The case for a new energy research,development and promotion policy for the UK

This paper is a critical assessment of the current balance of efforts towards energy research and development (R&D) and the promotion of low-carbon electricity technologies in the UK. We review the UK's main technological options and their estimated cost ranges in the medium term. We contrast the energy R&D spending with the current and expected future cost of renewable promotion policies and point out the high cost of carbon saving through existing renewable promotion arrangements. We also note that liberalisation of the electricity sector has had significant implications for the landscape of energy R&D in the UK. We argue that there is a need for reappraisal of the soundness and balance of the energy R&D and renewable capacity deployment efforts towards new energy technologies. We suggest that the cost-effectiveness of UK deployment policies needs to be more closely analysed as associated costs are non-trivial and expected to rise. We also make a case for considering increasing the current low level of energy R&D expenditure. Much of energy R&D is a public good and we should consider whether the current organisation of R&D effort is fit for purpose. We argue that it is important to build and maintain the research capability in the UK in order to absorb spillovers of technological progress elsewhere in the world. Against this background, the recent signs that an energy R&D renaissance could be underway are therefore positive and welcome.     

中国能源研究与发展(R＆D)投入

能源R＆D投入是能源R＆D计划政策分析研究的一个组成部分。文章研究计算了2000年中国能源R＆D的经费投入。在绝对数量上，我国与发达国家的差距很大，如仅仅为日本的1．8％。文中还分析了国际上政府能源R＆D经费在技术领域投向上的趋势。     

Real options valuation of US federal renewable energy research,development, demonstration,and deployment

Benefits analysis of US Federal government research, development, demonstration, and deployment (RD³) programmes for renewable energy (RE) technology improvement typically employs a deterministic forecast of the cost and performance of renewable and non-renewable fuels. The benefits estimate for the programme derives from the difference between two forecasts, with and without the RD³ programme in place. Three deficiencies of this approach are that it ignores: (1) uncertainty in the cost of non-renewable energy (NRE); (2) the possibility of adjustment to the RD³ effort commensurate with the evolving state of the world; and (3) the underlying technical risk associated with RD³. In this paper, an intuitive approach to determining the option value of RE RD³ is developed. This approach seeks to tackle the first two deficiencies noted above by providing an estimate via a compound real option of an RE RD³ programme in a future with uncertain NRE costs. A binomial lattice reveals the economic intuition underlying the decision-making process, while a numerical example illustrates the option components embedded in a simplified representation of current US Federal RE RD³.     

Measuring the social rate of return to R&D in coal,petroleum and nuclear manufacturing: A study of the OECD countries

This paper estimates the social rate of return to research and development (R&D) in the energy manufacturing industry. Our model tries to quantify the positive contribution that lagged R&D has on total factor productivity (TFP) growth in the manufacturing of coal, petroleum products and nuclear fuel for a number of OECD countries. Using a panel of data from the OECD STAN database we are able to obtain results suggesting that R&D has a positive and significant rate of return that varies for each country.     

Optimal policy of energy innovation in developing countries: Development of solar PV in Iran

The purpose of this study is to apply managerial economics and methods of decision analysis to study the optimal pattern of innovation activities for development of new energy technologies in developing countries. For this purpose, a model of energy research and development (R&D) planning is developed and it is then linked to a bottom-up energy-systems model. The set of interlinked models provide a comprehensive analytical tool for assessment of energy technologies and innovation planning taking into account the specific conditions of developing countries. An energy-system model is used as a tool for the assessment and prioritization of new energy technologies. Based on the results of the technology assessment model, the optimal R&D resources allocation for new energy technologies is estimated with the help of the R&D planning model. The R&D planning model is based on maximization of the total net present value of resulting R&D benefits taking into account the dynamics of technological progress, knowledge and experience spillovers from advanced economies, technology adoption and R&D constraints. Application of the set of interlinked models is explained through the analysis of the development of solar PV in Iranian electricity supply system and then some important policy insights are concluded.     

The european community second energy R&D programme. A review of performance

The performance of the European Community Second Energy Research and Development Programme is reviewed and some of the important developments are highlighted. The contributions that have been made in the various areas of interest, energy conservation, solar energy, hydrogen, geothermal energy and energy systems analysis, are discussed and examples are given of the advances that have been made.     

