Many renewable energy technologies are technically mature and could contribute significantly to a sustainable energy future. And though deployment and investment in renewables remains high, much more could be achieved given the right frameworks and support.
We designed the Future Cleantech Forum for European professionals in the energy and Cleantech area who are interested in developing and implementing strategies for deploying renewable energies. Encompassing the wider scene, we look at the current patterns and trends in energy demand, at strategies to deploy renewable energies and at new emerging technologies across the spectrum.
Complementing this with a deeper sectorial approach, we are seeking to dive into the deployment of specific renewable energies like solar, wind, and bio-energy; new renewable energy end-user products; and energy efficiency. While many discussions focus one or the other, we examine at opportunities and challenges both on the supply side and the demand side including current use patterns and trends, and deployment of renewable energies both in general and for specific types of renewables.
Strategy for Deploying Renewable Energies
Energy use of today and its trends is a common starting point. The current worldwide, European and some individual European countries’ energy mix and usage as well as some of the important forecasts for the coming years, from the International Energy Agency and the World Energy Council are important considerations. From this common base we can debate the best strategies and opportunities to evolve to a more sustainable future, considering also the issues of infrastructure development and energy security.
A debate on how to assure that we have the right conditions for deployment of renewable energies is needed. First, this will include understanding what strategic policy frameworks need to be created, what key technologies need to be deployed and finally how the right financing mechanisms can be made available.
Second, we need understanding on the main bottlenecks for deployment including how to assure reliable access to renewable energies, how to overcome bottlenecks in the supply chain for renewable energies and how to deal with the new water and energy dynamics triggered by the increased use of renewable energies.
Renewable energy products mean putting the consumer in the driver’s seat: Studies have shown that when given a choice many consumers would prefer products made or operating using renewable energies. What do we need to do to create such products and what are the roles of business and governments? What are promising initiatives in this area?
Challenges for European Companies in Cleantech
In preparation for the Future Cleantech Forum and to deepen our understanding of the economic situation that cleantech companies are facing in Europe, we have conducted research covering more than 100 European cleantech companies.
The participating companies were from over 25 countries, and represented businesses mainly in energy and power generation, energy storage, clean fuels, local-level energy control, energy efficiency, industrial, transportation and logistics, grid-level energy transmission and controls and water treatment. The mix of sizes was 48% of micro companies, 23% of small companies, 9% of medium companies, and 20% of large companies.
We are attempting with this research to better understand the major challenges for business when deploying renewable energies and also to learn from them what would be the best solutions to solve these challenges. Finally, we have also tried to understand if in the perception of the participating companies there is a difference between the situation in their home country and their export markets.
Main Perceived Bottlenecks and their Impacts
When looking at the impact of possible bottlenecks, we see that a majority of the companies feels that these bottlenecks have an impact on their economic success (with a minimum at 56.5% for large companies and a maximum of 90% for medium companies).
When we deepen our analysis, we can see that the main perceived bottlenecks are still very much around regulations and incentives and only on a second level around government approvals for cleantech installations, prizing levels for energy and finally around access to corporate financing. The sole important exception is large companies for their export markets, where they perceive an issue with funding for implementation projects.
This shows clearly a very large dependency on government actions to shape markets and hence an important dependency on state subsidies for economic success. This is a very little sophisticated market strategy and brings important risks, as we have been seeing in the overheated solar market with the currently ensuing important contraction and consolidation due to a reduced action of the governments and a massive entry of cheap solar offerings from countries like China.
Finally, all the more sophisticated approaches are not yet perceived as bottlenecks, like for example the lack of new business models, for example to offer a renewable energy solution based on renting of solar energy production and energy storage solution and paying the rent for this similar to the price paid for the energy provided by the energy distributor.
Proposed Solutions for these Bottlenecks
The solutions requested are also very much seen through government market shaping, either through improved regulations and incentives or through more important investments in infrastructure.
This shows again a lack of innovative market approaches and a high dependency on government action, which might just not happen at the level of the past anymore. The industry is still much to much oriented as a government “supplier” and hence misses out on other market approaches which might provide more sustainable opportunities, especially in this post financial crisis world.
Finally, a positive element is the recognition that the end consumer could be a good driver for consumption as a majority does recognize the potential positive impact with an increased direct choice for renewable energy of the end consumer (with a minimum of 63% for small companies and a maximum of 80% for micro and medium companies).
André Schneider is Program Director for the Future Cleantech Forum 2012. The Future Cleantech Forum is designed to be a cross-domain exchange facilitating new innovative and integrative solutions for the cleantech market.