Everything you wanted to know about innnovation but were afraid to ask

Posted by Matthew Lockwood

A key issue at the heart of our last two controversial posts was the potential for innovation in low carbon technologies to delink energy growth (and therefore economc growth) from carbon emissions.  One comment accused us of having a “blind faith in infinite innovation”. I wouldn’t quite put it that way, but we do believe that innovation offers the only viable path to mitigation, mainly by making clean energy cheap.

A couple of examples that have come my way in the last couple of days serve  to illustrate the point. Google has been pursuing R&D to bring down the cost of renewable energy to below that of energy from coal, and has just announced a new mirror technology that could halve the cost of concentrated solar power (rather confusingly known as solar thermal in the US). Meanwhile, researchers at Caltech have developed a new solar photovoltaic (PV) technology,  based on light-absorbing silicon microwires, that uses 1% of the material required for conventional solar PV while producing the same amount of electricity. If this can be scaled up, it offers dramatically lower costs, driven by fewer inputs and a shorter manufacturing process.

For the true geeks, there are many other examples of both incremental improvements and breakthroughs on sites such as GreenTechMedia  and MIT’s Technology Review. Of course, some reports are overhyped, and there is a particular incentive for venture capital backed projects to oversell their technology’s performance. Nevertheless, if you want to see what the low carbon future might look like, these aren’t bad places to start.

There are three broad points to make about what’s going on. First, these examples and others like them remind us that innovation opens up new options. There is a tendency to think in quite a fixed way about climate policy and technologies – that solar power will always be too expensive to play a major role, or that wind intermittency is an insoluble problem because it is so difficult and expensive to store electricity. The value of innovation is that it produces surprises, but this process can blindside policy makers and campaigners alike.

A second thing to grasp is that there isn’t really such a thing as “energy technology”. What is going on is the application of a range of established and emerging scientific disciplines to the low carbon problem. The Caltech solar PV breakthrough is a good example of the application of nanotechnology, which is also being pursued in electrical storage – vital for making renewable energy viable. In bio-fuels, the application of biotech is the big growth area, and although there are obvious questions about the risks of genetically-engineered microbes and algae to the wider environment, it is clear that conventional biofuel production is an environmetal dead-end. This alternative route is thus a potentially important one, since it will not mean the giving over of vast tracts of land to energy crops. Materials science is important in areas like new forms of lighting. Molecular engineering is responsible for breakthroughs such as the creation of a new amine that promises to cut the energy penalty – and therefore the major cost element – of CCS by a third. This could mean savings of billions of dollars in retrofitting coal-fired power stations around the world. ICT, meanwhile, is playing a major role in energy efficiency, through the development of  intelligent building management systems and smart grids, a key enabler of intermittent renewables like wind and solar.

A final point is that this is still early days for low carbon innovation. The technologies we currently have are like the Amstrads and early mobile phones of the 1980s – crude and costly. This is largely because very little R&D money and effort has gone into the energy field in the last 30 years, and the innovations I’m describing here are the fruit of just the last few years , with relatively small amounts of money. In the UK, the flagship low carbon innnovation programe – the Energy Technologies Institute – gets public funding of £500 million over 10 years, or £50 million a year. This is a little less than we spend on subsidising opera. So much for the greatest threat facing humanity. We urgently need a huge scaling up of suport. However, this is unlikely to change until campaign groups get on the case.

Thus while innovation is, I believe, the only viable route to mitigation, it will cost money, not only in support to R&D and in creating niche markets, but also in paying for the accelerated turnover of capital that will be needed to deploy new technologies much more rapidly than in the past. That raises the question of how we can raise the money in a politically realistic and fair way, a question that we’ll return to in the future.

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8 Comments

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8 responses to “Everything you wanted to know about innnovation but were afraid to ask

  1. I’m happy to have just discovered your blog, and am enjoying reading through it.

    I agree with your emphasis on innovation here, but this post is poorly titled. You have listed a number of interesting and promising developments, but in the end you have said very little about innovation itself. How does innovation actually work?

    You raise some important general innovation challenges in your last paragraph, these are tip of the iceberg. It’s not just about raising the capital (whether public or private), it’s figuring out how to invest it. People use all sorts of analogies for this: a new Manhattan Project, a DARPA for energy (ARPA-E), an Apollo moonshot effort… the list goes on. But are people actually thinking about how these models of innovation differ from one another, and which of them might actually be appropriate to the task? I suspect that in general they have not. They use these analogies because of a vague idea that those other cases were successful in some way, but that’s as far as it goes.

    I recommend you check out this report recently released jointly by a few DC-based organizations, which tries to inject some clarity with respect to innovation and the energy/emissions challenge:
    http://www.cspo.org/projects/eisbu/

    For the purposes of disclosure, I did not work on this project personally, but I am affiliated with one of the participating organizations (CSPO).

    Hope it proves interesting.
    Thanks!

    Ryan

    • andrewpendleton

      Dear Ryan

      Many thanks for your comment – of course you’re absolutely correct.

      It’s important to remember two things about this blog. The first is that Matthew and I do it in our spare time and so we can’t address everything immediately. The second is that innovation is at the heart of the matter on which we’re trying to stimulate debate. Either in our spare time or in our day jobs, we’d love to do some reviews and analysis of different experiences of innovation and what they can teach us.

      I know you’re generally supportive of Matthew’s blog, but to defend it against the criticism you make – which as I say is fair – it was designed more as a follow up to the growth limits ding-dong we had earlier in the week in which we felt the role of technological innovation was being overlooked. Hence the emphasis on this occasion on technology. However, as we both work for a public policy research institute, you can probably guess where we think the emphasis should be placed.

      My experience of the climate debate is on the international side. In the UNFCCC negotiations the word innovation is bandied around without any proper understanding of what it is; most negotiators assume it’s just R&D. As you suggest, it’s a process with many, complex stages and, currently, many different metaphors are being used and it’s hard to say whether these are accurate or errant.

      It’s great that you’ve found us. We’re working on blogs all the time, but often have to run the gauntlet of our families and write these in the evening and at weekends. However, we’re at a critical crossroads in the climate debate and so now is the time for these debates to be had.

      Keep reading and commenting and thanks for the link, which we’ll follow up.

      Andrew.

  2. David Chester

    It seems to me in view of the fact that this blog is part of a think-tank, that the inovation of greatest significance is about how to determine the workings of macroeconomics. I don’t mean what it is (which is was most students achieve and regretably stop at), but about how it works.

    From my study of many texts on the subject of economics, the only serious attempts in trying to see what makes our social system operate are either a) oversimplified or b) based on statistical data which replaces the “how” with the “what the response was”. Neither of these two kinds of answers are satisfactory and in fact the abilities of modern macro-economic theories to forecast the future are very poor.

    In response to this unsatisfactory situation I have developed a new theory and associated model which has the advantages of being sufficiently (but not too) simple so as to express the whole system in terms that are understandable. I would be glad to share this original work with somebody from your readers or research workers whose interest is academic (like my own) and can appreciate the difference between the present-day econometrics and what should be possible by use of methods taken from a more distant perspective that encompass the whole shebang.

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