 When we are talking about advanced manufacturing, new materials are going to be a key element for making advanced manufacturing moving forward. So, please welcome Mark Johnson. Well, thank you and thank you all for joining us here today and thank you for inviting me out here. One of the things we wanna talk about today was intelligence and smartness into manufacturing and how that comes together. And Silicon Valley is the right place to wind up having that conversation because as we know, we're in the middle of about a 50 year revolution that's gone on with starting with Moore's Law in 1965 on the information technology revolution. And so, bringing together this information technology revolution with the urgent needs of climate change around manufacturing really is one of the things we can wind up talking about here today. So, I thought I'd start taking a little look back and one thing you forgot to mention was actually my better half who's actually a historian so I was talking to her about it and she said, well you should really talk about the origin of the revolution that you're working on. So, we go back to 1775. There were two revolutions that were going on, started. You started in Lexington Concord, the American Revolution, I think everyone's familiar with that, we're all getting going. Another key revolution was 1775 is when James Watt put together and started his first company. And that really is the origin of the industrial revolution. So, and his innovation actually wasn't the steam engine, it was the control systems for the steam engine. It was the intelligence behind the steam engine. Newcombe invented the steam engine, he figured out how you wind up speed it up and get productivity out of it. It's a huge innovation. It was a transformational innovation that really started manufacturing revolution across this world. So, just a few years after that, at the end of the U.S. Revolution, one of creating a new constitution, we're standing that up, we have this new thing called Congress and they're trying to get their hands around the whole industrial revolution, what they should think about with that. So, they, as Congress did then and still does, is they commissioned a report. So, they sent that report down to their Treasury Department. And they said, what do you think about manufacturing? And the Treasury Secretary came, spent the summer and came back with a report on that and said, encouragement of manufacturing is in the interest of all parts of the union. It's not only the wealth, but the independence and security of a country appear to be materially connected to the prosperity of manufacturing. Manufacturing not only occasions positive augmentation of the produce and revenue of a society, but that they add to it a degree of energy and effect which is not easily conceived. And that was Alexander Hamilton in 1791 talking about manufacturing. He did point out in there, and this is relevant back to Silicon Valley here, that the limits, especially for new manufacturers, come down to three challenges they wind up having. Phrases it well, it says scarcity of hands, dearness of labor and want of capital. So, I believe anyone that's been doing a startup in Silicon Valley certainly appreciates the question of want of capital. There's got the dearness of labor is how you put together the people and scarcity of hands really is what's that knowledge? What's that key innovation? And that's been the challenges, and I should say that Hamilton went on throughout this entire report and said it's in the best interest of the United States as a government to take this thing seriously about manufacturing and work together with manufacturers in building these, using modern terms, public-private partnerships around manufacturing. So what we're working on right now really is an extension of that 225-year history that we've been doing together. So with that as a little bit of a background, plus I need to start stepping up my game in terms of the wording on our reports to Congress is what I'm realizing, but really looking at what are we doing with manufacturing and really looking at clean energy and manufacturing? And we talk about the same issues. That is to say it's important for our national security, it's important for our economy, and it's important for our environment. We can bring all those three things together. And if we're looking at manufacturing in this, we've really got two things we look at. One is how do we deal with the energy efficiency and driving energy productivity in the things that we manufacture across the economy? Whether it's steel or parts of our houses or our roadways and you name it. The other key element is how do we wind up driving the manufacturing and particularly the competitive manufacturing of those new clean energy products? Because this is emerging as potential trillion-dollar market opportunities that are emerging out there. And we really want to use this as a way we can have the US competitive advantage on this. So one of the things we come up with is this idea of advanced manufacturing. And we were just talking about this a few minutes ago, people wanting to get into advanced manufacturing. And you find out very quickly, say, well, what do you mean by it? Well, one of the things you look at as competitive advantages in manufacturing is things like low-cost labor, right? You can look at things like availability of material resources, the resources and the environment around you. Or you can look at this third thing, this innovation. Know-how. And that's really the US way. That's how we move forward as we innovate. And that's the area of advanced manufacturing. What we want to drive is we want to have the most productive workforce. Where we use information technology, we use advanced robotics, we use all these tools that we wind up having to wind up driving manufacturing as effectively as possible. And to drive the energy that we use in that as well out as much as possible. We use all those material resources as effectively as possible because we're using technology as that competitive advantage. And that's really where the partnership of the second revolution that we've been going on here. Which is, we're at a point now where manufacturing, historically I've thought about it, and this is when I was in college and grad school, we talk about manufacturing in terms of materials and processes, the technologies that are around it. Just as important now we're talking about materials, processes, and information technology. And having it, not just to have it be your accounting system and your computer sitting out at the factory, but how we want really bringing that information technology and the most advanced tools in information technology down to the work floor, down to the factory floor, so that you can wind up having that as the most effective idea out there. I was shocked by this. This is