American Entrepreneurship 101

In my travels, I continue to find people hard at work doing something that has never been done before.  With the hope of making a profit while doing it.  Just such a situation came up recently when I met with the owner and founder of Transcon Steel.

Among the mainstays of an industrial economy is construction, housing and commercial in particular.  While these industries are incredibly competitive, there is always room for innovation.  Precisely because it is a mature, competitive industry, really ground breaking solutions are sometime hard to find.

Transcon Steel is a small startup company in Georgetown Texas that makes structural steel building systems.  The innovation comes from the fact that Transcon roll forms flat sheet metal into structural shapes that are highly optimized to reduce weight and increase strength.  The steel structural shapes are formed into large panels with compressed foam which results in structures that are super light weight and extremely high strength.

The new structural panels permit construction of buildings in a variety of applications.  So called “temporary housing” for oilfield crews in remote area can be built in hours instead of days.  Heating and cooling costs are a fraction of conventional structures.  All of which leads to increased opportunities to serve unique construction applications with better solutions.

Transcon’s big challenge will be to create the manufacturing resources needed to produce the structural panels in very large numbers.  The enabling technology of the manufacturing processes?  Mechatronics. The roll forming of sheet metal is a classic application requiring high performance drives to de-reel the strip steel rolls and servo actuators to follow the roll throughout the various forming process that take place to make the final product.

The compressed foam requires unique tooling to form large rectangular panels that can be filled with foam, compressed with hydraulic actuators and cured with heat and pressure to form the final super dense structures.  Amazingly, the cores are made from material that is similar to the conventional styrofoam cups we use for coffee, yet, when the basic material is processed correctly, it becomes strong enough to withstand blows from a sledgehammer.  When it is bonded to an already strong steel frame, you have a complete building system that has incredible structural strength and insulation value.

Transon is negotiating enough new business that it will need a new facility 4 times the size of it’s present location and will hire CAD designers and plant personnel to support it’s manufacturing needs.  If they are successful at marketing the technology in other countries, it will be more of the same.  Lots of it.

And that is how job creation is done.  Someone with an idea, willing to work hard, taking risks, finding people to come alongside and help, to deliver a solution.  Making lives better by employing people, and by delivering a product that provides shelter at a lower cost than the traditional products in the building market.

American Entrepreneurship.

The Next Industrial Revolution

Modern manufacturing is largely the result of Henry Ford’s innovation, assembly line mass production.  The goal of which was primarily to make cars available to large numbers of people due to significantly lowered costs.   No other single innovation has contributed as much to increase the quality of living conditions throughout the world.  Mass production has made more goods available to more people in more places than any other system in the history of mankind.

The electric light, for example, which was coveted 100 years ago as the great solution to night time darkness, making obsolete the candle or gas lamp.  Mass production has made the light bulb an inexpensive  commodity on the verge of extinction at about 25 cents per bulb.  The desire to reduce energy consumption is ushering in the age of the light emitting diode (LED) as the replacement technology for electric light.  Every effort is under way to reduce LED costs by any means possible so that illumination will be available that is even cheaper than incandescent lighting when the energy cost over ten years is factored into the new technology.

Even generating and delivering electricity is the result of applying the principles of mass production.  Large generating facilities are able to generate power cost effectively through economy of scale, selling the power profitably at 4.5 cents per kilowatt hour.  Wire, cable, switching systems and other infrastructure are generally costed in at an additional 2 cents per kilowatt hour to deliver the power to your door.  This is an incredible deal, trillion of dollars of resources at your disposal for pennies.

But mass production is not the answer for every aspect of modern society.  Lowering the cost of mass-produced goods implies that there is a requirement for the sufficient numbers of a product to warrant the investment in the necessary processes and tooling to accomplish the task.

Enter 3D printing technology.  Also known as “Maker bots”, this new class of tools is making fabrication a  new American pastime at incredibly low cost.  Where 3D printing equipment has recently been the domain of well-funded large corporations , selling at $10,000 to $20,000 each, 3D printer kits are available at less than $1000.  And lest you think that these are only toys for boys, the additive manufacturing paradigm has taken hold in the metals industry producing high quality parts in various steel alloys and even in titanium.

