the clean energy technology context -- advanced manufacturing

ASEE- American Societyfor Engineering Education

- Public Policy Forum February 10, 2015

William B. BonvillianDirector, MIT Wash. Office

The Clean Energy Manufacturing Context --

• Will the U.S. manufacture clean energy technology products?– The market has grown worldwide from

• 2004: $54 billion• 2012: $269 billion• Ex., solar, wind on the way to becoming trillion dollar markets

• Increase energy productivity in U.S. production --> support the efficiency- enabling technology advances– Ex., power electronics

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SCIENCE Advanced Mfg Policies and Paradigms Dec. 6 2013 Policy Section 3

What’s the Advanced Mfg Context? --- Recent Reports…

REPORT TO THE PRESIDENT

ACCELERATING U.S. ADVANCED MANUFACTURING

October 2014

Points:1) Manufacturing is not Agriculture2) Our Manufacturing Firms are Increasingly: “Home Alone”3) Small, mid-sized, and start-up firms – most of U.S.

manufacturing - can’t get financing to “Scale-Up” innovative production

4) Strong innovation capability means strong production capability• Emerging advanced technology fields

5) Manufacturing is part of the innovation system 6) Workforce Training/Education – the issues 7) What Germany can teach us: strong ecosystem 8) Jobs – How manufacturing sector affects

U.S. services sector 4

Point One: Manufacturing is not Agriculture

• For a long time we thought manufacturing was agriculture. • In 1900 half of population farming; now less than 2% farming• Producing more than ever, so enormous “productivity gains’ in

agriculture

• But the reports tell us this manufacturing is not agriculture• We lost 5.8 million manufacturing jobs from 2000 to 2010

– We thought manufacturing output was holding firm, but it wasn’t - on reexamination we’re finding it was in decline

– So we didn’t get the productivity gains we thought

– Job loss data tells us manufacturing sector is hollowing out not getting more productive

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Point Two: Home Alone• The reports tell us for the past three

decades we have been thinning out our manufacturing ecosystem– We used to have firms and supply chains that were very

vertically integrated– We hit on a financial model of emphasizing quarterly

returns, which led us to reduce risk by making our firms “core competency” and “asset light”

– So the shared assets of training, bringing best practices to suppliers, thinned out

– The companies in our system are now much more “home alone”

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Point Three: The Scale Up Problem• We have 3 manufacturing sectors:

– 1) Our big multinationals – they are global, they can get production efficiencies by producing in lower cost countries and they must be in all the global markets

• They’re OK, although they are increasingly producing abroad

+ Two More Vulnerable Sectors: – 2) Main Street firms – they do most of our manufacturing, there are 300,000

small and mid-size firms– They have trouble getting production scale up funding, they’re thinly capitalized,

must be risk adverse to survive, and don’t do R&D (although they can be very innovative about process)

– 3) Our entrepreneurial startups that make something –• they do well until they have to scale up for production of their product – they

lack financing for scale- up here – Venture firms don’’t fund this – send startups to contract mfgs.in Asia

• So they turn to contract manufacturers abroad

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Point Four: The tie between Innovation and Production

• For most products need to tie innovation closely to initial production – Need dense feedback loops as you do product design-

initial production requires very creative engineering and design – it’s part of innovation

– So if you shift production capability, in many cases innovation capability has to follow it

– Produce there = Innovate there• Innovation is U.S. strong suit –what it does best• But if many of our important innovations have to

follow production, then endangering our innovation strength

• And Innovation is the key factor in growth 8

Point Four, con’t• Are there new advanced manufacturing “Paradigms” that could lead to

restoration of mfg. leadership?• Energy Efficiency – energy is “waste”

• “Network centric” – mix of advanced IT, RFID, sensors in every stage and element, new decision making

from “big data” analytics, advanced robotics, supercomputing w/adv’d simulation & modeling

• Advanced materials– “materials genome” – ability with supercomputing to design all possible materials

with designer features – Biomaterials, bio fabrication, syntehtic biology– Lightweighting everything

• Nanomanufacturing– fabrication at the nano-scale

• Mass Customization– Production of one at cost of mass production (ex.: 3D printing /additive

mfg, etc.)