just a side note, not shocked, but it's amazing to think that 20 years ago, we had entire national programs working towards terraflop computers. Right now you can buy a kit for $500 and build a terraflop computer with a GPU board and put it in your hand. Think about where are all the places you can wind up then using that data, using that computational power, putting it into the manufacturing floor so that the people that are doing that manufacturing can do more and more and more with the resources that they wind up having. It drives that productivity and drives that productivity growth. So at the 50,000 foot level or the national level, one of the things we wind up doing over this past two years was we call our quadrennial technology review across the Department of Energy. This is really driven by the Secretary of Energy having a priority on this, saying where are those areas that over the next four years and start a four year planning process? And we actually, Secretary Chu did this in 2011, we've now updated it in 2015 and said, let's really figure out where are those technological advantages? And one key section of that is on advanced manufacturing, advanced manufacturing for clean energy. And we identified 14 key areas where we can wind up really focusing our energy on it. All this, by the way, is online and it's, if you have insomnia, it stacks up with all the technical assessments, Bill. I know you were writing a bunch of them, so. I still haven't woken up. Yeah. You know, there's a lot of material there. I also found out, talking to someone recently, I said, wow, it's really useful to have the Department of Energy do that because it's pulling together a framework where we can wind up working on these things and working together. I think in the manufacturing area of kind of two broad areas that we wind up working together on this. One is technologies that are applicable to that area of efficiency technologies. So how do we manufacture the things we do more effectively and more efficiently? And in the other areas, platform technologies that enable the manufacturing of new products, right? And particularly new energy products that are out there. Now there's some crossover between these two things, but those are the two broad areas. And we can further categorize them. You see that there's these color coding around the outside of it. And I'm sorry, this is supposed to be green down here, not gray, I believe, but the color coding of where the primary impact and the secondary impact is, whether it's the development of materials, whether it's development of processes, or it's that energy and resource management, which is the information technology, it's the data. I will say a side effect of actually, where I said before about information technology coming into the partnership on it. Any time, if you're a manufacturer, you can translate something from being a materials and process technology alone to being an information technology problem. You suddenly change the pace of innovation for your firm, for your industry, from that of whatever you were on to that of Moore's Law. That's a transformational change that can wind up happening in those companies. So we can look at some of the things we work on. So things like process heating and process intensification that can wind up making smaller footprint, more effective chemical reactions, those sort of things. Better waste heat recovery, better combined heat power, how we integrate with the grid more effectively, how we use materials more effectively. Another statistic. We use about 24 quads of energy per year, quadrillion BTUs of energy per year in the manufacturing sector. Of that, about half of that, little more than half of that, is an energy intensive industry that's four or five industry sub-sectors that consume large, large amounts of energy. Within that, the chemicals industry, the primary metals industry, and the fibers industry, pulp and paper and things like that, food processing. 50% of the material that's manufactured in those, that go into those plants, wind up in landfills within 12 months of their manufacturing. That corresponds, roughly, just a rough estimate, to about four quadrillion BTUs or 4% to 5% of the national energy budget is being put into landfills every year just about how we manage and use the materials that go through our factories. This scenario we can absolutely do better in. How do we do better in that is a big challenge. So, within the Advanced Manufacturing Office, how do we address these problems? We really have three modes of work. The bottom two are technology development. What you'd think about is research and development, either in terms of individual projects that you're working on where you've identified a science and technology challenge that's motivated by trying to manufacture something, and you're trying to bring technology to bear to address that, or standing up these consortia. So, you bring together in a supply chain environment a number of different companies that are working on a common challenge so they can work together. I think familiar out here in Silicon Valley is Semitech. That's been a foundation of the semiconductor industry for 25 years at this point, so it's a good model. A third area is what we call the dissemination of knowledge, and this is where something's been invented. We need some way of getting the tools and knowledge of that more disseminated broadly. It's up the industry to decide to adopt it, but just making that awareness, making that transparency, leveling that playing field is a key role where we can work in that area. So, starting with our technology assistance programs, we really have four hallmark efforts we do. Our better plants program is getting company buy-in to energy efficiency. So, if you look at, in a typical company, the energy manager, especially a company where they've got multiple plants, is fighting with everybody else for budget, right? And they're going in and they're walking in with projects that they say this will pay back in two to three years with a assured rate of return. 