The Practice of Emerging Technology Management Context, Issues and - - PowerPoint PPT Presentation

The Practice of Emerging Technology Management

Context, Issues and Opportunities

Jonathan Livingston December 30, 2008

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Agenda for Today

• What are Emerging Technologies?
• “Cross the chasm”
• Resources and best practices for success
• Historical examples
• Current opportunities
• Your questions and discussion

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“If I have seen further, it is only by standing on the shoulders

• f Giants.”

– Sir Isaac Newton

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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

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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

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Some EE solutions are available now (McKinsey 2008)

• 110

1.0 1.2 1.4

• 50

1.8 2.0 0.2 2.2 2.4 2.6 2.8 3.0 3.2 0.4 0.8

• 40

0.6

• 20
• 10

1.6 10 40 50 70 80 100 20

• 100
• 70
• 80

30 60 90

• 120
• 30
• 60
• 90
• 230

Residential electronics Commercial electronics Residential buildings - Lighting Fuel economy packages – Cars Cellulosic biofuels Industry – Combined heat and power Conservation tillage Fuel economy packages – Light trucks Coal mining – Methane mgmt Nuclear new-build Natural gas and petroleum systems mgmt Afforestation of pastureland Reforestation Winter cover crops Coal power plants – CCS new builds with EOR Biomass power – Cofiring Industry – CCS new builds on carbon- intensive processes Coal-to- gas shift – dispatch of existing plants Car hybridi- zation Commercial buildings – HVAC equipment efficiency Residential buildings – HVAC equipment efficiency Industrial process improve- ments Manufac- turing – HFCs mgmt Distributed solar PV Commercial buildings – New shell improvements Abatement costs <$50/ton

Cost

Real 2005 dollars per ton CO2e

Low-, mid- penetration

• nshore wind

Active forest management

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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

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But ET doesn’t just happen…

Diffusion of Innovation (Rogers 2003)

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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)

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To succeed, ETs have to make it across the chasm

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Making it across requires just the right resources

• Partners
• Portfolio
• Processes

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Like most business practices, ET management is a team contact sport

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Winning teams combine innovation, funding and market deployment skills

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You’ll find ET teams all over the world

• BPA
• NEEA
• California utilities
• CEC PIER
• BC Hydro
• Ontario Power Authority
• E Source
• Focus on Energy / CleanTech

Partners (Wisconsin)

• Pecan Street Project (Austin)
• NYSERDA
• NEEP
• Massachusetts Technology

Collaborative

• Connecticut Clean Energy Fund
• ACEEE
• EPA Climate Choice
• Advanced Energy (NC)
• UK Carbon Trust
• Electricité de France

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Manage ET risk with a portfolio approach

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Adopt consistent process to accelerate market penetration Broad Use of Technology

Initial Market Acceptance ETs Assessed / Validated Projects Selected Technologies Screened Objectives and Resources Set Program Criteria Established Measure Transferred to Program

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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?

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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?

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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

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Create and follow a SMART ET roadmap (illustrative)

2009 2010 2011 Potential Savings Sponsor

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

HVAC Hybrid RTU

300 GWh (lifetime), 92 MW Regional Agency

Mesh Wireless EMS

620 GWh (lifetime), 44 MW Utility A

Quality Installation Package

97 GWh (lifetime), 17 MW Utility B

Economizer Enthalpy Control

TBD Manufacturer

Assessment Program Uptake Market Adoption Low-Rise Commercial Res / Comm’l. New Const. All Commercial

Technology Application

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Ask yourself, “How are things in my town?”

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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

• utside the organization.
• 7. Create the right metrics and incentives for innovation.

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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

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Pull it all together -- and cross the chasm (PG&E 2005)

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Lessons learned from past crossings

• Electronic ballasts
• Heat pump water heaters
• LED traffic signals
• Compact fluorescent lamps

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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)

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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

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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

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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

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“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)

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One more thing -- the key to ET success

Jonathan Livingston

Direct: 415.383.7480 Cell: 415.306.3582 Email: jonathan@livingston-ei.com