• Distribution efficiency– IT advances that yield distribution efficiency (ie, supply chain)

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Point Five: Production must be seen as part of the Innovation System

• Manufacturing not pictured as part of the innovation process– Focus on only R&D: fragmented view– Innovation is a system, from early-stage research through

production

• Production is the major enabler of “increasing returns” in an economy – a foundational societal wealth creator.

• treat production as critical element that must be connected to innovation system or risk innovation erosion

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Point Six: Workforce• MIT study surveyed 3000+ manufacturing firms

– 75%: filled job vacancies in less than a month– There is no emergency on workforce talent– After all, we laid off 5.8m workers in last decade

• But the 25% is interesting– Innovative firms requiring higher job skills in this group– If we want to move to advanced mfg., increasing skills key– And: Big demographics problem – aging

workforce– Engineering Ed – KEY ISSUE

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Point Seven: what Germany can teach us• We thought that we had to lose manufacturing jobs to

low cost producers in Asia because we are high wage. • But Germany is high wage and high cost – German wages

and benefits are 66% higher than the U.S.• They run a major manufacturing surplus, including a

manufacturing surplus with China• They have a deep ecosystem for their manufacturers,

small and large – they aren’t “home alone”• Extensive collaborative R&D shared by industry- gov’t-

universities around manufacturing technologies and processes

• Shared training system for their workforce • Ways to link their supply chains for rapid scale up • Some German practices don’t apply, some do

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Point Eight: Jobs – the manufacturing sector affects the services sector

• U.S.: 80% “services” economy• But increasingly – the 21st century firm ties complex

products to services – to offer “solutions”– Tradeable goods are tied to services, which makes

the service tradeable– Personal services are face to face, don’t scale– But with the tradeable good, you can scale both the

good and the service– So: success in production increasingly tied to

success in services, & vice versa– Scaling is how an economy grows– Lose the product, can’t scale the service 13

Behind it all: Understanding the Hourglass --

<---- Resources, Suppliers, Components,

Innovation

<--- Production (12m jobs)

<--- Distribution, Sales, Life Cycle

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Summary: The Eight Points… • Manufacturing is part of Innovation System• Manufacturing is not Agriculture• U.S. Manufacturing Firms are Increasingly “Home Alone”• The Scale-Up problem for small, mid-sized, and start-up firms –

most of U.S. manufacturing production strong• Close linkage between innovation/production • New production paradigms?

• Workforce: to move to adv’d mfg., need skills training• Germany: strong mfg. ecosystem • Jobs – tie tradeable goods to tradeable services for

scaleable growth • manufacturing sector affects services

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Linking Policy to the Points• Lesson from “home alone” – restore the ecosystem:

– Manufacturing Institutes – like Germany’s Fraunhofers– Education – community college role; put adv’d mfg into engineering

education – need lifelong learning - use online• Lesson from “innovation/production connection”- reconnect:

– Use the federal R&D system in adv’d mfg– Technology strategies for adv’d mfg paradigms

• Collaborative – industry-univ.-gov’t• Digital mfg., adv’d materials, nanofabrication, mass customization...

– Tie in R&D system to strategies, link to institutes• Lesson re Workforce: need training for adv’d mfg• Lesson re Production Scale up

– Gap in financing system – needs review

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So: Advanced Mfg. Parternership 2.0 --

• Transformative Technologies – Technology Strategies Linked to R&D

• Implementing Manufacturing Institutes and networking them

• Demand-Driven Workforce Solutions• Technology Scale-Up/Policy

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Program Name or Ancillary Text eere.energy.gov

DOE/EERE R&D Priorities and DOE/EERE R&D Priorities and University EngagementUniversity Engagement

David Danielson

Assistant Secretary,

Energy Efficiency & Renewable Energy

ASEE, Engineering Deans Public Policy Colloqium Feb 10, 2015

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Outline

• Personal Introduction

• Introduction to EERE

• Major DOE/EERE Research Priorities

• EERE University Engagement

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Personal Background

• B.S., Materials Science & Engineering, UC Berkeley

• Ph.D., Materials Science & Engineering, MIT

• Founder, MIT Energy Club; Collegiate Energy Association; New England Clean Energy Council