Why does it matter?  Because anything that lowers the barrier to market entry for new products creates the opportunity for people to enter a market that was previously inaccessible.  The hidden relationship is financial, it is the cost of amortizing the manufacturing resources across a given number of products that makes startup of a new product impractical.  So barriers to entry in new product development are primarily the result of amortization costs.

What happens when a new technology introduces a significant reduction in the amortization cost?  You get the opportunity to experiment with things because the cost of iterating the design is low.  New products can be test marketed and improvements made because there is no major investment in tooling that would have to be modified in order to change the design.  You don’t have to get it right the first time.

And that means that anything is possible.

Innovation in Motors for Mechatronics

Innovation is the watchword of mechatronics.  The pressure for solutions in alternative energy continue to push the boundaries of design in electromechanical systems.

In the wind energy arena the biggest change has been the shift to direct drive permanent magnet generators.  By eliminating the gear “increaser” to convert the low RPM of the propeller system to a high RPM for a standard high power generator.  This is crucial step in bringing the cost of wind power down. Current systems are weighing in at 100 tons and have to be suspended above water or land 165 feet in order to pick up sufficient wind currents to be economically practical.

There is no single solution that is ideal for wind applications.  One supplier has a generator that is made up of 4 smaller units on a single large ring gear.  This system seems to have significant advantages in reducing the size and weight of the generator and makes maintenance more simple in the event of a failure.

Among the major mechatronic challenges driving change in the motor industry, electric vehicle applications are continually pushing the boundary for energy density and efficiency.  The performance demands of electric vehicles and other mobility applications make every percentage point of efficiency crucial to the range of the target vehicle.  This has led to a rash of new motor and drivetrain designs with a variety performance capabilities.

Each new innovation seeks to organize the basic materials of the electric motor in a new way to improve some aspect of performance.  Electric motors are copper conductors, “soft” magnetic steels and many times, permanent magnets.  The basic costs for copper wire at $5-6 a pound, commodity strip steel is about $.50 per pound but has to be punched in precise shapes, coated with insulation and stacked into larger assemblies, and $16. per pound for permanent magnets.  Complex processes associated with motor manufacturing make motor costs considerable.

In a recent development teams in academia in Australia and the US have developed simple low RPM motor structures based on polymer actuators referred to as “artificial muscle”.  While this development is in its early phases, the simplicity and low cost are significant and very appealing.  A demonstration of the new technology can be seen on YouTube at;  www.youtube.com/watch?v=ZcCPNJR5PCMand it is very much worth the watch.

The only sure thing is that we continue to meet the challenge of new market needs with innovation.

Tranportation, Economics and the New Solutions

In the US, and most industrialized economies, the second largest expense of individuals and households is personal transportation.  Given the hundreds of man-years in development of the technology, the extremely low cost and high energy density of gasoline and diesel as fuels, it is not surprising that the dominant means of transportation is combustion powered.  Cars, buses, motorcycles, even bicycles are powered using the same basic combustion approach.

Considering the possibilities of improved personal transportation, the consequences of a major change in transportation technology are significant and should be carefully considered as we move forward.

The major impact of all the technology being promoted these days is increased efficiency and reduced fuel consumption.  Whether your motivation is reducing emissions and cleaning the air, or you are interested in reducing your cost of transportation, the requirement is the same; get more miles out of a gallon of gasoline or eliminate gasoline usage altogether, as is the case for a pure electric vehicle.

Across the entire population of cars in the US, the average fuel efficiency is around 20 miles per gallon. Despite the demand for higher fuel mileage from consumers, this situation hasn’t improved much in the last few decades.  A dismal thought in contrast to the claims being made these days for the new solutions.

The US consumes 383.25 million gallons of gasoline and diesel fuel per day.  This all goes into transportation.  The only fuel going into electrical generation is in diesel gen-sets for backup and remote power, just in case anyone is thinking about the barrel- of-oil-to-electricity energy equivalency.

