Assistant Secretary for EERE Danielson Keynote (text version)

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Below is the text version for the Keynote: The Honorable David T. Danielson, Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy Video.

DAVID DANIELSON:  Next up, we are going to have a very exciting panel with some major thought leaders in the private sector and then we will be moving to the incredibly value networking time, but I am just going to spend a few minutes before we move to our panel to kind of -- as Secretary Moniz said, we really do find ourselves at the beginning of a truly exciting time, critical time in our nation’s energy history, both in terms of clean energy manufacturing -- manufacturing those products that are coming down in cost and dramatically coming up in volume, but also in terms of broader trends around our industrial energy competitiveness more broadly. And so, the opportunity we have in front of us in clean energy manufacturing is truly unprecedented and while I want to spend just a few minutes taking it down another level on the opportunity and how we are responding to it through our DOE Clean Energy Manufacturing Initiative and through AMC partnership we have with the council.

If you just look at the size of this opportunity, I want to walk you through just a couple of facts and figures. It is estimated that more than ten trillion dollars will be invested globally in new power generation between now and 2030. This will represent not only rapidly growing demand for advanced manufactured renewable power technologies like wind and solar, but will also give us a tremendous opportunity for the U.S. to export other technologies like advanced gas turbine technologies.  You know, I think of that specific example, we are going to have a video showing you some great works going on there by General Electric, but I also, when I was in -- just outside of Beijing not too long ago, just a few months ago, I went to one of the most advanced natural gas combined cycle, it was actually TriGen making both heat power and cooling for an industrial park. When I got to visit this plant, they are very open and transparent and I asked every question I could think of and so I asked myself, is there any United States technology in here? And they said, well yeah. There is a really high end gas turbine in the combined cycle. And I said, well, about how much of that -- how much of the total value of the plant was in that? And it was 30%.  So as China and India and other countries are growing out there energy infrastructure, I think if we get it right, a substantial portion of the value add going into the energy infrastructure both here and abroad, can come from advanced technology and embedded manufacturing here in United States. That turbine was actually manufactured right here in Connecticut. So there is a tremendous global opportunity. In the transportation sector, rapid advances in engine technology, battery technology, power electronics, lightweight materials, along with new fuel economy standards or fueling innovation and manufacturing boom, a come back in the American auto industry and I just point to one example and I think we also now recently -- the commitment of Tesla Motors to build a five billion dollar battery manufacturing plant right here in the United States in Reno, Nevada. And in the energy efficiency sector, the IEA, International Energy Agency, estimates that globally in the years ahead, more than 300 billion dollars a year will be invested in energy efficiency worldwide, representing a huge and growing global market for manufacturers of advanced energy efficiency products like high efficiency heat pumps and water heaters, [unintelligible] lighting, variable speed motors, just to name a few of dozens and dozens of examples where we can compete and lead on energy efficiency products.

So from the power sector to the transportation section to the building and industrial sectors, this vast and growing set of markets presents a major opportunity for our nation to leverage its world class science and innovation and to sustained clean energy manufacturing competitiveness. To provide a window into this exciting opportunity, we actually went out with our AEMC partnership and our partners and spent some time with leaders in the advanced lighting industry who are creating clean energy manufacturing jobs all across the country today from the California Bay area to North Carolina, to Wisconsin and upstate New York. Let’s see what they have to say. Cue the video.

SUNIL THOMAS:  There are shots from NASA of the United States at nighttime and you see these beautiful pictures of the metro areas all lit up at nighttime. What that light is, is actually wasted light. It is light being reflected into space and not usable. And what LED’s can do is actually drastically reduce that. Philips sees that the lighting revolution is coming through LED. So the advantage of U.S. manufacturing is we build an ecostructure of other companies that we associate with. From specialty gases to quartz vendors to suppliers, to equipment manufacturers. We spawn innovation and entrepreneurship. It’s not only about U.S. jobs in Lumenlabs; it’s about U.S. jobs in all these support companies. The U.S. has significant competitive advantages and we need to keep building on it. We are at a tipping point. Where we see a lot of technology maturing and now the manufacturing has to come in and be able to produce it at a very large scale. There is a science associated with that and we need the U.S. government to encourage the development of that science.

JOHN EDMOND:  LED lighting and [unintelligible] lighting can virtually replace every lighting system there is right now. Roughly 22% of electricity used today is for lighting, so by going to LED lighting, we basically can cut that usage in half or less. The efficiency is higher than any light source right now. The light quality is very good and the lifetime -- it’s better than most any light source now. And the lumens per dollar are coming down very rapidly. So it’s very exciting to work at Cree because we are constantly making advances. We make everything from indoor consumer products, street lights, interior lighting, football stadiums, are now going to LED lighting. The potential is to basically replace every light source known to man. DOE funding in companies like Cree help to justify long term projects that we normally wouldn’t otherwise do. So by having the manufacturing here in the U.S., drives the technology to the next level so that we can maintain the leadership in solid-state lighting in the world and continue to grow solid-state  lighting in the U.S. 

