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“Clean Energy Manufacturing: A National Focus Can Unlock a Potential Treasure Chest”

Remarks by
Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute

Council on Competitiveness/American Energy & Manufacturing Competitiveness Partnership

Tuesday, August 13, 2013

I want to thank the Department of Energy Office of Energy Efficiency and Renewable Energy and the Council on Competitiveness for forming the American Energy & Manufacturing Competitiveness Partnership, and for convening these discussions.

I had the great privilege of serving as co-chair of the Council on Competitiveness Energy Security, Innovation, and Sustainability Initiative from 2007 through 2009. While there have been a number of significant shifts in the kaleidoscopic energy picture since then, many of them arguably positive, the fundamental truth has not changed: Energy security is the single greatest challenge of our era.

As I am sure everyone in this room is well aware, reliable and affordable energy has enabled modern civilization: its security, its vanquishing of disease and expansion of lifespans, its spreading of economic opportunity, its many delightful and liberating tools. It was only when we began inventing machines that could unleash the energy contained in fossil fuels—starting with the steam engine during the Industrial Revolution in England—that humanity was able to escape the Malthusian constraints of earlier eras—and achieve lasting improvements in the quality of life, even with rising populations.

Over the last decade, almost all of the growth in the world’s demand for energy has come from emerging economies following that same energy-enabled trajectory out of poverty. And clearly, the wealthy nations of the world have an obligation to do all they can to expand access to energy to those who lack it, including the 1.2 billion people who still are living without electricity.

At the same time, as we work to spread an energy-based prosperity globally, we must limit the unwanted side effects of the world’s rising appetite for energy in terms of climate impact, and related threats to agriculture, clean water, human health, and our infrastructure.

Many US-based companies have long understood the risks of business as usual, as well as the explosive economic opportunities to be had in developing new sources of energy, conserving energy, and mitigating carbon emissions—and have demonstrated true leadership within their spheres of influence.  And, certainly in our technological research universities and national laboratories, our brilliant scientists and engineers have been assailing the problems of sourcing, diversifying, and more efficiently using energy, for many years on an inspiring array of fronts. At Rensselaer Polytechnic Institute, research and education in energy, the environment, and smart systems is one of our Signature Thrusts.

As a nation, however, we long have lacked a concerted response to the challenges of energy security.  For the last 40 years, we have had a series of energy shocks and crises that have captured the attention of the public and of policymakers in this country and abroad. These include the Arab oil embargo, the Iraqi invasion of Kuwait, the great Northeast blackout of 2003, the abrupt oil price spike in 2008—just as the economic downturn was gathering momentum, the earthquake and tsunami that destroyed the nuclear reactors at the Fukushima Daichi Nuclear Power Station—severely affecting energy, food, and water supplies in Japan, and its economy, and, of course, Superstorm Sandy—which left millions in the U.S. without power or heat in the November cold and many without gasoline that would allow them to leave the devastated areas. Each time, we have responded to the crisis at hand with a limited attention span and short-term solutions—lacking the consistent breadth of vision and commitment of resources the overarching issue demands.

Clearly, President Obama and his administration have been willing to think more broadly, and to take the longer view. In 2011, the President released a Blueprint for A Secure Energy Future, and in late June, he unveiled a plan for the nation to lead the world in what he called “a coordinated assault on a changing climate.” Indeed, an attack on every flank is the only rational choice when natural disasters are becoming a way of life, and there is a growing body of evidence linking extreme weather and carbon emissions.

As recent natural disasters have demonstrated decisively—with supply chain disruptions that have reverberated globally, while causing immensely painful local effects—we all increasingly are subject to intersecting vulnerabilities with cascading consequences from triggering events, such as extreme weather.

Energy security requires that, on a national basis, we do five key things:

  • Create redundancy of supply and develop the diversity of energy sources to power our economy.
  • Invest in smart infrastructure for energy supply, generation, transmission, distribution, and use.
  • Commit to environmental sustainability, and energy efficiency and conservation, with a calculation of the full lifecycle costs of energy sources, systems, and devices; and their use.
  • Adopt policies that ensure consistent regulation and transparent price signals, in order to ensure well-functioning energy markets that are not distorted by excessive speculation or outright manipulation.
  • Think strategically about how each sector of use is matched to the supply source that will be the most efficient, cost-effective, sustainable, and reliable.

Achieving energy security—with both an ample supply of energy sources and a reduction, where possible, of carbon emissions—requires innovation on a grand scale.  

In research universities, discovery and innovation comprise our way of life.  However, we also are keenly aware of the challenges of moving breakthroughs from discovery or conception—across several valleys of death—to production and widespread commercial adoption. This shines a spotlight on the need for a manufacturing renaissance—in particular, for advanced manufacturing. It is crucial that, on the national level, we recognize how essential manufacturing is to the development of next-generation energy products and processes, because of the degree to which research and development follow manufacturing. Although manufacturing represents only about 12 percent of U.S. GDP, it accounts for 70 percent of industry R&D and much of the nation’s intellectual property generation. This has been the topic of many reports and remarks, including ones made as recently as last month (July 2013) by Gene Sperling, head of the National Economic Council.

