Leveraging the Innovation Ecosystem
for a Clean Energy Transformation:
The Role of Public-Private Partnerships
ICEF 2016
Tokyo, October 6, 2016
Chad Evans
Executive Vice President
U.S. Council on Competitiveness
Unique Opportunity to Transform the
Energy Landscape
Momentum for Change:
• Soaring global demand for energy
• Concern over carbon emissions & meeting energy demand
sustainably
• Rapid industrialization in emerging economies; an opportunity
to build-in clean energy & energy efficiency
• Renewable energy
more cost competitive
• Growing recognition of the energy efficiency value
• Shale gas boom
• Suite of new technologies for energy innovations
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Solar
Homes & Buildings
• Photovoltaic technology
• Appliance sensors/controls
• CSP
• Building materials
Wind
• Advanced Lighting
• Turbine technology
Manufacturing
• Distributed wind systems
• Waste-heat recovery
• Utility scale systems technology
• Combined heat & power
Water
• Smart manufacturing
• Hydrokinetic flow turbines
• Additive manufacturing
• Hydropower generators/turbines
Vehicles
Bioenergy
• Lightweight materials
• Bioenergy feedstocks
• Advanced Lubricants
• Bioenergy processing/conversion
• Alternative Fuel Vehicles
• Integrated biorefineries
Hydrogen & Fuel Cells
• Fuel cells
• Hydrogen production & storage
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Energy Innovation Ecosystem
Government
• Funds R&D, demonstration
• Government labs
• Incentives
– Tax
– Subsidies
– Renewable Energy Portfolio
Standards
– CAFÉ
• Test-bed & early adopter
• State/regional economic
development
Utilities
• Producer/customer
• Smart grid
• Energy efficiency driver
Universities
• Basic & applied R&D
• Energy workforce training
Finance Community
• Venture capital
• Loans/loan guarantees for
clean energy development,
facilities, production
Business Community
• Commercialization
• Manufacturing
• Clean energy user
• Company energy efficiency
initiatives
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Energy Innovation Challenges
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High risk/high cost of new clean energy technologies,
first-of-a-kind technology, utility scale systems
Meeting price/performance of incumbent energy sources &
producers
Valley of death
Expensive demonstrations
– Pilot scale biorefinery: $30-$50 million
– Demonstration scale biorefinery: $140 million
– Grid-connected tidal power (turbine system): $20-22 million
Inadequate innovation infrastructure
(i.e., lab facilities, equipment, expertise)
Inadequate supply chain
Complex regulatory environment
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Valley of Death
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Models of Public-Private Partnership (PPP):
Early Market
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Focus on early stage technologies not established in the market
Risky, few firms willing or able to support on their own
Industry may partner, but not lead investor
Examples:
– Rare earth mineral substitutes
– Artificial photosynthesis
Examples:
– Government cost-shared grants to industry and/or universities
– Cooperative projects between companies & national labs
– Critical Materials Institute
– Fuels from Sunlight Hub
Source: U.S. Council on Competitiveness, “Power of Partnerships, 2013.
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Models of Public-Private Partnership (PPP):
Mature Market
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Advance objectives of more mature industries
Industry-led, often consortia
Focus on pre-competitive research, cooperative R&D,
standards, advanced manufacturing technologies
Examples:
– SEMATECH (next-generation semiconductors)
– Photovoltaic Manufacturing Consortium
– Intelligent Manufacturing
Source: U.S. Council on Competitiveness, “Power of Partnerships, 2013.
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Models of Public-Private Partnership (PPP):
Test-Bed/Demonstration
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Testing & demonstration to validate cost & performance to
attract commercial financing/help establish market
Examples:
– Energy-Efficient Buildings Hub (demo
of energy efficient building technologies)
– Pilot scale biorefineries using algae or
lignocellulosic feedstock
– Smart manufacturing test bed
– Solar testing facility
Source: U.S. Council on Competitiveness, “Power of Partnerships, 2013.
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Models of Public-Private Partnership (PPP):
Innovation Network
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National/international networks of applied research &
demonstration organizations
Focused on particular technology/set of technologies at each
network node
Examples:
– Manufacturing USA (formerly National Network for
Manufacturing Innovation)
– NDEMC (high performance computing for small & mediumsized manufacturers)
– IMEC (next-generation electronics in
multiple applications)
Source: U.S. Council on Competitiveness, “Power of Partnerships, 2013.