35% IRR. Most energy managers have a very challenging problem of convincing their CFO that they should make that investment. Why is that? Because people tend to take free cash flow in companies and put it into top-line growth more than bottom-line growth. These sort of things, though, give you sustained growth. So, how we address that? We get corporations to commit to improving their energy savings and reporting their energy targets over a 10-year period. Typically, a 25% improvement in energy productivity over a 10-year time frame. It's about twice what status quo would do and reporting progress toward that. When you do that as you wind up seeing an effect, suddenly you've got boardroom and senior executive level buy-in to energy efficiency and reporting on that energy efficiency. That suddenly gives a lever to the energy manager at a distributed plant somewhere. When they're going in and they're saying this is where we get capital spend plans. It's an incredible impact that winds up happening as a result of that. We then have one of the tools you can use so we can wind up providing specialized assessments for things like combined heat and power. We have resource centers around the country in our combined heat and power technical assistance program. A key element is our support of this ISO 5001 standard. So ISO is International Standards Organization, very successful in things like quality, the ISO 9000 standard. In 2011, came together and said, we need to develop a standard about how you put a framework together for energy management. If you think about it, what this does is that's the protocol in which the information technology overlay can be applied. So Germany has about 3,000 plants in the ISO 5001 plan. We have about 500 in the US. So what we're doing is trying to develop tools and a particularly measurement and verification protocols through our superior energy performance program to wind up getting greater and greater adoption. So one thing that wound up happening in the clean energy ministerial that was announced earlier this week is internationally the members of the SEM have committed to saying we wanna get by 2020, 50,001 companies worldwide adopting ISO 5001. So we now have an international target for how we get that adoption, how we get the buy-in. Similar to in the early 90s with the quality movement, you wanna get ISO 9000 out there. So this is gonna be a big part of our priorities going forward. And then working with small businesses, we have our industrial assessment centers. So this is when you have the small, really small manufacturers, how do they wind up understanding and working to getting that know-how of how they improve energy efficiency? We run R&D projects and a couple of things that are of highlights on this. We've worked with Lawrence Livermore National Labs, Lawrence Berkeley and Oak Ridge over the past year and started a program called High Performance Computing for Manufacturing. How do we wind up unleashing that computational power that resides within the Department of Energy on these very challenging, technical challenges around manufacturing? Things like how do you model and simulate water processes in the poorest membrane for de-wetting or for food processing? Sounds prosaic, sounds mundane as a problem. Huge energy budgets. And then when you wind up being the computational science guys in there, they're like, I have to couple the chemistry, the molecular dynamics chemistry of all the molecules that are in food and the complexity of the molecules in food over a plant the size of a football field. That suddenly becomes a really complex mathematical problem. And I'll point out that the Department of Energy has five of the 12 most powerful computers on the planet. Typically, we're moving towards always having that capability of the most advanced computational power and we're moving towards that goal of getting to exoscale computation. So how do we wind up coupling that together with things like visualization tools? Another area is developing in these consortia through our national lab systems. How do we open up the national labs to do better engagement with industry on manufacturing? We have things like our manufacturing demonstration facility. This is down at Oak Ridge National Labs. They focus on advanced three-dimensional printing. And one of the highlights, and this was actually up in San Francisco this past week, was we actually wound up 3D printing an entire electric vehicle of the iconic 1965 Cobra. I will say, I don't fit in that car. One of my colleagues, well, I don't fit in the original Cobra either, let's just say that. But one of my colleagues has, and on a closed course, not in an open road, it's been at least up to about 85 miles an hour. So it's got a full electric vehicle drive on it. So it's quite an accomplishment showing what's possible out there. We talked about the consortium. This has been a highlight of the current administration to say, how do we really focus on bringing technology back to manufacturing in the US? I really say this is something that, I was in a startup company 15 years ago, we were starting. And one of the first things in our series A pitch that our investors wanted to know was, what's your outsourcing strategy? They didn't even ask if we should. They're just like, what's your outsourcing strategy? A key challenge we want to forget that we're relearning now is when you wind up decoupling that first manufacturing process from your research and development. You can do that for one business cycle, but after you've done it for one business cycle, you've disconnected manufacturing from research and the research doesn't know which way to go. And you really are not supporting your manufacturing anymore. And that becomes a real challenge because 75% of all patents are actually related to manufacturing. So you really, it's essential, we have this tremendous critical asset in the US of our university and our national lab system. We need to have that very first manufacturing closely coupled together so we don't lose that possibility and understanding why some of these advances really matter. And so there's a recognition of that, how we wind up bringing these advanced manufacturing, these early stage technology manufacturing ideas where technology does provide a competitive advantage back to the US. So we've done this as a partnership with the Department of Defense and the Department of Commerce and Department of Energy in standing up these national network for manufacturing innovation. These are individual consortia where each one is five to seven years of funding from the federal government matched at least 50% from the private sector or states and private sector to work on specific technical challenges. And so the goal is to have at least 15 of these by the end of the administration. We want a pathway to do that. The Department of Energy has a goal of leading five of those. So our partners in the Department of Defense have the Digital Manufacturing Institute in Goose Island in Chicago is where its leadership point is, the Lightweight Metals Institutes in Detroit, the Additive Manufacturing Institutes in Ohio, the Integrated Photonics Institutes at Upstate New York. We also have the Advanced Fibers and Textiles Institute that's led out of MIT and then Next Flex, Flexible Electronics Institute just down the road here in San Jose is where that's being led. For the Department of Energy, we have Power America, which is our Advanced Power Electronics Institute, led out of North Carolina. We have the Advanced Composites Institute led out of Tennessee. And we have three other institutes that are in some degree of solicitation right now. The