中国能源研发（R＆D）政策研究概要

该课题主要研究21世纪国内外新形势下的能源R&D的政策问题。主要研究评价能源R&D资源配置与投入,同时研究评价能源R&D计划的从立项到促进R&D成果产业化管理,能源R&D计划管理的政策分析是该研究的又一任务。     

Innovation in the energy sector: Lessons learnt from R&D expenditures and patents in selected IEA countries

Long time series of the IEA and international patent offices offer a huge potential for scientific investigations of the energy innovation process. Thus, this paper deals with a broad literature review on innovation drivers and barriers, and an analysis of the knowledge induced by public research and development expenditures (R&D) and patents in the energy sector. The cumulative knowledge stock induced by public R&D expenditures in 14 investigated IEA-countries is 102.3 bn EUR in 2013. Nuclear energy has the largest share of 43.9 bn EUR, followed by energy efficiency accounting for 14.9 bn EUR, fossil fuels with 13.5 bn EUR, and renewable energy with 12.1 bn EUR. A regression analysis indicates a linear relation between the GDP and the cumulative knowledge, with each billion EUR of GDP leading to an additional knowledge of 3.1 mil EUR. However, linearity is not given for single energy technologies. Further, the results show that appropriate public R&D funding for research and development associated with a subsequent promotion of the market diffusion of a niche technology may lead to a breakthrough of the respective technology.     

A study on making a long-term improvement in the national energy efficiency and GHG control plans by the AHP approach

Owing to the expiration of the national 10-year period plan and the establishment of an efficient energy and resource technology R&D system, the Korean government needs to make a strategic long-term national energy and resource technology R&D plan (NERP) to cope with forthcoming 10-year period. A new NERP aims to improve the energy intensity, reduce the emissions of greenhouse gas within the United Nations framework convention on climate change (UNFCCC), and contribute to the construction of an advanced economic system. We determine the priorities in technology development for the energy efficiency and greenhouse gas control plans (EGCP), which are parts of a new NERP, by using the AHP approach for the first time. We suggest a scientific procedure to determine the priorities in technology development by using AHP.     

Analysis of the relationship between international cooperation and scientific publications in energy R&D in China

Energy is important for China and for the whole world. Previously, the huge investment in energy-related research and commercialisation made it possible for China to cooperate with its international partners in various channels, and programs involving international cooperation and co-published papers increased annually. In this paper, through the review of intergovernmental cooperation programs and bibliometric analysis of the top energy journals, it was found that: (1) intergovernmental cooperation and non-governmental cooperation are two effective channels for energy R&D. (2) In these two channels, most participants of international cooperation are universities and institutes, and the most important partner countries are the US, Japan, and European Countries. (3) Industries began to be involved in international cooperation gradually. (4) For different areas, the degree of cooperation is not the same. Some areas have been more fruitful in cooperation, some are just beginning hydrogen energy, fuel energy and applied energy are the main co-publication areas with Chinese involvement; while wind energy, solar energy, fuel cells and bio-energy are new areas for China and there has not been so much co-publication until now.     

Integrated assessment of global climate change with learning-by-doing and energy-related research and development

This paper presents a small-scale version of an Integrated Assessment Model (IAM) of global climate change, which is based on a global, regionally differentiated computable general equilibrium (CGE) model with endogenous technological change. This model can be viewed as a basic framework for analyzing a broad range of economic issues related to climate change, in particular since technological change is represented in two ways: on the one hand, there is learning-by-doing (LbD) in non-fossil energy supply technologies, and on the other hand there is research and development (R&D)-driven energy-saving technical progress in production. Computational experiments are added for illustrating the role of technological innovation in a world both with and without cooperation in the solution of the global climate problem.     

Prioritizing investment in residential energy efficiency and renewable energy—A case study for the U.S. Midwest

Residential building energy use is an important contributor to greenhouse gas emissions and in the United States represents about 20% of total energy consumption. A number of previous macro-scale studies of residential energy consumption and energy-efficiency improvements are mainly concerned with national or international aggregate potential savings. In this paper we look into the details of how a collection of specific homes in one region might reduce energy consumption and carbon emissions, with particular attention given to some practical limits to what can be achieved by upgrading the existing residential building stock. Using a simple model of residential, single-family home construction characteristics, estimates are made for the efficacy of (i) changes to behavioral patterns that do not involve building shell modifications; (ii) straightforward air-infiltration mitigation measures, and (iii) insulation measures. We derive estimates of net lifetime savings resulting from these measures, in terms of energy, carbon emissions and dollars. This study points out explicitly the importance of local and regional patterns in decision-making about what fraction of necessary regional or national emissions reduction might be accomplished through energy-efficiency measures and how much might need to concentrate more heavily on renewable or other carbon-free sources of energy.     

