Free Enterprise Staff  | May 30, 2014

Innovative Technology Research Finds a Home in North Carolina

Even if you’ve never heard of Cree Inc., there’s almost a definite chance you’ve used one of their products. In fact, every time you Google something, you’re indirectly using a device made by Cree that’s deployed in vast server farms or in the cloud, says company co-founder, John Palmour.

The same is true for a significant share of solar inverters, which feed power generated by rooftop panels into the grid.

The Durham, North Carolina-headquartered firm, which spun out from North Carolina State University (NC State) in 1987, is best known for being a major player in the LED lighting industry.

And while the power electronics unit that Palmour oversees is currently the smallest part of the company, generating roughly $100 million a year, it is expected to grow to more than 10 times that in the next five to 10 years.

That’s going to happen, experts say, as silicon-based semiconductors are increasingly replaced by semiconductors made from silicon carbide, which are more efficient and capable of handling higher voltages and temperatures than their counterparts. That allows the efficiencies embedded in our phones and computers to be applied to a wide array of industrial applications—basically anything that uses a motor, including many of the modern conveniences we often take for granted such as refrigerators, elevators, air-conditioners, and heaters.

Roughly half of all electricity is used to run motors and the majority of these, especially in large industrial applications, are still ‘dumb,’ says Palmour, meaning they only feature on-off switches and lack the electronic controls needed to make them run most efficiently. Even higher-end household appliances with variable speed motor controls waste energy. “We can basically cut those losses in half,” says Palmour, who also serves as the company’s chief technology officer. Though power savings between 2-3% might sound like a modest gain, “at a system level that’s actually huge,” he notes.

Such commercial prowess is why NC State was recently designated as the hub for a new federally funded innovation center that brings together companies and university researchers to collaborate on finding new applications for this emerging technology. President Obama inaugurated the Next Generation Power Electronics Manufacturing Innovation Institute in January, drawing together five universities, two national labs, and 18 partner companies. Together, they’ll match the Department of Energy’s initial $70 million commitment.

Power electronics expertise in the Tar Heel state has been flourishing for years; it germinated from a cluster of world-class researchers at NC State who proved the superior qualities of silicon carbide and gallium nitride, among other compounds, some 20 years ago.

Tapping into this highly specialized skillset was the reason another firm, Vacon, set up shop in the nearby Research Triangle Park several years ago. The company is a leading manufacturer of controls that manipulate ‘raw’ grid power into useable electricity for medium-sized industrial electrical motors that range from 500 to thousands of horsepower.

“If you want to be really, really competitive you can’t just sit inside your own little bubble, you really have to understand what the others guys are doing in the adjacent fields, or on the supplier or component side,” says Dan Isaksson, a senior executive with the U.S. subsidiary, Vacon Inc.

During the course of a year, he explains, Vacon’s installed drivers save the energy output of ten, 700-megawatt (MW) power plants—roughly equivalent to a day’s worth of total global electricity demand.

Vacon is one of several foreign firms that are benefiting from the collaborations made possible at the Next Gen Power Electronics Institute. Membership carries a requirement that companies do some manufacturing here as ABB does in multiple U.S. sites; as Toshiba carries out in Texas; and as Vacon does in Chambersburg, Pennsylvania.

It’s a requirement Isaksson considers almost superfluous because of the compelling reasons to do that anyway: “It’s very difficult, certainly in our field, to disconnect manufacturing and development and research—so it makes sense to keep it all together. We didn’t think about it.”

This is helping to concentrate a critical mass of research and engineering talent that U.S. industry badly needs. It is already far behind Europe and Japan. China is also getting into manufacturing core components of what is also known as wideband gap technology, which for industry use is not even commercially available in the U.S.

The Next Gen Institute gives the U.S. a chance to catch up and retain a portion of the high-technology industry, which has benefited from years of government nurturing in other countries.

“The difficulty that industry has with these [new industries] is there’s a lot of upfront investment and the time horizon—if industry is left to do it alone—can be quite long, simply because of the investment required,” explains Devin Dilley, Vacon’s local chief of research and development.

“The role of the government as we see it is to accelerate that by helping to bring together industry and university to solve these problems so that we can commercialize this much, much faster than we would be able to otherwise,” Dilley says.

A key aim of the new center is to help drive costs down and to encourage more market penetration, which will, in turn, provide the volumes needed to drive costs down even further.

Another looming challenge for the U.S. is being addressed at National Science Foundation’s FREEDM Systems Center, which is also hosted at NC State. Scientists there have focused their efforts on the modernization of the nation’s electrical grid, which is stressed by new demand being placed on decades-old technology. One key limitation is that the grid was built just to handle electricity flow from base-load generation facilities—coal-fired plants, for instance—distributed to end-users.

Nowadays, though, those same households are generating power—from rooftop solar panels or windmills, for example—and so the flow has to be two-way, explains Chad Eckhardt, the chief executive of GridBridge, another NC State spinoff that currently has demonstration projects with Duke Energy.

“They need companies such as ourselves to help accommodate the influx of renewables—the train has left the station, renewables will continue to take off—so it is not a debate of wanting, it is debate rather of how to incorporate them,” says Eckhardt.

GridBridge is still a pre-revenue startup but with as much as $476 billion needed to be invested in a fully functional smart grid in the coming decades—according to a study by the Electrical Power Research Institute—it is well positioned to become yet another successful, federally-funded NC State spin–off.