MICHAEL KRAMES:   The time to invest in solid-state lighting is now. Solid-state lighting will improve our quality of lives immensely by changing the way we experience light. One of the unique aspects of Soraa’s technology is the fact that we utilize the advantages on GaN on GaN technology, which is higher powered capability and higher efficiency, we are able to actually deliver full spectrum emission all colors of the rainbow from violet to red. The Department of Energy has done a great job in supporting solid-state lighting in the United States. The U.S. can be very competitive; I don’t see any reason why we can’t be competitive with overseas manufacturing. It’s really a matter of a focus and investment. We would like to keep things in the United States. It allows us to keep a faster paced innovation in environment, because of the very strong base of talent. There are big advantages in terms of intellectual property, control and protection. We have a strong base of innovation in the best schools of the world. The LED industry has a good opportunity to show what can be done.

SUDHAKAR RAMAN:  Solid-state lighting is on the cusp of retransformation, replacing 100 year old incandescent bulb technology. We are beginning to see an increased demand, an increased penetration of solid-state lighting. Bottom line, adopting this lighting technology on a mass scale will save billions of dollars to our nation as well as save millions of metric tons of carbon emissions we know as gases. And none of this would be possible without the fundamental technology, the MOCVD technology that Veeco manufactures. MOCVD is the first fundamental, critical technology stat in manufacturing the LED chip. An advantage of being located in the U.S. is it helps us gain access to numerous high value supply chain manufacturers. It’s a really exciting time and its really encouraging to see government agencies like DOE really stepping in to bring industry’s partners together to help accelerate that option of solid-state lighting in the U.S. as well as globally.

DAVID DANIELSON:  So as you can see, in this area of solid-state lighting as with many others in recent years we are competing and winning and creating jobs all around this country together. An exciting thing to see it’s happening. Not just in this area, but many others.

But now I want to turn my attention to the other side of the coin, the impact that our broader energy transformation is having for industries across the board. So in addition to the massive opportunities we have talked about for American leadership and the manufacturing of these kind of clean energy technologies, the discovery and production of abundant U.S. natural gas supplies in recent years has strengthened America’s energy security, lowered our energy costs relative to the rest of the world, making the U.S. once again a global leader in energy intensive manufacturing.

President Obama said it best recently in Pittsburg, “What we have seen over the last several years is American manufacturing come roaring back. We actually have companies now saying that America is the number one place to do business again. Something that we haven’t seen in over 12 years. And companies, instead of outsourcing are now thinking about insourcing again. We have seen entrepreneurship in manufacturing, expanded the fastest pace that we have seen in 20 years. Due to the U.S. shale boom, more than 125 billion dollars in new U.S. manufacturing capital investments have been announced since 2010. And amidst this wealth of resources, manufacturers are also seeing the opportunity and the imperative to implement energy saving technologies and practices to make them more competitive and bring those savings right to the bottom line. Advancing energy efficiency in the American manufacturing base will take our expected strong position on energy price competitiveness that we expect over the next couple of decades and lock that in to competitive advantage that will last for the next 20, 30, 40 or 50 years.

At the Department of Energy, we work with U.S. manufacturers who make bold commitments to energy efficiency and see the results in the growth of their bottom line. And the companies that invent and manufacture the technologies that help these industries succeed. We went to a few of these companies so you could see first hand how and why they do it. Please cue to the video.

JOHN SELLDORFF:  Well, Legrand is a small to medium size manufacturer; we make electronic products for power light and data in the commercial building or residential environment. The reason that focusing on energy efficiency as a manufacturer is important is first and foremost, cost. We are challenged every day to provide more value for our customers and to have enough resources to reinvest in the organization and still give a good return. If I’m a manufacturer of clothing or I’m a manufacturer of plastic products, I may or may not have energy connected to what I do, but everything I do depends on energy and if I don’t manage that cost, just like I can manage my raw materials or my labor inputs, then I’m missing a huge opportunity to make me more competitive. The Better Buildings, Better Plant challenge was to reduce our energy intensity by 25% over ten years and that seemed to us a very daunting task. What surprised was by focusing on it, by engaging the employee base and looking for places that we were missing and we had a lot of help from the Department of Energy in doing so, we were able to identify and save more than that in a little over two years. There was just that much low hanging fruit because we weren’t focused on it. As we were working with our key strategic suppliers, we explained to them what we were doing and how we were doing it and we challenged them to join us.  We were able to get nine of our biggest and most strategic supplies to work themselves on their own energy intensity and use some of the best practices and experiences that we had developed. One of the nice things about energy intensity and focusing on reducing it, is that it’s one of those topics that everybody can support. It’s not that hard. You don’t have to be a technical person. It’s not intimidating, it doesn’t require huge dollars and you can achieve big impact. I think to keep manufacturing in the United States; we have to optimize everything we do. We have a wonderful economy and a great lifestyle, but we are always challenged to justify that in the form of how competitive we can be.

