplayersintheseinternationalmarketsisanopenquestion.Opportunitiesspanenergysupplyandend-usetechnologiesineverysector.133Particularconditionsneedtobeconsideredinsomecountries,suchasthelackofinfrastructure,lackofoperationsandmaintenancecapabilities,widevoltageandfrequencyexcursionsonthegrid,andmuchmore.134Particularopportunitiesincludethedevelopmentofapplicationsthatcangenerateincomeforusersinruralandoutlyingurbanareas.135Analysisoftransportationandsupplychainlogisticscostsalsoneedstobeincorporated.Factorslikethesearecurrentlynotaddressedincompetitivenessanalysis.

Intotality,theseevaluationfactorswillcontributetoanunderstandingofDOE’simpactontheglobalvaluechain136ofU.S.cleanenergytechnology;inturn,thismaybeusefultohelpinformdecisionsthatmaystrengthenthefuturemanufacturingcompetitivenessoftheU.S.cleanenergyindustry.

4. StrengtheningCleanEnergyTechnology&Manufacturing137DOEsupportscleanenergymanufacturing-relatedRDD&Dinpartnershipwithindustry,universities,nationallaboratories,non-profitorganizations,andothersthroughavarietyofmechanisms,particularlycompetitivelyawardedpublic-privatecost-sharedawardsinvariousforms.Thismanufacturing-relatedRDD&Dsupportsnationalgoalsofadvancingcleanenergytechnologyandmanufacturingtorealizesecurity,economic,andenvironmentalbenefitsfortheAmericanpublic,whilealsocontributingtoU.S.manufacturingcompetitivenessthroughsomeofthefactorslistedintheearliersection.Theseeffortsincludethefollowing:

• Engagingwithindustry,academia,nationallaboratories,andothers.TheCleanEnergyManufacturingInitiative(CEMI)co-hostedunderapartnership138withtheCouncilonCompetitivenessthreenationalandfourregionalsummitsinthepastseveralyearsaswellasanumberofforafocusedonspecifictopics.Theseactivitieshaveinvolvednearly2,000leadersinmanufacturingRDD&Dfromindustry,academia,nationallaboratories,government,andothers.139Thisengagementservesacriticalrolebytappingtheextensiveknowledgeofthebroadcommunitytohelpidentifykeycleanenergymanufacturingchallenges,opportunities,andpotentialpathwaysforward.

• EstablishingCleanEnergyManufacturingInnovationInstitutes.140AFederalgovernment-wideeffortwaslaunchedin2011bythePresidenttorebuildU.S.manufacturingcompetitiveness—ManufacturingUSA,theNationalNetworkforManufacturingInnovation(NNMI).141InsupportofNNMI,DOEhasestablishedManufacturingInnovationInstitutestofocusontechnologydevelopment,addresschallengesofmanufacturingscale-up,andhelpdevelopthenext-generationworkforce.142TheseInstitutesincludetheNextGenerationPowerElectronics

NationalManufacturingInnovationInstitute—PowerAmerica,143theInstituteforAdvancedCompositesManufacturingInnovation,144andtheSmartManufacturingInnovationInstitute.145Further,DOElaunchedtheRapidAdvancementinProcessIntensificationDeployment(RAPID)ManufacturingInstituteModularChemicalProcessIntensificationInstitute146inDecember2016,andlaunchedtheRecyclingandRemanufacturingInnovationInstitute(ReducingEmbodiedEnergyandDecreasingEmissions—REMADE)147inJanuary,2017.DOEisalsocollaboratingwithotheragency-ledNNMIs,suchastheDepartmentofDefense’s(DOD’s)NationalAdditiveManufacturingInnovationInstitute—AmericaMakes,148LightweightInnovationsforTomorrow—LIFT,149andtheDigitalManufacturingandDesignInnovation(DMDI)Institute.150

• AcceleratingMaterialsDevelopment.Discovery,development,validation,scale-up,andotherstepsincommercializingnewmaterialsatscaletypicallytakes10to20yearsormoreandisveryexpensive.Toaddressthischallenge,theAdministrationlaunchedtheMaterialsGenomeInitiativein2011tocutthistimeinhalforlessandtodotheworkatamuchlowercost.151TheAdministrationalsolaunchedtheAdvancedManufacturingPartnership2.0(AMP2.0).152Insupportoftheseefforts,amongotheractivitiesdescribedhere,DOEhaslaunchedtheEnergyMaterialsNetwork(EMN)tosubstantiallyaccelerateandreducethecostofdevelopingnew,affordable,high-performancematerialsforcleanenergytechnologies.153Currentconsortiainclude:theElectrocatalysisConsortium(ElectroCat)154todevelophighperformancefuelcellsthatdonotrequireexpensiveplatinumgroupmetals;theCaloricMaterialsConsortium(CaloriCool)155todevelopsolidstatematerialstoprovidecoolinginairconditionersandrefrigerators;andtheLightweightMaterialsNationalLabConsortium(LightMat)156todeveloplightweightmaterialsforvehiclesandotherapplications.Additionalconsortiaarebeingexamined,suchasforsolarmodulematerials.157

• AidingTechnologyInnovationandScale-upwithDOE.SomeappliedenergyofficessupporttheestablishmentofsharedfacilitiesformanufacturingR&Danddemonstrationorpilotfacilitiesfordemonstratingmanufacturingprocessesatscale.158ExamplesincludetheCriticalMaterialsInstitute(CMI)EnergyInnovationHub,159theVehicleSystemsIntegrationLaboratory(VSI),160OakRidgeNationalLaboratory’s(ORNL’s)ManufacturingDemonstrationFacility(seebelow),161DOE’sMaterialsEngineeringResearchFacility(MERF),162andtheJointCenterforEnergyStorageResearch.163DOEisalsoapartnerintheU.S.AdvancedBatteryConsortium(USABC).164

• DemonstratingManufacturing.DOEhasestablishedManufacturingDemonstrationFacilities(MDFs)toleveragenationallabcapabilitiestosupportthedemonstrationofnewmanufacturingprocesses,reducetechnicalrisks,andencouragecollaborations.Tosupportentrepreneursthataremovingnewinventionsintomanufacturedproducts,DOEhaslaunchedtheBuild4Scaleinitiativetoprovidetrainingonmanufacturingfundamentalssuchasselectingmaterials,designingforassembly,selectingproductionprocesses,andworkingwithproductionpartners.165DOEhasanumberofthetopsupercomputersintheworld,soDOE’sLawrenceLivermoreNationalLaboratoryisleadingtheefforttousesupercomputerstomodel,simulate,andanalyzekeyindustrialproductsandprocessesinordertosharplyreducethecostsofnewcleanenergytechnologiesandthetimerequiredtogetthemtomarket.166AnMDFatOakRidge

NationalLaboratoryisfocusedonadditivemanufacturing,carbonfiber,andothermanufacturinginnovations.167

• AssistingManufacturing.DOEhasseveralsignificantcleanenergymanufacturingassistanceprograms.TheseeffortsincludeLoanPrograms;168andtechnicalassistancetomanufacturerstofacilitatethecommercialization,acceptance,andadoptionofenergyefficiencyinmanufacturing--examplesincludetheSuperiorEnergyPerformance®(SEP™)169Program,TechnologyAssistancePartnerships(TAPs),170BetterPlantsProgram,171andIndustrialAssessmentCenters.172AssistanceprogramsalsoincludetheSmallBusinessVouchersprogramtoprovideassistanceusingNationalLaboratoryresources;173andothers.

• CollaboratinginPartnerships.Inaddition,DOEcollaborateswiththeU.S.DRIVEpartnershiponhydrogenandfuelcellR&D,electrochemicalenergystorage,andadvancedpowertrains174forpassengervehiclesandwiththe21stCenturyTruckPartnershiponheavy-dutyenginesforcommercialvehicles.ThereisalsoactivecollaborationoncombustionresearchaswellashydrogenandfuelcellresearchandmanufacturingwithseveralcountriesthroughtheIEA.

• AcceleratingTechnologyTransitiontoMarkets.DOE’stechnology-to-marketeffortsareaimedatenhancingtheindustrialimpactofthenationallaboratories.ActivitiesincludeDOE’sNationalCleanEnergyBusinessPlanCompetition(DOENCEBPC),175NationalIncubatorInitiativeforCleanEnergy,andSmallBusinessInnovationResearch/SmallBusinessTechnologyTransferPrograms(SBIR/STTR).176DOEisalsofacilitatingtrainingofresearchersfromnationallaboratoriestotransitionhigh-impactnationallaboratory-inventedtechnologiesintothemarketplace.EffortstohelpaddressthisincludetheLab-EmbeddedEntrepreneurshipProgramtohelpnationallabresearchersadvancetechnologiestowardscommercialsystems,177andtheTechnologiesinResidenceProgram.178WithinthisProgramarethefollowingthreecenters:CyclotronRoadatLawrenceBerkeleyNationalLaboratory,179ChainReactionInnovations(CRI)atArgonneNationalLaboratory,180andInnovationCrossroadsatOakRidgeNationalLaboratory.181

AlloftheseexamplesillustratestrategiestostrengthenU.S.competitivenessincleanenergymanufacturingtolowercosts,improveperformance,andhelpenableU.S.companiestobecompetitiveglobally,whilealsoprovidingjob,income,andotherbenefitsathome.

5. ConclusionAnalysesofU.S.-basedmanufacturingcompetitivenessofselectcleanenergytechnologies(Section2)haverevealedusefulinsightsforfactorsincludingemergingmarkets,supplychains,labor,industrialcommons,economies-of-scale,andtime-to-market,amongothers.Equallyimportantgapshavebeenidentifiedthatneedfurtherevaluation(Section3).TheseanalysesandinsightscanhelpinformU.S.publicandprivateunderstandingoftheglobalmanufacturinglandscape,theRDD&DrequiredtostrengthenthemanufacturingcompetitivenessofU.S.cleanenergytechnologiesfordomesticandglobalmarkets,andstrategiesforstrengtheningtheU.S.position.SomeofthesefactorsandareasforfurtheranalysisarelistedinTable3.

Table3.PotentialanalysestohelpinformfutureDOERDD&DstrategiestoenhancecompetitivenessofU.S.cleanenergytechnologiesinglobalmarkets.

FocusArea StepsforConsideration

AnalysisAnalyzeU.S.-basedproductionindomesticandglobalmarketstoidentifyrisksandRDD&Dopportunitiesthatcontributetoadvancingcleanenergytechnologies.

FlexibleAutomationExaminewaystolowerhigh-volumemanufacturinglaborcoststhroughRDD&Donflexibleautomation,designformanufacturing,andimprovedmetrologytoimproveyieldandquality.

CriticalMaterialsIdentifyRDD&Dstrategiestoimprovecaptureofmaterialsnowproducedassideproducts,increaseefficientuseofcriticalmaterials,eliminatetheneedformaterialsthataresubjecttosupplydisruptions,anddevelopsubstitutematerials.

IndustrialCommons DevelopRDD&DstrategiestoadvancecleanenergytechnologieswhilestrengtheningU.S.cleanenergymanufacturingthroughtheindustrialcommons.

Economies-of-Scale

Analyze:(1)issuesofeconomies-of-scale,economiesoflearning,andsupplychainefficienciesandimpactsoncostreductions:(2)theimpactofachievingeconomies-of-scaleforenablingdevelopmentofspecializedequipmentforhigh-throughput,high-performancemanufacturing;and(3)theextenttowhichscaleisimportantingeneratingincreasingrevenuesinsupportofRDD&Dandtheresultingimpactoncostreductionandoncompetitiveness.

Time-to-Market DesignRDD&Dstrategiesthatreducethetimerequiredtogetaproducttomarket.

EmergingMarkets DevelopRDD&DstrategiesthattargetenergytechnologymarketsoutsidetheOECDcountries.

Thecleanenergytechnologiesidentifiedaboveandothershaverapidlyimprovingperformanceandplummetingcosts,asindicatedinFigure9.IftheU.S.fallsbehindinaparticulartechnologyarea,therapidadvancesshowncouldquicklyresultinU.S.companiesbeingeffectivelylockedoutofthesemarkets.Innovationiscritical,andsoaremanufacturingcapabilitiesandcompetitiveness.

