Technological innovation has a central role to play in the Energy Transition currently being undertaken throughout the world. The shifts need to take the different parts of the energy system through a lifecycle approach to any future energy system
Briefly, our energy system has been based mostly on fossil fuels (oil, coal, gas) and as we extract these, they are non-renewable and the primary cause of the carbonization crisis we are all facing on planet earth. The solutions to replace these fuels are renewables based on wind, solar, biofuels, and have a sustainability credential. The economics of powering the energy system with renewables has got to the point where there is real competitiveness so we can undertake this energy transition and reduce the emissions of carbon into our atmosphere.
Such significant investments are made within the energy system that has assets that have thirty or even more years of “useful” life. So within our current need to undertake an energy transition, you have to first look to improve the efficiency of your existing plant or system; then you have to make this fuel shift from fossil reliant to renewables. The lifecycle is long and difficult in any transition from one source of power as the infrastructure, supply chain, and supporting needs all evolve around that principal source of energy choice. Any change is a massive undertaking.
To get to the point where you are finally taking out carbonization fully can be a journey over many years. The role of technological innovations will significantly help make the transitions needed, hopefully in a well thought through structured way.
Six critical focal points of the energy transition need a broad focus.
The six main thrusts for technological innovation within the Energy Systems for today’s energy transition are:
- To accelerate the deployment of renewable energy technologies throughout the system.
- There is a real need to find innovative solutions that focus on the end-user sectors of transport, industry, and buildings.
- The technological and digital innovative solution needs to focus on the overall system design and the operation needs.
- Innovation needs to increase electrification through emerging solutions on digitalization of the grids and provide grid-scale energy storage for resolving variable renewable power.
- To push, nurture, and facilitate different energy sources to provide solutions to scale them up. These include battery storage, solar power, geothermal, biopower, hydropower, onshore and offshore wind and finally tidal power.
- Lastly, innovation needs to achieve an affordably decarbonize industrial transition
Besides technological innovation, there is growing potential for redesigning operational systems through new services, tools, and distributed generation deployment. There are equal opportunities to find fresh market designs that have built into them demand-response models that can provide more significant differentiation in tailored services.
Changing the design of the energy system can also offer the exciting potential of designing new business models that look to co-creation, provide more flexible power purchase agreements and bring the consumer into the system as aggregators in their own right. Many of these are solutions that continually unlock the system’s flexibility.
The diffusion of innovation is essential to understand to eventually achieve scale.
The critical point of mobilizing the energy transition comes from the rate and extent of adoption of innovation. When you are attempting to undergo such an energy transition, the ability to recognize “adoption” of new solutions, technologies or radically new designs of energy needs to be well understood to enable this to occur.
To help understand this shift and adoption process, I turned to a theory outlined by Everett Rogers (March 6, 1931 – October 21, 2004). He was an eminent American communication theorist and sociologist, who originated the diffusion of innovations theory and introduced the term early adopter and the model for this we have become very familiar with.
The Characteristics of an Innovation Diffusion
Roger’s theories do stand the test of time, and I want to refer to the Characteristics of an Innovation Diffusion here as it is highly relevant to technology innovation diffusion in the energy system for going through an adoption process.
He characterized these as 1) Relative advantage, 2) Compatibility, 3) Complexity, 4) Trialability, and 5) Observability. Let me briefly explain these:
Relative advantage is the degree to which an innovation is perceived as better than the product or solution it superseded. This is in cost, financial payback, utility, convenience, or advantage. In his theory, the higher the perceived advantage, the faster the rate of adoption
Compatibility is the degree in which an innovation is perceived to be consistent with the existing values, experiences, and needs of potential adopters. As we change our “norms” in energy solutions and our values and appreciation of the requirements to change, there is a constant search for growing compatibility. The more it can be seen as compatible, easy to adopt, the more likely it will be considered as a progressive solution.
Complexity. Complexity is the degree to which an innovation is perceived s being challenging to understand or use. Those solutions that are more straightforward, more intuitive or a no-brainer will be adopted more rapidly than those that have high levels of new skills, knowledge and operational experience
Trialability is the degree to which an innovation can be experimented with on a limited basis. Something we trail or pilot represents less uncertainty to potential adopters and clearly can allow adopters to learn by doing. The value of trials, pilots, and prototypes will also be adopted more quickly than those which cannot. The value within such a highly evolving market like energy transitions, the functional effects can be related to the risks of the dysfunctional. Avoiding undesirable consequences helps the rate of adoption, where new technology has many unproven aspects.
Observability. Observability is the degree to which the results of an innovative solution are visible to others. The easier it is to see the benefits, as real and tangible, the more likely it gets adopted. The epidemic model applies here. When innovation spreads is when it is adopted and valued, and having contacts with users of the solutions significantly helps diffusion.
Rogers also discusses the adopter profiles familiar to many of us, early adopters, through to late majority to be the process of diffusion (see above). The critical point here is the process of diffusion needs to be well-managed as the process of development
So as we call for more technological innovation in the energy transition, the value of Rogers diffusion of innovation becomes essential to appreciate.
The need for accelerating the energy transition will be highly reliant on organizing the technological innovation pathway. Innovation is far broader than just R&D; it will also come from business models, changing existing policies, processes, and market design to provide the impact necessary for the changes we need in the energy system.
As we search for enabling technologies that facilitate the integration of renewable energy, accelerate storage, explore sector coupling, introduce new ways to operate within the electricity system, seek out new power generation, design the grids for increased flexibility and digitalize solutions to provide further services, tools and distributed generation deployment knowing how to diffuse innovation in these general five approaches becomes valuable.
It becomes valuable to design technological solutions to be able to “travel this diffusion path”; it gives market confidence and encouragement that the innovation story is designed to take decisions through this innovation adoption approach for the solutions the energy transition has to pass through.
Does it make sense to apply the diffusion of innovation? I think so as you have a validating process working through these five innovating characteristics.