Technological advance Creating Large Scale Solutions

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					  Technological advance: Creating Large
  Scale Solutions

                           Gerald M. Stokes
                           Director
                           Joint Global Change Research Institute


                           G8 Energy Research and Innovation
                           Workshop

                           Oxford - May 11-12, 2005
 Pacific Northwest
National Laboratory
                                                               JGCRI
                      PNNL-SA-45236           Joint Global Change Research Institute
  Key Points
  s   IPCC cross-cutting report in preparation and will
      provide a useful guide.

  s   Mechanisms of technological advance need to
      viewed in their full complexity.

  s   Technical feasibility is necessary but not sufficient.

  s   For climate related technologies, scale up is a very
      big issue.


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                  Cross-Cutting Themes (CCT)
                       CCT                    Lead WG   Anchors      Country
          1. Risk and Uncertainty             WG1       Manning      USA
                                                        Petit        France
          2. Regional Integration.            WG1       Giorgi       Italy
                                                        Carter       Finland
                                                        (Anchor 3)
          3. Water                            WG2       Kundzewicz   Poland
                                                        Mata         Venezuela
          4. Key Vulnerabilities (including   WG2       Schneider    USA
             UNFCCC Art. 2 Issues)                      Semenov      Russia
                                                        Patwardhan   India
          5. Adaptation & Mitigation          WG3       Grubb        UK
                                                        Huq          Bangladesh
          6. Sustainable development          WG3       Srivastava   India
                                                        Heller       USA
          7. Technology                       WG3       Edmonds      USA
                                                        Mirera       Brazil


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  The Technology CCT
  s   For the purposes of the technology cross cut
      theme (CCT), we will refer to technology as
      the broad set of processes covering know-
      how, experience and equipment, used by
      humans to produce services and transform
      resources.

  s   (Not just devices.)


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  IPCC Cross-cut will cover many key issues
  s   Report in progress:
       • “To facilitate and improve cross Working Group co-operation and to
          achieve better integration and consistent treatment of key issues
          throughout the AR4.”

  s   Characteristics of technology - both descriptive and
      resource requirements,
       • Importance of scale
  s   Technology and cost

  s   Technology and time - mechanisms of technological
      advance


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Joint Global Change Research Institute                                        5
  Sources of Technological Advance
            s   R&D
                  •   Applied               Basic
                  •   Principally funded by: Industry, Government
                  •   By technology area (e.g., energy versus non-energy)
                  •   Conducted by: industry, government, universities, not-for-profit companies,
                      research consortia
            s   Learning-by-doing (and using, etc.)
                  •   Not synonymous with experience curves
                  •   Experience includes all sources of change
            s   Spillovers
                  •   Discrete Examples: gas turbines, 3-D seismic imaging, hybrid vehicles
                  •   Intraindustry, interindustry,
                  •   International
                  •   Rent spillovers, knowledge spillovers
            s   Economies of scale (Not a source of advance)



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Joint Global Change Research Institute                                                              6
               Induced Technological Change
           Current approaches omit important dynamics of technological
            change. A broader framework for analyzing ITC is needed.




       Source: Clarke and Weyant. 2002. “Modeling Induced Technological Change – An Overview,” RFF
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Joint Global Change Research Institute                                                               7
  Some Observations Based on the
  Literature
          s   Induced environmental innovation is a reality …..
                •   but technology also advances as a function of sources largely unresponsive to climate policies….
                •   evidence suggests that a substantial portion of energy sector technological advance has arisen from
                    outside the energy industry incentive structure (e.g., gas turbine, 3-D seismic drilling)


          s   There is little compelling evidence to suggest that own-industry sources of
              advance are more or less “important” than spillovers, or that learning-by-
              doing is any more or less “important” than R&D.
                •   Experience curves and learning-by-doing are one approach – they are not “the answer” for long-term
                    planning and analysis.
                •   Treating each individual source of technological change as if it were independent of the other sources is
                    misleading – the interactions are far more complex
                •   Example: gas turbine, genomics?

          s   The “optimal” or “right” technology policy is unlikely to be a simple
              prescription.
                •   E.g. not necessarily just applied energy R&D (technology “Push”) or regulatory policy (Technology “pull”)
                •   Maintaining a strong technological base for society is important—the state of science, patent law, the
                    education system, etc.
                •   Basic scientific research is important—”Bohr’s Quadrant”, “Pasteur’s Quadrant”



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Joint Global Change Research Institute                                                                                          8
  R&D does not ‘solve’ the problem …
  s   Energy R&D refers to a series of linked processes
      by which technologies for energy supply, end use,
      or carbon management move from theoretical
      conceptualization to feasibility testing and,
      ultimately, to small-scale deployment.




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  Demonstration of technological feasibility
  is a long way from widespread deployment
   Penetration




                    Demonstration,
                     First in Field




                                         Technological
                                         Advance


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  The technology must also compete in the
  marketplace …
  s   Commercial feasibility implies:
       • The technology can be successfully operated with a
           reasonable return on investment.
       •   This means operation at reasonably predictable cost
       •   Adequate personnel to manage the facility on the day-to-
           day basis,
       •   Minimal likelihood of operational or regulatory surprises
       •   Widespread public acceptance of the technology.

  s   It affects both initial penetration and eventual
      extent of penetration


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Joint Global Change Research Institute                                 11
  Between technical feasibility and
  commercial viability is …
  s   The ‘Valley of Death’

       • Solution: an heroic model of breaking down barriers to
          market penetration


  s   Or - the ‘Muddle in the Middle’

       • The interaction between government and the private
          sector is very complex in this domain - incentives,
          standards and the impact of seemingly unrelated
          policies (e.g. agricultural policy, land-use and bio-fuels)


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  What factors might inhibit large scale
  deployment?
   Penetration




                    Demonstration,
                     First in Field




                                         Technological
                                         Advance


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 Technological Characterization


                            Importance of Scale

       Characteristics that are trivial for
       small scale may be extremely
       important for large scales.
               • Commercial biomass
               • H2 vehicles

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  What happens at scale ...
  s   In terms of resources - the technology moves from being a
      “price taker” to a “price maker”
       • For energy systems, in particular, their scale will greatly increase
          demand - e.g. land for bio-fuels

  s   The expertise for managing the technology must be a
      product of the standard education system and cannot
      count on the over-qualified developers that demonstrate
      the technology

  s   Seemingly low probability safety occurrences become
      increasingly likely as deployment increases, and small
      collateral effects, like emissions, become increasingly
      important in aggregate.

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Joint Global Change Research Institute                                          15
  Key Points
  s   IPCC cross-cutting report in preparation and will
      provide a useful guide.

  s   Mechanisms of technological advance need to
      viewed in their full complexity.

  s   Technical feasibility is necessary but not sufficient.

  s   For climate related technologies, scale up is a very
      big issue.


           JGCRI
Joint Global Change Research Institute                         16

				
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