Directionality challenges for transformative innovation policy: lessons from implementing climate goals in the process industry

In the new paradigm of ‘transformative’ or ‘mission-oriented’ innovation policy, which addresses broad societal challenges, policy makers are given a large responsibility for setting or shaping the direction of socio-technical transitions. However, the literature has so far not provided much concrete advice on how to achieve directionality in practice. The main argument of this conceptual article is that a more detailed approach is needed to better understand the challenges policy makers might face when they attempt to translate societal goals into more concrete and actionable policy agendas. It identifies and discusses eight analytically derived directionality challenges: handling goal conflicts, defining system boundaries, identifying realistic pathways, formulating strategies, realising destabilisation, mobilising relevant policy domains, identifying target groups, and accessing intervention points. To illustrate these challenges, the article uses examples from the implementation of the Swedish climate goal in the process industry

Turning the tanker? Exploring the preconditions for change in the global petrochemical industry

Meeting the goals set out in the Paris Agreement will require rapid and deep reductions of greenhouse gas emissions (GHG) across all sectors of the global economy. Like all major societal transformations, this climate transition will impact both social and technical aspects of society and, depending on how it evolves, will reallocate social and economic benefits and costs differently. Recognising the importance of decarbonising key industry sectors with large GHG emissions and an significant impact on society, this study explores the opportunities and tensions involved in a transition of the petrochemical industry. We do so by analysing how access to natural resources, the petrochemical industry's role in the economy and the socio-political landscape in key petrochemical producing countries impacts prerequisites for change. The assessment shows that devising adequate policy responses, building legitimacy for change and potentially building bottom-up pressure for a timely climate transition are likely to look very different in the 10 countries with the greatest active petrochemical capacity in the world: China, the United States, India, South Korea, Saudi Arabia, Japan, Russia, Iran, Germany and Taiwan. The indicators used to explore the prerequisites for change all point to areas where actions and policies must advance for a transition to be realised. This includes efforts to cap fossil feedstock supply and production capacity, efforts to limit and ultimately reduce demand for plastics and fertilisers, and measures to formulate transition strategies and policies that capture and provide agency for communities and groups that are currently on the receiving end of negative health and environmental impacts from the petrochemical industry and that will also, in many cases, be most closely affected by a transition

Petrochemicals and climate change: Powerful fossil fuel lock-ins and interventions for transformative change

With the risk of climate breakdown, pressure is increasing for all sectors of the economy to break with fossil fuel dependence and reduce greenhouse gas emissions. In this context, the chemical industry requires more focused attention as it uses more fossil-fuel based energy than any other industry and the production of chemicals is associated with very large emissions. Beyond the climate crisis, the chemical industry significantly impacts several critical dimensions of sustainability, including the planetary boundaries for novel entities, biosphere integrity, and ocean acidification. In this report, we focus on the petrochemical sector, which represents the largest share of the chemicals industry and is generally understood to refer to the part of the industry that relies on fossil-fuel feedstocks from oil, gas, and coal. The petrochemicals sector produces chemicals mainly used for plastics and fertilisers, but the products also end up in paints, pharmaceuticals, pesticides, and other applications. This report provides a critical exploration of the petrochemical sector to strengthen awareness of its relevance to the climate crisis and to provide tools and recommendations for decision-makers in different domains to initiate, support, and accelerate much-needed transformation. The report highlights the rapid expansion of the petrochemical sector as well as the range and growth of economic, infrastructural, and political interlinkages with the fossil fuel extraction sector. It argues that these developments and dynamics are crucial to understanding pathways, strategies, and interventions for a low-carbon transition for petrochemicals

Challenges in mobilising financial resources for renewable energy-The cases of biomass gasification and offshore wind power

To mitigate climate change, substantial investments are needed in emerging renewable energy technologies. However, developers of the technologies - both capital goods suppliers and utilities - lack the capital to make the required investments, and other investors hesitate because of the high risks and low returns involved. This article analyses the challenges of financing the development and large-scale diffusion of biomass gasification and offshore wind power in Europe. Biomass gasification needs to take the step from public to private finance and find investors willing to make a sizable investment with high risk. Mobilising the amount of capital needed to bring about large-scale diffusion of offshore wind power will require innovative financial solutions. To overcome these challenges, changes are needed in both the financial sector and in firms in the energy sector. Amongst other suggestions this article points to bonds specially designed for renewable energy as one way to increase investment

