Onshoring Clean Energy with Giulia Siccardo, DOE's Office of Manufacturing and Energy Supply Chains
Jun 18, 2024
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Giulia Siccardo discusses onshoring clean energy manufacturing and the initiatives of the US Department of Energy to strengthen America's supply chains. Topics include history of offshoring, US-China tensions, workforce development, AI in manufacturing, and investments in critical energy sectors.
Efforts to onshore clean energy supply chains in the US are focused on investing in manufacturing capacity and enhancing workforce development.
Supply chain vulnerabilities highlight the need to balance specialization with resilience to avoid over-reliance on foreign supplies.
Tension between offshore manufacturing, especially with China, necessitates building domestic production capacity for clean energy to ensure resiliency and avoid dependency.
Deep dives
U.S. Efforts on Onshoring Manufacturing of Clean Energy Supply Chains
Efforts are underway in the U.S. to onshore manufacturing of key clean energy supply chains, like EV battery metals. The shift from offshore manufacturing, which happened from the 1980s onwards, is being addressed. Initiatives by the U.S. Department of Energy's Office of Manufacturing and Energy Supply Chains (MESC) focus on investing in manufacturing capacity, enhancing workforce development, and analyzing supply chain vulnerabilities.
Challenges and Implications of Offshore Manufacturing Shift
The offshore shift in manufacturing was driven by economic theory and policies like NAFTA, relocating labor-intensive activities to lower-cost countries. However, externalities stemming from over-specialization and dependency highlighted vulnerabilities. Supply chain disruptions during events like the pandemic underscored the need to balance specialization with resilience, especially in light of unreliable trade partners.
Tension Between Offshore Manufacturing and Domestic Production
The tension between offshore manufacturing, particularly with countries like China, and domestic production is evident. China's dominance in manufacturing solar panels and critical battery metals raises concerns. Balancing clean energy deployment with building domestic production capacity aims to avoid over-reliance on foreign supplies while ensuring resiliency.
Role of Government in Promoting Manufacturing and Mitigating Externalities
The government plays a role in addressing market failures and mitigating externalities in manufacturing. Initiatives by the Department of Energy focus on creating opportunities, supporting private sector investments, and fostering a stable energy economy. Collaborations with industry aim to de-risk projects and stimulate growth in key manufacturing sectors.
Focusing on Workforce Development and Job Creation in the Clean Energy Transition
Investments in manufacturing capacity go hand in hand with developing the workforce. Programs like the Industrial Assessment Center initiative offer opportunities for training and upskilling in manufacturing efficiency. The emphasis on workforce development aims to address the evolving job landscape in the clean energy transition, ensuring job creation and sustainable growth.
Today's conversation is all about how the US is trying to onshore manufacturing of key clean energy supply chains, things like EV, battery metals, and the like.
We start out with a bit of a history lesson on why manufacturing somewhat intentionally moved offshore from the 1980s through the 20-teens and the implications of this move on the American workforce. We then talk about how and why MESC was formed and the initiatives and programs that MESC is undertaking to swing manufacturing back within America's borders.
To give you a bit of the detail before we start the conversation, MESC was established as a new office in the DOE in 2022 with the aim of strengthening and scaling America's clean energy supply chains through investments in manufacturing capacity, workforce development, and data analysis of America's supply chain vulnerabilities.
Giulia joined the DOE after many years with McKinsey, including having led McKinsey's green growth service line and having co-created Frontier, the advanced market commitment to buy over a billion dollars of carbon removal.
In this episode, we cover:
[2:55] History of offshoring manufacturing
[6:08] U.S.-China tensions in clean energy manufacturing
[9:57] Energy supply chain and workforce intersection
[15:14] AI as a blue-collar workforce generator
[17:33] Evolution of the manufacturing workforce and training
[22:08] Overview of DOE's Office of Manufacturing and Energy Supply Chains (MESC)
[29:42] MESC's non-dilutive equity efforts
[35:03] Critical minerals and materials for energy transition
[37:18] MESC's global collaboration portfolio
[42:04] MESC's 48C tax credit program
[47:05] Considerations for companies approaching MESC during an election year
[48:47] Giulia's background at Frontier
[54:04] Data analysis on U.S. supply chain vulnerabilities
[58:00] MESC's plans to publicly share data and insights
Episode recorded on May 31, 2024 (Published on June 17, 2024)
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