Imagining a future in which gasoline usage declines is not difficult.  I drive a Ford Fusion for work which is averaging 30 mpg combined city and highway.    If the US fleet average is 20 mpg, increasing that average to 30 mpg implies decreasing the amount of gasoline sold by 1/3.  Currently, gasoline retails for $3.25/gallon, or $453 Billion annually at the pump.

So a sharp change in usage due to efficiency or an increase in the number of electric vehicles, is cause for concern from oil & gas exploration companies, gasoline refiners, distributors and dealers.  Unless gasoline prices continue to go up.  In which case there would be less gasoline solid at roughly the same total revenue, which suggests that higher profits might be the side effect if the true cost doesn’t go up.

What about tax revenues?  The direct state and federal tax on gasoline is about 40 cents per gallon.  This does not include large excise taxes collected by the states, taxes paid by refiners and distributors, etc.  In fact, it would be hard to calculate how much of gasoline pricing is taxes and how much is the cost of the product.  Regardless, at 40 cents/gallon, the daily revenues are $153 million and the annual is above $55.8 billion.

Given the current economic picture, is there any level of government that is willing to give up the tax revenue from gasoline?  Probably not.  Is this any different than “Dollars for Oil” at the UN a couple of years ago?  Probably not.  But we thought that was a scandal.

EV’s Everywhere, and More!

Alternative energy fans are getting  good news this year end, 2012 will be the year of the electric car.  No matter what flavor of technology, dual drive train hybrid, true hybrid, plug in electric, there will be something for everybody.

American buyers will be able to buy American hybrid cars.  The Chevy Volt will be flanked by the Ford Fusion Electric scheduled to be released for sale in 19 US markets in March of 2012.  The Nissan Leaf might be the first production electric, so most commentators will make comparisons regarding driving range, speed and recharge time based on the performance of the Leaf.  At present, the claimed performance of the vehicles is very comparable.

It’s all speculation until there are a few units out there and the actual life cycle of the batteries can be measured.  100′s to 1000′s of vehicles will have to be built and consumer experiences cataloged in order to get a handle on how the batteries really work.  With all due respect to the development and testing efforts, it’s educated guesswork until there is real world experience.

Will the batteries be able to cycle enough times to make them cost effective?  When will they require replacement?  What will the price tag be for the battery pack?  Hopefully less than the $13,000 Tesla battery pack.

EV’s are coming.  But they are, like all the alternative energy technologies, still not cost competitive with Internal Combustion engines.  Most vehicles carry a $39,995 starting price tag with a $7,500 Federal rebate.  The basic purchase price puts EV’s out of the price range for many people, which fundamentally defeats the purpose.  The point of alternative energy technology is that it must become widespread in order for any impact on the environment to take place.  High prices are a major barrier to broad adoption.

Meanwhile the internal combustion engine is seeing some revival.  New approaches are being built and tested that offer dramatic improvements in efficiency and engine weight.  The EcoMotors opposing piston engine has been under DARPA development since 2007.  EcoMotors technology has been demonstrated to 40% efficiency, more than double that of traditional ICE.  In addition, it weighs less, takes up less space and gives of dramatically less heat.

Recently, the University of Michigan announced a new breakthrough called the wave engine that is expected to increase combustion efficiency to 60%.  And the rotor only turns in one direction like a scroll compressor instead of a piston, so there are no reciprocating motions to deal with.  This will also lower vehicle weight substantially, so the engine efficiency improvement leads to further overall efficiency in fuel required per transportation mile.

If these ICE improvements translate directly into miles-per gallon, then based on average 20 mpg cars today, we are talking about 53+ mile per gallon in town and possibly 70 mpg highway for EcoMotors solution.  At these levels, the equivalent energy cost per transportation mile is at parity with electricity.  If the wave engine proves successful, in town ratings of 80 mpg and 100 mpg highway become feasible, making electric options more expensive.

The future is what we make it.  Let’s make it the best we can with choices that make sense economically and environmentally.

Alternative Energy Considered

Alternative Energy technology is something we have to consider carefully in the context of the real cost of energy.  Certainly we can use less as part of the solution.  But we can use less without changing our living conditions to the point that we freeze in the winter, broil in the summer and read by candlelight.