ThecompetitivenessfactorsdiscussedaboveindicatesomeoftheissuesthatneedtobeaddressedtohelpsupportU.S.competitivenessinglobalmarkets.FurthercasestudiesandadditionalanalysescanhelpidentifyparticularlyimportantRDD&DopportunitiesandmechanismstoimproveU.S.-basedmanufacturingcompetitivenessindomesticandglobalmarkets,buildingontheapproachesidentifiedinSection4,andstrategiesforgoingforward.

Figure9:For(a)Wind,(b)Utility-ScaleSolarphotovoltaics(PV),(c)whiteLight-EmittingDiodes(LEDs),and(d)ElectricVehicleBatteries,thebarsindicatethereductionincostovertime,andthelinegoingupindicatesthesalesofequipment.Finally,(e)indicatespercentagereductionsincostssince2008.Source:182

AcronymsandGlossary

AMP2.0 AdvancedManufacturingPartnership2.0ANL ArgonneNationalLaboratoryCAFÉ CorporateAverageFuelEconomyCaloriCool CaloricMaterialsConsortiumCEMAC CleanEnergyManufacturingAnalysisCenter(DOE/NREL)CEMI CleanEnergyManufacturingInitiative(DOE)CFRP CarbonFiberReinforcedPlasticCFRTP CarbonfiberReinforcedThermoplasticCMI CriticalMaterialsInstituteDMDI DigitalManufacturingandDesignInnovationInstituteDOC DepartmentofCommerceDOD DepartmentofDefenseDOE U.S.DepartmentofEnergyElectroCat ElectrocatalysisConsortiumEMN EnergyMaterialsNetworkEV ElectricVehiclesGDP GrossDomesticProduct

Gr GraphiteAnodes(inLIBs)GW GigawattsHPRTM High-pressureResinTransferMoldingIAC IndustrialAssistanceCenterIEA InternationalEnergyAgencyLED LightEmittingDiodeLIB LithiumIonBatteryLIFT LightweightInnovationsforTomorrowLightMAT LightweightMaterialsNationalLaboratoryConsortiumLPO LoanProgramOfficeofDOEMDF ManufacturingDemonstrationFacilityMERF MaterialsEngineeringResearchFacility(MERF)MIT MassachusettsInstituteofTechnologyMOCVD MetalOrganicChemicalVaporDepositionMWh MegawatthoursNCEBPC NationalCleanEnergyBusinessPlancompetition(DOE)NiCad Nickel-CadmiumBatteryNiMH Nickel-MetalHydrideBatteryNMC Nickel-Manganese-Cobalt(CathodesinLIBs)NNMI NationalNetworkforManufacturingInnovationNREL NationalRenewableEnergyLaboratoryNSF NationalScienceFoundationOECD OrganizationforEconomicCooperationandDevelopmentOLED OrganicLEDORNL OakRidgeNationalLaboratoryOTA U.S.CongressOfficeofTechnologyAssessment(de-funded)PHEV Plug-InHybridElectricVehiclePV PhotovoltaicQC/QA QualityControl/QualityAssuranceQTR QuadrennialTechnologyReview2016RDD&D Research,Development,Demonstration,andDeploymentREMADE RecyclingandRemanufacturingInnovationInstitute(ReducingembodiedEnergyand

DecreasingEmissions)RTM ResinTransferMolding(ForCFRPs)SBIR/STTR SmallBusinessInnovationResearch/SmallBusinessTechnologyTransferProgramSiC Silicon-Carbide(SubstratesforLEDs)SSL SolidStateLightingSEPTM SuperiorEnergyPerformance®TAP TechnologyAssistancePartnershipUSABC U.S.AdvancedBatteryConsortiumVSI VehicleSystemsIntegrationLaboratoryVTO VehicleTechnologiesOfficeofDOE

1U.S.DepartmentofEnergy,“QuadrennialTechnologyReview2015”,http://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015andhttp://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015-omnibus2MengMengandJosephineMason,“Chinatoplow$361billionintorenewablefuelby2020”,Reuters,January5,20173InternationalEnergyAgency,“WorldEnergyOutlook2016”,OECD/IEA,Paris,France,2016.Seetextpage22,“Acumulative$44trillionininvestmentisneededinglobalenergysupplyinourmainscenario,60%ofwhichgoestooil,gasandcoalextractionandsupply,includingpowerplantsusingthesefuels,andnearly20%torenewableenergies.Anextra$23trillionisrequiredforimprovementsinenergyefficiency.4Foramorecompletereviewandanalysis,see:CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,NREL/BR-6A50-65312,March,2016;http://www.manufacturingcleanenergy.org/andhttp://www.nrel.gov/docs/fy16osti/65312.pdfCleanenergytechnologyandmanufacturingcompetitivenessarerichtopics,wheremanystakeholdershaveeffortsunderway.ThisSupplementalInformationappendixfocusesprimarilyonDOEanalyses,andtapsintosomeofthemanyassessmentsandstudiesconductedbyindustry,academia,andothersthatexploreU.S.competitiveness.5BloombergNewEnergyFinanceCleanEnergyInvestmentFactPack,accessedJanuary9,2017.6U.S.DepartmentofEnergy,“QuadrennialTechnologyReview2015”,http://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015andhttp://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015-omnibus7Inparticular,see:QTR,6L“SustainableManufacturing-FlowofMaterialsthroughIndustry”,http://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015-omnibus8TheEuropeanCouncilforanEnergyEfficientEconomydescribesenergyefficiencyasthemostpowerfulandquickestwaytocuttheenergycostsofEuropeanbusinesses,andtherebyboosttheircompetitiveness.See:

• “Europeancompetitivenessandenergyefficiency:Focusingontherealissue,Adiscussionpaper,”theEuropeanCouncilforanEnergyEfficientEconomy,21May2013.http://www.eceee.org/all-news/press/2013/the-real-issue-on-energy-and-competitiveness/ee-and-competitiveness.

• EuropeanCouncilforanEnergyEfficientEconomy,“EnergyEfficiencyandCompetitiveness,”http://www.eceee.org/policy-areas/competitiveness.

Theimpactofenergyefficiencyonenergysecurityandeconomicsecurityisalsodiscussedin,forexample:• “SpreadingtheNet:TheMultipleBenefitsofEnergyEfficiencyImprovements”,InternationalEnergyAgency,2012.

http://www.iea.org/publications/insights/ee_improvements.pdf.9Energyinnovationmayincludetechnologiesthathelpusersofenergy,technologiesthathelpproductionofenergy,andtechnologiesthathelpproducersofenergyproducts.10See,forexample,

• Miller,M.;Perry,T.D.;etal;“CleanEnergyInnovation:SourcesofTechnicalandCommercialBreakthroughs,”NationalRenewableEnergyLab,March2011;NationalRenewableEnergyLaboratory,NREL/TP-6A20-50624.http://www.nrel.gov/docs/fy11osti/50624.pdf.

• President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresidentonCapturingDomesticCompetitiveAdvantageinAdvancedManufacturing,”July2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast_amp_steering_committee_report_final_july_17_2012.pdf.

11TheNationalResearchCouncil’s“RisingtotheChallenge”,NationalAcademiesPress,2012,https://www.nap.edu/catalog/13386/rising-to-the-challenge-us-innovation-policy-for-the-global12ExecutiveOfficeofthePresident,President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresident:AcceleratingU.S.AdvancedManufacturing”,October2014,https://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/amp20_report_final.pdf13Seealso:GregoryF.Nemet,DanielM.Kammen,“Energyresearchanddevelopment:Declininginvestment,increasingneed,andthefeasibilityofexpansion”,EnergyPolicy35(2007),746-755.14NationalSciencefoundation,NationalCenterforScienceandEngineeringStatistics,2017.BusinessR&DandInnovation:2014.DetailedStatisticalTables(forthcoming).Arlington,VA.Willbeavailableat:http://www.nsf.gov/statistics/industry/Seealso:GregoryF.Nemet,DanielM.Kammen,“Energyresearchanddevelopment:Declininginvestment,increasingneed,andthefeasibilityofexpansion”,EnergyPolicy35(2007,746-755.https://thefoodenergywaternexus.files.wordpress.com/2015/10/nemetkammen_ep07.pdf15AmericanEnergyInnovationCouncil,“CatalyzingAmericanIngenuity:TheRoleofGovernmentinenergyInnovation”,“Figure3:TotalR&DSpendingasaShareofSales”.http://americanenergyinnovation.org/;Benjamin Gaddy, Varun Sivaram, Francis O’Sullivan, “Venture Capital and Cleantech: The Wrong model for Clean Energy innovation” MIT Energy Initiative Working Paper, July 2016. http://energy.mit.edu/publication/venture-capital-cleantech/

16DatadrawnbyDOEfromBloombergNewEnergyfinanceandincludesVC-Tech/EarlySpinoff,VC-SeriesB/SecondRound,VC-SeriesA/Firstround,VC-Seed/Angel.NotethatChina’sgrowthissubstantiallyduetoafewverybigdeals,butChinahasmanyfewerdealsthanintheU.S.17BenjaminGaddy,VarunSivaram,FrancisO’Sullivan,“VentureCapitalandCleantech:TheWrongmodelforCleanEnergyinnovation”,MITEnergyInitiativeWorkingPaper,July2016.http://energy.mit.edu/publication/venture-capital-cleantech/18BoardonEnergyandEnvironmentalSystems,“WasItWorthIt:EnergyEfficiencyandFossilEnergyResearch1978-2000”,NationalResearchCouncil;NationalAcademiesofScience,Engineering,andMedicine;NationalAcademyPress,Washington,DC,2001.http://www.nap.edu/catalog/10165/energy-research-at-doe-was-it-worth-it-energy-efficiencyThisstudyexaminedanR&Dportfolioinenergyefficiencyofabout$1.6billion,roughlyone-fifthofthetotalFederalexpenditureonenergyefficiencyR&Dfortheperiodexamined,andfoundaneteconomicbenefitattributabletothepublicsectorofabout$30billion.19See,forexample,theretrospectivebenefitsstudieslistedat:http://www.energy.gov/eere/analysis/program-evaluation-eere-planned-and-completed-evaluationsandhttp://www.energy.gov/eere/analysis/policy-and-analysis-publications20See,forexample:

• “WheretheShaleGasRevolutionCameFrom:Government'sRoleintheDevelopmentofHydraulicFracturinginShale,”TheBreakthroughInstitute,May2012.http://thebreakthrough.org/blog/Where_the_Shale_Gas_Revolution_Came_From.pdf.

• Boyd,G.A.andJ.X.Pang,“Estimatingthelinkagebetweenenergyefficiencyandproductivity,”EnergyPolicy,28(2000)289-296.http://www.sciencedirect.com/science/article/pii/S0301421500000161.

• Worrell,E.,J.A.Laitner,M.Ruth,andH.Finman,“Productivitybenefitsofindustrialenergyefficiencymeasures”,Energy,28(2003)1081–1098.http://www.sciencedirect.com/science/article/pii/S0360544203000914.

• NationalResearchCouncil,“EnergyResearchatDOE:WasitWorthIt?EnergyEfficiencyandFossilEnergyResearch1978to2000”,NationalAcademyPress,Washington,DC,2001.http://www.nap.edu/catalog/10165/energy-research-at-doe-was-it-worth-it-energy-efficiencySeepage23,Table3-2fortheDOEenergyefficiencyexpendituresanalyzed,whichtotalabout$1.6B,andpage29,Table3-4showingnetrealizedbenefitsof~$30Bineconomicbenefits,~$3-20Binenvironmentalbenefits,and~$0.2-1Binsecuritybenefits.

• Numerousretrospectivebenefitsstudiescanbefoundat:http://www.energy.gov/eere/analysis/program-evaluation-eere-planned-and-completed-evaluationsandhttp://www.energy.gov/eere/analysis/policy-and-analysis-publications

21Forexample,thelevelsofR&DdescribedinthereportsbelowcanbecomparedonapercapitalandGDPbasisbycountry.• GDPdatafromTheWorldBank,WorldDevelopmentIndicators.http://databank.worldbank.org/data/home.aspx.• Japan,Canada,SouthKorea,andU.S.RD&DdataisavailablefromtheOrganizationforEconomicCooperationand

Development(OECD)Libraryhttp://www.oecd-ilibrary.org/energy/data/iea-energy-technology-r-d-statistics_enetech-data-en.