• Venture Capitalist, General Catalyst Partners

• Employee #1, ARPA-E (May 2009)

• DOE Assistant Secretary, Energy Efficiency & Renewable Energy (April 2012 – now)

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EERE’s RDD&D Scope

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EERE’s Guiding Principles

1.HIGH IMPACT: Is this a high impact problem?2.ADDITIONALITY: Will the EERE funding make a large difference relative to what the private sector (or other funding entities) is already doing?3.OPENNESS: Have we made sure to focus on the broad problem we are trying to solve and be open to new ideas, new approaches, and new performers?4.ENDURING U.S. ECONOMIC BENEFIT: How will this EERE funding result in enduring economic benefit to the United States?5.PROPER ROLE OF GOVERNMENT: Why is what we are doing a proper high impact role of government versus something best left to the private sector to address on its own?

The 5 EERE Core Questions

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EERE RDD&D Approach

EERE identifies high-impact opportunity areas, creates aggressive long-term cost-reduction goals, develops and implements targeted multi-year program

plans/roadmaps, and updates them on a regular basis.

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Major Emerging DOE/EERE R&D Priorities

• Clean Energy Manufacturing (Advanced Materials/Manufacturing Methods)

• Grid Modernization

• Subsurface Science & Technology

• Energy & Water

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• Materials Genome Approaches to Accelerated Materials Discovery, Processing, Qualification

• Additive Manufacturing

• Advanced Composite Materials/Structures• Critical Materials• Next Generation (Wide Bandgap) Power Electronics• Next Generation Electric Machines• Smart Manufacturing: Advanced Sensors, Real-Time

Modeling & Control

• Chemical Process Intensification• Roll-to-Roll Processing• Sustainable Manufacturing (water, CO2, waste products)

EERE Advanced Manufacturing Office Priorities: Foundational Technologies

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Vehicles: Beyond Lithium Ion Batteries

Fuel Cells: Anion Exchange Membranes,

Renewable H2 Production

Biofuels: Drop-In Hydrocarbon Production

Solar: Grid Integration, high T materials for CSP

Wind: Wind Plant Optimization

Buildings: Low/No GWP Working Fluids for Cooling

Some Key University-Relevant Emerging Technology Areas

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• Manufacturing Innovation Institutes ($70M/5 years)– Next Generation (WBG) Power Electronics (NCSU)– Advanced Composites (UT Knoxville)

• Michigan State, Purdue University, Univ of Kentucky, …

• Multi-University Research Initiative: High Operating Temperature Thermal Fluids (2012-2017, $5M/each)– UCLA (UC Berkeley, Yale)– Univ of Arizona (ASU, Georgia Tech)

• Marine Hydrokinetic Energy University R&D Center ($5M)– Oregon State University (Univ of Washington, Univ of Alaska)

• “Next Generation Photovoltaics” ($15-$25M, every 2-3 years); other EERE funding opportunities – restricted to universities, non-profits, National Labs

Examples of Major University Based Activities

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• Advanced Grid Modeling

• Advanced Power Systems Engineering

• Power Electronics

• Electric Machine Design

• Materials, Process, End-Use Modeling & Simulation (HPC); High Throughput Experimental Methods

• Chemical Process Intensification

• Combustion Modeling

• Energy Systems Modeling/Optimization

• Smart Systems/Controls/Big Data

Emerging & Continuing STEM Need Areas

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• Engage in Biannual Program Peer Reviews/Workshops/DOE Visits

• Participate in Competitive Funding Calls as Prime or Sub (consortia vs individual projects)– Some calls targeted at universities, non-profits, Labs– “Incubator” Funding Opportunities – 5% of R&D/off roadmap– http://eere-exchange.doe.gov

• Engage with DOE National Laboratories

• Student Competitions

• Fellowships/Traineeships

University Engagement Mechanisms

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EERE’s New Cost Share Approach (2014)

Applied R&D:

•Standard: 20% project level

•Cost Share Waiver: 10% project level

– If prime is University, Non-Profit, National Lab

– If prime has >50% of funding

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David.Danielson@ee.doe.gov

Thanks and Get in Touch…