Smart Manufacturing Institute is really the information technology, real-time process control, modeling and simulation. So that's right near the end of its, well, the proposals came in in January for those. Process Intentsification, that's a live solicitation right now with the concept papers do in the middle of this month. So this is how you went up getting really small footprint, higher efficiency chemical processes, new catalysts, all those sort of good things. And then Renate, how we deal with this four quads of material that we wind up disposing. The problem isn't that we don't know the materials there and if it was gold, you can go out and extract the gold out of it. It's high value-add. The challenge is those energy intensities, typically you need to have cost parity and energy parity for getting that material out and reusing it again. So what are the technical challenges around that? So those are the institutes we're working on. Couple of them I'm gonna highlight real quick, Power Electronics. So when Professor Terman here at Stanford convinced William Shockley to move out here and come from Bell Labs, it was really the start of Silicon Valley. I think everyone recognizes that. Another key moment that happened was this guy named Carver Mead that set something up called Moses, which was a factory, a chip factory for silicon processes in the early 80s. Where before that, if you were a company that was in the semiconductor industry and they were all right here down the road, you had to have people that were both the material scientists that knew how to process silicon and the chip designers that knew how to do the design electronics. Moses really started this process of decoupling those two. So the chip designers could send their designs in and have chips made and delivered. As a result of that you end up having a great expansion of hardware manufacturers. Companies like Broadcom and Cisco and all the device manufacturers would not exist without that capability. NVIDIA, right? So folks like that, they wind up being able to do the design and focus on what they're doing. So a whole new category of semiconductor materials coming along right now. Beyond silicon. So you've got silicon carbide and gallium nitride. What these do is allow you to operate at much higher voltages and much higher power. As a result of that you can actually not just share information about how things, how power is transmitted but you can actually control the power itself. So in the Power America Institute one of the key things we've done is using a factory that's actually down in Texas that was a silicon factory. They've refitted it to establish the very first Moses-like process called XFAB for silicon carbide. They're gonna wind up having their first wafers coming out this summer as a result of that where people can wind up sending in and having silicon carbide devices made. What we hope is that one's really expanding a promotion of the power electronics world. That has impact on everything from the bricks you're carrying around to power your computers to the power grid itself. Huge, huge impacts that could wind up happening on that. Our Smart Manufacturing Institute, as I said the proposals were due on this in January. Please keep up to date on this but if you look at this whole idea of information technology in the factory you really have kind of two big dimensions you can look at based on time. You can look at the flow of data over the life cycle of a product all the way from where you wind up getting the raw materials through the end of life and controlling all of that data and all that information. That's important and actually that's what the Digital Manufacturing Institute is working on. Really looking for us is saying what are all those tools you need to really get that real time control? And real time being, are you talking five minutes ahead, 15 minutes ahead, one minute ahead, two seconds ahead, real time, you get into what does it mean to be real time? It's a different set of information technology about how do we build that hardware, the sensors, the controls, the platforms, innovation around all of that is the area we're looking at. And the goals for that we really think we can wind up proving the productivity, the energy productivity, GDP per BTU by up to 50% just by how you're using energy in those things. It's a big, big opportunity for how factories will work in the future. Now my last slide I'm gonna talk about and this is a, because I'm in Silicon Valley I'm gonna take the opportunity to this. Longer, who's one of my colleagues here at actually one of Bill's colleagues at Berkeley is running this program. Though we were looking at a problem statement on this and really how we drive innovation because if we're gonna use innovation for advanced technology and advanced manufacturing we need to be investing in innovators. Here in Silicon Valley we have four national laboratories. Four national laboratories run by the Department of Energy and we're in the middle of an energy challenge where we're trying to bring technology forward. How do we make those ecosystems the best place where startups can have an increased opportunity? Can you reduce their technical risk by opening up that access for startups regardless of where the technology innovation comes from? Building those partnership for those innovators so they have an opportunity to wind up moving forward. Because I think there's a common discussion you go up to Sand Hill Road and they'll say, clean tech takes too long. Well, can you wind up really looking at reducing the risk, especially the technical risk and the operational risk by building these partnerships in a way where there's some assurity about things like IP and all those sort of things by working with these ecosystems around it and really accelerating it. So Cyclotron Road, it's the compliment to Sand Hill Road. So how you wind up, a joke, yeah. But that's really the experiment we're looking at is how you wind up spinning these things in. Started a program this past year working that area. A lot will be working about that a little bit later today. So with that, hope I gave you a little bit of an overview on what the office is looking at, what we're looking at. So what success look like is we're not only inventing products here, but we're actually competitively making them clean, making them efficiently, and making them as the most competitive way in the world. So with that, thank you very much. Thank you, Dr. Johnson. We still have time for a couple of questions. Oh, I saw the red badge go up over here, so I thought it was over time. Yeah, in the back. Set up for questions. Yes, please. The last program you just mentioned, that one. Yeah. Does that have any relation to the Small Business Voucher program that you use? Yeah, so there's similar program. What Small Business Voucher really is, is a creative