You are here
Disruptive Innovations in Energy
Innovation is now a near ubiquitous phrase in the business vocabulary. However, use or rather abuse of this phrase has led to a situation where many think that innovation is just a new buzzword, around which some excitement can be generated during a discourse or discussion. Yet, the backers of innovations, and surely the innovators themselves, are not worried about the misconceptions around the term and get on with their work, sincerely believing in the ideas that they are financing or themselves working on.
With the current set of resource challenges, the world needs innovations to allow for greater efficiency of resource usage. The kind of innovations that we need are numerous and limited only by the extent we limit our minds. There are quite a few institutions around the world that celebrate these innovations. MIT Technology Review, one of the foremost of them, has been listing Top 50 Disruptive Innovation companies every year since 2010. The 50 companies span energy, materials, bio-medicine, computing, web, and transport.
MIT Technology Review list for 2013 has a dozen companies in energy and related fields. These are ABB for perfecting a circuit breaker for high-voltage DC lines, which is a crucial step for widespread use of renewable energy, Ambri and Aquion Energy for their work on batteries for grid storage, Alta Devices for advancing ultra-efficient solar sheets, BrightSource Energy for opening the biggest solar plant where mirrors reflect light onto a tower to generate steam, Dow Chemical for commercializing roof shingles that double as solar photovoltaic panels, General Electric for their work on a new gas turbine that ramps up quickly when greener power isn't available thus helping utilities make use of wind and solar, Nest for their thermostat that learns users' temperature preferences and maximizes efficiency as it implements them, Philips for making efficient LED light bulbs affordable and more useful, Semprius for using a novel method of concentrating sunlight through tiny lenses to boost the efficiency of solar power, Siemens for developing batteries and wind technologies that will be crucial in Germany's plan to rely more heavily on renewable power, and Toyota for its new
plug-in version of the Prius.
In earlier years, winners have included companies working not just in the ‘traditional’ areas like nuclear reactors (Babcock & Wilcox), solar power (First Solar, Suntech, and Applied Materials), wind energy (Goldwind Science and Technology and Siemens), batteries / energy storage (Sakti3 and Wildcat Discovery), electric vehicles (Nissan and Tesla Motors), but also those working on newer technologies such as Lanza Tech that makes fuel and chemicals from the carbon monoxide produced by processes such as steelmaking using genetically engineered organisms, Siluria that has developed a family of catalysts that selectively cause methane to react to form ethylene, Better Place that has designed battery charging infrastructure enabling increase in the range of electric vehicles and WiTricity for its system that can recharge a battery pack wirelessly. Companies with innovative technologies to produce biofuels namely Amyris, Joule Unlimited, and Synthetic Genomics have also featured in the earlier years’ list.
In sustainability the kind of disruptions being celebrated and rewarded in the area of energy, materials and transport may not be seemingly disruptive in nature yet but the early signs indicate potential for creating visible disruptions in a few decades time. As with the process of invention and discovery, a breakthrough innovation in the realm of energy could possibly disrupt the market even in shorter period. The recent example of this is the upsurge of oil and gas production in the US due to the innovation of fracking.
The story of US shale gas in short is as follows. The gas trapped in shale formations was considered extremely hard to bring to ground until a few small independent entrepreneurial companies came in. They improved the technology of fracking and combined that with the technology of horizontal drilling. This ‘breakthrough’ resulted in an industry that literally started unearthing the massive shale gas reserves in the US. Since some of the shale formations are rich in liquids, the oil production in the US also increased in tandem. This resulted in a situation of glut in the midland US. The benchmark WTI crude oil of US, which historically traded at a premium to the European benchmark Brent crude oil, started trading at a discount to Brent. The situation was such that at its peak the discount was as much as over $ 20 per barrel.
The plentiful shale gas supplies caused natural gas price at Henry Hub to fall below $ 2 per MMBtu at one point in time. This in turn led to power plants switching away from coal on one hand and the petrochemical and other industries using natural gas as feedstock becoming highly competitive in the world markets second only to the Saudi companies on the other. Another impact seen is the reversal of considerations in US LNG business. Several US companies had lined plans to import LNG before the US shale gas production revealed itself to the market. Now there are more than a dozen projects with approvals to export LNG from the US. The whole disruption, if you may, occurred over a span of couple of years.
Even among the lists of MIT Technology Review, and to be sure other companies working on similar or other aspects, there are potential candidates to cause disruption in the way current energy resources are deployed. A product or service in the area of smart grids that can be replicated in other parts of the world could mean that utilities adopt altogether different business model(s). A breakthrough in making fuel from waste or algae by use of genetically modified microorganisms could bring new dimension to the world oil supplies. A new idea in grid energy storage could mean entirely different ways of operating our electricity plants. Hence a big thumbs-up to the innovators and urging all those yet-to-get-ignited innovative minds to get to work now.
References:
http://www2.technologyreview.com/tr50/2013/
http://www2.technologyreview.com/tr50/2012/
http://www2.technologyreview.com/tr50/2011/
Dr Ashish Rana works in a leading private sector company. He has been a Lead Author in Working Group III of the IPCC.