• China’sRD&Ddatacanbederivedfrom:StateandScienceTechnologyCommission,ChinaStatisticalYearbookonScienceandTechnology(2009),ascitedin:Gallagher,K.S.,etal.,“Trendsininvestmentsinglobalenergyresearch,development,anddemonstration,”WileyInterdisciplinaryReviews:ClimateChange,Volume2,Issue3,pages373–396,May/June2011.http://www.researchgate.net/publication/229925882_Trends_in_investments_in_global_energy_research_development_and_demonstration.

22Timeseriesmanufacturingvalue-addedasapercentageofGDPfortheU.S.canbeseeninthegraphicbelow,developedfromdataavailablefromtheBureauofEconomicAnalysis,GDP-by-IndustryData2013.http://www.bea.gov/iTable/iTable.cfm?ReqID=51&step=1#reqid=51&step=51&isuri=1&5114=a&5102=5.

U.S.manufacturingvalueaddedasapercentageofGDP.

23ThegraphicbelowisdevelopedfromdataavailablefromtheU.S.CensusBureau,ForeignTradeDivision.ForTradeinGoodswithAdvanceTechnologyProducts,seehttps://www.census.gov/foreign-trade/balance/c0007.html.For“AllofManufacturing”,seehttps://www.census.gov/foreign-trade/statistics/historical/gands.pdf.The‘‘high-tech’’portionofthedomesticmanufacturingsectorisalsoonthedecline.Thebalanceoftradeforadvancedtechnologyproducts,whichincludesbiotechnologyproducts,computers,semiconductors,androbotics,wasinsurplusfrom1988until2002,whenitturnednegative.

U.S.tradebalancesforhigh-techandallmanufacturedproducts.TheU.S.tradedeficitinmanufacturedproductstalliedto$7.5trillionfrom2000to2013.

24See,forexample,JustinR.Pierce,PeterK.Schott,“TheSurprisinglySwiftDeclineofUSManufacturingEmployment”,AmericanEconomicReview2016,106(7),1632-1662.25“Table1.Manufacturing(ISICC,NAICS31-33),Hourlycompensationcosts,U.S.Dollars,2008-2012,”BureauofLaborStatistics,July2014,www.bls.gov/fls/ichccindustry.htm#C.26Parilla,J.,J.L.Trujillo,andA.Berube,“SkillsandInnovationStrategiestoStrengthenU.S.Manufacturing:LessonsfromGermany,”TheBrookingsInstitution,2015.http://www.brookings.edu/~/media/research/files/reports/2015/02/25-germany/lessonsfromgermany.pdf.Fordetailedinformationonindustrialcomparisonsbycountry,seeBLShourlycompensationcosts(2012data)here:http://www.bls.gov/fls/ichccindustryreport.htm#chart03.ForfurtherdiscussionsofGermany’sapproachtosustainastrongmanufacturingsector,see:MITProductionintheInnovationEconomyCommission.“ProductionintheInnovationEconomy”,MITPress,2013.

-900

-800

-700

-600

-500

-400

-300

-200

-100

0

100

1990 1995 2000 2005 2010 2015

Billion

sofDollars

AdvancedTechnologyProducts

AllofManufacturing

27See,forexample:Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,T.Buonassisi,“Assessingthedriversofregionaltrendsinsolarphotovoltaicmanufacturing,”Energy&EnvironmentalSciences,2013.http://pubs.rsc.org/en/Content/ArticleLanding/2013/EE/c3ee40701b#!divAbstract.28Inaddition,thereisalsoextensiveliteratureonthechallengesoftechnologydemonstration,manufacturingscale-up,andmarketadoption.See,forexample:

• TheCommitteeonAmerica'sEnergyFuture.“America'sEnergyFuture:TechnologyandTransformation:SummaryEdition,”NationalAcademyofSciences,2009.http://www.nap.edu/catalog/12710/americas-energy-future-technology-and-transformation-summary-edition

• Berger,S.,etal,“MakinginAmerica”,MITPress,2013.• “RestoringAmericanEnergyInnovationLeadership:ReportCard,Challenges,&Opportunities”,AmericanEnergy

InnovationCouncil,February2015.http://bipartisanpolicy.org/wp-content/uploads/2015/02/AEIC_Energy_Innovation.pdf.

29Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,T.Buonassisi,“Assessingthedriversofregionaltrendsinsolarphotovoltaicmanufacturing,”Energy&EnvironmentalSciences,2013.http://pubs.rsc.org/en/Content/ArticleLanding/2013/EE/c3ee40701b#!divAbstractThisanalysisshowedthatsupplychaindevelopmentandtheabilitytoscale-upmanufacturingprovidedamoresignificantcompetitiveadvantagefortheChinesePVindustrythanlaborcostadvantages.InOctober2012,U.S.DepartmentofCommerce(DOC)issuedfinaldeterminationsinthesolarantidumping(AD)andcountervailingduties(CVD)investigation.TheDOCaffirmeditspreliminaryfindingthatChinese-origincrystalline-siliconcellsaresubjecttoantidumping(AD)andcountervailingduties(CVD)whenimportedintotheU.S.See,forexamplehttp://enforcement.trade.gov/download/factsheets/factsheet_prc-solar-cells-ad-cvd-finals-20121010.pdf.Also,http://www.usitc.gov/press_room/news_release/2015/er0121ll329.htm.30Chung,D.,T.James,E.Elgqvist,A.Goodrich,andS.Santhanagopalan,“AutomotiveLithium-ionBattery(LIB)SupplyChainandU.S.CompetitivenessConsiderations,”NationalRenewableEnergyLaboratory,August22,2014.http://energy.gov/eere/cemi/downloads/automotive-lithium-ion-battery-supply-chain-and-us-competitivenessIn2011,EnergySecretaryStevenChutestifiedtotheHouseEnergyandCommerceCommitteeabouttheChinaDevelopmentBankofferingmorethan$34billionincreditlinestoChina’ssolarcompanies.Seehttp://energy.gov/articles/my-testimony-house-energy-and-commerce-committee.In2012,aSenatereportindicatedthatChina’sNationalPeople’sCongressapprovedtheTwelfthFive-YearPlaninMarch,2011,whichestablishedspendingandpreferentialtaxandprocurementpoliciesdesignedtopromoteChineseindustriesrelatedtosolar,biomass,andwindenergytechnology.See,Wyden,SenatorRon,“InternationalTradeinEnvironmentalGoods,2012Report,LosingtheEnvironmentalGoodsEconomytoChina”,February28,2012.https://www.wyden.senate.gov/download/staff-report-losing-the-environmental-goods-economy-to-china.Seealso,Melton,Oliver,“China’sFive-YearPlanningSystem:ImplicationsfortheReformAgenda”,TestimonyfortheU.S.-ChinaEconomicandSecurityReviewCommission,April22,2015.http://www.uscc.gov/sites/default/files/Melton%20-%20Written%20Testimony.pdf.31See,forexample:

• President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresidentonCapturingDomesticCompetitiveAdvantageinAdvancedManufacturing,”ExecutiveOfficeofthePresident,July2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast_amp_steering_committee_report_final_july_17,_2012.pdf

• President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresident:AcceleratingU.S.AdvancedManufacturing”,ExecutiveOfficeofthePresident,October2014,https://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/amp20_report_final.pdf

32Porter,M.E.,“TheCompetitiveAdvantageofNations,”HarvardBusinessReview,1990.https://hbr.org/1990/03/the-competitive-advantage-of-nations.33See:

• Porter,M.E.andJ.W.Rivkin,“TheLoomingChallengetoU.S.Competitiveness,”HarvardBusinessReview,March2012,https://hbr.org/2012/03/the-looming-challenge-to-us-competitiveness/ar/1.

• Seealso:“CanAmericaCompete?Strategiesforeconomicrevival,”Sept-Oct2012,HarvardMagazine.http://harvardmagazine.com/2012/09/can-america-compete.

34RisingAboveTheGatheringStorm,Revisited,byMembersofthe2005“RisingAbovetheGatheringStorm”Committee,NationalAcademyofSciences,2010.http://www.nap.edu/catalog/12999/rising-above-the-gathering-storm-revisited-rapidly-approaching-category-5.35Kochan,T.,“JobsCompactforAmerica’sFuture,”HarvardBusinessReview,2012.https://hbr.org/2012/03/a-jobs-compact-for-americas-future/ar/1.

36Manyika,J.,etal.,“Manufacturingthefuture:thenexteraofglobalgrowthandinnovation,”Washington,DC:McKinsey&Company,2012.http://www.mckinsey.com/insights/manufacturing/the_future_of_manufacturing.37WorldEconomicForum,“GlobalCompetitivenessReport,2011–2012”,http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf38TheCompetitivenessandInnovativeCapacityoftheUnitedStates,Washington,DC:U.S.DepartmentofCommerce,2012.http://www.esa.doc.gov/reports/competitiveness-and-innovative-capacity-united-states.39TheGlobalCompetitivenessReport2008-2009,2008WorldEconomicForum.http://www.weforum.org/reports/global-competitiveness-report-2008-2009.40Atkinson,R.D.,“Competitiveness,InnovationandProductivity:ClearinguptheConfusion,”ITIF,August2013.http://www2.itif.org/2013-competitiveness-innovation-productivity-clearing-up-confusion.pdf.41ShaleGas:ReshapingtheUSChemicalsIndustry,PriceWaterhouseCooper,October2012.AccessedonMarch20,2015at:http://www.pwc.com/en_US/us/industrial-products/publications/assets/pwc-shale-gas-chemicals-industry-potential.pdf.EstimatesarebasedonPWCcostmodelsanduseEIAdataandforecastsfornaturalgasprices.42“InternationalEnergyAgency.WorldEnergyOutlook2014Factsheet,”InternationalEnergyAgency.http://www.worldenergyoutlook.org/media/weowebsite/2014/141112_WEO_FactSheets.pdf.Turner,G.,“GlobalRenewableEnergyMarketOutlook,”BloombergNewEnergyFinance,2013.http://about.bnef.com/content/uploads/sites/4/2013/04/Global-Renewable-Energy-Market-Outlook-2013.pdf43GrossDomesticProduct-by-IndustryData,NewQuarterlyGrossDomesticProductbyIndustryStatistics,SurveyofCurrentBusiness(SCB),BureauofEconomicAnalysis,May2014.https://www.bea.gov/scb/pdf/2014/05%20May/0514_gdp-by-industry.pdf.44NationalScienceandTechnologyCouncil,“ANationalStrategicPlanforAdvancedManufacturing”,ExecutiveOfficeofthePresident,2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/iam_advancedmanufacturing_strategicplan_2012.pdf.45ForadiscussiononemploymentmultipliersfortheU.S.economy,see:

• Bivens,J.,“UpdatedEmploymentMultipliersfortheU.S.Economy,”WorkingpaperNo.268,EconomicPolicyInstitute,August2003,23.

• Moretti,E.,“LocalMultipliers,”AmericanEconomicReview,Papers&Proceedings100,May2010.http://emlab.berkeley.edu/~moretti/multipliers.pdf.

• Ezell,S.J.andR.D.Atkinson,“TheCaseforaNationalManufacturingStrategy,”ITIF,2011.http://www2.itif.org/2011-national-manufacturing-strategy.pdf.

• NationalScienceandTechnologyCouncil,“ANationalStrategicPlanforAdvancedManufacturing”,ExecutiveOfficeofthePresident,2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/iam_advancedmanufacturing_strategicplan_2012.pdf.

46ForadditionaldiscussionontheroleofmanufacturingsectorinsupportingU.S.exports/imports,see:• President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresidentonCapturingDomestic

CompetitiveAdvantageinAdvancedManufacturing,”ExecutiveOfficeofthePresident,July2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast_amp_steering_committee_report_final_july_17_2012.pdf

• ExecutiveOfficeofthePresident,President’sCouncilofAdvisorsonScienceandTechnology,“ReporttothePresident:AcceleratingU.S.AdvancedManufacturing”,October2014,https://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/amp20_report_final.pdf

47AnNSFanalysisfoundthatthemanufacturingindustriesinaggregate(NAICS31–33)exhibitedaconsiderablyhigheroverallincidenceofinnovationthandidthepopulationofcompaniesasawhole.About22%ofallthecompaniesinmanufacturingindustriesreportedoneormoreproductinnovationsinthe2006–08periodandabout22%reportedprocessinnovations.Boroush,M.,“NSFReleasesNewStatisticsonBusinessInnovation,”NationalScienceFoundation,October2010.http://www.nsf.gov/statistics/infbrief/nsf11300/.48See:

• Tassey,G.,“RationalesandMechanismsforRevitalizingUSManufacturingR&DStrategies,”JournalofTechnologyTransfer35,no.3(2010):283-333.http://www.nist.gov/director/planning/upload/manufacturing_strategy_paper.pdf.