Public R&D and commercialization of energy-efficient technology: A case study of Japanese projects

Are public R&D programs really effective in developing innovative technologies? How many technologies developed in these programs have been successfully commercialized? What are the key factors for successful commercialization and diffusion in the market? This paper tries to answer these questions by examining the Japanese experience of public R&D in demand-side energy efficiency, focusing on two major projects conducted in the 1980s and 1990s. It is found that of the 34 technologies developed in the two projects, only seven have been commercialized so far, four of those seven have only a very limited number of installations, and only one has a growing market. The results show that, while public R&D investments have a high risk of failure, they can bring new technologies to the market after a certain lead time. In addition, several factors resulting in the success or failure of commercialization/diffusion are identified, such as long-term R&D support by the government, a marketing strategy to respond to and influence market demand, and combination of R&D and deployment policy.     

Future costs of key low-carbon energy technologies: Harmonization and aggregation of energy technology expert elicitation data

In this paper we standardize, compare, and aggregate results from thirteen surveys of technology experts, performed over a period of five years using a range of different methodologies, but all aiming at eliciting expert judgment on the future cost of five key energy technologies and how future costs might be influenced by public R&D investments. To enable researchers and policy makers to use the wealth of collective knowledge obtained through these expert elicitations we develop and present a set of assumptions to harmonize them. We also aggregate expert estimates within each study and across studies to facilitate the comparison. The analysis showed that, as expected, technology costs are expected to go down by 2030 with increasing levels of R&D investments, but that there is not a high level of agreement between individual experts or between studies regarding the technology areas that would benefit the most from R&D investments. This indicates that further study of prospective cost data may be useful to further inform R&D investments. We also found that the contributions of additional studies to the variance of costs in one technology area differed by technology area, suggesting that (barring new information about the downsides of particular forms of elicitations) there may be value in not only including a diverse and relatively large group of experts, but also in using different methods to collect estimates.     

Industrial energy efficiency: the need for investment decision support from a manager perspective

Global competition, commitment to the Kyoto Protocol and a deregulated, integrated European electricity market will in all probability increase the demand for energy efficiency on the part of companies in Sweden. Investment decisions are an important part of meeting the new demands, because they decide the future efficiency of industrial energy systems. The objective of this study is to investigate, from a managerial perspective, the need to improve decision support in some industries, which can help to facilitate and improve investment decisions concerning energy efficiency. This work has been conducted through in-depth interviews with representatives for a number of energy-intensive companies and non-energy-intensive companies from different sectors. One need that was identified was the improvement of working methods in order to support the decision-making process. Here, external players seem to be playing an increasingly important role. Access to correct information, better follow-up activities, and transparent, understandable calculations are also considered to be important. The study will form the foundation for subsequent work on decision support and energy efficiency in industry.     

The performance of the Norwegian carbon dioxide,capture and storage innovation system

In order to take up Norway's twin challenge of reducing CO₂ emissions, while meeting its growing energy demand with domestic resources, the deployment of carbon capture and storage (CCS) plays an important role in Norwegian energy policies. This study uses the Functions of Innovation Systems approach to identify key policy issues that need to be addressed in order to prolong Norway's international leadership position in the development of CCS. The analysis shows that Norway has been successful in building an innovation system around CCS technology. The key determinants for this achievement are pinpointed in this article. However, the evolution of the innovation system seems to have entered a critical phase that is decisive for a further thriving development of CCS in Norway. The results provide a clear understanding of the current impediments in the CCS innovation system and stress the need to direct policy initiatives at the identified weak system functions—i.e. entrepreneurial activity and market formation—to improve the performance of the system. We discuss how policymakers can use these insights to develop a coherent set of policy instruments that would foster the deployment of CCS concepts related to power production and enhanced oil recovery in Norway.     

Long-term energy projections for the U.S.A.