In part, a strategic energy policy should include incentives for people willing to engage in the risk of financing photovoltaic plants and wind power projects.  One of the problems with this is that the technology is not cost effective compared to the established methods of generating electricity.  More on that shortly.

But of great concern is how the “incentive” programs are designed to work.  And are they working as intended?

The creation of a “Feed in Tariff” (FiT) is one mechanism that the state governments use to incentivize investment in photovoltaics.  However, the FiT is limited in how much capacity can be built in the photovoltaic supply of electricity.  It has to be funded at the State government level.  So this is really a transfer payment from a group of taxpayers to a small group of investors to get the PV plant built.

In another frame of reference, when we consider the cost of producing energy, the history of the last hundred years has resulted in a mature industry that delivers power on demand to 300+ million users for pennies per kilowatt hour.  The purchase price of a coal fired power plant to produce energy in the US is in the range of $5.9 million per megawatt of capacity.  And that capacity is available day or night.

By the way, this also means that charging electric cars at night, when demand is generally lower for the power plant, is a great way to make the plant more profitable.

So the remaining question is; if you were really worried about the environment and felt that coal and natural gas were bad for the environment, what are the choices and most of all, how expensive is that going to be?

Well, if you are paying 14 cents a kilowatt hour presently, understand that your utility company is probably paying anywhere from 23 to 30 cents per kilowatt hour to buy the power from photovoltaic sources.   That’s pretty expensive.

And photovoltaic plants suffer from the fact that they only operate during daylight.  In fact, they only operate at peak power 2 to 3 hours a day.  Which is only 1/8 of the 24 hour day.  So the asset is only producing 12.5% of the time.  So they are not very cost effective with out a lot of subsidy money coming in to pay for them.

Nuclear power using wave reactors or pebble bed reactors can be very small, are very safe and they are also very economical.  They operate 24 hours a day and don’t emit any pollution to the atmosphere.  At an estimated $6.8 mil/mW they are the ideal alternative for those who are Eco-conscious without breaking the bank.

So why aren’t we hearing more about this option?

Wind Power – Progress, Slowly

Converting the energy from wind to electricity is a huge mechatronic challenge.  Lots of backyard inventors are trying their hands at it.  At the end of the day, it will come down to what works economically.

The issue is that you have to convert the kinetic energy of the wind, which is very low depending on where you are, into enough mechanical energy to turn something that will turn a generator.  Sounds simple, and it is, up to a point.

The wind part can be thought of in Watts per Square Meter of energy.  So we have to come up with something that has very large surface area and very light weight.  Sailing technology comes to mind.  And there is a huge range of efficiency based on aerodynamics, which is why there is so much effort around blade design in the current generation of wind turbines.

But at energy levels of 150 W/m**2, it takes a lot of square meters to hit enough energy to be useful.  If you are thinking “small wind” for residential applications 2000-3000 watts peak power would require 20 square meters of surface area. That could be a rotor just over ten feet in diameter by eighteen feet tall.   That is a very large mechanical structure for a residential building.  And not easy to support securely against high winds.

2000  to 3000 Watts of intermittent power might displace half your power bill during the year if the wind blows a lot.  If not, maybe 1/4 of your annual power bill if you don’t get a lot of wind.  So you still need the power company unless you make the turbine 4 times bigger.

And the product cannot cost more than you are paying presently for the electricity. In states like New Jersey, New York or California where electricity costs are high, that might amount to $1500 if the value is for part of the annual power used.  In states where electricity costs are 11 cents/kWh, its really not worth it.

Land based wind farms have not done very well so far.  Think about the complexity of building gearboxes at the megawatt level that have to withstand sudden changes in wind conditions.  It’s nothing like the industrial world.  Historical costs of operation and maintenance (O&M) are being reported at 20 and 30% due to premature failure of gearboxes, electrical systems catching fire, blades breaking due to control system failures.  The list goes on.

So Wind Power still stands as a major mechatronic challenge.

