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The strengths and weaknesses in the
Swedish renewable energy sector – an
assessment
SAEE 2016 Luleå
Jonas A Grafström
Luleå University of Technology
971 87 Luleå, Sweden
[email protected] | +46 703475854
2
Outline
• What? – General information about the paper.
• Why? – Should we bother?
• How? – A Valley of Death approach. Figures and data
will be presented.
• Conclusions– Strengths and weaknesses?
3
What?
Strength/weakness: Observations about factorsthat relative
to other countries are good/bad or worthy of note.
Swedish Renewable energy sector: Companies
concerned with the creation of energy and energy
technology.
Focus: Technological change and opportunity for it.
4
Why bother?
• Absorptive capacity - the ability to receive technological
spillovers or use advancements made abroad are a function of
the country's past experience in research (Cohen & Levinthal,
1989).
• International technology flows crucially depends on the
destination country's ability to comprehend and make use of
external knowledge (Mancusi, 2008).
• Technological capabilities of a country are important for the
development of renewable energy since it has been found to
spur innovation (Consantini et al., 2015).
5
A technological development approach
Invention: The creation of new products and processes
through the development of the new knowledge or from
new combinations of existing knowledge.
Innovation: The initial commercialization
of invention by producing and marketing a new good
or service or by using a new method of production
Diffusion: occurs after the innovation has taken place.
The innovation progressively becomes widely available
for use, through adoption by firms or individuals.
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7
8
Average wind power investment cost, US$ per kW
(2008 prices)
0
500
1000
1500
2000
2500
3000
1991 1993 1995 1997 1999 2001 2003 2005 2007
Denmark Germany UK Spain Sweden France Italy Netherlands
From Grafström and Lindman (2016) in press.
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Diffusion: Installed wind power capacity
(MW)
Source: EPI (2014).
10 The innovation chain and the technology ‘‘valley of death’’ (adapted from Grubb 2004).
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• "Drill for oil? You mean drill into the ground to try and find oil?
You're crazy." -- Workers whom Edwin L. Drake tried to enlist to
his project to drill for oil in 1859.
• "There is not the slightest indication that nuclear energy will ever
be obtainable. It would mean that the atom would have to be
shattered at will." -- Albert Einstein, 1932.
• "The Americans have need of the telephone, but we do not. We
have plenty of messenger boys." -- Sir William Preece, chief
engineer of the British Post Office, 1876.
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13
Number of firms 197
Number of work places 372
Number of employees 5 763 persons
Total net revenue 46 billion sek
Number of big firms (> 250 employees) 1
Number of medium size firms (51– 249
employees) 12
Number of small size firms (< 50 employees) 184
The Swedish energy firms, numbers, revenue, size. Strömberg 2013.
Wind Solar Bio energy
133 115 +300
Review of the professional organizations in member companies 2015
18% 5%
59%
18%
Employees
Wind
Solar
Bio
Hydro/wave
The sector: in numbers
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Environmental area
Number of
work sites Turn over Export
Air Emissions Control 128 3 029 1 276
Sewage treatment 946 14 240 2 430
Waste disposal 2 757 35 168 4 478
Soil and groundwater 435 2 402 392
Noise and vibrations 39 281 --
Environmental consultant 1 555 7 691 649
Education, research and monitoring 261 1 307 98
Recycled material 1 933 38 910 11 856
Renewable energy sources 2 687 90 107 9 142
Heat / energy saving 901 13 692 6 187
Sustainable agriculture and fisheries 4 513 7 954 292
sustainable forest 102 6 403 29
Other (including ecotourism) 177 1 210 --
TOTALT 16 434 222 393 37 061 Figure 4 Sales and exports in million SEK in environmental sector 2013, SCB 2014
The Swedish environmental sector
15
0
100
200
300
400
500
600
700
800
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Wind energy
Solar thermal
Solar photovoltaic (PV)
Solar thermal-PV hybrids
Geotermal
Marine energy (excluding tidal)
Hydro energy - tidal, stream or damless
Hydro energy - conventional
Granted renewable energy patents, OECD (2014).
Sector Percentage in
the biggest
subclass
Biofuels 37 %
Geothermal 38 %
Hydroelectri 73 %
Hydroogen
and Fuel cells
77 %
Solar 66 %
Tidal 84 %
Waste to
energy
51 %
Vågkraft 92 %
Wind 96 %
Other 93 %
Source: Correspondentens with Peter Keefe Patent Examiner
Patent Informatics Analyst. UK Patent office.
