UpStarts: Can Rare Earth Replacements Spur A Supply Chain Revolution?


UpStart [uhp-stahrt] n. 1. A company or organization with innovative approaches to energy use, carbon pollution, resource consumption, and/or social equity, 2. A company or organization overcoming market barriers to build the new clean energy economy.

by Adam James

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 — including magnets, superconducting wire, batteries, and motors — 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 — 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 — 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 — 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.

Adam James is a special assistant on the energy policy team at the Center for American Progress.

7 Responses to UpStarts: Can Rare Earth Replacements Spur A Supply Chain Revolution?

  1. Paul Klinkman says:

    No one has commented so I’ll start. This sounds like an on-target research effort.

    There are two primary ways to create electricity in 2012. The dominant method is an electric dynamo powered by a revolving axle, where the axle may be turned by wind, falling water, steam from solar heat or steam from fossil fuels. Photovoltaics creates the relatively tiny remainder. So, every basic 1% advance in dynamo efficiency can lead to nearly 1% more electricity with no increase in raw force.

  2. Flakmeister says:

    I pipe in…

    The problem with RE is the mining and processing. It generates a lot of radioactive waste, primarily Thorium…

    The Chinese undercut other producers by throwing any enviromental standards out the window. “Clean” REM are expensive….

    If anyone is interested, a very interesting company is Great Western Mineral, a vertically integrated producer. They currently have 20% of the worlds market for Samarium Cobalt magnets…

  3. MorinMoss says:

    I wouldn’t call Thorium radioactive waste. While I’m not yet convinced that the MSR / LFTR reactor is but a few investment dollars around the corner, it does show potential.

    Refining the thorium now and stockpiling it, as China is already doing, is a smart move IMO.

    I’d heard that the Mountain Pass mine is being reopened – that should alleviate any short-term worries about REEs until research into alternatives picks up steam.

  4. Anne van der Bom says:

    Currently, many electric vehicle designs operate with batteries that heavily rely on imported rare earth materials.

    Rare earths are hardly used in lithium ion batteries. The author is perhaps talking about NiMH batteries that indeed contain large quantities of lanthanum. But these are not used anymore in EV’s, only in some hybrids.

    Baldors motor would be lighter, smaller, and rare-earth free.

    What do the supposed rare earth metals in the batteries have to do with the the Baldor motor? How exactly can another motor reduce the use of rare earth metals in the battery? Oh wait, it can’t.

    Tesla and Nissan are already using rare earth free synchronous AC induction motors, so what is so special about the Baldor motor?

  5. Flakmeister says:

    Molycorps Mountain Pass mine is primarily light RE, the interesting ones are the Heavy RE…

    Currently the thorium is a waste product, to call it anything else is wishful thinking.. Moreover, the thorium fuel cycle is hardly the panacea that many make it to be…

  6. Terry Floyd says:

    The radioactive isotopes {TH90, U238} are all fuels for the Liquid Fluoride Thorium Reactor
    (LFTR)and could power the remote mining sites.
    Exploiting the LFTR Fuel scenario is the most
    expedient path.

  7. Mulga Mumblebrain says:

    Product placement?