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Manufacturing USA
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Network of institutes with companies, universities, community colleges,
government labs, industry associations, state & regional economic
developers
At least $70 million in U.S. government support, with equal or greater
private-sector match
Institutes on cleaner/more energy-efficient manufacturing:
– PowerAmerica: wide-band gap semiconductors (25 partners)
– The Institute for Advanced Composites Manufacturing
Innovation: advanced composites manufacturing (122 partners)
– America Makes: smart manufacturing (200 partners)
– Modular Chemical Process Intensification: chemical process
intensification (competition in progress)
– Reducing Embodied Energy and Decreasing Emissions
(REMADE): technologies for reuse, recycling & remanufacturing of
manmade materials (competition in progress)
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The Institution Ecosystem
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International Public-Private Partnerships
U.S.-China Clean Energy Research Center
• 100 partners (universities, research institutions, industry)
• R&D consortia: advanced coal technology, clean vehicles, building
energy efficiency, water & energy technologies, energy efficient
medium & heavy duty trucks
• $75 million each from U.S. & China
Indo-U.S. Science & Technology Forum
• Co-funded/co-governed by governments of India & United States
• Administers Indo-U.S. Joint Clean Energy R&D Center
– Provides 50% cost-shared funding up to $15M for R&D consortia
of universities, industry & national labs/research institutes from
India & the United States
– R&D consortia: solar energy, biofuels, energy efficient buildings
– Competition underway for consortia in smart grid, energy storage
& distributed energy
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International Public-Private Partnerships
U.S.-Israel Binational Industrial Research & Development
• Established by U.S. & Israeli governments
• Pairs of companies—one Israeli & one U.S.—apply for grants
to fund up to 50% of development & commercialization costs
• Grants range from $200K-$1 million
• Repayment of grant if commercial revenues generated
• BIRD Energy:
– Solar power, alternative fuels, advanced vehicle
technologies, smart grid, wind energy, energy efficiency
technology
– Company may partner with one university/research center
from U.S. & one from Israel
– Project should lead to commercialization
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Benefits of Public-Private Partnerships:
For Government
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Insight on industry need & market potential
Leverage:
– Infrastructure/capabilities it does not possess
– Commercial know-how
– Government investment
Risk sharing
Cost sharing=partner incentives to succeed
Potential for better ROI on government investment (i.e., get through
the Valley of Death)
Link government programs into business ecosystem (i.e., business
assets for product development, financing & commercialization)
May drive economic benefits: industry clusters & jobs
May meet government high-tech needs at reduced cost
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Benefits of Public-Private Partnerships:
For Companies
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Early access to new technological developments
Undertake R&D that otherwise may not occur
Reduced cost for new technology/product development
Drive public/PPP research & technology agenda/investment
Access:
– Specialized facilities such as government labs
– Specialized expertise or technical assistance
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Some Important Considerations
• Do the homework
• On-ramps & off-ramps
• Skin in the game: industry cost-sharing to ensure
commercial potential, commitment & motivation to
succeed
• Raise the floor, raise the ceiling
• Provision for proprietary projects
• Foster private sector competition
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Strong Leadership
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Clear, Compelling
Mission
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Early Funding to
Establish PPP
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IP Practices that
Attract Corporate
Participation
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Participation
across Industry
Value Chain
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Engagement by
Multiple Large
Companies
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Affordable
Membership for
Small Companies
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Regional Organizations &
Mechanisms to Engage
Entrepreneurs/Risk Capital
Community
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Talent
Development
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Universities &
Institutions with
Culture of Applied
Research
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Positive Community
Impact
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Acceptance of High
Failure Rates for New
Firms & Products
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Standards
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Council on Competitiveness
Energy Leadership Initiatives
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Energy Security, Innovation & Sustainability Initiative (ESIS)
U.S. Energy & Manufacturing Competitiveness Partnership
(EMCP)
American Energy & Manufacturing Competitiveness Partnership
(AEMC)
Accelerate Energy Productivity 2030 (AEP 2030)
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