opportunity for small businesses. So lowering the barrier, one of the things we've found is actually having a standard creative format where people say, we've negotiated good terms, gotten it through all our legal. Everyone's welcome to always negotiate their own customized form, but it's a pretty good deal. If you just say, hey, I'll just sign here. And so working through this administrative goal is what the Small Business Voucher is for. And that's for any small business that's out there at any stage of development, across the country, and getting access into the national labs. What this program's looking at is really for, you could think about this as an entrepreneurial postdoc on this. I'll give you an example. You had two students graduating from a pretty premier university. They were interested in an arcane field of thermionics. They'd done a bunch of development in that area. I think they're actually sitting back there. And when they were looking at, how would they turn this into a business? They hadn't even had a business yet. They were PhDs. They were finishing their thesis. That was their goal at that point in their life. How do they go home to their grandmother and say, I just finished four years getting my PhD done? And instead of taking that job at whatever company it is, I'm gonna go and think I'm gonna be able to raise money within a couple of years and I'm gonna sleep on couches till then, right? But that's hard to convince people to do. But instead, if you went up saying, within the national lab system, we have essentially a postdoc mechanism where you can say, the IP from your university, that's your university. Everything developed at the national lab, yeah, it's jointly owned, just like a small business voucher. But what we're gonna do is we're gonna wind up providing entrepreneurial mentoring, training, so that you can, making all those mistakes every would-be entrepreneur does is they're trying to put their business together. But at the same time, having that framework where you've got mentors, role models, all those sort of things around you so that you have a much higher batting average once you come out of it. Giving you, it's not indefinite amount of time, up to two years, but embedding them and building partnerships with the national lab system. What we found was interesting on that was, so this one project came in, they wound up finding a couple of researchers that were in the national lab that had always thought they were interested in this topic, they just didn't know who to do research with in the area. So it's actually creating new research opportunities back in the national lab system as well. And wind up getting support then, putting in proposals, they wind up getting funding. So it's just, it's raising batting average. If we can raise batting average, we can do a lot with this. So that's kind of the goal of that. If I can, in some reason, it's more for solidifying the proof of concept, not necessarily commercialization. So I'd even take it a step back from that. It's developing people. It's developing people that are scientists. And so they go from being scientists to having that skill set to be, would be innovative inventor entrepreneurs. Thank you. One more question. Yes. You have seen manufacturing fewer and fewer things than we consider. So if you look at what in the future the US can manufacture, what's the biggest limit to effectively manufacturing in a world competitive market? What do you see as the kind of things in the manufacturing of the future that will lead to growth and also increased employment? So let's start with this. The US is the second-largest manufacturing in the world, has been. Our GDP of our manufacturing sector has been growing and continues to grow over the past 20 years. Our productivity is going up. So if you look at things like the reshoring studies that BCG has done, on a productivity-adjusted basis, the US is one of the best places to manufacture in the world, bar none. You end up seeing companies that had moved things offshore moving back in the US for two reasons. And these are the contract manufacturers that are moving back. They need to be closer to their manufacturers and they also need to be closer to their customers. So those are areas where speed urgency matters that you end up getting greater and greater connection. I'm gonna take one industry that's an example of this. The metal casting industry. Arcane, old industry, you've been doing sand casting since BC time, right? If you look at the innovations that are going on in that area, right now the tooling time for that is 12 to 18 weeks, historically. And that's a key limiting factor. Bringing things like 3D printing in, suddenly you can turn around the tooling time to three days. So now, if you're a designer sitting here at D-Lab and you need someone to make you an iron cast part or a copper cast part, you need to, you can't afford the time to ship it halfway across the world to get your part back. Where you have those fast innovation design cycles. Those are absolutely the place to wind up feeling. But, you know, I actually would start by arguing with the underlying hypothesis that the US can't manufacture. We can manufacture and we continue to manufacture. And it's because we're driving productivity growth that we manufacture. We manufacture the most advanced technology in the world. Always, always, always. Whenever we wind up running into any sort of economic challenge what we do is we innovate. We change the game with innovation. We bring technology to bear and we wind up moving forward with the latest and greatest faster than anyone else can. And that's been our pathway. That's exactly how we've worked and we'll continue to work in that way. Thank you, once again. Thank you very much for this national perspective. Now, let's move closer to home, so to speak. So let's have Bill Morrow who is a research scientist at Lawrence Berkeley National Laboratories to bring a California perspective, means how in that national plan California can fit to do something. Of course, needless to say, the same like Dr. Johnson, Bill is very well prepared to tell us something about advanced manufacturing because his interest was always to combine different environmental goals with social demands for energy services, for sustainable economic development. So that's what his area is. And as we heard minutes ago, advanced manufacturing is also a part of local development, regional development. So Bill is capable to answer your questions if we will have time. So I'm going to shorten that introduction of Bill and would like to ask him to take a podium and make a presentation. Sure, please. Let's see if I can figure out the technology. Thank you for the introduction, Mark. And thank you, Mark, for the national perspective and really a good picture of how the United States Department of Energy and specifically