MONTE ATWELL:   GE is the premier heavy duty gas turbine supplier worldwide. We are a U.S. company; we have been a U.S. company for a long time. To get the largest most efficient gas turbines in the world, the technology is really, really important, but its not just the science behind the technology, it’s also about the delivery of that technology into one of these machines and that is about manufacturing. The competitive advantage of having our manufacturing facilities connected to our engineering teams is that the pace and advancement of manufacturing technology is a lot faster. We have a long relationship working with the Department of Energy and the National Energy Technology Laboratories. One of our premier combustion technologies that allow us to meet lower and lower emissions is a direct result of working with the DOE on those programs. It is an arms race. Every tenth of efficiency is extremely important in a high fuel market. U.S. manufacturing benefits tremendously from having the largest, most efficient gas turbines. The technologies that we put into these machines help us win. When we win, it drives volume, volume drives investment, investment drives jobs and that is the hallmark of what we do.

DAVID DANIELSON:  If that doesn’t fire you up, I don’t know what is wrong with you. It fires me up.

So now I want to move into a little bit more detail about our Clean Energy Manufacturing initiative. We launched this a little more than a year and a half ago and like we said all morning, really two sides to it. One, how are we going to be more competitive on the manufacturer of clean energy, energy efficient products? On the other side, how do we bolster our energy productivity across all of our manufacturing base to make us a more competitive destination for manufacturing across the board?  And so, we have really focused on three pillars in our partnership with the Council and with Clean Energy Manufacturing Initiative. One, we have committed to significantly increased DOE’s advanced manufacturing focused R&D investments into both clean energy technologies and platform technologies that have broad applicability across clean energy and other industries and industrial efficiency. Two, we have worked on creating a network of shared facilities for manufacturing research development and demonstration. And three, we have continued to push hard on providing resources for manufacturers to help them enhance their energy efficiency. On the R&D front, this past year, DOE increased its investments into advanced manufacturing focused research and development to more than 325 million dollars.  These investments included millions of dollars for advanced manufacturing and research in a lightweight carbon fiber, material for vehicles, high performance energy efficient windows, advanced biomass conversion technologies and a wide variety of other cutting edge technologies.

I’m pleased today to announce two new wind manufacturing R&D projects that are just the next step in the drum beat that we have going forward on advanced manufacturing innovation. One of these projects really represents a distributed new manufacturing technology to enable us to dramatically increase the height of wind turbine towers from on the order of 80 meters we have today up to about 140 meters. We need to do that in order to access more resource. In fact, going from 80 meters to 140 meters would enable us to open up the whole Southeast as a location of cost competitive wind power. But it’s going to take innovation because you can’t move these things very far. So the innovation here is really about distributed manufacturing and one of the partners we have is a start-up spin out from MIT called Keystone Tower Systems, which is working with a number of advanced companies across the sector of wind manufacturing and deployment on a spiral welding technology where you can actually ship sheet steel and weld it into towers on site. This is the kind of innovation that we are looking to support. And although we have had some twists and turns in U.S. solar PV manufacturing competitiveness, the tide appears to be turning in our favor with a number of companies recently announcing plans to establish or expand solar manufacturing right here in the United States. Soleeva announced an expansion into Michigan. And very excitingly, Solar City and Solavo, both companies with a long history with Department of Energy and the Clean Energy Manufacturing Initiative have made a commitment to establish over time more than gigawatt of solar pv manufacturing capacity in upstate New York, which would make this one of the single largest solar manufacturing plants in the world.

In addition to R&D and innovation, our second pillar is really about facilities, shared infrastructure. And we have gone across the whole country and we really have begun to create a whole new kind of innovation infrastructure with our partners across all of government for the future of American manufacturing. From Ames, Iowa to Youngstown, Ohio, to Oakridge, Tennessee and Raleigh, North Carolina, we have established first of a kind centers that focus on foundational manufacturing, technologies like critical materials, rare earths, additive manufacturing, carbon fiber production and next generation wide band gap power electronics. Our manufacturing demonstration facility at Oakridge, you will hear more about that from Tom Mason today, the director of Oakridge National Lab, has more than 35 3-D printers and a 390 foot long processing line for innovators to try experimental ways to produce carbon fiber at production scales. Our critical material institute, 120 million dollar five year effort led by Ames National Laboratory, Alex King, is here today, can tell you more about this institute. He’s working the enhance the security of American company’s supply to critical rare earth elements needed for a wide variety of advanced American technologies. More than 17 patent disclosures in just over a year and they have doubled the number of industry partners over the last year. So we are seeing great success there.