SCALING UP RENEWABLE ENERGY TECHNOLOGIES - The role of resource mobilisation in the growth of technological innovation systems

Rapid and large-scale diffusion of renewable energy technologies is needed to avoid severe climate changes that would dramatically affect the conditions for human life on Earth. To scale up these technologies involves technological development, but also the alteration of structures that are locked-in to established socio-technical systems. As the scale of this transition is enormous and the timeframe is short, policy intervention is essential to assist the industrialisation and building up of new socio-technical systems. In this thesis, the technological innovation system (TIS) framework is used to analyse the challenge of scaling up renewable energy technologies. The TIS framework is effective for capturing dynamics in emerging technologies and industries, defining mechanisms that are blocking or inducing development and suggesting where policy could intervene. Mobilisation of resources such as human and financial capital, and of complementary assets such as transmission grids, raw materials and the space needed for construction and operation, are essential for the growth of novel energy technologies, as substantially more resources are needed when the systems expand. Understanding what is constraining resource mobilisation and how this can be overcome is therefore key for understanding how up-scaling of renewable energy technologies can be achieved. Thus, the purpose of this thesis is to increase the understanding of system up-scaling, by applying the TIS framework, with an emphasis on the role of resource mobilisation. Empirically, the thesis concentrates on two cases of renewable energy technologies: wind power and biorefineries. It includes analyses with different geographical scopes, ranging from a small country to large countries and regions.The theoretical contribution of the thesis is a conceptualisation of the TIS’s context that enables analyses of the resource mobilisation needed for up-scaling of renewable energy technologies. The empirical contributions include observations of what characterises a TIS in the growth phase. The empirical contributions also include findings on resource mobilisation challenges, for example the scale and quality of human capital needed for large-scale diffusion of offshore wind power in Europe, and suggestions for how these can be overcome. To effectively address some resource mobilisation challenges, strategic action or policy intervention is required. A suggestion for policy intervention, if this is not done by industry actors, is to coordinate activities within the TIS. For actors involved in development and diffusion of the technology, one way to ease resource mobilisation challenges is to communicate their need for resources, in terms of quantity and quality, to policymakers, academia, the financial sector and incumbent industry actors. Academia and the financial sector can facilitate resource mobilisation by evaluating the need for resources for renewable energy technologies and possibly initiate targeted programmes for education and investments

Resource mobilisation for energy system transformation

A transition to a sustainable path of development will require that fossil fuels are replaced with renewable energy sources and involve, therefore, a large-scale transformation of the energy system. In the EU, offshore wind power and biorefineries have the potential to play an important role in this transformation. This thesis focuses on development and, particularly, diffusion of these technologies and the associated crucial mobilisation of resources. First, the formation of competences is analysed, with focus on the need for engineering competences in the offshore wind sector. Second, an analysis is made of an incumbent industry that is in control of strategic raw material, competences and technical systems and which, therefore, can hinder or drive the development of technology. The incumbent industry in question is the Swedish pulp and paper industry and the focus is on the adoption of biorefinery options. The analytical framework used is constructed by combining literature on innovations systems, transition management and strategic management. This combination contributes to a better understanding of the interactions between different system levels. The analysis of the human capital required to realize an expansion of offshore wind power shows that there is a need for both deep competences and new types of integrated competences. By 2020, the number of additional engineers needed in the wind power value chain may easily go beyond 10 000. The demand for competence has implications for the universities, which need to expand the number and types of educational programmes. This up-scaling of university programmes will require that the associated teaching staffs are enlarged. It may also require support for a European portfolio of specialized courses that are made available to students from different universities.The analysis of the pulp and paper industry describes how the industry has started to change its attitude towards development of biorefinery technologies due to pressure from several changes at a societal level. This far, the industry’s reaction to these changes has been modest and is characterized by incremental change and extended vertical integration. However, development along two new technological trajectories (including development of gasification and separation/refining technologies, respectively) can be identified. The firms’ different reactions to pressure can be explained by their different prerequisites regarding resources, skills, position and experience. These reactions can be seen as an initial phase of a regime fragmentation and could constitute a starting point for a transition