the Advanced Manufacturing Office is approaching some of the national demands and trends in the United States and visions of where we want to go. Murrick had talked to me about giving the California perspective, which I hope to hit on mostly. And I'll do my best to answer questions. I may not be able to say specifically what the answers are, but just a general framework and visions from what I think is a California perspective is sort of my topic area and where I hope to go. So as you guys have heard this morning and throughout this conference, and I'm sure all of you are very much aware of the California context, when it comes to energy and environmental goals, we're a very ambitious state, taking a leadership role in the United States by having bold goals and metrics for our future. And it looks like we are largely on target to hit a lot of these. When they were proposed, we tended to think that's impossible, but now we are on target to hit some of the earlier ones. 33% renewable portfolio standards by 2020 is a considerable amount of electricity generated from intermittent resources. Taking that to 50% by 2030 is a bold jump. I think there's been a professor here that has proposed global renewable that we could do that now. I think we would need some considerable infrastructure changes, but maybe that will end up being the target that we will go for. California also would like to reduce carbon emissions associated with the transportation sector, like we heard this morning, and then we have our greenhouse gas emissions that we're just talked about in the introductory. Hitting these targets requires very ambitious steps within the state. So a number of years ago, I was at Energy and Environmental Economics, it was mentioned earlier, the E3 produces the model that helps legislators look at the forward projection of how to meet the greenhouse gas emission reduction targets. I don't have their latest pathways model, but this was the model that I helped them develop when I was there, and so I pulled this slide. I think that the graphs have changed, but the point is still the same. Meaning that hitting the greenhouse gas reduction targets means that we have to max out what we think is our energy efficiency potential. And then we have to go beyond that. We have to decarbonize the transportation sector and the most popular vision of doing that is to electrify, but then we need to decarbonize the electricity. So there's significant steps that have to be taken for California to hit its greenhouse gas emission reduction goals, and it's very important, like the CEC commissioner was saying this morning, that California is a leadership. Our ability to show leadership has ramifications across the United States and across the globe. So these are important goals for us to focus on. And as a snapshot, I just pulled together kind of the energy budgets in 2014 in California. Industry is 16 billion just in energy expenditures across all energy resources. Six billion of that is electricity. The entire state is 138 billion in fuels, 39 billion in electricity. That's a good big number. That's sort of the market area that we're playing around in. Talking about electrifying transportation, this top gray big wedge could make our electricity demand double by the time we hit 2050. It also means that we're taking that 138 billion number and shifting it into the 39 billion bracket area. So there is various companies and institutions that will have to change, that will have to morph, that will have to be different than they are now. So as California provides leadership and its organizations and businesses provide leadership, I tend to ask the question of what will happen as we do this large scale infrastructure system makeover? It seems that there are opportunities for new manufacturing and business models. And we certainly are in the Silicon Valley where paradigms and new business models have completely changed all of modern society, computers. We're also home to software developers. We're home to social engineers, the Facebooks. We create new ways of optimizing systems through Google. We make battery-operated automobiles. I'd like to be able to afford one. I think a lot of people should be able to afford one. And so one of the things that we can start thinking about is using smart technologies to help us push down costs. How do we do that? Well, we can start by looking at supply chain efficiencies, manufacturing optimizations, and as Mark was saying, waste management. Throwing away a tremendous amount of material into waste landfills every year. It's just kind of embarrassing. When I think about my grandchild looking back at my generation and I can just imagine him being like, what were you doing? So I'm standing here on a podium talking about it. But I want to ask, what is the scale of opportunities? On the smart manufacturing frontier, this is a slide that some of my colleagues at Argonne National Lab have put together and it poses the question, what does smart technologies and smart manufacturing mean? We're kind of scratching our head trying to understand what the definition is and what the taxonomy is and what it covers. Does it imply that we are dumb manufacturers now? I don't think it does. But it is a new echelon or a new frontier that we are merging. And so we tend to think of it as having vertical integration opportunities and horizontal integration opportunities. Horizontal meaning that you inside your supply chain and customer service are communicating more tightly and more closely. Vertical meaning that your supply chains overall, the overall ecosystem is tightly communicating, building things in real time, extracting materials, putting them into intermediated products and then eventually into final products that go to shelves. Integrating all of those allows us to have, well, system optimizations and waste management reductions are waste management strategies. And then I think as Mark was talking about, as we go in the three-dimensional axis, the temporal integration, thinking of innovations that are made possible through communication, essentially. Real-time systems communicating with each other. I can imagine that if once you are able to build your own cell phone cover, on your computer and send it to your local printing shop that prints your cell phone cover and then you go pick it up in an hour, there's probably gonna be some neat things that come out of that. Smart industry case studies. The colleagues at Argonne National Lab and Northwestern have also been grappling with putting measurements on where our how smart technologies and growth in communication can add value back to manufacturers. And in particular, we chose a case study of looking at battery manufacturing. And I apologize if the text is too small to read on the bottom. But essentially, what we are finding, probably all the text is, that just monitoring