What is the proper role of the government in the wind energy business?  President Obama says he is committed to promoting wind energy in this country.  Wind Energy will bring jobs to America.  Well, maybe for some of the construction guys.  So far, a significant amount of wind turbines sold in the US come from foreign suppliers.  And even for domestic wind turbines, a lot of the parts come from offshore suppliers.

If you look at all the new bureaucracy being created,  well, it will be amazing if anything ever gets done.  The newly formed Bureau of Ocean Energy Management Regulation and Enforcement has been created to oversee the sale of leases of Federal Waters, where offshore wind is expected to migrate. Seems like the only jobs being created are Federal jobs.  By the way, they have 14 openings right now and some of them are Petroleum and Enviromental Engineers, so if you’re not busy, check it out.

The process to get a lease from BOEMRE will take at least 2-3 years before you can even think about putting equipment out.  Can you spell Boondoggle?

Energy Saving and Industry

Energy conservation is a popular subject.  And a lot of commentary has been offered about the importance of energy conservation in the industrial community.  I agree.  But the desire for energy conservation needs to be tempered with real cost benefit analysis.  Which sometimes gets passed up.

Almost all variable frequency drives are sold on the basis of the amount of energy, and money, they will save as part of the justification for spending the money on the equipment and installation.  Fans and pumps can benefit from reduced power consumption, especially when there are hundreds of horsepower of load involved.   Mechanical life expectancy increases and maintenance costs are reduced as system speeds are reduced to meet the operating setpoint of the driven load.

Large material handling systems have found ways to reduce costs.  Systems that are divided into zones can be monitored for the the presence of product on the conveyor lines.  If there is no product present, the conveyor motor is idled which saves energy.  When there are large systems, like airport baggage handling systems, with hundreds of horsepower of equipment spread over miles of conveyors, the load requirements are similar and a 20% or 30% reduction in system energy consumption can be very significant.

But plant floor machinery can be very different depending on the industry you are in.  In the medical manufacturing arena, there are lots of machines and lots of stepping motors in them.  Sometimes 24 axes of stepping motors can be in a very small machine.  And medical manufacturing plants can have hundreds, even thousands of motors.  So you would think that there are similarities in terms of the energy savings opportunity.

But factory automation systems present different energy usage problems.  Stepping motors, for example, are low power consumption systems are always on.  The motor may not be doing any work, but the power supply needed to provide DC power is always on.  So power is being converted, even though the motors may not be doing any work.  But the fact is that stepping motor systems are fairly low power, 200 Watts is typical.  So even when there are loads made up of hundreds of stepping motors, its hard to come up with enough energy saving to return the cost of a complex effort to control it.

In the servo world because multiple servo axes are not all on at the same time, average load and power supply sharing have led to a number of servo amps that use common dc bus architecture. This is a great way to say money and reduce equipment size.  But even large systems are limited to 10 kilowatt average power.  And frequently these systems have the ability to manage the input power so that the AC load is fairly efficient.

But once in a great while, there are applications where excess bus energy is generated, or regeneration is taking place.  This is the case when a palletizing machine lowers its load.  The weight of the material on the pallets drives the motors instead of the amplifiers.  This puts generated electricity onto the input voltage bus.  Imagine the surprise of the electrical maintenance department getting an emergency call that the palletizing equipment was generating too much power!

Every prospective energy saving project needs to be considered in the context of the industry, application and cost benefit.    A simple Pareto analysis of the major segments of energy consumption can be conducted which will categorized and quantify the opportunities for energy cost reduction.  Many of the best opportunities will come from unexpected areas.

Change the World

As we approach the end of the year and contemplate the coming year, it is a natural point in time to reflect on our accomplishments and consider our goals for the future.  So forgive me if I wax philosophical.  But I would like to offer the opinion that engineering is about changing the world. If it isn’t, it should be.  Change the world, make things better than you found them.

Engineers Without Borders has completed a project in Lashaine Village Tanzania that will increase their ability to harvest rainwater, treat and store local water supply up to 120,000 liters, and add 1080 Watts of solar panels that will power an upcoming computer lab.  This project literally impacts hundreds of families by creating improved water quality and availability.  It also creates an electrical infrastructure that will enable the Middle School students to run computers and radically improve their educational opportunities.  This is a part time, volunteer organization that raises funds for projects and sends out teams all over the world to provide improved conditions in the lives of people who have a need and couldn’t get it done without outside help.

