TECHNOLOGY MIGRATION ACROSS LEAD MARKETS: Greening Energy Trhough Global Complementarities

Transcription

1 TECHNOLOGY MIGRATION ACROSS LEAD MARKETS: Greening Energy Trhough Global Complementarities Atle Midttun: Presentation at the Salzburg Energy Seminar 29 August

2 Takeoff for Green Energy GW From Kåberger 2012 A Result of Policy and Technology Migration 2

3 Historical Learning Curve for PV 3

4 The thesis in brief Sequential Lead Markets Technology Migration Lead markets have limited endurance They often cannot take the technology all the way A Sequence of lead markets may be needed to take it all the way to industrial maturity Technology must migrate to find appropriate lead markets at different stages of development Each lead market takes it one step further down the learning curve Untill hopefully industrial maturity is reached and the technology is mainstreamed 4

5 The Drive from Lead Markets Lead markets: Adopt innovations early Shape world markets by their demand Have local preferences that create the basis for international diffusion Typically depicts one lead market that then spreads to follower markets Environmental lead markets: Stimulated by high envrionmental standards Supported by high promotional measures International diffusion of clean tech suported by diffusion of their supporting policies Marian Beise, Jürgen Blazejczak Dietmar Edler, Klaus Jacob Martin Jänicke, Thomas Loew Ulrich Petschow, Klaus Rennings FFU

6 The Experience Curve Connection The law of learning by doing 6

7 The Policy Connection From Wene

8 Policy and Technology Migration The virtuous cycle The experience effects on prices From Wene

9 Sequential Lead Markets for PV 9

10 The PV story I Early Pv Development for Space applications First pv driven sattelite Vagard 1 in1958 Since 1961 all military, communication and scientific sattelites solar Late 70 Federal Energy Admin launched a devt. strategy for pv It only got funding for research, not for deployment Research funding and NASA maed the US an early lead market Leading research groups/ laboratories thrived Lack of deployment support prevented industrial learning in the USA 10

11 One-sided US model Stimulates the R&D side But not the deployment side Thereby amputates the experience dynamics 11

12 The Pv story II Japan took a leading role in PV in the mid 1970s following the 1973 oil crisis The Sunshine project to develop new energy sources Received up to 29% of total MITI R&D budget in New Energy and Industrial Technology Development Organisation established Public funds to R&D and subsidised interest rates, but no easy access to electricity grid The market for industry was within calculators and solar powered clocks The electricity markets were not accessible neither pricewise nor in terms of legal entry rights. Lack of deployment in the el-market limited the drive for pv expansion in Japan PV in Japan in the 1980s therefore stagnated PV picked up again in mid 1990s with the New sunshine project, following the international climate debate and acceptance of net-metering and feed in from el-industry. Source: IEEJ (1985) and RTS Corp. (2006). (Kimura & Suzuki 2006) 12

13 The Limited Early Japanese Model Continnues to stimulate the R&D side Introduces weak deployment incentives Exploits a limited high cost electronics market But does not trigger the general electricity market Failed to give efficient market acces Thereby starts the experience dynamics but not in full scale 13

14 The PV Story III Driven by Unique Political Greenred alliance Established Strong Deployment policy Early feed in law (1990) Stimulated wind but not pv New feed in law (2000) Stronger incentives which made Germany a major driver of pv Aspirations to combine greening with industrial returns German ambitions for world leadership in low carbon energy systems Challenged by recent global competition Found methods of policy adaptation Triggered policy spread 14

15 The PV Story III (ctd) Dynamic amendments to adjust to evolving technology Based on farily transparent method with periodic reviews 2002 cap removal 2009 corridor degression scheme 2010 unscheduled degression responting to price drops 2011 revised corridor degression schedule 15

16 The GermanDeployment Stimulates deployment side with dynamic feed in tariffs Thereby gets the experience dynamics going where Japan left it However still has some way to go to get prices competitive Express 16

17 The PV Story IV China built up massive pv production to serve international markets Is subsequently building up a major domestic pv market The Golden Sun Initiative 2009 China s finance ministry has selected hundreds of projects totaling nearly $3 billion in costs for its subsidy plan to dramatically boost the country s solar energy production. Expedited Boost of PV in year plan New energy (solar) is singled out as strategic industry Promoting R&D, production and over all competitiveness Support and price subsidies Introduction of solar feed in tariff Raised targets for solar installation 50GW,

18 The Chinese Scaling Express Stimulates deployment side through strong industrial champion policy and financial support Thereby gets the experience dynamics going even stronger in external markets Subsequently follows up with domestic deployment policy to compensate for stagnant western markets and to green domestic economy 18

19 From Kåberger

20 Conclusion Globalisation entails not only a lead market and diffusion to following markets The PV story indicates that we need to think about green innovation as a involving sequential lead markets The innovation journey has different challenges along the way. One lead market may be better than another. We need the right approach and interest at the right time 20

21 Are We getting there? 21

22 Not Quite 22