your processes when you're manufacturing batteries can increase your quality control of those batteries. And you can save your failure rates. Roughly, this is 10% energy reduction, which can be translated into a cost metric, can be reduced by just monitoring your processes better to have quality control further in the origin of your processes rather than later once things are coming out of your machinery and then you're testing them and finding out that they don't work and scrapping them. You know, overall, reduce overall design and aging cycles are relatively, in our estimation are relatively small compared to the order of magnitude of having better process yields. You know, Mark talked about process intensification as being one of the focal areas. And there are certainly tremendous amounts of improvements that we could expect through high computational speeds, but also smart, you know, metallurgic folks, chemists being together with the mechanical engineers, the process engineers, designing systems and embedding communication in the machinery all along the steps. Machinery that used to operate by itself and stand alone have an on-off button. Maybe the next generation can have variable components to it, can be controlled, can better match the other processes around it. I hope so. There's an, as Mark Johnson talked about, wide band gap materials that can enable better control of power electronics can also handle, I don't think that you mentioned, high temperature applications. That is one of the advantages of using them. And so areas where you used to not be able to control necessarily inside a furnace, let's say high temperature, you perhaps could have some controls with wide band gap materials and have decision making taking place inside a furnace. I'm not promising that I can produce one of those this afternoon, but let's think about it. We maybe can as a society. There's tremendous amounts of cost reductions, energy savings and CO2 emission reductions that are sitting in front of us. Great institutions like Stanford here and Berkeley and the other institutions, academic institutions around the country are producing great science people. I think that we can make steps in producing the futures that Mark talked about and hitting the targets and goals of greenhouse gas emission reductions that our legislators are putting in place. There's another component that I think Mark, Merrick would appreciate, is that when we do have greater sensors, greater communication, smarter technologies, it opens up this area where potentially manufacturing and industrial facilities can participate more in grid stability. Essentially what we were saying earlier of large renewable penetrations, the intermittency and variability of those resources need to be balanced. And one of the good ways of balancing those supply intermittencies and variabilities is by having demand variability that can match the variability of supply. And so conceptually grid integration is a tremendous aspiration, goal, body of research, technical challenge, and having industry tap into that could be a great contribution that can be enabled by smart manufacturing. Now, you know, there's a lot of questions. What is the value proposition to manufacturers? If I'm making, let's say, a food product, I want to make sure that that product doesn't spoil before it gets to the shelves. Why would I wanna turn off my machine that makes it safe so that the grid saves a little bit of electricity? You know, there's no value to me in doing that other than, you know, a little bit of money on electricity. So communicating that value proposition presents to me an opportunity for business folks, the smart people that create new companies to help identify this value proposition, develop the protocols to measure it, monitor it, communicate it to facility managers, get it from facility managers into decision makers within organizations, buy the equipment, build the equipment, install it, operate it. We can make a lot of headways, I believe, with new companies, new visions, new directions. So I kind of wanted to get a sense of what we're talking about on just magnitude. Who will develop, patent and manufacture this stuff? And sort of Mark was alluding to the need for those design or the manufacturing to come back into the United States to be closer to customers, but also be close to the innovation engine, the thinking. So what is the budget? What sort of pies are we looking at? And 6 billion in California industrial electricity that we're saying, okay, let's have companies that help us optimize that 6 billion. Great, there's another 10 billion that gets spent in industry on all the other energy resources. That extra 10 billion is what we are thinking we need to decarbonize. We need to turn it into electricity. So that number will start shifting into the 6 billion. Okay, now we're talking about a growing market size for companies to provide services for, to make machinery for. If you look at all of California electricity, now we're talking about 39 billion size market. The spillover of getting it right in industry, spilling over into residential, commercial. It's a much larger market. California total, now we're at 138 billion dollars. This is just 2014, one year expenditures, but that 138 contains all of the petroleum and fuels that we need to stop putting their carbon into the atmosphere. So those, that bar will shift into the California electricity bar into the future. Look at US industrial, down to 67 billion, maybe about double the size of California's industry. It's still a fairly decent market, but US industrial total, 250 billion. Once again, California providing leadership to the rest of the United States, I hope, will eventually follow. This is a market for organizations and manufacturers to go for, to go after. And then you look at US electricity total and the total amount of expenditures over the US economy, 1.4 trillion dollars. If we can make the production efficiencies much better. How much of this energy can we optimize away? What is its value? How close are we to fast DR? We have day ahead markets. We get participation from the refrigeration, a couple of steel or aluminum contributors, but the fast stuff, the 15 minute increments, five minute increments. Will we be able to have the industrial sector achievements spill over into other sectors? Will we be able to get our transportation sector electrified and have cars plugged in, controlled, contributing to the electric grid stability structure? I think that we can. And the great thing is that if we do so, right here in California is the place that we invent new stuff. I think this is the place where people will create these solutions. So I believe it is kind of a challenge. I don't have the answer of which widget X or Y will be successful 20 years from now, but it's more of a call to the community in the Silicon