• Boroush,M.,“NSFReleasesNewStatisticsonBusinessInnovation,”NationalScienceFoundation,October2010.http://www.nsf.gov/statistics/infbrief/nsf11300/.

49Helper,S.andH.Wial,“StrengtheningAmericanManufacturing:ANewFederalApproach,”BrookingsInstitution,September2010.http://www.brookings.edu/~/media/research/files/papers/2010/9/27-great-lakes/0927_great_lakes_manufacturing.pdf.50AgrowingnumberofanalystsarguetheimportanceofthelinkagesbetweenR&Dandmanufacturingandtheextenttowhich

feedbackfromproductionhelpsguideR&D.Thisisespeciallytrueforindustrieswhereproductdevelopmentandinnovationaretightly-coupledwithmanufacturingprocesses.Anoverviewofthisconceptcanbefoundin:

• Bonvillian,W.,“AdvancedManufacturingPoliciesandParadigmsforInnovation”,Science,V.342,6Dec.2013.• “TheRoleofManufacturingCollaborationsina21stCenturyInnovationEconomy,”113thCongress,TestimonyofDr.

MartinA.Schmidt,2013.Acasestudyintheoptoelectronicindustrycanbefoundin

• Fuchs,E.andR.,Kirchain,“DesignforLocation?TheImpactofManufacturingOffshoreonTechnologyCompetitivenessintheOptoelectronicsIndustry,”ManagementScience,Volume56,Issue12,2010.http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1545027.

51NationalScienceBoard,ScienceandTechnologyIndicators,2014.http://www.nsf.gov/statistics/seind14/.52Theseindustrialcommonsincludenotjustsuppliersofadvancedmaterials,productionequipment,andcomponents,butalsoR&Dknow-how,advancedprocessdevelopmentandengineeringskills,andmanufacturingcompetencies.See:

• PisanoG.andW.Shih,“RestoringAmericanCompetitiveness,”HarvardBusinessReview,July2009.https://hbr.org/2009/07/restoring-american-competitiveness/ar/1.

• Berger,S.,“MakinginAmerica”,MITPress,2013.• Gertner,J.,“DoesAmericaNeedManufacturing?”,NYTimes,8201128,

http://www.nytimes.com/2011/08/28/magazine/does-america-need-manufacturing.html.• Pisano,G.P.,“TheU.S.IsOutsourcingAwayItsCompetitiveEdge,”HarvardBusinessReview,October1,2009,

https://hbr.org/2009/10/the-us-is-outsourcing-away-its/.• Hayes,R.H.,OutsourcingIsHighTech’sSubprime-MortgageFiasco,HarvardBusinessReview,October7,2009,

https://hbr.org/2009/10/outsourcing-is-high-techs-subprime/.53TheFraunhauferinstituteisdiscussedin,forexample:

• Berger,S.,“MakinginAmerica”,MITPress,2013.• BergerS.andMITIndustrialPerformanceCenter,“HowWeCompete:WhatCompaniesaroundtheWorldAreDoing

toMakeItinToday’sGlobalEconomy”,NewYork:CurrencyDoubleday,2005.• Pisano,G.P.andW.C.Shih,“DoesAmericaReallyNeedManufacturing?”HarvardBusinessReview,March2012,

https://hbr.org/2012/03/does-america-really-need-manufacturing/ar/1.54Thecompetitivenessadvantagefromanindustrialcommonsisdiscussedin,forexample:

• Porter,M.E.,“TheCompetitiveAdvantageofNations”,FreePress,1990.• TheCouncilonCompetitiveness,MichaelE.Porter,MonitorGroup,“OntheFrontier,ClustersofInnovationInitiative:

RegionalFoundationsofU.S.Competitiveness,”October2012.http://www.hbs.edu/faculty/Publication%20Files/COI_National_05202014_ad0fe06c-674c-494b-96f6-6882db4e6aaf.pdf.

55TheresearchersattheMITProductionintheInnovationEconomyCommissioninterviewedmultiplefirmstoexploretheirapproachtoconnectingproductionwithdevelopmentanddesign.FirmssuchasToyota,Honeywell,Johnson&Johnson,andUTCallcitedtheneedforthecloserelationshipbetweenproductdevelopmentandmanufacturing.Toyotaindicatedtheimportanceofcollocatingdevelopmentwithmanufacturing.Johnson&Johnsondescribedtheimportanceofhavingmanufacturingclosetoresearchanddevelopment.However,forHoneywellandUTC,theimportanceofthedevelopment-to-manufacturinglinkagevarieddependingontheproductline.See,“ProductionintheInnovationEconomy”,MITProductionintheInnovationEconomyCommission,2013.56See,forexample:

• U.S.Congress,OfficeofTechnologyAssessment,“RenewingOurEnergyFuture,”OTA-ETI-614(Washington,DC,September1995.Seepages257-258.https://www.princeton.edu/~ota/disk1/1995/9552/9552.PDF

• ForahistoricalreviewoftheFederalgovernmentcontributiontoincreaseU.S.innovationandcompetitiveness,seeAtkinson,R.D.,“UnderstandingtheU.S.NationalInnovationSystem,”ITIF,June2014.http://www.itif.org/publications/2014/06/30/understanding-us-national-innovation-system.

57Forsolarenergy,see,forexample:• CommitteeonHarnessingLight:CapitalizingonOpticalScienceTrendsandChallengesforFutureResearch,“Optics

andPhotonics-EssentialTechnologiesforOurNation”,NationalAcademyofSciences,2013.http://www.nap.edu/catalog/13491/optics-and-photonics-essential-technologies-for-our-nation.

• Curtright,A.E.,M.G.MorganandD.W.Keith,“ExpertAssessmentsofFuturePhotovoltaicTechnologies,”EnvironmentalScience&Technology42:9031-9038,2008.http://pubs.acs.org/doi/abs/10.1021/es8014088.

Forwindenergy,see,forexample:• Siler-Evans,K.,I.L.Azevedo,M.G.Morgan,andJ.,Apt,“Regionalvariationsinthehealth,environmental,andclimate

benefitsofwindandsolargeneration”,PNAS,2013110:11768-11773.

http://www.pnas.org/content/110/29/11768.shorts.• Lam,L.,L.Branstetter,andI.L.Azevedo,“TooFast,TooSoon?TheRiseoftheChineseWindTurbineManufacturing

Industry,”WorkingPaper,DepartmentofEngineeringandPublicPolicy,CarnegieMellonUniversity,June20,2014.http://cedmcenter.org/wp-content/uploads/2014/06/Lee-Branstetter.pdf.

• Apt,J.andP.Jaramillo.“VariableRenewableEnergyandtheElectricityGrid”.2014.RFFPress.ForLi-Ionbatteries,see,forexample:

• Sakti,A.,J.E.Michalek,E.Fuchs,andJ.Whitacre,“Atechno-economicanalysisandoptimizationofLi-ionbatteriesforpersonalvehicleelectrification,”JournalofPowerSources.273:January2015pp.966-980.http://www.cmu.edu/me/ddl/publications/2014-JPS-Sakti-etal-Techno-Economic-EV-Battery.pdf.

ForLEDs,see,forexample:• Min,J.,I.L.Azevedo,andP.Hakkarainen,“Netcarbonemissionssavingsandenergyreductionsfromlightingenergy

efficiencymeasureswhenaccountingforchangesinheatingandcoolingdemands:aregionalcomparison,”AppliedEnergy,Volume141,1,March2015,Pages12–18.http://cedmcenter.org/net-carbon-emissions-savings-and-energy-reductions-from-lighting-energy-efficiency-measures-when-accounting-for-changes-in-heating-and-cooling-demands-a-regional-comparison/.

• Min,J.,I.L.Azevedo,J.Michalek,andW.BruinedeBruin,“Labelingenergycostonlightbulbslowersimplicitdiscountrates,”2014,EcologicalEconomics,97:42–50.http://www.sciencedirect.com/science/article/pii/S092180091300325X.

Forcarboncomposites,see,forexample:• Fuchs,E.,F.Field,R.Roth,andR.Kirchain,"PlasticCarsinChina?TheSignificanceofProductionLocationover

MarketsforTechnologyCompetitiveness",InternationalJournalofProductionEconomics,132(2011):79-92.,2011.http://www.sciencedirect.com/science/article/pii/S0925527311001290

• Fuchs,E.,F.Field,R.Roth,andR.Kirchain,"StrategicMaterialsSelectionintheAutomotiveBody:EconomicOpportunitiesforPolymerCompositeDesign",CompositeScienceandTechnology,68(9):1989-2002,2008.http://www.sciencedirect.com/science/article/pii/S0266353808000316.

58Thefollowingfactorsareconsideredinthecompetitivenessanalysis:technologyinnovationpotential,manufacturingexperience,learningbydoing,intellectualproperty,costofenergy,costofmanufacturing,availabilityofinvestmentcapital,low-costlaborrequirementsandavailability,skilledlaborrequirementsandavailability,taxpolicy,currencyfluctuations,importandexportpolicies,automation/advancedmanufacturing,rawmaterialavailability,easeoftransportation,existingsupplychains,synergisticindustries,existingorgrowingmarket,easeofdoingbusiness,safety,andregulations,andothers.TechnicalDiscussions,NationalRenewableEnergyLaboratory,2014and2015.59Ibid,TechnicalDiscussions,NationalRenewableEnergyLaboratory,2014and2015.60See:CleanEnergyManufacturingAnalysisCenter,JointInstituteforStrategicEnergyAnalysis,U.S.DepartmentofEnergyCleanEnergyManufacturingInitiative,http://www.manufacturingcleanenergy.org/,61Themethodologyoncleanenergycompetitivenessanalysisisquantitativeandtechnology-specific.Seecasestudiesdescribedinthetext.62Fordetaileddiscussionsonthecostmodel,seePowell,D.M.,M.T.Winkler,A.GoodrichandT.Buonassisi,“ModelingtheCostandMinimumSustainablePriceofCrystallineSiliconPhotovoltaicManufacturingintheUnitedStates,”IEEEJournalofPhotovoltaics,2013,3,662–668.http://ieeexplore.ieee.org/xpl/articleDetails.jsp?reload=true&arnumber=640763863See,forexample,Goodrich,A.,T.James,andM.Woodhouse,“SolarPVmanufacturingcostanalysis:U.S.competitivenessinaglobalindustry.”Washington,DC:NationalRenewableEnergyLaboratory,2011.64See,forexample:

• Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,andT.Buonassisi,“Assessingthedriversofregionaltrendsinsolarphotovoltaicmanufacturing,”Energy&EnvironmentalSciences,2013.http://pubs.rsc.org/en/Content/ArticleLanding/2013/EE/c3ee40701b.Keyexamplesofregionalincentivesareprovincial/statesubsidiesandtaxholidays.

• U.S.DepartmentofCommerce,InternationalTradeAdministration,FactSheet,“CommerceFindsDumpingofImportsofCertainCrystallineSiliconPhotovoltaicProductsfromChinaandTaiwanandCountervailableSubsidizationofImportsofCertainCrystallineSiliconPhotovoltaicProductsfromChina”http://www.finance.senate.gov/imo/media/doc/Certain%20Crystalline%20Silicon%20Photovoltaic%20Products%20Factsheet1.pdf

• UnitedStates,InternationalTradeCommission,“U.S.ITCVotestoContinueCasesonCertainCrystallineSiliconPhotovoltaicProductsfromchinaandTaiwan”,February14,2014, http://www.usitc.gov/press_room/news_release/2014/er0214mm1.htm.

65Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,andT.Buonassisi,“Assessingthedriversofregionaltrendsinsolar

photovoltaicmanufacturing,”Energy&EnvironmentalScience,2013.http://pubs.rsc.org/en/Content/ArticleLanding/2013/EE/c3ee40701b66CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,NREL/BR-6A50-65312,March,2016;http://www.manufacturingcleanenergy.org/http://www.nrel.gov/docs/fy16osti/65312.pdf67CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,NREL/BR-6A50-65312,March,2016;http://www.manufacturingcleanenergy.org/http://www.nrel.gov/docs/fy16osti/65312.pdf68Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,andT.Buonassisi,“Assessingthedriversofregionaltrendsinsolarphotovoltaicmanufacturing,”Energy&EnvironmentalSciences,2013.http://pubs.rsc.org/en/Content/ArticleLanding/2013/EE/c3ee40701b.69Woodhouse,M.,A.Goodrich,R.Margolis,T.LJames,M.Lokanc,andR.Eggert,“Supply-ChainDynamicsofTellurium,IndiumandGalliumwithintheContextofPVModuleManufacturingCosts,”IEEEJournalofPhotovoltaics,April2013,andhttp://www.nrel.gov/docs/fy13osti/56883.pdf.70EricWesoff,“RestinPeace:TheFallenSolarCompaniesof2014”,December6,2014,http://theenergycollective.com/eric-wesoff/2165821/rest-peace-fallen-solar-companies-2014.71O’Connor,A.,R.Loomis,F.Braun,“RetrospectiveBenefit-CostEvaluationofDOEInvestmentsinPhotovoltaicEnergySystems”,2010,http://www.energy.gov/sites/prod/files/2015/05/f22/solar_pv.pdfhttp://www.energy.gov/eere/analysis/downloads/retrospective-benefit-cost-evaluation-doe-investments-photovoltaic-energyandhttp://www.energy.gov/eere/analysis/program-evaluation-eere-planned-and-completed-evaluations72The2014SunShotInitiativePortfolioBookincludesoverviewsofeachofSunShot’sfivesubprogramareas,aswellasadescriptionofeveryactiveprojectintheSunShot’sprojectportfolioasofMay2014.See:“TacklingChallengesInSolar:2014Portfolio,SunShotInitiative,”SolarEnergyTechnologiesOffice,U.S.DepartmentofEnergy.http://energy.gov/eere/sunshot/downloads/2014-sunshot-initiative-portfolio-book-tackling-challenges-solar-energy73By2015,thereweremorethan75gigawattsoftotalinstalledwindpower,ascomparedtoonegigawattin2005.See:U.S.DepartmentofEnergy,“RevolutionNow:TheFutureArrivesforFiveCleanEnergyTechnologies–2016Update”,http://energy.gov/eere/downloads/revolutionnow-2016-update74TheanalysisbySandiaNationalLaboratoryestimatedthebillofmaterialsfora61.5meterbladedesign(JohannsandGriffith2013).Whiletheinputswerevalidatedbyindustry,itshouldbenotedthattheresultsdonotnecessarilyrepresentthecostsforallmanufacturersandbladedesigns.TheNRELcostmodelalsoincorporatedinsightsfrompastDOE-fundedprogramsliketheWindPartnershipsforAdvancedComponentTechnology(Berry,etal.2003),inadditiontomorerecentNationalLaboratoryledeffortssuchastheAdvancedManufacturingInitiative(AMI)andothercollaborativeworkwithindustry(JohannsandGriffith2013).See:

• Johanns,W.andD.T.Griffith,“UserManualforSandiaBladeManufacturingCostTool:Version1.0.”SandiaNationalLaboratoriesTechnicalReport.SAND2013-2733.April2013.http://energy.sandia.gov/energy/renewable-energy/wind-power/offshore-wind/offshore-wind-sandia-large-rotor-development/.

• Berry,D.,S.Lockard,K.Jackson,M.Zuteck,C.VanDam,T.Ashwill,T.andP.Veers,“CaseStudyforLargeWindTurbineBlades,”WindPACTBladeSystemDesignStudies.SAND2003-1428.May2003.http://windpower.sandia.gov/other/031428.pdf.

75TheWindPartnershipsforAdvancedComponentTechnology(WindPACT)studieswereconductedtoassistindustrybytestinginnovativecomponents,suchasadvancedbladesanddrivetrains,tolowerthemanufacturinganddeploymentcost.See,forexample:Berry,D.,S.Lockard,K.Jackson,M.Zuteck,C.VanDam,T.Ashwill,T.andP.Veers,“CaseStudyforLargeWindTurbineBlades,”WindPACTBladeSystemDesignStudies.SAND2003-1428.May2003.http://windpower.sandia.gov/other/031428.pdf.76CleanEnergyManufacturingAnalysisCenter,http://www.manufacturingcleanenergy.org/77James,T.andA.Goodrich,“SupplyChainandBladeManufacturingConsiderationsintheGlobalWindIndustry,”NationalRenewableEnergyLaboratory,2013.http://www.nrel.gov/docs/fy14osti/60063.pdf.78ThisNRELanalysiswascompletedusingSandia’sNuMAD-basedmodelingandisfocusedonvacuumassistedresintransfermoldingprocesses.Scalingfactorsarefromanindustry-validatedmodelingprojectledbySandiaNationalLaboratories.Thestartingmassforthemodel’s5MWbladepointdesignis20%higherthansomeoftoday’scommercialproduct.SeeJames,T.andA.Goodrich,SupplyChainandBladeManufacturingConsiderationsintheGlobalWindIndustry,NationalRenewableEnergyLaboratory,2013.http://www.nrel.gov/docs/fy14osti/60063.pdf79James,T.andA.Goodrich,SupplyChainandBladeManufacturingConsiderationsintheGlobalWindIndustry,NationalRenewableEnergyLaboratory,2013.http://www.nrel.gov/docs/fy14osti/60063.pdf80CleanEnergyManufacturingAnalysisCenter(CEMAC),“2015Researchhighlights”,2015.http://www.nrel.gov/docs/fy16osti/65312.pdf81U.S.DOE,“WindVision:ANewEraforWindPowerintheUnitedStates.”March2015,seeChapter2.https://energy.gov/eere/wind/wind-vision

82Foradiscussionofpolicyimpactonrenewableenergydeployment,seeBredehoeft,G.,“TheOutlookforRenewableElectricityintheUnitedStates:AssessingtheRoleofPolicyandOtherUncertainties,”2014EIAEnergyConference,July14,2014,Washington,DC.http://www.eia.gov/conference/2014/pdf/presentations/bredehoeft.pdf.83James,T.andA.Goodrich,SupplyChainandBladeManufacturingConsiderationsintheGlobalWindIndustry,NationalRenewableEnergyLaboratory,2013.http://www.nrel.gov/docs/fy14osti/60063.pdf84TheWindTechnologiesMarketReportdescribesthestatusoftheU.S.windenergyindustryin2013;itstrends,performance,marketdriversandfutureoutlook.“2013WindTechnologiesMarketReport,”DepartmentofEnergy,WindandWaterTechnologyOffice,April2014.http://energy.gov/eere/wind/downloads/2013-wind-technologies-market-report.85“2013WindTechnologiesMarketReport,”DepartmentofEnergy,WindandWaterTechnologyOffice,April2014.http://energy.gov/eere/wind/downloads/2013-wind-technologies-market-report86Foramorecompletediscussion,see:CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,JointInstituteforStrategicEnergyAnalysis,2016,NationalRenewableEnergyLaboratoryNREL/BR-6A50-65312,March2016,http://www.nrel.gov/docs/fy16osti/65312.pdf,andreferencescitedwithin.87DonaldChung,EmmaElgqvist,ShriramSanthanagopalan,“AutomotiveLithium-ionCellManufacturing:RegionalCostStructuresandSupplyChainConsiderations”,NationalRenewableEnergyLaboratory,NREL/TP-6A20-66086,April2016,http://www.nrel.gov/docs/fy16osti/66086.pdfandDonaldChung,EmmaElgqvist,ShiriramSanthanagopalan,“AutomotiveLithium-ionBattery(LIB)SupplyChainandU.S.CompetitivenessConsiderations”,NationalRenewableenergyLaboratory,NREL/PR-6A50-63354,June2015,http://energy.gov/eere/cemi/downloads/automotive-lithium-ion-battery-supply-chain-and-us-competitivenessandhttp://energy.gov/sites/prod/files/2015/06/f23/Lithium-ion%20Battery%20CEMAC.pdf88DonaldChung,EmmaElgqvist,ShiriramSanthanagopalan,“AutomotiveLithium-ionBattery(LIB)SupplyChainandU.S.CompetitivenessConsiderations”,NationalRenewableenergyLaboratory,NREL/PR-6A50-63354,June2015,http://energy.gov/eere/cemi/downloads/automotive-lithium-ion-battery-supply-chain-and-us-competitivenessandhttp://energy.gov/sites/prod/files/2015/06/f23/Lithium-ion%20Battery%20CEMAC.pdf89SomesafetyrelatedconsiderationsincludethenatureofthematerialinenhancedstabilityandsafetyofalternativematerialsunderEVs’moreabusiveconditionsofhighvibration,temperatureextremes,andcarcrashes.90TherearetwomechanismsbywhichNRELpostulatethisimmaturitymaymanifest:utilizationandyield,asseenbelow.

InterviewsconductedbyNRELwithindustrysuggestyieldsforlargeformatautomotiveLIBcellsrangefrom70-90%.ForaKoreanmanufacturingfacility,thisrepresentsadifferenceinmodeledpriceofbetween~$400and~$325/kWh,orabouta23%difference.See:DonaldChung,EmmaElgqvist,ShiriramSanthanagopalan,“AutomotiveLithium-ionBattery(LIB)SupplyChainandU.S.CompetitivenessConsiderations”,NationalRenewableEnergyLaboratory,NREL/PR-6A50-63354,June2015,http://energy.gov/eere/cemi/downloads/automotive-lithium-ion-battery-supply-chain-and-us-competitivenessandhttp://energy.gov/sites/prod/files/2015/06/f23/Lithium-ion%20Battery%20CEMAC.pdf91Foradditionaldiscussion,see:DonaldChung,EmmaElgqvist,ShiriramSanthanagopalan,“AutomotiveLithium-ionBattery(LIB)SupplyChainandU.S.CompetitivenessConsiderations”,NationalRenewableenergyLaboratory,NREL/PR-6A50-63354,

