The Practice of Emerging Technology Management Context, Issues and Opportunities Jonathan Livingston December 30, 2008
Agenda for Today • What are Emerging Technologies? • “Cross the chasm” • Resources and best practices for success • Historical examples • Current opportunities • Your questions and discussion 2
“If I have seen further, it is only by standing on the shoulders of Giants.” – Sir Isaac Newton 3
What are emerging technologies? “A technology or solution, not in common use, that promises a quantifiable increase in efficiency of energy end-use as seen by utility customers.“ - BPA, 2008 4
We need EE ETs - because the world is now facing a “perfect storm” • Urgent need for more global warming solutions • Geopolitics of oil amplifying economic instability • Centralized power generation “stabilization wedge” solutions require long lead-time and risk tolerance • Regulatory and implementation bottlenecks limit customer energy efficiency impacts 5
Some EE solutions are available now (McKinsey 2008) Residential Commercial Low-, mid- Cost buildings – 100 buildings – penetration Real 2005 dollars per ton CO 2 e Nuclear HVAC HVAC onshore wind 90 new-build equipment equipment 80 efficiency efficiency Fuel economy Industrial Coal 70 Distributed packages – process mining – 60 solar PV Light trucks improve- Methane 50 Residential ments mgmt Active forest electronics 40 management 30 Residential buildings - 20 Lighting 10 0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 -10 -20 -30 Industry – Biomass CCS new -40 power – Industry – builds on Cofiring Combined -50 Manufac- carbon- heat and -60 turing – intensive power Car HFCs -70 processes hybridi- mgmt -80 zation Coal power Cellulosic -90 plants – CCS new biofuels -100 builds with EOR Natural Coal-to- -110 Commercial gas and gas shift – Conservation Commercial electronics -120 Winter petroleum dispatch of tillage buildings – cover crops systems existing plants New shell mgmt improvements Reforestation -230 Abatement Fuel economy Afforestation of costs <$50/ton packages – Cars pastureland 6
And markets are primed for action • Entrepreneurs moving from IT and biotech into clean tech • Consumers jumping onto the green wave • Politicians promoting the EE + jobs connection • Investors targeting EE companies • Funding is growing despite economy • The time to act is now 7
But ET doesn’t just happen… Diffusion of Innovation (Rogers 2003) 8
In fact, the obstacles are daunting. Reason for Dissatisfaction % of CFL Bulbs for Which This Answer Was Given Should dim better 0.2% Too bright 0.4% Needs to be dimmable 0.6% Needs to be 3-way 0.7% Fit in fixture 0.9% Should last longer 3.0% Not bright enough 4.5% Color 6.5% Appearance 15.6% Eliminate flicker 23.1% Should reach full brightness faster 39.6% Population surveyed 394 CFL saturation (KEMA 2007) 9
To succeed, ETs have to make it across the chasm 10
Making it across requires just the right resources • Partners • Portfolio • Processes 11
Like most business practices, ET management is a team contact sport 12
Winning teams combine innovation, funding and market deployment skills 13
You’ll find ET teams all over the world • BPA • NYSERDA • NEEA • NEEP • California utilities • Massachusetts Technology Collaborative • CEC PIER • Connecticut Clean Energy Fund • BC Hydro • ACEEE • Ontario Power Authority • EPA Climate Choice • E Source • Advanced Energy (NC) • Focus on Energy / CleanTech Partners (Wisconsin) • UK Carbon Trust • Pecan Street Project (Austin) • Electricit é de France 14
Manage ET risk with a portfolio approach 15
Adopt consistent process to accelerate market penetration Broad Use of Technology Initial Market Acceptance Measure Transferred to Program ETs Assessed / Validated Projects Selected Technologies Screened Objectives and Resources Set Program Criteria Established 16
Screen technologies qualitatively • Who is advocating this technology? • How significant is its potential energy savings? • How large is its potential market? • Will customers want it – or not? • What could keep it from success in the market? 17
Select projects quantitatively • Why is this a compelling solution for the customer – value, comfort, safety, productivity, aesthetics, self-esteem? • What are the projected savings? • How large is the market? • What is the projected 5-year market penetration? • How strong is the financial case? • What are the risks of failure – technical, product/ manufacturing, business, market? 18