Output: patents
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Total number of renewable energy patents per country ( the
paper covers per capita)
0
100
200
300
400
500
600
700
800
Austria
Belgium
Denmark
Finland
France
Germany
Hungary
Italy
Netherlands
Portugal
Spain
Sweden
United Kingdom
Figur 1 Total number of renewable patents, by country. Source OECD (2014)
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The number of renewable energy patents taken at
the EPO by the Swedish and Danish innovators.
Data from the European Patent Office (EPO, 2014).
0
50
100
150
200
250
199019911992199319941995199619971998199920002001200220032004200520062007200820092010
Sweden
Denmark
18
The number of renewable energy patents taken at
the EPO
0
100
200
300
400
500
600
700
800
Germany
France
United Kingdom
The number of renewable energy patents taken at the EPO. Data from
the European Patent Office (EPO, 2014).
19
Patents in each category, wind, solar and biofuel.
Sweden
0
5
10
15
20
25
Vindenergi
Sol
Biobränsle
EPO, 2014
20
Patents in Geothermal, wave/hydro, tidal/dams
conventional waterpower. Sweden
0
1
2
3
4
5
6
7
8
Geotermisk
Havsburen, vågenergi exkluderad
Tidvatten och dammar
Konventionell vattenkraft
EPO, 2014
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22
Tillväxtanalys (2014)
Private and public VC funds investments in
cleantech companies 2007-2013
0
100
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012 2013
Milio
n S
EK
Finance from capital funds, totalt
Private
Public
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Public VC funds investments in cleantech
companies 2007-2013, by development stage
0
50
100
150
200
250
300
350
400
450
2007 2008 2009 2010 2011 2012 2013
Milio
nr
SE
K Seed
Product development
Introduction
Expansion
Tillväxtanalys (2014)
24
Public VC funds investments in cleantech
companies 2007-2013, by development stage
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012 2013
Milio
n S
EK
Seed
Product development
Introduction
Expansion
Tillväxtanalys (2014)
25
05
10
15
20
Fö
rny
bar
en
ergi,
do
llar
per
cap
ita
1990 1995 2000 2005 2010Year
Danmark Finland
Norge Sverige
Money in the state budget on renewable
energy, per capita. OECD, 2014.
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International ranking
General
innovation drivers
Cleantech-specific
innovation drivers
Evidence of
emerging
cleantech
innovation drivers
Evidence of
commercialised
cleantech
innovation
1 17 4 9
Tabell 4 Cleantech group och WWF´s (2014) ranking av länder, Sveriges placeringar.
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Strenghts
Opportunity – Sweden is ranked high current climate for innovation:
The Cleantech Group and WWF (2014) rankings placed Sweden as
the country in the world where the general conditions for the taking up
and pursuit of innovative start-ups are the best.
Fast-growing industry - the Swedish environmental energy industry
has grown rapidly (in percentage) in all categories studied.
Sympathetic population and politicians: The Swedish population
and politicians are generally in favor of supporting the renewable
Energy, with various policy measures.
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Weakness
Lack of capital - Access to capital is insufficient (could be
better).
Small critical mass - absorbing technology: In order to absorb
technology human capital is needed, not only in general but
specific technology.
Lack of industry technology clusters - If the Swedish
environmental energy sector fails to grow and reach the critical
mass, there is a risk that the industry is stagnating.
29
Weakness 2 • Uncertain political environment: Companies need a good business
environmen,t but also stability. Environmental Energy investments are
often capital-intensive. An investor will be less willing to invest if there
is a risk that policies introduced removed.
• Business angels do not understand the industry: As angel
investors not only contribute capital to the company, but also its
expertise, commitment and contacts, it is important for most business
angels that they understand the industry to invest in. This means that
there are fewer potential angels even if the capital is available.
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Conclusion
• Relatively few inventions and innovations are made (though rising in
recent years.
A problem in the sector is that the number of businesses are few and
geographically dispersed across the country, which impair cluster
formation.
The Swedish capital market for green energy companies is limited.
The number of business angels are also small, as the experience in
the relatively new industry is limited
32
Contact information
Jonas Grafström and
Luleå University of Technology
Economics Unit
SE-971 87 Luleå, Sweden
Email: [email protected]
Thank you very much for your attention