Price vs. Yield Price vs. Utilization

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June2015,http://energy.gov/eere/cemi/downloads/automotive-lithium-ion-battery-supply-chain-and-us-competitivenessandhttp://energy.gov/sites/prod/files/2015/06/f23/Lithium-ion%20Battery%20CEMAC.pdf92 Chung,D.,EmmaElgqvist,ShriramSanthanagopalan,“AutomotiveLithium-ionCellManufacturing:RegionalCostStructuresandSupplyChainConsiderations”,CleanEnergyManufacturingAnalysisCenter(CEMAC),NationalRenewableEnergyLaboratory,NREL/TP-6A20-66086,April2016,http://www.nrel.gov/docs/fy16osti/66086.pdf94Brodd,R.J.,“CostComparisonofProducingHigh-PerformanceLithium-ionBatteriesintheU.S.andinChina,”JournalofPowerSources,22December2012.http://www.researchgate.net/publication/257225636_Cost_comparison_of_producing_high-performance_Li-ion_batteries_in_the_U.S._and_in_China.95Bae,Andy,“Lithium-ionBatteryMaterials:JapanDominatesintheEVEra,”February4,2011,NavigantResearch.http://www.navigantresearch.com/blog/articles/lithium-ion-battery-materials-japan-dominates-in-the-ev-era.96“ElectricVehicleBatteries,LithiumIonBatteriesforHybrid,Plug-inHybrid,andBatteryElectricLightDutyVehicles:MarketAnalysisandForecasts,”PikeResearch,2013.97DOE/NRELidentifiedalistofkeyLIBincumbentadvantagesincluding:greatercumulativeproductionexperience,manifestedinpartashigheryields;volumepurchasingdiscountsformaterials;establishedsupplychainrelationshipsthatsupportfurtherdiscountedmaterialscosts;amortizationofsomefixedcostsacrossgreatervolumes/endmarkets;potentialcross-utilizationofsomecapacity;greaterabilitytowithstandlargemarketfluctuations;andgreatercredibilityandtrackrecordwithrespecttostringentautomotiveOEMrequirements.98ThisistheconclusionofNREL’s“future”scenario.Ifinputmaterialpricescouldbeequalized,andalowercostofcapitalcouldberealized,theU.S.canpotentiallyhostcost-competitiveLIBcellproduction.Howlowermaterialscostsarerealizedoffshoreappearstobepartiallyduetoscaleandvolumepurchases,partiallyduetosomedegreeofbackwardsintegrations,andpartiallyduetopossiblenationalincentivesfavoringdomesticsupplier/producertransactions.See:DonaldChung,EmmaElgqvist,ShriramSanthanagopalan,“AutomotiveLithium-ionCellManufacturing:RegionalCostStructuresandSupplyChainConsiderations”,CleanEnergyManufacturingAnalysisCenter(CEMAC),NationalRenewableEnergyLaboratory,NREL/TP-6A20-66086,April2016,http://www.nrel.gov/docs/fy16osti/66086.pdf.99Materialscoststendtobeafunctionofcellmanufacturingcompanycharacteristics,inthatpricingisdeterminedinpartbypurchasingvolume,butalsobythenatureoftherelationshipsbetweenLIBmanufacturersandtheirsuppliers.Asianmanufacturerstendtohavewellestablished,closerelationshipswithregionallycollocatedinputmaterialssuppliersthatappeartoconferpricingadvantagebeyondvolume-baseddiscounts.Further,somedegreeofverticalintegrationacrossAsianmarketparticipantsdriveslowereffectivematerialcostsforcertaincellproducers.Whiletheseadvantagesmanifestasregionalinnature,theyarenotnecessarilyimpossibletoreproduceinothergeographiesastheredonotappeartobeendemic,region-specificcharacteristicsthatcontributetothisadvantage.See:DonaldChung,EmmaElgqvist,ShriramSanthanagopalan,“AutomotiveLithium-ionCellManufacturing:RegionalCostStructuresandSupplyChainConsiderations”,CleanEnergyManufacturingAnalysisCenter(CEMAC),NationalRenewableEnergyLaboratory,NREL/TP-6A20-66086,April2016,http://www.nrel.gov/docs/fy16osti/66086.pdf100Nykvist,B.andM.Nilsson,“Rapidlyfallingcostsofbatterypacksforelectricvehicles”,NatureClimateChangepublishedonline23March2015,v.5,April2015,pp.329-333.http://www.nature.com/nclimate/journal/v5/n4/full/nclimate2564.html.101Brodrick,J.,TechnicalDiscussions,DepartmentofEnergy,BuildingTechnologiesOffice,2014.102DOE’seffortisfocusedoncontinuedreductionofmanufacturingcoststoaccelerateadoption,andtoensureproductsmeetthelevelsofqualityandreliabilitydemandedbythemarkets.2014.See:“ManufacturingRoadmap:Solid-StateLightingResearchandDevelopment,”U.S.DepartmentofEnergy,BuildingsTechnologyOffice,August2014.http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mfg_roadmap_aug2014.pdf.103“ManufacturingRoadmap:Solid-StateLightingResearchandDevelopment,”U.S.DepartmentofEnergy,BuildingsTechnologyOffice,August2014.http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mfg_roadmap_aug2014.pdf.104Brodrick,J.,TechnicalDiscussions,DepartmentofEnergy,BuildingTechnologiesOffice,2014.105See:

• “ManufacturingRoadmap,Solid-StateLightingResearchandDevelopment,”U.S.DepartmentofEnergy,BuildingsTechnologyOffice,August2014.http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mfg_roadmap_aug2014.pdf.

DOE’sBuildingTechnologiesOffice’s(BTO’s)isfocusedonimprovingtheefficiencyofexistingandnewbuildingsinboththeresidentialandcommercialsectorthroughthedevelopmentofhigh-impactenergyefficiencytechnologiesandpractices.Inadditiontosolid-statelighting,BTOisalsofundingR&Dactivitiestoreduceinstalledandmanufacturingcostsinordertoincreasethelikelihoodofmass-marketadoptionoftheenergyefficiencytechnologies.See:

• “R&DRoadmapforEmergingWindowandBuildingEnvelopeTechnologies,”U.S.DepartmentofEnergy,BuildingTechnologiesOffice,February2014.http://energy.gov/sites/prod/files/2014/02/f8/BTO_windows_and_envelope_report_3.pdf.

• “Research&DevelopmentRoadmapforEmergingWaterHeatingTechnologies,”U.S.DepartmentofEnergy,BuildingTechnologiesOffice,September2014.http://energy.gov/sites/prod/files/2014/09/f18/WH_Roadmap_Report_Final_2014-09-22.pdf.

106Foramorecompletediscussion,see:CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,JointInstituteforStrategicEnergyAnalysis,2016,NationalRenewableEnergyLaboratoryNREL/BR-6A50-65312,March2016,http://www.nrel.gov/docs/fy16osti/65312.pdf,andreferencescitedwithin.107ForadditionalinformationonORNL’scompetitiveanalysisofcarbonfiber,pleasesee,forexample,QTRChapter6,Appendix6E: “Technology Assessment: Composite Materials and their Manufacture”, http://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015-omnibus108Recognizingbothcarbonfiber(CF)andcarbonfiberreinforcedpolymer(CFRP)asmaterialscriticalforseveralDOEinitiatives(e.g.,transportationlightweightingandwindturbineblade),thisanalysisseekstoidentifykeyopportunitiesintheCFsupplychainwhereU.S.canachieveormaintainacompetitiveadvantage.See:Das,S.,J.Warren,D.West,andS.M.Schexnayder,“GlobalCarbonFiberCompositesSupplyChainCompetitivenessAnalysis,”OakRidgeNationalLaboratory,TechnicalReportORNL/SR-2016/100andNREL/TP-6A50-66071,May2016,http://www.nrel.gov/docs/fy16osti/66071.pdf109ORNLdefinesalarge-towbundleasanuntwistedbundleofgreaterthanorequalto24Kfilaments.110Arecentcostanalysisof100mcarbonsparcapwithfoambladeusingVacuumAssistedResinTransferMolding(VARTM)infusionwithseveralpreformcomponentsindicatesthatmaterialsaccountfor75%oftotalbladecost,asshownbelow.

Costbreakdownofa100mcarbonsparblade.See,Griffith,D.T.andW.Johanns“LargeBladeManufacturingCostStudiesUsingtheSandiaBladeManufacturingCostToolandSandia100-meterBlades,”SAND2013-2734,SandiaNationalLaboratories,Albuquerque,NM,Apr2013.http://energy.sandia.gov/energy/renewable-energy/wind-power/offshore-wind/offshore-wind-sandia-large-rotor-development/.

111CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,JointInstituteforStrategicEnergyAnalysis,2016,NationalRenewableEnergyLaboratoryNREL/BR-6A50-65312,March2016,http://www.nrel.gov/docs/fy16osti/65312.pdf112Commercialaircraftisastrongdriverofthisincreaseindemandwithintheaerospacesector,anditstwodominantcompanies,BoeingandAirbus,ascanbeseeninfigurebelow.

BreakdownofaerospaceCFdemandbysector.See:“GrowthOpportunitiesintheGlobalCarbonFiberMarket:2013-2018,”Lucintel,Irving,TXNov2012.http://www.lucintel.com/reports/chemical_composites/growth_opportunities_in_china_carbon_fiber_market_2013-2018_trend_forecast_and_competitive_analysis_august_2013.aspx

113ThedistributionofautomotiveCFdemandwithrespecttothesekeyautomotiveprogramsisseenbelow.TheBMWi3electricvehicleprogramandthethreeNorthAmericanprogramsaccountformorethan80%ofpresentCFdemandbytheautomotiveindustry.The“Allothers”categorycontainstheVolkswagenGroup,ownerofmanyoftheluxurybrands(Lamborghini,Porsche,Bentley,Bugatti,Ducati)whowereamongthefirsttouseCFforautomotiveapplications.Seeforexample,Sloan,J.,“CarbonFiber2013Report,Part2:Automotive”,http://www.compositesworld.com/blog/post/carbon-fiber-2013-report-part-1-automotive.

Distributionof2013automotivecarbonfiberdemandbyspecificautomotiveprograms(Sloan2013).

114Das,S.,J.Warren,D.West,andS.M.Schexnayder,“GlobalCarbonFiberCompositesSupplyChainCompetitivenessAnalysis,”OakRidgeNationalLaboratory,TechnicalReportORNL/SR-2016/100andNREL/TP-6A50-66071,May2016,http://www.nrel.gov/docs/fy16osti/66071.pdf115CleanEnergyManufacturingAnalysisCenter,“2015ResearchHighlights”,JointInstituteforStrategicEnergyAnalysis,2016,NationalRenewableEnergyLaboratoryNREL/BR-6A50-65312,March2016,http://www.nrel.gov/docs/fy16osti/65312.pdf116Historically,acombinationofpublicly-fundedR&D,directgrantstoindustry,andpublic-privatepartnershipshavehelpedenablethedevelopmentofastrongdomesticcarbonfibermanufacturinginJapan.Ontheotherhand,theU.S.CommerceDepartmentrestrictstheexportofgoodsandtechnologythatcouldcontributetomilitarypotentialornuclearproliferationofothernations,includingcarbonfiber.Carbonfiberprecursors,includingmanufacturingequipmentareexport-controlledtodayevenwiththeanticipatedlargegrowthinthenon-defensesectorinthefuture.Das,S.,J.Warren,D.West,andS.M.Schexnayder,“GlobalCarbonFiberCompositesSupplyChainCompetitivenessAnalysis,”OakRidgeNationalLaboratory,TechnicalReportORNL/SR-2016/100andNREL/TP-6A50-66071,May2016,http://www.nrel.gov/docs/fy16osti/66071.pdf117Foradditionalinformation,seeQTRChapter6andtheassociatedtechnicalappendicesat:http://energy.gov/under-secretary-science-and-energy/quadrennial-technology-review-2015-omnibus118Theterm“ValleyofDeath”describesthechallengeoftransitioningatechnologyfromthedrawingboardtocommercialdeployment.Two“ValleysofDeath”arediscussed.Thefirst“ValleyofDeath”describestheperiodoftransitionofapromisingdevelopingtechnologytodemonstrationstage,showingthepromiseofcommercialdeployment.Thesecond“ValleyofDeath”describestheperiodtransitioningfromthedemonstrationstagetocommercialscale.

• ForanalysesoftheValleyofDeathphenomenon,see:o Branscomb,L.andP.Auerswald,“ValleysofDeathandDarwinianSeas:FinancingtheInventionto

InnovationTransitionintheUnitedStates,”TheJournalofTechnologyTransfer28(3-4),August2003.http://link.springer.com/article/10.1023%2FA%3A1024980525678.

o Tassey,G.,“RationalesandMechanismsforRevitalizingUSManufacturingR&DStrategies,”JournalofTechnologyTransfer35,no.3(2010):283-333.http://www.nist.gov/director/planning/upload/manufacturing_strategy_paper.pdf.

o Boroush,M.,“NSFReleasesNewStatisticsonBusinessInnovation,”NationalScienceFoundation,October2010.http://www.nsf.gov/statistics/infbrief/nsf11300/.

• DOEsupportsRDD&Dwherethesecond“D”referstodemonstration.Assuch,thefirstvalleyofdeathistosomeextentaddressedthroughtechnologydemonstrationswhilethesecondvalleyofdeathisaddressedtoanextentbytheDOELoanProgramsOfficethatfinancesscaleupandcommercializationefforts.

119ThesecondvolumeoftheMIT“ProductionintheInnovationEconomy”reporthasanimportantstudyontheproblemfacedbystartups,includinginenergystartups,ofobtainingfinancingforproductionscaleupinnon-IT/softwaresectors;volumeonediscussestheproblemthatmanufacturingSMEshaveingettingfinancingforthisstage.120CriticalMaterialsInstitute(CMI)EnergyInnovationHubisworkingtoassuresupplychainsofmaterialscriticaltocleanenergytechnologies.See:https://cmi.ameslab.gov/.121ManyU.S.consumerelectronicscompaniesoptedtotransferlarge-volume,low-marginmanufacturingtooffshoreproducersasearlyas1950s.Theappealrangedfromincentivesbythehostcountry(e.g.,taxbreaks,low-costorfreeland)tolowlaborcost.Agrowingnumberofanalystshavepresentedcasestudiesoncompaniesthatshowedthatoncemanufacturingactivitymovesoverseas,sodotherequiredskills,networks,andsupplychains;andonceoffshorethemanufacturingactivities,andthelearningtheyengender,aredifficulttorecover.Forexample:

• Locke,R.M.andR.L.Wellhausen,Editors,“ProductionintheInnovationEconomy”,TheMITPress,2014.• Berger,S.,MakingInAmerica,MITPress,2013.• Pisano,G.P.,andW.C.Shih,“RestoringAmericanCompetitiveness,”HarvardBusinessReview,July-August2009.

https://hbr.org/2009/07/restoring-american-competitiveness/ar/1.• Rappaport,A.,“Outsourcingisn’taProblemforSiliconValleybutisforDetroit,”HarvardBusinessReview,October9,

2009.https://hbr.org/2009/10/outsourcing-isnt-a-problem-for/.• Ezell,S.J.,andR.D.Atkinson,“TheCaseforaNationalManufacturingStrategy,”InformationTechnologyand

InnovationFoundation,April2011.http://www2.itif.org/2011-national-manufacturing-strategy.pdf.122Foranexample:

• Tassey,G.,“TheManufacturingImperative,”in“StrengtheningAmericanManufacturing:TheRoleoftheManufacturingExtensionPartnership”,NationalResearchCouncil,2013.http://www.nap.edu/catalog/18329/strengthening-american-manufacturing-the-role-of-the-manufacturing-extension-partnership.