Optimize assessment and validation • Start with robust experimental design • Maintain credibility, objectivity, and confidentiality • Measure vendor, customer and installer acceptance • Address all major uncertainties • Apply brutal honesty to the findings • Provide constructive feedback to the product developer if assessment discloses flaws • Provide sponsors with all the facts they need for market deployment without hesitation 19
Create and follow a SMART ET roadmap (illustrative) 2009 2010 2011 Potential Sponsor Savings Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 HVAC 300 GWh Regional Hybrid RTU (lifetime), Agency 92 MW 620 GWh Mesh Wireless EMS (lifetime), Utility A 44 MW 97 GWh Quality Installation Package (lifetime), Utility B 17 MW Economizer Enthalpy Control TBD Manufacturer Assessment Program Uptake Low-Rise Commercial Market Adoption Technology Application Res / Comm’l. New Const. All Commercial 20
Ask yourself, “How are things in my town?” 21
Does your organization play by the rules of good innovation management? (Davila et al, 2007) 1. Exert strong leadership on the portfolio decisions and encourage truly significant value creation. 2. Integrate innovation into the company's basic business mentality. 3. Align the amount and type of innovation to the company's business; select a "Play to Win" or a "Play not to Lose" innovation strategy. 4. Manage the natural tension between creativity and value capture so that the company generates successful new ideas and gains the maximum return on its investment. 5. Neutralize organizational antibodies that kill off good ideas because they are different from the norm. 6. Recognize that the fundamental building blocks of innovation are networks that include people and knowledge, both inside and outside the organization. 7. Create the right metrics and incentives for innovation. 22
Last but not least, track ET impacts • Document what happens next with completed assessments • Get savings records for utility programs that support successes • Investigate market and technical failures • Stay current on technologies that failed in assessment 23
Pull it all together -- and cross the chasm (PG&E 2005) 24
Lessons learned from past crossings • Electronic ballasts • Heat pump water heaters • LED traffic signals • Compact fluorescent lamps 25
Does this look familiar? Reason for Dissatisfaction % of CFL Bulbs for Which This Answer Was Given Should dim better 0.2% Too bright 0.4% Needs to be dimmable 0.6% Needs to be 3-way 0.7% Fit in fixture 0.9% Should last longer 3.0% Not bright enough 4.5% Color 6.5% Appearance 15.6% Eliminate flicker 23.1% Should reach full brightness faster 39.6% Population surveyed 394 CFL saturation (KEMA 2007) 26
Promising opportunities… in the present • LED lighting • Data center energy optimization • Hospital efficiency solutions • Advanced HVAC, including hybrid systems • Wireless energy management controls • Advanced water-heating systems • Commercial kitchen “suite” • Home energy display and control networks • Low-cost demand responsive ballasts 27
Gather market intelligence to find future opportunities • Read the technical literature and connect with… • Entrepreneurs • Consulting companies • Universities • Large technology providers • Utilities – and their customers • Private / venture investors • Labs 28
For example: despite the economy, investors still love EE companies • Capital markets’ increased focus on clean tech alternatives • End-use efficiency broadly cited as cheapest and fastest solution to climate change • Intellectual and social capital movement into this domain • Convergence of emerging energy efficiency technologies with information and communication technology innovations 29
“Watch this space” -- recent EE & demand response startup investments • Hycrete (Rockport $?? Series B 2006) • EnerNOC (IPO 2007) • Serious Materials ($50M Series B 2007) • Adura Technologies ($5M Series A 2008) • Calstar Cement (Foundation Capital $3M Series A 2008) • EnergyHub ($5M Series A 2008) • Green Plug, Inc. ($5M Series A 2008) • HID Labs (closing $6M Series A 2008) • Integrity Block (Navitas $2.7M Series A 2008) • Sustainable Spaces ($6M Series A 2008) 30
One more thing -- the key to ET success 31
Jonathan Livingston Direct: 415.383.7480 Cell: 415.306.3582 Email: jonathan@livingston-ei.com
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