Is the Mass Market Holding Us Back in Energy Innovation?

I recently gave a talk at IEEE in Austin about how the present state of energy is based upon the mass market and that the mass market’s requirements don’t foster innovation. They foster the status quo.

I began with a simple question, “How many people in this room think that we have the best energy system(s) today?” If you think we have the best systems in place to deliver energy where we need it, then you’ll be happy with incremental change. If not, then we need to think differently about how we produce, deliver, and use energy. Existing mass market players do not have the strong incentive to think differently.

One requirement the status quo places upon innovations is that those new technologies must scale. If they don’t scale, they won’t solve our problems and therefore are not viable solutions according to status quo thinkers. A common example is energy writers, politicians, or utility executive’s criticism of wind and solar that they can’t scale. Currently, they supply only 2% of today’s energy needs. That’s not enough, they say.

My argument is this. If scale is the main requirement of new technologies, we will suppress innovation. New technologies can’t scale to mass market size right off the line for reasons that go far beyond technology. As I see it, there are three stages to innovation:
1) creation of new technologies
2) initial market niches for new technologies
3) penetration and scaling of these now not so new technologies

The status quo argues that new technologies must be born into stage three. If this were in fact true in the petroleum industry, then gasoline would still be a waste product of kerosene production, the main lighting fuel of the 1870’s and 1880’s.

I then go on to argue by analogy that in energy, we are poised for great change in the same way we were poised for great change in other industries.

One comment

  • July 14, 2010 - 11:29 am | Permalink

    Until a refiner can figure out how to make a 3rd generation biofuel replacement for the fuel used for automobiles in EPA tests (called Indoline) the auto industry will not be able to get behind biofuels. Or to put it another way. Until an EPA certified test biofuel comes available the automakers have no choice but to continue to dance with Big Oil. Without the EPA mandated Federal Test Procedures (FTP’s) taking biofuels into account, the status quo, shall remain just that. Come hell, or high water literally.

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