As you know, manufacturing jobs have been increasing in the United States for the first time since the 1990s, and at a rate greater than could be expected from the mere fact of cyclical recovery. There are a number of factors here: Labor costs are rising in China, where so much manufacturing has gone. Now, in addition to having a productive workforce, the United States now has an energy cost advantage over much of the world, because of the advent of new sources of energy such as unconventional sources of natural gas and oil. There also is an increasing recognition that off-shoring the manufacture of sophisticated products may cost a business its long-term competitiveness.  Even in a global economy, there is value in keeping design and production closely linked physically, because next-generation products often arise from manufacturing innovation, and associated research and development.

Given the centrality of energy to our economy, if we act decisively, energy innovation can serve as the focus of a full-fledged resurgence in US manufacturing—and global leadership that spurs exports and growth. 

A three-pronged opportunity is open to US manufacturers:

First, to use more energy-efficient technologies and approaches in manufacturing itself—to keep the costs of domestic manufacturing competitive with the rest of the world. The opportunities here include advanced manufacturing techniques such as digital manufacturing, additive manufacturing, nanomanufacturing, and biomanufacturing. Motor-driven systems, which, today, account for more than half of all the electricity used by manufacturers, offer another important opportunity for efficiency gain.

Power electronics using wide bandgap semiconductors such as silicon carbide—which can handle greater voltage, higher temperatures, and operate at higher switching frequencies for less energy loss—may soon make electric motors much more efficient.

Second, US manufacturers have opportunities to lead in developing and manufacturing clean energy products.  A recent Pew report found that in 2011, the balance of trade between the US and China in clean energy technology benefitted the United States. And, although some have argued that America’s current bonanza of inexpensive shale gas is going to curb demand for renewable energy products, the market for renewable technologies clearly is global and is growing. It is short-sighted to think otherwise.

In 2012, investments in renewable power and fuels increased by almost 20% in developing economies, with sharp increases not just in China, the biggest market for clean energy—but also in Chile, Kenya, Mexico, Morocco, and South Africa. Two of the world’s biggest economies, Japan and Germany, have insignificant reserves of shale gas and are phasing out nuclear power generation. Renewables are crucial to them. If we do not design and produce the next generation of renewable energy products for export to these markets, other nations surely will.

In addition, American manufacturers can improve the global competitiveness of products of all kinds by reducing the energy required to operate them. Widespread adoption of the wide bandgap semiconductor gallium nitride, already used in LED lighting, could increase radically the efficiency of power supplies for products such as computer servers and laptops, while silicon carbide could allow us to manufacture extremely efficient electric cars.

The third prong is recognizing the targets of opportunity for the future—and creating the capacities that will allow the United States to get a jump start on them.

The future is clearly “smart” everything:

  • Smart buildings that can sense the weather outside and the presence of humans inside, and make adjustments to heat and light based on them. 
  • A smart grid that allows for variable and distributed generation, that can integrate renewable sources of energy, that permits the transmission of that energy over long distances—with multi-terminal high-voltage DC networks and other new power system architectures and technologies enabled by wide bandgap power electronics.  
  • Smart materials, computationally designed and digitally manufactured – at nano and molecular scale.
  • Smart products, equipped with sensors that send data back to the grid—and to their manufacturers, so they can be improved continuously in terms of performance and efficiency. 

Our host GE has been a pioneer here, using sensors in its wind turbines, as well as in many other products. And we are just in our infancy in terms of our ability to make use of the so-called “Internet of Things” formed by such networked products: to “mash up” unrelated data sets and to employ the rapidly expanding capacity of super-computers and increasingly intelligent cognitive computers, coupled with powerful predictive analytics and visualization capacities—in order to make every product and process better. At Rensselaer, we are pushing the frontiers in these arenas. We recently have launched The Rensselaer Institute for Data Exploration and Applications—or The Rensselaer IDEA—to potentiate work we already have begun, to further develop these tools and technologies, and to apply the remarkable digital tools at our disposal to applications in clean energy, and smart energy use and management.

The question is, how to potentiate this three-pronged, energy-based approach to a resurgence of American manufacturing?

We do not have to reach very far back into our history for the answer: the robust three-way partnership between academia, industry, and the federal government in research and development that flowered during World War II, and that after the war, allowed the United States to emerge as the world’s greatest economic power, largely because it became the world’s greatest scientific and technological power. The innovations arising out of this partnership—including MRI, GPS, and the Internet itself—have been transformational, underpinning our economic growth for decades.

Other countries have learned significant lessons from our history, and are making large investments in research and development, and in education, in order to use science and technology to fuel their growth.  Therefore, it is incumbent upon us not to forget our own history.