And earlier this year, with a 70 million dollar over five year investment, we established the first DOE manufacturing innovation institute in support of the President’s National Network for Manufacturing Innovation, focused on manufacturing of next generation wide band gap power electronics at North Carolina State University and you will hear from Randy Woodson, the Chancellor at NCSU today about that. And we are also looking to announce in the next few months our second DOE Manufacturing Innovation Institute in the area of advanced composites, so stay tuned for that. We are also continuing to push hard in our efforts, you will hear more about this later today, to really drive our resources to you to help you lower your energy footprint in your factories from combined heat and power partnerships to industrial assessment centers all across the country that provide free assessments to help you identify the low hanging fruit in terms of industrial efficiency and our Better Plants Challenge, an opportunity for you to join a growing network of innovators, sharing best practices to meet a bold commitment of 25% reduction in energy intensity of your factories over the next ten years. We are driving hard in that area. But American Energy and Manufacturing Competitiveness Partnership is not about what we are doing alone at DOE, it’s about what we can do together. So I’m committed over the next two years, together we are going to continue to increase our investments in research and development and advanced manufacturing, clean energy manufacturing. We are committed to continue to build out the NNMI infrastructure around the country and continue to work with our national labs to establish world-class manufacturing demonstration kind of capabilities for companies to access. And we are committed to continuing to work with states to help them develop next generation strategies, working with their private sectors and their research infrastructure. We have worked with eight states to date to help them develop these plans and over the next year we want to double down on that commitment and work with twice as many states as we have to date. And last year at this very summit, we launched [unintelligible] national lab impact initiative, an effort to dramatically increase the amount of successful engagement between our national laboratory infrastructure and the private sector. We have already launched an exciting new effort called Lab Core, modeled after the NSF’s iCore program to help pull technology out of the labs, train lab researchers into what the customer wants. The voice of the customer and try to figure out what technologies they should be working on to be even better partners for you.

And over the next year we are going to open up our labs to technologists and residents, strengthening our partnerships and helping manufacturing companies take advantage of the unique lab capabilities. In addition, over the next year, we will make 20 million dollars available to small businesses to leverage our national lab resources through a new small business vouchers pilot program.

But we can’t stop here. We must together commit to take on these challenges in American Clean Energy manufacturing competitiveness and through our dialogues and discussion over the last two years, this summit, our regional summits, our many dialogues that we have a number of you participate in, for me it’s really three big themes that we need to rally around going forward. The first is the area of materials acceleration. Materials genome. I think there is a once in a generation opportunity for us to dramatically accelerate the rate at which we go from materials discovery to born certified/born qualified parts, using our high performance computing infrastructure, advance computing, advance modeling simulation, new experimental and diagnostic techniques. The Secretary and I are looking to work, going forward, with the rest of the Department through the Clean Energy Manufacturing Initiative to move aggressively in this direction. Secondly, we need to figure out how to apply [unintelligible] not only to that problem, but to clean energy and clean energy manufacturing more broadly. How do we take advantage of unprecedented computing power to transform unprecedented amounts of data into unprecedented and unparalleled insights to make our manufacturing more productive and more efficient.

And finally, how are we going to reinvent a model by which ideas are going to go from early stage all the way to widespread deployment? We do not currently have a well established model. Having been a venture capitalist myself, that model is not appearing to sustainable. Early stage venture capital and clean energy is down to almost zero. And so how are we going to work together, bringing together philanthropists, foundations, venture capitalists, open innovation programs and big corporate organizations and other entities to really reinvent the model by which we are going to take innovation from the seedling all the way to widespread deployment and that is an area where I think we pull together, we can do some exciting things over the next year or two through our partnership.

So these are exciting times and these are bold goals that we are getting after, but the Department of Energy, we are committed to action. I’m honored and energized that our colleagues across the Department have joined us in the Clean Energy Manufacturing Initiative and many of them are here today. I want to thank the Council again for being such great partners, I want to thank the Secretary for his leadership and I want to thank this community of partners for your insights and commitment. Together we can forge ahead in a winning innovation strategy and together we can take on the defining challenges in clean energy manufacturing and seize the unique opportunity before us to cement American leadership and the transition to the global clean energy economy. Thank you very much.