Manufacturing Innovation is Needed to Support Clean Power

clean powerMark Johnson, the Department of Energy’s resident innovation expert, told GreenBiz that while new energy-centric technologies are being invented, there remain challenges producing them in a cost-effective manner. “We can do a lot to invent new technologies relevant to energy…But where you get those real breakthrough adoption moments is when the technology drives to the point where it reaches cost parity because of manufacturing innovation,” said Johnson.

3D printing, additive manufacturing, and the IoT has the potential to help improve clean energy technology manufacturing by reducing waste and improving efficiency. Mike McKittrick, leader of the Critical Materials Institute at the Department of Energy, told Energy.gov that additive manufacturing can potentially solve the nation’s rare earth material challenge, which is critical to driving clean energy technologies. Because additive manufacturing precisely deposits materials only where they are needed, it enables new shapes and designs that were previously impossible, minimizes waste and lowers manufacturing costs.

“Where you get those real breakthrough adoption moments is when the technology drives to the point where it reaches cost parity because of manufacturing innovation.”

The Department of Energy’s Clean Energy Manufacturing Initiative aims to increase U.S. competitiveness in manufacturing clean energy technologies. The DOE also launched the Energy Materials Network (EMN) in 2015 to help accelerate innovation around the material challenges in the clean-energy industry. The department noted in a public statement that there is a lack of available high-performance materials. These materials are the “key enablers” for countless transformational clean energy technology advancements. While their discoveries are made in labs, most never reach widespread market development, or spend too long in costly cycles. The EMN said it can take up to 20 years for some of these materials to move from the lab to market.

“As a result, the development timeframe for advanced materials isn’t keeping pace with America’s goals to combat climate change and build a clean-energy economy,” said the release.

An article at McKinsey & Company said it’s important not to paint clean energy technologies with a broad brush. Of the 16 sectors looked at by the authors, every single one has made progress over the past decade but “some are moving much faster than others.” The article notes that “profit margins have certainly been squeezed in some areas.” And in other cases, companies with decreasing subsidies and limited capital have scaled back investments in clean tech. While some new technologies are being potentially being held back due to production issues, some technologies are advancing and costs are decreasing.

“Costs for onshore wind, solar PV, and lithium-ion batteries have all fallen faster than many industry watchers anticipated, for example, and art continuing to drop,” said the article.

The McKinsey & Company article said for successful cleantech businesses to survive, the critical elements that must come together include costs, access to capital, go-to-market approach, and regulation. Yet the most important contributors may be from innovative manufacturers that improve their processes to increase efficiencies and reduce costs. “The principles that apply to any manufacturing business, such as reducing procurement costs and improving productivity through lean manufacturing, are increasingly important for clean technologies as well,” said the article.

Craig Guillot
Craig Guillot is a business writer based in New Orleans, La. His work has appeared in Wall Street Journal, Entrepreneur, CNNMoney.com and CNBC.com. You can read more about his work at www.craigdguillot.com.

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