To ensure that the United States leads in clean energy manufacturing, this three-way partnership now must come together to accomplish two things:

1. Create a fertile environment for innovation.

2. Overcome market failures that keep promising technologies from commercialization.

Let us begin with the fertile environment. First, tax and business policies, such as a more globally competitive corporate tax rate, should encourage innovative American companies to conduct R&D and manufacture here.

Second, national policies must also expand the human capital to fuel advanced manufacturing. There should be support for more opportunity-focused post-secondary education that recognizes that even traditional crafts (such as welding) now require a mastery of mathematical and scientific concepts. There must be a nationwide awareness of “The Quiet Crisis” that confronts us, as the scientists, engineers, mathematicians, and technologists of the Sputnik generation retire in great numbers—yet we fail to attract sufficient young talent to these fields. This must change. We must tap the talent of young women and minorities, and all of our bright young people. And, we need immigration policies that invite highly skilled men and women to work in the United States, particularly those whom we have educated at advanced levels in key fields.

A fertile environment for innovation also must  include government support for the basic research that gives birth to game-changing ideas. Less than one percent of our federal budget currently funds basic research, and the majority of that flows to the life sciences, with only a relatively small portion devoted to the physical sciences, environmental sciences, and engineering. Even this commitment is threatened by budgetary conflicts. Yet it may be the single most important investment we make nationally—to sustain and grow our economy.

However, support for basic research alone cannot solve our second problem. Academia, government, and industry must find mechanisms to overcome the market failures that doom promising innovations before commercialization.

On a national basis, we must support product and process innovations whose development is beyond the capacity of individual companies, particularly smaller enterprises—or whose benefits accrue to a broad array of companies, and so cannot justify large investments by a single firm. This should not be an industrial policy that favors specific companies or sectors, but rather an innovation policy that undergirds emerging technologies with potentially great returns to the economy as a whole.

This investment must include the physical capital that allows new technologies to be improved and scaled for the marketplace—shared infrastructure for the development of advanced manufacturing processes, as well as the prototyping and testing of new products. The Institutes for Manufacturing Innovation currently being developed offer one such example.

At Rensselaer, we have an extremely successful example of shared infrastructure in our Computational Center for Nanotechnology Innovations (CCNI), which holds one of the world’s most powerful university-based supercomputers, an IBM Blue Gene/Q system. Used for research by our faculty, the supercomputer also allows businesses, ranging from Fortune 50 firms to small startups, to work with Rensselaer researchers, and to solve problems affecting their competitiveness in the global marketplace.

Rensselaer also hosts two of New York State’s 15 Centers for Advanced Technology, the Center for Future Energy Systems and the Center for Automation Technologies and Systems, or CATS. At our Smart Lighting Engineering Research Center, funded by the National Science Foundation, LED technologies are being developed that will address the 12% of American electricity consumption that lighting represents, and change the way we illuminate our world.

These centers combine the resources of federal and state government entities, other university partners, and manufacturers—to transfer technology into commercially viable products and processes. For example, a partnership between CATS, the New York State Energy Research and Development Authority, the National Science Foundation, manufacturer Kintz Plastics, and two Rensselaer students pioneered research into the manufacture of advanced composites. The result was a spin-off company—Vistex Composites. Vistex is bringing to market a new, patented method of consolidating and curing advanced composite laminates that is much less expensive and much more energy efficient than the standard autoclaving.

This same story could be repeated with tens of thousands of new processes and products that the era of clean energy demands. The opportunities are here for another golden age of American manufacturing. However, we are at an inflection point.

We have made considerable progress, nationally, by recognizing the need for an Advanced Research Projects Agency for Energy, or ARPA-E, to fund transformational research, and a National Network for Manufacturing Innovation to revolutionize our products and processes. Yet, the progress we have made may well be undone by concerns about the federal debt, budget impasses, and sequestration.  The private sector and academia face their own pressures, as well. We, once again, may be backing away from key investments and policy development, when we should be plunging ahead.

The potential returns of any investment we make in clean energy manufacturing are undeniable. The challenges of energy security, globally and at home, are not going to diminish. In an increasingly prosperous world, the market for clean energy products will continue to grow. 

We have faced such challenges and opportunities many times before, including during the Space Race that succeeded in putting a man on the moon. The resultant technological advances are myriad. Now, here we are—energy security is, indeed, the Space Race of our time.

We can accomplish something equally startling today, with infinite innovations contributing to a single outcome: abundant, affordable clean energy that safeguards the natural world, as it powers our economy and radically improves human lives. 

We need just one thing: focus—national focus, on the opportunities before us.

So, as this distinguished group considers the mechanisms of public-private partnerships, I hope you will consider the need to inspire as well. The jobs, the prosperity, the environment, and the future of the American people, and of humanity itself, depend upon our seizing the opportunities before us.

Everyone in this room understands that. But we do need to help Americans at large, and all of our leaders, to see the multitude of bright possibilities here.

Thank you.

Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.

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