October 22, 2013 The effect of technology deployment policies on renewable energy R&D STPP all staff meeting Joern Huenteler Pre-doctoral fellow 2013-14 STPP/ETIP
Overview Presentation of PhD thesis and ideas for fellowship research Agenda Motivation: wide-spread use of energy deployment policies Methodology: mapping impact on technological trajectories Results & discussion: pro s and con s of deployment policies Proposals for future research Feedback All feedback and questions welcome, especially on interpretation of results and proposals for future research 1
Introduction (1/4) Deployment policies increasingly used to advance technologies Definition: Deployment policies are public policy measures to increase the demand for innovations or to improve conditions for the adoption of innovations (Edler, 2010) Examples: Feed-in tariffs, production tax credits, renewables portfolio standards, bidding schemes, investment subsidies, environmental standards Estimated global deployment policy spending for renewable energy Total R&D spending renewables $10 bn in 2011 Source: BNEF 2013, WEO 2012 2
Introduction (2/4) Deployment policies increasingly used as innovation policies Explicit innovation policy objectives (some examples): German feed-in tariff for PV: "market entry assistance to allow for cost reductions, which will then facilitate the diffusion of photovoltaic through the market" (German Federal Diet, 2000, p. 11,064); ~5-10bn$ annually The U.S. production tax credit for electricity production from wind power and other technologies was enacted to enable further advances of renewable energy technologies, and exports of United States renewable energy technologies and services (102 nd Congress, 1992) ~5-10bn$ annually The U.S. Recovery Act in 2009 provided 7.5 bn$ in deployment policies (tax credits) to create tens of thousands of jobs in construction and manufacturing, [and] to help renewable energy technologies achieve economies of scale and bring down costs (The White House, 2009) 3
Introduction (3/4) Two main motivations to use deployment for innovation Cost Cumulative production Source: McNerney et al 2011 Learning curves. and Denmark s wind export boom 4
Introduction (4/4) Research objectives: understand impacts on upstream R&D Question: How do deployment policies affect R&D processes? Do deployment incentives shift the focus from radical to incremental innovation? Potential implication: pre-mature technological lock-in Does deployment help identifying unanticipated problems? Potential implication: diffusion indispensable to exploit full cost reduction potential, R&D alone not sufficient How do effects differ between technologies? Potential implication: technology-specific design of innovation policy strategy 5
Data and methodology (1/2) Two-step method for analyzing trajectories and policy impact Cases: Wind power and solar PV Step 1 patent citation networks: identification of trends in innovative activity Database of 110,000 global wind power and solar PV patents Calculation of significance of individual patents in the network using social network analysis Manual coding of abstract content of top 500-1,000 patents per technology Step 2 archival research and interviews: making sense of developments Identification of demand/policy influences Identification of technology characteristics 6
Data and methodology (2/2) Top patents were coded according to levels of hierarchy Hierarchy-level of innovation Likelihood of radical innovation Wind Solar PV Technology core High Rotor Cell Power train Module Turbine integration Mounting structures Technology periphery Low Grid integration Grid integration 7
Results & discussion Top patents in the network of patents and citations Rotor Hierarchy-level of innovation 1975 1980 1985 1990 1995 2000 2005 2009 Power train Turbine integration Wind farm integration Nodes: patents Links: citations 8
Downward trend visible when individual weights are shown for nodes and links Rotor Hierarchy-level of innovation 1975 1980 1985 1990 1995 2000 2005 2009 Power train Turbine integration Wind farm integration Nodes: patents Links: citations 9
R&D trajectory: From core to peripheral components, as ever more detailed engineering problems emerge Rotor Hierarchy-level of innovation Rotor blades and rotor speed control 1975 1980 1985 1990 1995 2000 2005 2009 Power train Turbine integration Variable speed power train systems Wind farm integration Nodes: patents Links: citations Grid integration 10
Adding the citations with a lag of more than 5 years (blue) clearly shows that technological development proceeds along hierarchy Rotor Hierarchy-level of innovation 1975 1980 1985 1990 1995 2000 2005 2009 Power train Turbine integration Wind farm integration 11
Trend towards incremental innovation correlates with level of deployment policy support in wind energy Weighted average hierarchy level OECD Deployment policy funding [m$_2008] 1975 1980 1985 1990 1995 2000 2005 2 3'500 3 4 5 6 7 8 3'000 2'500 2'000 1'500 1'000 500 0 Source: SusTec, IEA 12
PV innovation shows a trend towards process innovations rather than peripheral innovations Cell Hierarchy-level of innovation / Materials Process 1970 1975 1980 1985 1990 1995 2000 2005 2009 Cell concepts Module / Materials Process Array / mounting / Materials Process Module circuitry designs Cell production process innovations Grid integration / Materials Process 13
Interviews indicate three effects of deployment policies on R&D Deployment policies 1. steer R&D trajectory Incentives to focus on short-term, low-hierarchy problems New, unanticipated problems: Learning by doing/using 2. make R&D trajectory (partly) irreversible Firms optimize current technologies in ever finer detail, and scale-up production, thereby create entry barriers for new technologies Radically new rotor concepts unlikely to come from inside the current wind industry 3. affect technologies differently Wind: shift from core to periphery (complex, systemic product) PV: shift from product to process (complex, systemic process) 14
Technology characteristics Types of complexity / uncertainty affect innovation processes Technological uncertainty PV cells Wind turbines R&D Manufacturing Demonstration Long-term use Complexity of product design Material specification Product design Process design Small scale production Large scale production Demonstration plants Long-term use R&D Complexity of process Production Use 15
If part of technology policy strategy, deployment policy support should reflect technological characteristics Large overall market and conditions for firm growth important for innovation High Design-intensive technologies Dually complex technologies Wind, CCS, nuclear Electric cars, batteries Complexity of product design Low Simple technologies Solar heating, small hydro, small wind Process-intensive technologies PV, biofuels, building materials Large single markets and stable conditions important for innovation Low High Complexity of production process 16
Proposals for fellowship research Use patent network methodology to understand roles of different actors What role does the private/public sector play? Trajectories in patents vs trajectories in scientific publications What is the nature of university research in different technologies? Use the methodology to understand process of catching-up Do late-comers jump on the trajectory, or build their own? Do late-comers follow similar trajectories, and if not, why? Apply the methodology to further cases studied by other group members 17
Thank you for your attention!