technologies in which systemic barriers are gradually removed Jacobsson Bergek

Technologies in which systemic barriers are gradually

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technologies, in which systemic barriers are gradually removed (Jacobsson & Bergek, 2004). The establishment of a clear cost hierarchy for re- newable energy technologies is complicated by the great variability among countries, and even regions, of technology- and location-specific supply chains, cost structures, and resource availability (IRENA, 2012). As discussed, there are nevertheless signifi- cant cost differences between fossil and renewable energy technologies, as well as among different forms of renewable energy technologies. It appears from table 1 that for renewable energy technologies to be able to compete with fossil energy, produc- tivity-enhancing innovation needs to take place. This must happen at the same time it is established. Such a simultaneous innovation and dissemination process is an obstacle, because a technology under rapid improvement tends to stall the implementa- tion process. The diffusion challenge can be clarified further when seen as involving three different types of in- novation. Smith (2009) distinguishes between in- cremental innovation, disruptive innovation, and radical innovation. 12 Incremental innovation con- cerns improvements in and the diffusion of rela- tively mature and established technologies such as heat pumping technologies for cooling/heating in buildings, and hydropower. Disruptive innovation involves technologies with significant unexploited technological potential, such as geothermal en-ergy, solar panels, and wind energy (particularly offshore). Radical innovation concerns relatively immature technologies such as fusion power, hy- drogen, ocean energy, advanced fuel cells, space- based solar power, and similarly advanced energy storage technologies, e.g., batteries, capacitors, and compressed gas storage. These distinctions al- low us to see the need for different types of learn- ing spaces ranging from basic science to market creation. Incremental innovation and dissemina-tion possibly may be achieved with market-based 58 GLOBELICS THEMATIC REVIEW
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instruments such as carbon taxes and renewable energy quotas. Disruptive innovations and their dissemination require technology-specific poli- cies, further market formation, and public pro- curement to stimulate competence building. Fur- thermore, nascent markets are needed to support learning spaces in which performance characteris-tics can be improved. Access to finance and further market creation will be crucial. Relevant policies include technology- specific feed-in tariffs and low-carbon financing. More radical forms of low-carbon energy innova-tion are necessary for the longer term, thus call-ing for basic research. Here learning spaces have a stronger orientation toward such research, R&D, and experimentation. The investments needed are not only highly uncertain, but also large-scale and capital-intensive, and must be expected to take a long time; coordination problems are also foreseea- ble. These features are augmented as we move from incremental through disruptive to radical innova-tions; it is therefore to be expected that
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