This column has focused largely on market barriers and consumer engagement with clean energy, but less on the supply chain portion of companies’ business models. Along with supplying end-products, the clean energy economy will be populated by many companies who are purely in the business of supplying the materials used in clean technologies. It is important for U.S. competitiveness and industry to ensure that these new companies are fostered right here at home.
A Common Thread: Rare Earth Metals
Rare earth metals are naturally occurring minerals whose properties make them uniquely suited to certain clean technologies, particularly electric vehicles and wind turbines. The components in these clean technologies â€" including magnets, superconducting wire, batteries, and motors â€" are made possible through the unique properties these rare earth metals provide.
So what’s the issue? It isn’t that rare earth metals are rare. In fact, they are quite plentiful. The problem is that they are mainly plentiful in China. This puts the America at a competitive disadvantage, subjecting U.S. manufacturing to the kinds of prices that a 95 percent Chinese stake in the market allows.
Even if dominance of the rare earth metal market is temporary, as some have argued, more control over the clean technology supply chain will help tap into two of America’s strongest assets. The first is a manufacturing workforce that is still bouncing back from economic downturn. The second is unlocking the entrepreneurs who are looking to start innovative companies â€" if they can get costs down far enough to compete.
The United States recognized this problem, and issued $30 million in grants through the Advanced Research Projects Agency for Energy (ARPA-E) and the Department of Energy (DOE) to develop alternatives to rare earth materials. Not all these projects will succeed, but the ones which do will go a long way toward crafting the necessary inputs for a clean energy economy.
Motors and Wires
There are a host of projects out there that contribute to a more secure supply chain. But let’s hone in on two organizations that have the potential to make waves in the clean energy economy. They are true UpStarts.
The first company is Baldor Electric, an ARPA-E grant recipient, which is is working to create a rare-earth-free traction motor. Currently, many electric vehicle designs operate with batteries that heavily rely on imported rare earth materials. Baldors motor would be lighter, smaller, and rare-earth free. Additionally, it would have the capacity to provide more torque at lower cost while using an improved cooling system.
Why does this matter? Development of advanced manufacturing techniques in U.S. factories ensures that if this new technology gets traction, the supply chains stay in America. Second, as logically follows, this will decrease U.S. dependence on importing goods and moderate price volatility.
Magnets are also currently used in wind turbines. Specifically, magnets have been used in turbines under 6 MW. But once turbines are designed with a higher capacity, the cost-effectiveness of magnets drop dramatically. Plus, as explained above, the rare-earth materials used in these magnets are subject to price volatility and are largely imported.
Enter superconductors. Superconductivity is when a material has zero electrical resistance at certain temperatures. Coiled superconductor wire can replace rare earth magnets in wind turbines â€" potentially offsetting both the dependence on foreign products and the associated costs of using these metals (particularly if superconductor wires costs can get low enough, which is certainly possible).
One company making headway in this area is Advanced Magnet Lab in Tampa Bay, Florida (another DOE grant recipient). AML’s generators, using superconducting materials, will be up to 75 percent lighter, 50 percent smaller and more efficient than existing systems. For wind turbine manufacturers, this presents a (much-needed) serious technological alternative to the current reliance on rare earth metals, while also investing in American-made products that increase the domestic content of turbines. AML’s double helix design, which differs from the classic single helix “solenoid†or “racetrack†style coils, boosts the efficiency of the coil by reducing resistance between 30-70 percent.
We must find new ways to create secure domestic supply-chains for innovative clean energy companies â€" helping to encourage innovation, drive down costs of product, and create American jobs. So here’s to you, supply-chain UpStarts, for helping lay the groundwork for the clean energy economy.
Image: Supply Chain via Shutterstock
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Adam James
Adam James is a Special Assistant for Energy and Environmental Policy at American Progress, whose portfolio is the transition to a clean energy economy. He works on a range of issues, including increasing the market share of renewables, deploying a smart grid, scaling up energy efficiency, and international climate negotiations. He is also interested in the ethical dimension of environmental ...
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