This report starts by surveying a series of papers that are representative of recent U.S. work on national and international energy policy. Among professional analysts, there are the beginnings of a consensus on energy demand projections and on energy-economy interactions. Moreover, it is recognized that conservation policies will be difficult to implement unless domestic prices are raised to the international level. The paper includes a series of long-term energy projections based upon ETA-MACRO. This model allows for: energy-economy interactions, cost-effective conservation and interfuel substitution between electric and nonelectric energy. the calculations are based upon a somewhat less optimistic view of synthetic fuels and of ‘backstop’ technologies than appear in the Carter Administration's recent proposals. With synfuels, backstops and nuclear energy—and with realistically reduced projections of demand growth—there is a reasonable prospect that the U.S. could meet an international commitment to limit oil and gas imports. U.S. import reductions could be achieved directly through the market price mechanism, without tariffs or quota limitations. For this to happen, however, the international price of oil would have to be doubled (in constant dollar terms) by the year 2000. A policy of gradual OPEC oil price increases would facilitate the transition away from oil, and could serve the long-run interests of both the producing and consuming nations.     

From potential forecast to foresight of Turkey's renewable energy with Delphi approach

A Delphi Survey is a series of questionnaires that allow experts or people with specific knowledge to develop ideas about potential future developments around an issue. The Delphi questionnaires were developed throughout the foresight process in relation to the responses given by participants in bibliometric and SWOT analysis conducted prior to the Delphi survey. In this paper, Turkey's renewable energy future is evaluated using the Delphi method. A two-round Delphi research study was undertaken to determine and measure the expectations of the sector representatives regarding the foresight of renewable energies. First and second round of Delphi study were carried out by using online surveys. About 382 participants responded in the first round of the Delphi questionnaire yielding a respond rate of 20.1%, whereas 325 participants responded at the second round yielding a respond rate of 84.9%. About 50% of Turkey's energy demand was foresighted to be met by renewable energies around 2030. The results showed that all types of renewable energies would not only provide economic and environmental benefits but also improve living standards.     

Wind power in Taiwan: Policy and development challenges

The main aim of this paper is in discussing the outcome of the government's policies aimed at promoting the wind power industry. By analyzing the policies on renewable energy and the direct and indirect support mechanisms, the author reviews the achievements, limitations and strategies faced during their various stages. This research discovered that the series of measures adopted between 2000 and 2005 including installation plans, financial incentives, feed-in tariffs, export credit subsidies and R&D, helped to initiate the early steps of private investment, and allow domestic wind capacity to see stable growth. After 2005 with more clear goals set for wind energy installed capacity policies, R&D and industrial cooperation mechanisms, there was even greater breakthrough in limited market, enabling Taiwan's fledgling wind power industry to take its first steps onto the international production chain. In particular, the passing of the Renewable Energy Development Act in 2009 incited rapid growth in the domestic market as well as driving further development in the domestic wind energy industry. Overall, in current stage there is a need to get a handle on the gap still existing between international technology and market and that in Taiwan, in order to strategically develop a competitive advantage globally.     

International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization

It is now widely recognized that technological change will play a substantial role in reducing GHG emissions without compromising economic growth; hence, any better understanding of the process of technological innovation is likely to increase our knowledge of mitigation possibilities and costs. This paper explores how international knowledge flows affect the dynamics of the domestic R&D sector and the main economic and environmental variables. The analysis is performed using WITCH, a dynamic regional model of the world economy, in which energy-related technological change is endogenous. The focus is on disembodied energy R&D international spillovers. The knowledge pool from which regions draw foreign ideas differs between High Income and Low Income countries. Absorption capacity is also endogenous in the model. The basic questions are as follows. Do knowledge spillovers enhance energy-related technological innovation in different regions of the world? Does the speed of innovation increase? Or do free-riding incentives prevail and international spillovers crowd out domestic R&D efforts? What is the role of domestic absorption capacity and of policies designed to enhance it? Do greenhouse gas stabilization costs drop in the presence of international technological spillovers? The new specification of the WITCH model presented in this paper enables us to answer these questions. Our analysis shows that international knowledge spillovers tend to increase free-riding incentives and decrease the investments in energy R&D. The strongest cuts in energy R&D investments are recorded among High Income countries, where international knowledge flows crowd out domestic R&D efforts. The overall domestic pool of knowledge, and thus total net GHG stabilization costs, remain largely unaffected. International spillovers, however, are also an important policy channel. We therefore analyze the implication of a policy-mix in which climate policy is combined with a technology policy designed to enhance absorption capacity in Low Income countries. Significant positive impacts on the costs of stabilizing GHG concentrations are singled out. Finally, a sensitivity analysis shows that High Income countries are more responsive than Low Income countries to changes in the parameters. Additional empirical research efforts should thus be focused on the former.