Valley area that there's a huge market facing us and we know how to invent things. So I'm gonna leave it there and answer questions. Thank you. You go first. So do you know of any initiatives for charging stations for electric rainbows in California? Well, certainly, yeah. They're small and not well distributed. That is obviously an obstacle. But you are beginning to see, I'm beginning to see them in various places that I'm surprised by. Grocery stores, a lot of places you can pull up and charge your car while you're in a convenience store. But any state level, figure on a bigger scale. Grocery stores, Google, Facebook, everybody has that, but you're at a bigger scale. I would be surprised if there's not a program. I don't know of it specifically. But I'm pretty sure that there would be or there is a program. But obviously, it's a chicken or egg question of do the charging stations enable people to buy electric cars? Or once they bought an electric car, will they demand the charging stations and they will appear? You can kind of run the same arguments with hydrogen. Like where's our hydrogen fueling stations? We've got the fuel cell car operating, but where do you get the hydrogen? I think the electricity is way easier to do than the hydrogen. And I would imagine that we will start seeing them. If I could get a Tesla for $30,000 instead of $70,000, I would think we would see a lot more Teslas on the road. Yeah, well, yeah. Our- I was gonna add, if you look at the program, certainly you could look at, say, well, how we went up, I didn't plan the program out there. I'd say one of the real focus areas for the department of energy, particularly the vehicle technologies program is, how, as you pointed out, things like process control, very mundane topic relative to lithium-ion batteries. But if you're able to reduce the cost in half as a result of that, that's the equivalent of having a permanent subsidy for everything. You get to subsidy free. If you look at the declining cost curve on batteries, you look at how LED's what's been going on, looking at what's going on with solar technology. You may, some people say, oh, you know, price of gas and oil plummeted 50% a year, whatever it is. A 20% cost reduction per year over a decade, compound interest adds up, right? I mean, it's that, it's those sort of focuses are the other area that I think, especially LBL, is playing a key role in with things like the battery hub and CalCharge on those sort of efforts that are there to wind up really getting that as fast as possible. This gentleman, a second, okay. My question will be based on my European background. That's a very interesting, I'm a little bit particular about this manufacturing. And it's certainly, in part of your document, it is how you will prevent any more disconnection between the one who knows and the one who doesn't know. And destabilize the society. That is a big issue because you need to provide the work for the maximum people. And this speed that's happening, this creating not a problem in Europe, is you can see some elements here, in the campaign, a lot of frustration, how it is the education system will follow early forward. Yeah, so. I'm sorry, it is not because Berkeley, do you want to take it first? I'm curious to hear what I have to say. So I'm gonna take this, let's take it off the table, I'm not gonna respond at all to campaign questions. Okay, so let's start with that. I will talk about these manufacturing institutes. They have actually, from the start, a two-fold goal. Technology development and dissemination of knowledge across all the way through K through lifetime. And so developing the transferable skills and knowledge sets that you can wind up educating and putting out in things like community colleges, colleges, K-12, all those sort of areas are a key issue that I think is exactly getting at what you're saying. It's because, if you look at the US pathway, is productivity growth. It has been for the past 50 years of productivity growth. Productivity growth requires knowledge. So having that connection back to our education system, again, the challenge of if you just outsource it all, you suddenly lose the ability to wind up educating and pulling that sort of capability together. So there is a huge focus on making sure that we're not only developing those technologies, but transferring those technologies. I'm gonna ask a show of hands. How many people here have children? How many of those who have children have already bought a 3D printer for your child? When I was in high school, my family went out and they bought one of those first big, you know, it was an Apple computer, giant computer. I could not encourage you more than going out and buying a 3D printer for your kids. If you look at the evolution that's going on in areas like that, that's the lever that really brings in and just unleashes that skill set. We have time for one more question, please. Oh, oh, three of you. Oh, thank you, gentlemen. Yeah. You, please. I'm curious, what's the entire grid modernization, modernization issue it is with your commander spots in the United States? Yeah, so it's interesting. We have, GMLC obviously, is trying to pull together the grid modernization. I would say one of the things that Merrick and I are both working on is saying, how you tie the entire manufacturing sector back in better, particularly in the R&D challenges that we're doing. We certainly have interoperability challenges and all those sort of things, but often people look at it and say, once it hits the meter at a factory fence, on the other side it's like, well that's not the grid's problem anymore. We're working on the smart manufacturing side and we're saying you need to be interoperable with all the sort of smart grid protocols and all those sort of things. Without saying what the solution has to be, but it's saying it needs to have that interoperability across it. We certainly are communicating together on that to make sure we're working together. But building that capability out's a key thing. The other key element is, as you start getting to the factory fence, on the edge of that, you're talking about sort of 10 MVA, 15 MVA kind of applications, especially steel mill much higher than that. You now have the opportunity to test and develop some of the new hardware. You'd have things like smart transformers, things like that right at the factory fence where you have better frequency control on one side, but you might let it drift on the other side because your response is on the other side and you have a solid state transformer. So all those sort of hardware opportunities are there for integrating across it. I will say the thing that they're really integrated through is the whole quadrennial energy review effort that's going on right now in the spot. Okay, thank you. And I would like, please join me, thank you both. Heel and heart.