• Tassey,G.,“TheTechnologyImperative”,EdwardElgar,2009.• Pisano,G.P.andW.C.Shih."DoesAmericaReallyNeedManufacturing?"HarvardBusinessReview90(3),March

2012.https://hbr.org/2012/03/does-america-really-need-manufacturing/ar/1.FordiscussionontheimpactofaweakenedsupplychainontoU.S.competitiveness,see:

• Tassey,G.,“RationalesandMechanismsforRevitalizingU.S.ManufacturingR&DStrategies,”TheJournalofTechnologyTransfer,January29,2010.http://www.nist.gov/director/planning/upload/manufacturing_strategy_paper.pdf.

123Newtools,technologies,andplatformsaremakingitfasterandcheapertoprototypeproducts,creatingnovelopportunitiesforentrepreneurshipinmanufacturingintheUnitedStates.Forexample:

• Additivemanufacturingcanreducethecostofdesigningandprototypingautomobilecomponentsbyasmuchas99%.• Newonlinecommunitiescanhelpentrepreneursrapidlyassembletheappropriateworkforce.• Newtechnologiesandcomputeraideddesigntoolscandramaticallylowerthecostofprototypinginmanufacturing.

Forexample:• FordPressRelease,“Ford’s3D-PrintedAutoPartsSaveMillions,BoostQuality,”December12,2013.”

https://media.ford.com/content/fordmedia/fna/us/en/news/2013/12/12/ford_s-3d-printed-auto-parts-save-millions--boost-quality.html.

• “MakinginAmerica:U.S.ManufacturingEntrepreneurshipandInnovation,”TheExecutiveOfficeofThePresident,June2014.https://www.whitehouse.gov/sites/default/files/docs/manufacturing_and_innovation_report.pdf.

124“TheRoleoftheChemicalSciencesinFindingAlternativestoCriticalResources:AWorkshopSummary,”NAP,2012.http://www.ncbi.nlm.nih.gov/books/NBK97332/.Chapter6,CriticalMaterialsinLarge-ScaleBatteryApplications,providesextensivediscussionofthedependenceofbatteriesandotherenergystoragetechnologyoncriticalmaterials.125Foradetaileddiscussionontrendsinadvancedmaterialsandintegratedcomputationalmaterialsengineering,seeShipp,S.S.,“EmergingGlobalTrendsinAdvancedManufacturing,”InstituteforDefenseAnalysis,March2012.http://www.wilsoncenter.org/sites/default/files/Emerging_Global_Trends_in_Advanced_Manufacturing.pdf

Forthecurrentandfutureoutlookforcriticalmaterialsusedinsustainableenergyapplications,andaresearchanddevelopmentagendaacrossthesupplychaintomitigatetheeffectsofmaterialcriticalityonachievingasustainableenergyfuture,see:

• “CriticalMaterialsforSustainableEnergyApplications,”ResnickInstituteReport,CaliforniaInstituteofTechnology,September2011.http://resnick.caltech.edu/docs/R_Critical.pdf.

• “CriticalMaterialsStrategy,”U.S.DepartmentofEnergy,December2011.http://energy.gov/epsa/initiatives/department-energy-s-critical-materials-strategy.

TheCriticalMaterialsInstitute(CMI)EnergyInnovationHubisworkingtoassuresupplychainsofmaterialscriticaltocleanenergytechnologies.https://cmi.ameslab.gov/.126Industrialcommonsisatermthatdescribesthecomplexandenduringpartnershipsamongmanufacturers,universities,technicalcolleges,firms,researchinstitutes,financingentities,andotherlinksinthesupplychain.Toremaincompetitive,companiesrequireanindustrialcommonsthatincludesnotjustsuppliersofadvancedmaterials,productionequipment,andcomponents,butalsoR&Dknow-how,advancedprocessdevelopmentandengineeringskills,andmanufacturingcompetencies.

• Forexample:o Pisano,G.P.,“TheU.S.isOutsourcingAwayitsCompetitiveEdge,”HarvardBusinessReview,October1,

2009,https://hbr.org/2009/10/the-us-is-outsourcing-away-its/.o Augustine,N.R.,Chair,RisingAbovetheGatheringStormCommittee,IsAmericaFallingOfftheFlatEarth?

NationalAcademyofSciences,NationalAcademyofEngineering,andInstituteofMedicineoftheNationalAcademies,2007.http://www.nap.edu/catalog/12021/is-america-falling-off-the-flat-earth.

• Thiswasoriginallycalled“industrialclusters.In“TheCompetitiveAdvantagesofNations”,MichaelPortermakesthecasethatindustrialclustershavethepotentialtoaffectcompetitioninthreeways:byincreasingtheproductivityofthecompaniesinthecluster,bydrivinginnovationinthefield,andbystimulatingnewbusinessesinthefield.SeePorter,M.E.,“TheCompetitiveAdvantageofNations”,NewYork:TheFreePress.857pgs.1990.

127ThisisincontrasttoApple,Qualcomm,andCiscowheretheytookfulladvantageofthe“modularity”oftheglobaleconomy.Theyfocusedtheirbusinessmodelonthedesignoftheirproductsandassociatedinformationsystems;offshoringtheindustrialworkdidnotleavethematadisadvantage.See:

• Berger,S.,MakingInAmerica”,MITPress,2013.• Fuchs,E.,“Globalmanufacturingandthefutureoftechnology,”1August2014Science,Vol345Issue6196.

http://www.sciencemag.org/content/345/6196/519.• Bonvillian,W.,“AdvancedManufacturingPoliciesandParadigmsforInnovation”,Science,V.342,6Dec.2013.

http://www.sciencemag.org/content/342/6163/1173.128Additionaldiscussionsontheimportanceoftheindustrialcommonsonmanufacturingcompetitiveness,seeMIT“ProductionintheInnovationEconomy”,MITPress2013.129Goodrich,A.C.,D.M.Powell,T.L.James,M.Woodhouse,andT.Buonassisi,“Assessingthedriversofregionaltrendsinsolarphotovoltaicmanufacturing,”Energy&EnvironmentalSciences,2013.http://pubs.rsc.org/en/content/articlelanding/2013/ee/c3ee40701b#!divAbstract.130Economistsrefertothisconceptasthetradabilityofaproduct.Tradabilityisthepropertyofaproductthatcanbesoldinanotherlocationdistantfromwhereitwasproduced.Seeforexample,M.Macintyreetal.(eds.),ServiceDesignandDelivery,SpringerScience+BusinessMedia,LLC,2011.DiscussionsonthetradabilityofPVcanbefoundin,forexample,Woodhouse,M.,A.Goodrich,R.Margolis,T.LJames,M.Lokanc,andR.Eggert,“Supply-ChainDynamicsofTellurium,IndiumandGalliumWithintheContextofPVModuleManufacturingCosts,”IEEEJournalofPhotovoltaics,April2013.http://www.nrel.gov/docs/fy13osti/56883.pdf.Discussionsonthetradabilityofwindturbinebladescanbefoundin,forexample,JamesT.,andA.Goodrich,“SupplyChainandBladeManufacturingConsiderationsintheGlobalWindIndustry,”NationalRenewableEnergyLaboratory,2013.http://www.nrel.gov/docs/fy14osti/60063.pdf.131Additionaldiscussioncanbefoundin“GlobalTradeandConflictingNationalInterests”,whereGomoryandBaumolnotethat,inaworldofcapitalmobilityandeconomiesofscale,oncecapitalisestablishedinacountryittendstoremaininthatcountry.Inotherwords,onceanindustryiscapturedbyacountrythatindustryis“retainable.”Onceanindustryisdevelopedinacountry,newcompetitorshavedifficultyenteringthatmarketsincetheycannottakeadvantageofscaleeconomies.Thecorollaryisalsotrue,onceanindustryreachesscaleatacountry,itisunlikelytoleavethatcountry.Gomory,R.E.andW.J.Baumol,“GlobalTradeandConflictingNationalInterests”,MITPress,2001.132Newtechnologiesforrapidprototyping–fromlasercutterstoCNCroutersto3Dprinters–havedramaticallyloweredthecostofdevelopingaprototype.See,“MakinginAmerica:U.S.ManufacturingEntrepreneurshipandInnovation,”TheExecutiveOfficeofthePresident,June2014.

https://www.whitehouse.gov/sites/default/files/docs/manufacturing_and_innovation_report.pdf.133ForumssuchasSustainableEnergyforAll(SE4All)Forum,4-6June2014,attendeesfromtheEuropeanUnion,China,Iceland,andSierraLeoneemphasizedtheneedforinnovativetechnicalandinvestmentsolutionstoprovideuniversalaccesstosustainableenergy.See,“ReportonSustainableEnergyforAll(SE4All)Forum,4-6June2014”,UnitedNations,2014.http://www.se4all.org/se4all-forum/.134Technologicaldevelopmentsalonewillnotbesufficienttotransformtheenergyharnessinglandscape.Newbusinessmodels,capital,etc.Moreover,acollaborativeinnovationapproachisneeded.Manytechnologiesthatcouldbegamechangingneedtobedevelopedindifferentareas,rangingfromadvancesincomputationalmanagementtoadvancedmaterialsandmarketization.See:King,SirDavidandC.Grey,“EnergyHarnessing:NewSolutionsforSustainabilityandGrowingDemand,”WorldEconomicForum2013.http://www.weforum.org/reports/energy-harnessing-new-solutions-sustainability-and-growing-demand.135Ofthe1.5billionpeoplethathavenoaccesstoelectricity,85%liveinruralareasoronthefringesofthecities.TheUnitedNationsestimatesthatanaverageof$35-$40billionayearneedstobeinvesteduntil2030soeveryoneontheplanetcancook,heatandlighttheirpremises,andhaveenergyforproductiveuses.See:

• TheSecretary-General’sAdvisoryGrouponEnergyandClimateChange(AGECC),“EnergyforaSustainableFuture,ReportandRecommendations,”UnitedNations,28April2010NewYork.http://www.un.org/wcm/webdav/site/climatechange/shared/Documents/AGECC%20summary%20report%5B1%5D.pdf.

• “EnergyintheDevelopingWorld:PowertothePeople,”TheEconomist,September2,2010.http://www.economist.com/node/16909923.

136OECDdefinestheGlobalValueChainas“thefullrangeofactivitiesthatarerequiredtobringaproductfromitsconception,throughitsdesign,itssourcedrawmaterialsandintermediateinputs,itsmarketing,itsdistributionanditssupporttothefinalconsumer,”asdefinedbyDukeUniversity’sGlobalValueChainsInitiatives.http://www.globalvaluechains.org/concepts.html.See:

• Gereffi,G.andK.Fernandez-Stark,“GlobalValueChainAnalysis:APrimer,CenteronGlobalization,Governance&Competitiveness(CGGC),”DukeUniversity,May31.http://www.cggc.duke.edu/pdfs/2011-05-31_GVC_analysis_a_primer.pdf.

• Donofrio,N.M.andK.S.Whitefoot,Editors,“MakingValueforAmerica:EmbracingtheFutureofManufacturing,Technology,andWork”,NationalAcademyofScience,2015.http://www.nap.edu/catalog/19483/making-value-for-america-embracing-the-future-of-manufacturing-technology.

