Friday, April 20, 2012

Innovation in a Global Market - The Case of Bioenergy

On wednesday the University organized again a lunch seminar like the one in November last year. This time the seminar was about innovation and in particular innovation in bioenergy.

First we got some general informaton on bioenergy. If you do not know what bioenergy is you can check out for example wikipedia here.

Bioenergy stands for about 20%-30% of energy consumption in Sweden. 10% of the electricity produced comes from bioenergy and 5% of transportation use bioenergy.

85% of bioenergy comes from forest origin and in Sweden it is only produced from whatever sidewaste you have in wood logging. However, in at least US they acctually grow forest that is cut down only for making biomass. Bioenergy is referred to as a renewable energy but when we start growing forest just for this purpose and use agrable land for growing biofuel instead of food, it is not really sustainable any longer. For a sustainable bioenergy consumption it should be locally produced and prefereably come from waste or similar, and locally consumed, if transportation is needed we are always at a loss.

We also discussed the importance of long-term strong political policy measures for companies to invest in these technologies. A problem is that the political cycle is only about 4 years, whereas investments in renewable energies usually have a payback period of 20 years or so. Which means that it is difficult for companies to rely on that a favorable tax policy will last during the whole time frame of 20 years.

Some interesting figures from the Swedish Private Equity & Venture Capital Association:
In 2003 there were no venture capitalists putting money into cleantech.
In 2009 there was 18.
Now in 2012 there is 65.

So it does seem that the interest for cleantech is picking up. Lena Malmberg (co-founder of LM Broking AB, LMBgreen Cleantech, Consulting Small to Medium-Sized Enterprise and has herself acted as a business angel for cleantech businesses) brought up some of the most important factors on why an innovation is successful or not.
  • Pull or push effect
    Is the market ready for the new invention or does it need to be pushed onto the consumers? Obviously it does seem like the time for cleantech is better now than 2003.
  • Capital
    For innovation there needs to be sufficient capital for improvements etc.
  • Culture
    This relates to everything from supporting policy making, supporting infrastructure and in a sense it also relates to pull and push, is the culture amoung consumers openminded towards the new idea.
  • Timing
    Again, this has to do with how ready the market is and how developed the product is.
Lena's future vision is that there will never be one solution that will replace oil completely, but instead we will have to think of 100, maybe more solutions, that will work in different local contexts. Halophytes plants might be a solution in the desert, while something else might be the solution here in the Nordics. Lena had experienced, first hand, a bus in Stockholm run on human excrement, apparently it was not an unpleasent ride at all, quiet and smooth.We need more of these sort of ideas that run on energy found locally.

According to Lena we will also more and more have to consider the embedded Co2 emissions and what affect the technology have on our resources. Like, where and how is our solar panels made? Can they be considered cleantech if they are made from material that are not "clean"? Wind power is a good example on that, some time ago there was an article (in Swedish) about the rare metals, like neodym, which are used in wind power turbines and how dirty the mining of these metals are.

So very much similar ideas was brought up as on the Sustainability Day. Let's hope companies keep up with the pressure to innovate and be creative.

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