After 20 years in the sustainable energy space, we’ve come to realise that one of the best indications of a sustainable energy technology maturing is the evolution in the questions asked about it.
First, they ask explorative questions: What is it? How does it work? Then you have the exploitation queries: Great – so how do we monetise it? What’s the business case? Finally, a penny drops when the industry realises the new tech is here to stay and asks the existential questions: What does this mean for us and our business model?
Part one of this series looked at question one, now what about two and three?
Exploitation: how can we make money out of it?
Wait a minute, this might just work – what’s the business model? Where’s the market? Who should we be working with? Such are typical questions asked of a technology when it becomes clear that it’s viable. At this point, more technology developers enter the fray, policymakers start to take it seriously, perhaps designing subsidy or other support schemes, and a wider circle of investors start to prick up their ears. Demonstration projects yield encouraging results, as well as setbacks. These are all hallmarks of a maturing technology.
To continue the example of hydrogen fuel-cell vehicles from part one, this shift happened around the early 2000s, with palpable momentum by midway through the decade.
The 2001-2006 Clean Urban Transport for Europe (CUTE) initiative saw 27 hydrogen buses rolled out across nine European cities, and its successor HyFleet CUTE expanded that to 47 in 10 cities between 2006-2009. These feeler projects established the use-case and built industry knowledge.
Around this time you could sense a shift in the industry. Manufacturers started taking hydrogen cars seriously, with Hyundai launching the Tucson iX35 in 2013 and Toyota launching the Mirai in 2014, looking to build an early lead in the market. Despite the early models being loss-making, the sector had started shifting from exploratory enquiry to exploitation.
Existential: what does it all mean?
How do you know that a clean energy technology has really made it, though? In our experience, it’s when the incumbent industry players start getting nervous and asking the big questions – wait, if this takes off, what does it mean for us? How does this technology fit in?
That’s where we are now with zero emission vehicles (ZEVs) – both battery and hydrogen. The automotive industry has spent a hundred years perfecting the internal combustion engine and honing its manufacturing processes and supply chains – ZEVs were a niche concern, not where the money was. Now though, they’re faced with something new and they’re getting worried.
Toyota took things seriously from an early stage, with the Prius and the Mirai. Over the past few years though, most major manufacturers have changed their tune. Now, you’d be hard-pressed to find a serious industry player without an EV programme – Volvo, for example, has pledged to phase out combustion-engine only vehicles from its range by 2019.
Crucially, this is the point where scope tends to broaden beyond its narrow focus on the technology itself and start to take on systems thinking.
This wider aperture sees the sector start to think hard about a technology’s place in a given system. For example, maybe battery EVs are best suited to short-haul city trips, and hydrogen for long journeys and haulage? How do electricity markets couple with the transport fuelling ones? Will we even continue with the model of private vehicle ownership, or will car-sharing schemes take on greater importance?
With the UK joining France and the Netherlands in planning to phase out new petrol and diesel car sales, it’s safe to say we’ve reached that point for ZEVs – showing it’s a technology on the cusp of full maturity.
In part three of the series, we’ll take a broader look at the sustainable energy sector and how the three-question framework throws light on the industry’s evolution.