Energy sector insiders outline the next steps to unlock further energy innovation in Europe and beyond. By Kelvin Ross
Most people in the energy sector would concede that existing technologies alone will not deliver the energy transition at the pace that is desired – nor needed.
And most too would agree that we need greater innovation to unlock the enabling solutions of the near future.
So how do we accelerate innovation in the energy sector? How do we make the next generation of entrepreneurs see the energy landscape as fertile ground for their innovations?
“The power sector has always been an innovation leader and has delivered unprecedented change over the last two decades,” says Joerg Gmeinbauer of Bureau Veritas.
“Who would have imagined in the 90s that offshore wind would one day easily beat cost from lignite power generation?
“But while large OEMs continue playing a major role, the decentralisation of energy systems has opened up a different path to innovation at a micro level that looks both at grid and generation – as well as demand and supply – in a more integrated way.”
He highlights how the success of many startups has come as “large utilities are much more open to partnering with entrepreneurial ventures.”
And he says to accelerate this further, “policymakers will need to work on the risk-reward balance. In many countries the power sector is still too protectionist of the status quo and governments protect obsolete technologies. That heavily discourages true innovation and entrepreneurial behaviour.”
Matthias Zelinger, managing director of VDMA Power Systems agrees. “Today the energy sector is one of the most dynamic businesses. Progressive players are combining the disruptive potential of renewable energies and digitalisation. To unleash the full potential of these innovations, open markets and up-to-date regulation is key.”
“I have seen a paradigm shift in the way the energy sector approaches innovation,” says Enlit Europe director Paddy Young.
He says ‘innovation’ positions within companies were once “where you put someone who had been working there for a long time and you weren’t sure what to do with them anymore.” Now he says those same companies are “working to develop the technologies to achieve the goals of tomorrow.”
“I have witnessed how companies are rising to the challenges of today and are investing in, and piloting, new solutions, stimulating young talent and innovating in business models.
“We see more and more cross-sector innovation initiatives: companies that were viewed as a potential threat to the very existence of utilities now collaborate with many of them on smart engagement with consumers. Sector coupling has also stimulated new partnerships to tackle many efficiency challenges and create opportunities to accelerate the energy transition.”
He adds that the essential role of innovation in the energy transition is what led to the creation of Initiate: “We saw the need to create a platform in the event to showcase innovation, startups, young talent and investors, and a global movement was born.”
And he stresses his “great faith” that the energy sector will come out of its silos, work with the ‘extended’ sector, and accelerate innovation to deliver carbon neutrality by 2050.
Francisco Puente, business development and projects director at energy consultants Escan, believes that new market entrants are needed to introduce innovative solutions in several key areas, including smart grids, energy storage and big data management.
But he adds that “the changes in the energy sector will have to take care of the customer’s personal data protection, write new regulations for the new conditions, find cost-effective products and be able to market specific solutions for each need.
And Edouard Sauvage, chief executive of French gas distributor GRDF, says that “greater innovation can be unlocked by stronger partnerships between energy actors, tech startups and R&D institutes.
“International cooperation and open innovation will be accelerators to bridge gaps and make the energy transition faster, easier and cheaper.”
Sergio Olivero, head of the Finance & Business Innovation Unit in the Energy Centre at Turin university Politecnico di Torino, cautions that “technology related to the energy transition is a powerful tool to accelerate innovation… but technology without finance is not enough.
“The economic crisis caused by the coronavirus is showing the limits of speculative finance,” he says, “and shows the need to put the real economy back at the centre of investment policies for the recovery after the crisis.”
He says that funds will be available soon at European and world level, “and innovative business models are needed in order to exploit this investment capacity. A comprehensive strategic approach must therefore rely upon short to long term initiatives that are capable of involving local supply chains, where all stakeholders can play an active role and reactivate their production processes.”
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Natalie Samovich of renewables innovation developer Enercoutim says that existing technologies are only partially addressing the current needs of the energy transition. “The greater innovation need stems from the fact that the societal challenges we are facing are cross-domain and of crossborder relevance.
“What we innovate on – and the integrated solutions we are currently working on within the energy sector – have broad reach and scale-up potential… an incentive and driver to all stakeholders.”
And she adds that more significant innovation can occur “within the environments where implementation barriers are eliminated along the way. Our effectiveness at mission-oriented targeted research and innovation should follow an effective scaling-up across Europe.”
Mark Howitt is chief technology officer of compressed air energy storage firm Storelectric, which like Enercoutim and Politecnico di Torino is a member of ETIP SNET, the European Technology & Innovation Platform for Smart Networks for Energy Transition.
He is keen to stress that “the issue is not innovation per se – it is the roll out of innovative solutions into the field.
“The valley of death is broad for both large-scale prototype construction and, especially, full-scale, first-of-a-kind commercial plants”.
He says this valley “is particularly deep for technologies that cannot be built small” and adds that he believes that the European Commission should fund the ‘risk’ element of such projects by matchfunding their construction regardless of whether income will be generated from the resultant prototype.
Marloes Wichink-Kruit is human capital manager at InnoEnergy, Europe’s sustainable energy innovation accelerator, which works to bring together inventors, graduates, researchers and entrepreneurs with the energy markets.
“Innovation is key to the energy sector and it can come from anywhere,” she says. “In the next generation, the ambition is there, the will is there, the knowledge is there – but what is holding everyone back from making the transition is the ability to step in easily to the sector.”
She says embracing innovation and experimenting with solutions “is a process that needs time: every year will get us one step closer. There will not be one solution, there will be several, and we may not know which of them have worked until years from now when we look back. At the moment we don’t know – so we need to pay attention to all the possibilities.”
And she adds: “It’s very important to inspire the existing generation with new ambition and ideas and to drive for a purpose.”
Of course, this year has seen the coronavirus pandemic impact many aspects of the energy sector, and innovation is no exception.
In August, EIT InnoEnergy mobilised €7.3 million in additional funding from the European Institute of Innovation & Technology (EIT) to support energy innovators through COVID-19.
Diego Pavia, chief executive of EIT InnoEnergy, said the impact of COVID-19 on energy innovation “cannot be overstated – without support, much of the past decade’s progress on the energy transition will be lost.”
He said the message is clear: energy start ups “need a cash injection now to ensure their survival. COVID-19 has put on hold expected sales, capital increases or previous commercial agreements – they need our support now more than ever.”
“With the EIT, we have worked tirelessly to put the support in place that will save our startups. This funding not only helps to secure jobs and mitigate the risk to existing investments but ultimately forms a cornerstone to Europe’s sustainable recovery too.”