Challenges in mobilising financial resources for renewable energy-The cases of biomass gasification and offshore wind power

© 2015 Elsevier B.V. To mitigate climate change, substantial investments are needed in emerging renewable energy technologies. However, developers of the technologies - both capital goods suppliers and utilities - lack the capital to make the required investments, and other investors hesitate because of the high risks and low returns involved. This article analyses the challenges of financing the development and large-scale diffusion of biomass gasification and offshore wind power in Europe. Biomass gasification needs to take the step from public to private finance and find investors willing to make a sizable investment with high risk. Mobilising the amount of capital needed to bring about large-scale diffusion of offshore wind power will require innovative financial solutions. To overcome these challenges, changes are needed in both the financial sector and in firms in the energy sector. Amongst other suggestions this article points to bonds specially designed for renewable energy as one way to increase investment

The role of values for niche expansion : the case of solar photovoltaics on large buildings in Sweden

Background Solar photovoltaic (PV) plants can contribute to the transformation of the electricity system in Sweden not only by adding capacity, but also by forming new decentralized ownership structures and involving new actors. This article focuses on solar PV plants on larger buildings, which represent a significant share of the installed capacity (although the total capacity is still very low in Sweden) and which have a good future potential. We are interested in the reasons owners of large buildings have for investing in solar PV plants, despite the fact that they face a complex regulatory situation. The aim of this paper is, therefore, to identify added values from solar PV plants for large buildings and to see how these values contribute to the ongoing expansion of the solar PV niche in Sweden. We use sustainability transitions as the theoretical point of departure and focus particularly on the role of values in an expanding niche. Data was collected via 15 semi-structured interviews, mainly with large building owners. It provides an interesting empirical case of the pioneers within the actor group of large building owners who potentially can play an important role in the expansion of solar PV technology in Sweden. Theoretically, the article contributes to the sustainable transition research field by demonstrating how values are developed and affect the niche-regime interplay. Results The findings demonstrate that owning a solar PV plant adds values such as sustainability, fair cost, and induced innovativeness. These values have an effect on niche expansion by contributing for example to the development of a social network, new role development, positive niche narrative, and niche empowerment. Conclusions We conclude that the broad set of values added by solar PV plants on large buildings increases the desire and enhances the positive experience to take on a new role development. Furthermore, we conclude that added values contribute to developing a social identity which is important when expanding the social network around the niche. Finally, we conclude that added values shape the positive niche narrative among niche advocates and give direction for policy development related to the niche

Mechanisms blocking the dynamics of the European offshore wind energy innovation system - Challenges for policy intervention

Decarbonizing electricity production in the EU may necessitate building new “low-carbon” capacity (excluding nuclear investments) to deliver 3500 TWh by 2050. Offshore wind power has the potential to contribute substantially to fill this gap. Realizing this potential is, however, difficult since deploymentoffshore does not constitute simple diversification by the onshore wind turbine industry to a new segment. This paper identifies factors obstructing the development of the northern European innovation system centered on offshore wind power, specifies a set of associated policy challenges and discussesvarious policy responses

Formation of competences to realize the potential of offshore wind power in the European Union

The electricity sector has to undergo a large-scale transformation process to reduce the threat of climate change. Wind power has a strategic role to play in this process. This paper makes a preliminary assessment of the types and numbers of engineers required to sustain a large-scale expansion of offshore wind energy in the EU and draws lessons for universities. A variety of competences are required, including (a) deep competences in many fields (electrical and mechanical engineering, but also engineering physics and civil engineering); (b) integrative competences within engineering (e.g., mechanical and electrical engineering) and between engineering and non-engineering fields (e.g., meteorology and logistics). A large number of engineers are required. A rough estimate indicates a need for more than 10 000 new engineers until 2020. The nature and volume of the competences required raise serious questions for the scale and organization of training programmes at universities