EUROPE’S ENERGY CHALLENGE -...

Genome pioneer J. Craig Venter on algae and energyR&D: Europe’s new energy prioritiesCan innovation deliver the solutions?How university–industry partnerships can help

EUROPE’S ENERGY CHALLENGEA SPECIAL REPORT November 2014

Editor, Gail Edmondson

Deputy Editor, Peter Purton

ContributorsDoug Arent, Brigitte Bach, Colin Bailey, Hans Bernhoff,John Carey, Carlo Carraro, Wendy Cooper, GeorgErdmann, Claus Crone Fuglsang, Beth Gardiner, CarlosHaertel, Angela Karp , Éanna Kelly, Juha Kiviluoma,Andreas Löschel, Cheryl Martin, Isabel Ortega, ReginaPalkovits, Timothy Spence, Florin Zubascu

Design and ProductionChris Jones, design4science ltd

Cover imageJ. Craig Venter by Evan Hurd/Alamy

PrintingSarum Colourprint

PublisherScience|Business Publishing LtdAvenue des Nerviens 79, Box 22 1040 Brussels, [email protected]

© Copyright Science|Business Publishing Ltd 2014

Printed on FSC certified paper

Photographs AcalnetARPA-EBigstockBP PLCBritish GasCenters for Disease Control and Prevention, Dr. W.A. Clark Christopher Halloran/BigstockDeutsche WelleDMS LtdESBRIEnergy Technology Institute European CommissionGE3GF - Global Green Growth ForumGraduate Institute of GenevaHarvard UniversityIEAInstitute of GenevaJ. Craig Venter InstituteNational Human Genome Research InstituteNREL, Benjamin Ihas/Greg GlatzmaierPaul O’DriscollRenaultSamsungScience|BusinessSteve Jurvetson TU BerlinUCD Research DublinUCLUniversity of ExeterUniversity of ManchesterUniversity of YamanashiUS Department of Energy

EUROPE’S ENERGY CHALLENGEA SCIENCE|BUSINESS SPECIAL REPORT

Europe’s Energy Challenge | 3

The new European Commission has made energy policy oneof its top priorities. Reflecting that, this specialScience|Business report on “Europe’s energy challenge”

gathers insights from across the world on a key topic: Caninnovation bring the answers—can it lay the foundation forenergy security, affordability and sustainability?

We frame the tough choices ahead for Europe on energy R&Dpolicy and examine the challenges facing Europe’s two newenergy czars: Miguel Arias Cañete, commissioner for climate andenergy, and Maroš Šefčovič, vice president for energy union.

As well as garnering opinion from across Europe, we also bringin views from across the Atlantic. Craig Venter, a global leader inthe bio revolution, shows in his new energy venture howdisciplines are crossing. Cheryl Martin, director of the USDepartment of Energy’s Advanced Research Projects Agency–Energy, explains how the US agency is accelerating energyinnovation.

And among contributions from the UK, Colin Bailey, vicepresident of the University of Manchester, looks at the secret tobuilding successful industry–university research partnerships.

The upshot: innovation will be necessary, but not sufficient.Success will also require market reforms, wise incentives andlong-term planning on an international level. Above all, the EUmust urgently embrace a more integrated approach to energyR&D policy and planning. We at Science|Business will bewatching the new European Commission and Parliament over thenext five years to ensure they play their part.

Gail Edmondson, Editorial Director, Science|Business

PR EFACE


06 What’s NewEurope’s new energy commissioners, plus a round-up ofrecent low-carbon energy news

12 EU Energy Priorities As a new European Commission goes to work on its post-2020 climate and energy policies, big questions remainabout how to spur new innovation

16 J. Craig Venter on Genomics and Biofuels Carbon pricing holds the key to success in the fight againstclimate change, says gene sequencing pioneer

20 Matching Supply with DemandSmart technologies could enable greener energy, but asOxford University’s Sarah Darby cautions, educating peopleto use them remains a challenge

22 Europe’s Strategic Energy Technology PlanA 2015 update will set greater priority on systemsintegration and energy efficiency

