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
jonas.grafstrom@ltu.se | +46 703475854
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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?
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.
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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).
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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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.
Diffusion: Installed wind power capacity (MW)
Source: EPI (2014).
10 The innovation chain and the technology ‘‘valley of death’’ (adapted from Grubb 2004).
• "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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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 Figure 4 Sales and exports in million SEK in environmental sector 2013, SCB 2014 16 434 222 393 37 061
The Swedish environmental sector
0 100 200 300 400 500 600 700 800
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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
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
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)
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
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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).
Patents in each category, wind, solar and biofuel.
Sweden
0 5 10 15 20 25
Vindenergi Sol Biobränsle
EPO, 2014
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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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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
Milion SEK
Finance from capital funds, totalt
Private Public
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
Milionr SEK Seed
Product development Introduction
Expansion
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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
Milion SEK
Seed
Product development Introduction
Expansion
Tillväxtanalys (2014)
05101520
Förnybar energi, dollar per capita
1990 1995 2000 2005 2010
Year
Danmark Finland
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.
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.
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
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Contact information
Jonas Grafström and
Luleå University of Technology Economics Unit
SE-971 87 Luleå, Sweden
Email: Jonas.Grafstrom@LTU.se
