Electrification and The Next Generation of American Manufacturing
By Baskar Vairamohan
Since the Great Recession, American manufacturing has seen slow, but sustained growth. A hockey stick graph shows the steep declines after 2008 with consistent — yet restrained — growth in manufacturing in the subsequent years. Data from the U.S. Bureau of Labor Statistics show the sector is adding jobs at a faster rate than almost any other part of the economy in recent months.
What is driving these changes, especially in such a turbulent economic environment, is unclear. With pending changes to international trade norms, widely discussed but yet to be proposed government-funded infrastructure investment programs, and the recent overhaul of U.S. tax codes, there is substantial uncertainty in segments of the economy impacting manufacturing. While some of these changes, such as those to the tax code, will lead to investment in this space, others provide more questions than answers.
Regardless of opacity within the sector, there is significant opportunity to efficiently electrify the industry, positioning the American market for investment and American manufacturing for competition within a global economy. This will lead to more jobs in the short-term and a stronger sector well into the future. Similar potential exists around the world.
Over the past few years, the Electric Power Research Institute (EPRI) has collaborated with sectors across the economy to examine the forces changing the world’s energy systems and their impact to diverse industries. At the center of this research is an Integrated Energy Network—the idea that the integration of supplier and user networks will lead to more reliable, flexible, and affordable energy services. This has major implications for the manufacturing industry, here and abroad.
The findings of a recently published study by EPRI on efficient electrification present a number of clear growth opportunities for the electric power industry, which may be applied successfully to manufacturing. In the United States, electricity has grown steadily from three percent of final energy in 1950 to around 21 percent today, with modeled results showing electricity’s role as an end use energy having the potential to grow to between 32 to 47 percent by 2050. The study suggests that rapid gains in energy efficiency coupled with cleaner electric generation leads to substantially lower U.S. energy use as well as lower carbon emissions while meeting the needs of a growing economy.
While the continuous technological innovation and modernization of the electric grid needed to enable this shift in the electric energy industry will open the door to more manufacturing of the tools and products needed for these improvements, the real value of efficient electrification will be in the manufacturing industry leveraging the approaches to its core business practices.
A key example is in process heating and its current energy consumption in industrial processes. Conventional heating utilizes fossil fueled heating, salt and lead bath heating, flame-based heating or even electric resistance ovens and furnaces. Induction heating is a more efficient and cost effective heating method in which electrically-conductive materials are placed in a magnetic field generated by high-frequency alternating current flowing through an inductor. Research has shown replacing conventional heating processes with induction heating can lead to major savings. When this technology is used for treating metal for railroad bearings, one producer saw an overall cost savings per ton on the order of 25 to 30 percent, providing a return on an investment that took less than a year and half to realize and a reduction in scale loss and scrap by 75 percent each. This transition resulted in an increase in production rate and a significant decrease in product waste.
Reducing waste is one of the major advantage in additive manufacturing (AM) or the process of making any complex shape by using a digital model as the guide for adding layers of material; this process is also known as 3D printing. Distinct from traditional manufacturing methods such as machining, milling or casting which are subtractive in nature, AM builds parts one layer at a time and uses less raw materials and less energy intensive than their counterparts. For example, in one case, the bracket for an aircraft produced with AM used a third of energy used for making it using conventional method, a clear example of efficient electrification. While this technology is just emerging from its infancy, AM has the potential to transform American manufacturing, focusing the industry on high margin, low volume products.
This approach could help the entire global manufacturing industry—especially in regions where financing is more readily available—to transition from traditional methods to AM. Major investments in AM technology the short-term for the high margin products, will lower transition costs which could lead to AM being applied to high volume products for the automotive, airspace and other industries where these components could be used.
At the end of the production process, the electrification of in-factory and warehouse transportation has major savings implications for the industry. Conventional forklifts fueling costs are in the range of $64-$96 per-day while the fuel cost for an electric forklift for the same operation are approximately $21 per-day, a 33 to 78 percent savings. Maintenance costs are also reduced and waste disposal costs of oil and filters are eliminated. Electrified forklifts increase productivity due to the reduced downtime for forklift fueling, enabling employees to simply drive to the charger and plug it in at the end of a shift.
Additional benefits to the manufacturing industry include the expansion of local agriculture production to occupy currently under-utilized warehouse or plant space, shifting from current fuels to electric cooking for commercial food production and much more. However, there are significant unanswered questions related to the infrastructure investment needed to ensure the stability of the electric grid required to enable industry-wide adoption of these electrified industrial practices, as well as necessary changes to policy that will support those smart investments.
There must be cross-industry collaborations and spaces in which to explore these issues. That is why this August, EPRI will host Electrification 2018 with the express intent of bringing together thought leaders, innovators, researchers and other stakeholders to focus on the underlying factors and motivations driving emerging electric technologies.
Manufacturing has been an engine of U.S. economic growth for generations, and with strategic innovation and an embrace of electrification, this sector will continue its recent gains with the potential to fuel further American growth. Moving forward, the sector will have questions to answer related to other eventualities that will drive efficiencies, such as automation, but the future of American manufacturing will be strengthened by it embracing electrification today.
Baskar Vairamohan, P.E., C.E.M., is Senior Technical Leader, Energy Utilization at Electric Power Research Institute (EPRI). EPRI provides thought leadership, industry expertise, and collaborative value to help the electricity sector identify issues, technology gaps, and broader needs that can be addressed through effective research and development programs for the benefit of society. Visit www.epri.com for more information.