At a fundamental level all engineering should be about leaving things better than we found them.  Every project I have been involved in represented incremental improvements that provided more benefit to the business than the investment cost.  And we should consider context carefully.  For the employer who delivers a product or service, being competitive and producing quality are what keep the company in business.  So as engineers we are frequently engaged in the development of technology that enables our employers to be more successful, by way of improved product quality, increased throughput, decreased part costs, or any of a number of parameters by which the company you work for may measure success.

And that may not always “feel” like we are getting something done that Changes the World.  But it can make the difference between being open for business and having to close.  It can make the difference between having steady employment, and adding new jobs because of expanding sales. It’s not always as direct as going to a remote part of the world and helping people to have water to drink, wash and grow crops with.

The creative drive to develop something new and useful shows up in all new products.  Certainly the new “tablet” computers and hand help “Pad” computers are marvels of technology.  Does this product feed a starving person in a foreign land?  No.  But it creates real value that people are willing to pay for, to the tune of an estimated $5 Billion in new product revenue for Apple with much more to come.   And this will enable Apple to employ more people, some of whom will either give from their income, or be able to participate directly in their spare time, in projects like those of Engineers Without Borders.

My encouragement to each person out there is to think about your role in the context of what interests you, what skill and training you have been given, and where you can apply those skills to leave things better than you found them.  For yourself and for others.

Lithium – The Next Big Thing

Modern lithium battery technology got started in then US in the 1970′s.  As with all emerging technology, cost was a secondary consideration to the opportunity to create improved energy density batteries.  The potential, of course, was huge.

Everything from power tools to electric cars would be impacted by a new battery chemistry with less weight.  The latest generation of light weight laptop computers is largely a result of light weight battery technology.  Cell phones and various computer pad platforms are all impacted as well.

The new Chevy Volt will be one of the first production cars with a major lithium battery pack.  And every major auto maker is poised to deliver and electric of some type in 2011. Volkswagen Electric Golf with an 85 mile estimated drive range, a Lincoln Fusion Hybrid with a 41 mile per gallon fuel efficiency.  New power density levels makes possible a wide range of vehicle options from the modest all electric Think being manufactured in Indiana for the US market, to high performance sports cars like the Fiskar and Tesla cars.

Interestingly, much of the development work done on lithium battery technology was done in the United States.  The initial supply of lithium was mined in North Carolina.  MIT and University of Texas contributed significantly in the development, and Exxon owned the technology at one point.

But the mine in North Carolina is relatively small compared to the amount needed to supply the current demand.  So where will all the lithium come from?  Presently, most of it is coming from South America.  Chile, Argentina and Bolivia have huge deposits of lithium that are currently developed and they are supplying to battery companies around the world.  Interestingly, Afghanistan is supposed to have $1 Trillion worth of lithium, the largest deposits in the world.  A great way to generate revenue for the Afghan economy instead of poppies.

If the lithium is coming from South America, where are the batteries going to be made?  Presently A123 Systems is the largest US maker of lithium batteries with a major effort going in to the Detroit area to supply batteries to US auto makers.  But A123 also touts their Asian supply relationships.

Yes, I get it.  Lithium battery technology is still the most expensive part of the electric car.  So price is still an issue if the electric car market is going to expand.  So there is a lot of pressure.

With the existing market pressure for improved lithium in computers and cellphones, and the prospect of auto markets with hundreds of times more sales available, the R&D effort to improve the technology at the chemistry level is massive.  Even the federal government has made billions of dollars available in the recent stimulus bill to fund improvement in the technology.  This is a rare case where I agree with the role of government in supporting this technology.  The US needs to be a world leader in lithium batteries, not just on a technology development level, but on a manufacturing level as well.

So why is Chevy sourcing the battery pack for the Volt from Korea?  Isn’t there enough supply in the US?  Not yet, but its coming.

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