137Amoreextensivereviewisprovidedby:U.S.DOE,“TheCleanEnergyManufacturingInitiative:StrengtheningAmericanManufacturingandCleanEnergyInnovation”,DOE/EE-1462,http://www.energy.gov/eere.cemi,andhttp://www.energy.gov/sites/prod/files/2016/10/f33/CEMI%20Publication-WebR.pdf138ThepartnershipwiththeCouncilonCompetitivenessistheAmericanEnergyandManufacturingCompetitiveness(AEMC)Partnershipandisdescribedat:http://www.compete.org/programs/compete-energy-manufacturing/aemc139U.S.DOE,“TheCleanEnergyManufacturingInitiative:StrengtheningAmericanManufacturingandCleanEnergyInnovation”,DOE/EE-1462,http://www.energy.gov/eere.cemi,andhttp://www.energy.gov/sites/prod/files/2016/10/f33/CEMI%20Publication-WebR.pdf140“ManufacturingUSA–theNationalNetworkforManufacturingInnovation”,https://www.manufacturing.gov/nnmi/“NationalNetworkforManufacturingInnovation”,http://energy.gov/eere/amo/national-network-manufacturing-innovation141“NationalNetworkforManufacturingInnovation:APreliminaryDesign,”ExecutiveOfficeofthePresidentNationalScienceandTechnologyCouncil,AdvancedManufacturingNationalProgramOffice,ExecutiveOfficeofthePresident,January2013.http://www.manufacturing.gov/docs/nnmi_prelim_design.pdf.“ManufacturingUSA—theNationalNetworkforManufacturingInnovation”,https://www.manufacturing.gov/nnmi/142Asindicatedin“NationalNetworkforManufacturingInnovation:APreliminaryDesign”,therearegapsthatseparateAmericaninventions,researchdiscoveries,andideasfromthedevelopmentandscale-upofdomesticmanufacturing.Examplesofgapsare

• Marketfailuresthatdeterprivate-sectorinvestmentinadvancedtechnologies.• Technologydevelopmenttimehorizonsdrivenbyinvestorexpectationsforrealizingreturns.• Thechallengesinscale-up,astechnologiesandproductsbecomeever-morecomplexandtheirlifecyclesshrink.• Thelackofnetworkoforganizations—fromsuppliersofequipment,parts,andservicestoschools,colleges,and

trainingprogramstoutilitiesandotherinfrastructuresystems.• Increasedinnovationtoremaingloballycompetitive.

TheNNMIprogramisdesignedtoaddressthesegapstobringtogetherindustry;universities(includingcommunitycolleges);andlocal,StateandFederalgovernmentstospurmanufacturinginnovation.Eachinstitutewillfocusonbuildingclustersof

advancedmanufacturingcapabilitiesthatjoinexpertisefromindustry,academia,andgovernment;inessenceforminganindustrialcommons.Seealso,

• “CapturingDomesticCompetitiveAdvantageinAdvancedManufacturing,”AMPSteeringCommitteeReport,President’sCouncilofAdvisorsonScienceandTechnology,ExecutiveOfficeofthePresident,July2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast_amp_steering_committee_report_final_july_17_2012.pdf.

• “ANationalStrategicPlanforAdvancedManufacturing,”President’sCouncilofAdvisorsonScienceandTechnology,ExecutiveOfficeofthePresident,February2012.https://www.whitehouse.gov/sites/default/files/microsites/ostp/iam_advancedmanufacturing_strategicplan_2012.pdf

• http://www.manufacturing.gov/.143TheNextGenerationPowerElectronicsNationalManufacturingInnovationInstitute(PowerAmerica)isfocusedonmakingwidebandgap(WBG)powerelectronicscost-competitivewithinfiveyears.PowerAmericaactivitiesarefocusedondevicemanufacturing,WBGspecificpowermoduledevelopmentandelectronicstoexploittheattributesofWBGdevices.http://www.ncsu.edu/power/.144TheInstituteforAdvancedCompositesManufacturingInnovationworkstodevelopnewlow-cost,high-speed,andefficientmanufacturingandrecyclingprocesstechnologiesthatwillpromotewidespreaduseofadvancedfiber-reinforcedpolymercomposites.http://energy.gov/eere/amo/institute-advanced-composites-manufacturing-innovation.145“PresidentObamaAnnouncesWinnerofNewSmartManufacturingInnovationInstituteandNewManufacturingHubCompetitions”,WhiteHouse,OfficeofthePressSecretary,June20,2016,https://www.whitehouse.gov/the-press-office/2016/06/20/fact-sheet-president-obama-announces-winner-new-smart-manufacturing“CleanEnergySmartManufacturingInnovationInstitute”,https://smartmanufacturingcoalition.org/146“EnergyDepartmentAnnouncesAmericanInstituteofChemicalEngineerstoLeadNewManufacturingUSAInstitute“,December9,2016,https://energy.gov/articles/energy-department-announces-american-institute-chemical-engineers-lead-new-manufacturing147“EnergyDepartmentLaunchesNewManufacturingUSAInstituteFocusedonRecyclingandReusingMaterials”,January4,2017,https://energy.gov/articles/energy-department-launches-new-manufacturing-usa-institute-focused-recycling-and-reusing148“AmericaMakes”,https://www.americamakes.us/about/overview149“LIFT—LightweightInnovationsforTomorrow”,http://lift.technology/150Asummaryofon-goingNNMIscanbefoundathttp://manufacturing.gov/welcome.html.151MaterialsGenomeInitiative,https://www.whitehouse.gov/mgi152“ReporttothePresident:AcceleratingU.S.AdvancedManufacturing”,ExecutiveOfficeofthePresident,President’sCouncilofAdvisorsonScienceandTechnology,October2014.https://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/amp20_report_final.pdf153EnergyMaterialsNetwork,http://www.energy.gov/eere/energy-materials-network/energy-materials-network154“Electrocat:ElectroCatalysisConsortium”,http://www.electrocat.org/155“CaloriCool”,https://www.caloricool.org/156“LightMAT:LightweightMaterialsConsortium”,https://lightmat.org/157EnergyMaterialsNetworkWorkshop,http://energy.gov/eere/sunshot/downloads/energy-materials-network-workshop158Theseactivitieshelpremovethecapitalcostbarrierinlaboratoryandtestingequipmentthatwouldhavepreventedacleanenergytechnologyfrombeingdemonstratedandvalidated.Furthermore,drawingupontheideaoftheindustrialcommons,thesefacilitieshelpfostercollaborationbetweennationallaboratories,universities,andcompanies(small,medium,andlargealike).159CriticalMaterialsInstitute(CMI)EnergyInnovationHubisworkingtoassuresupplychainsofmaterialscriticaltocleanenergytechnologies.https://cmi.ameslab.gov/.AdditionaleffortswithinDOEincludeprojectsrelatedtothebatteriesandmagnetsinelectricvehicles(VehiclesTechnologiesOffice,VTO)andtherecoveryoflithiumfromgeothermalbrines(GeothermalTechnologyOffice,GTO).160VehicleSystemsIntegrationLaboratory(VSI),acollaborationbetweenDOE’sVTOandORNL,enablesintegratedtestingofvehiclepowertraintechnologies,includinghybridsystems.http://www.ornl.gov/science-discovery/clean-energy/research-areas/transportation/vehicle-systems.161ORNL’sManufacturingDemonstrationFacilityprovidesindustrywithaffordableandconvenientaccesstofacilities,toolsandexpertisetofacilitaterapiddeploymentofadvancedmanufacturingtechnologiestoenhancethecompetitivenessofU.S.manufacturing,withparticularfocusonadditivemanufacturing,compositesmanufacturing,carbonfibermanufacturing,andbatterymanufacturing.http://web.ornl.gov/sci/manufacturing/mdf/.162DOE’sMaterialsEngineeringResearchFacility(MERF)atArgonneNationalLaboratory(ANL)andDOE’sBattery

ManufacturingR&DFacilityatORNLaidinmovinginnovationsfromthelabtothemarketplace.TheMERFdevelopsprocessesandscalesupbatterymaterialsfromthegramquantitiesinthelabtothetensofkilogramsquantitiesneededforevaluationbyindustry.TheBatteryManufacturingR&DFacilitydevelopsanddemonstratesadvancedmanufacturingprocessesthatreducethecostofbatterymanufacturing.http://www.anl.gov/energy-systems/facilities/materials-engineering-research-facility.163TheJointCenterforEnergyStorageResearchistheEnergyInnovationHubforBatteryandEnergyStoragewithinBasicEnergySciences.Itaimstoenablenextgenerationbatteriesandenergystorageforthegridandfortransportationbydeliveringelectricalenergystoragewithfivetimestheenergydensityandone-fifththecostoftoday’scommercialbatterieswithinfiveyears.www.jcesr.org.164ThecollaborationwithU.S.AdvancedBatteryConsortium(USABC)supportscleanenergymanufacturingbyconductingbatterymanufacturingR&Donadvancedbatterytechnologiesthatreducelithium-ionbatterymaterialscostsandmanufacturingprocesscosts.http://www.uscar.org/guest/index.php.165“Build4Scale:TrainingCleantechEntrepreneursforManufacturingSuccess”,http://energy.gov/eere/articles/build4scale-training-cleantech-entrepreneurs-manufacturing-success“DOEAnnouncesManufacturingTrainingforCleantechEntrepreneurs”,http://energy.gov/eere/articles/doe-announces-manufacturing-training-cleantech-entrepreneurs166HighPerformanceComputingforManufacturing(HPC4Mfg),AcceleratingInnovation,https://hpc4mfg.llnl.gov/167OakRidgeNationalLaboratoryManufacturingDemonstrationFacility,http://web.ornl.gov/sci/manufacturing/168InvestmentsbytheU.S.DepartmentofEnergy'sLoanProgramsOffice(LPO)hassupportedthedeploymentofinnovativecleanenergyprojectsandadvancedvehicle-manufacturingfacilitiesacrosstheUnitedStates.Todate,LPOsupportsadiverseportfolioofmorethan$30billioninloans,loanguarantees,andcommitments,coveringmorethan30projectsacrossthecountry.ThecurrentprojectsfocusonAdvancedFossilEnergy,RenewableEnergyandEnergyEfficiency,andAdvancedNuclearEnergy.http://energy.gov/lpo/loan-programs-office.169TheSuperiorEnergyPerformance®(SEP™)Programisanexampleoftechnicalassistancetomanufacturersfocusedonimplementingenergyefficiencytechnologies.SEPutilizestheISO50001-energymanagementsystemstandardasitsfoundationandisdesignedtohelpfacilitiesimprovetheirenergyperformance.http://www.energy.gov/eere/amo/superior-energy-performance.170TechnologyAssistancePartnerships(TAPs),inworkingwithnationallaboratoriesandcompanies,focusonthedeploymentofenergyefficiencytechnologiessuchascombinedheat&power(CHP)andwasteheattopower.http://energy.gov/eere/amo/chp-technical-assistance-partnerships-chp-taps.171BetterPlants,http://energy.gov/eere/amo/better-plants172IndustrialAssessmentCenters,http://energy.gov/eere/amo/industrial-assessment-centers-iacs173SmallBusinessVouchersProgram,https://www.sbv.org/about.html174U.S.DRIVE(UnitedStatesDrivingResearchandInnovationforVehicleefficiencyandEnergy),isagovernment-industrypartnershipfocusedonacceleratingthedevelopmentofpre-competitiveandinnovativetechnologiestoenableafullrangeofaffordableandcleanadvancedlight-dutyvehicles.http://www.uscar.org/guest/partnership/1/us-drive.175http://techportal.eere.energy.gov/commercialization/natlbizplan.html.176InformationonactivitiessuchasSBIR/STTRcanbefoundathttp://energy.gov/eere/about-us/technology-market-team.177U.S.DOE,“TheCleanEnergyManufacturingInitiative:StrengtheningAmericanManufacturingandCleanEnergyInnovation”,DOE/EE-1462,http://www.energy.gov/eere.cemi,andhttp://www.energy.gov/sites/prod/files/2016/10/f33/CEMI%20Publication-WebR.pdf178“TechnologistinResidenceProgram,http://energy.gov/eere/cemi/technologist-residence-program179CyclotronRoad,“Wherebreakthroughenergytechnologiesareborn”,http://www.cyclotronroad.org/180ChainReactionInnovations,http://chainreaction.anl.gov/181InnovationCrossroads,http://innovationcrossroads.org/182U.S.DepartmentofEnergy,“RevolutionNow:TheFutureArrivesforFiveCleanEnergyTechnologies–2016Update”,http://energy.gov/eere/downloads/revolutionnow-2016-update

Competitiveness Case Studies - Energy

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