24 How ARPA-E Drives US Energy InnovationCheryl Martin, acting director of the Advanced ResearchProjects Agency–Energy, explains how it works

26 Experts CornerWe asked ten leading energy experts one question—and wegot ten different answers. But there were somecommonalities

30 Industry-University PartnershipsProfessor Colin Bailey, vice president of the University ofManchester, explains his secrets to successful collaboration

34 Time is shortCarlo Carraro outlines urgent actions needed to curbgreenhouse gas emissions

CONTE NTS

Members of the new EuropeanParliament inStrasbourg willneed to make toughdecisions to meetambitious EUenergy transitionmilestones.

BY ÉANNA KELLY

When he assembled a newexecutive team to steerEuropean Union policy for the

next five years, Jean-Claude Juncker, thenewly elected President of the EuropeanCommission, sent a clear signal thatenergy is top priority, naming twocommissioners to handle energy issuesinstead of one.

Splitting the energy portfolio in two isone of the most significant changes inthe new Juncker Commission, which nowincludes a vice president for EnergyUnion, Slovakia’s Maroš Šefčovič, and acommissioner for Energy and ClimateChange, Spain’s Miguel Arias Cañete,who will report to the Šefčovič.

That change was an apt response to aseries of daunting challenges—from thethreat of gas and oil supply shock to thereverberations of the American shale gasrevolution. What is less clear about thesplit is how the new one-two policypunch will work in practice. What can theduo sensibly achieve during their time inoffice?

Let’s stick together Šefčovič is tasked with accelerating thecreation of a fully integrated Europeanmarket for energy—a goal that wassupposed to be achieved by 2014 buthas proven difficult to implement. Twoforces underpin the new urgency: theUkraine, and shale gas.

Conflict in the Ukraine has raised fearsof threats to EU energy supplies. Russiaprovides some 30 per cent of Europe’sgas and the risk of oil and gas cuts hasEuropean leaders scrambling toovercome obstacles to a more coherentand efficient Europe-wide energysystem.

At the same time, European leadersare seeking a response to the US shalegas revolution, which looms as a threatto European industrial competitiveness.Shale gas has led to dramatically lowerUS electricity prices, creating a costdisadvantage for European rivals.

In his audition for the job, Šefčovičwas mindful of both concerns. He vowedto reduce Europe’s dependence onRussian gas by increasing the continent’srelationship with suppliers in Azerbaijan,

6 | Europe’s Energy Challenge

WHAT ’S N EW

Energy innovation in the EU: It takes two

As a new EuropeanCommission sets towork, its energy-chiefduo must make sure2030 targets aremet, bring down CO2emissions andaccelerate a singleEuropean energymarket

Maroš Šefčovič

Europe must get tough onwaste and inefficient

structures to address theissue of high European

energy costs and industrialcompetitiveness


Turkmenistan and other countries. “Bysupporting the South Stream project, wewould only increase our dependence onRussia. We should rather support theSouthern Corridor project, which willconnect us with the Caspian Sea,” hesaid.Šefčovič also argued Europe must get

tough on waste and inefficient structuresto address the issue of high Europeanenergy costs and industrialcompetitiveness. A greaterinterconnection of European networkswould eliminate isolated “energyislands”. Finland and the Baltic statesneed to combine better with the rest ofthe Europe, he explained. The EU shouldsupport gas exploration in theMediterranean and build liquefiednatural gas terminals to reconnectCyprus and Malta.

Creating a dossier with the goal offorging a single European energy market—with harmonised rules and polices—isa resolute move on the part of EUleaders, but anyone who’s seen the EU’ssluggish decision-making process willknow how hard it will be to deliver.Fortunately, Šefčovič will have a powerfulally in the form of the former PrimeMinister of Poland, and new President ofthe European Council, Donald Tusk.

“I can hardly imagine a more devotedadvocate of progress in this crucial areathan him,” said Jerzy Buzek, member of

the European Parliament (MEP) andchair of the chamber’s Industry,Research and Energy committee, in aninterview in September.

Decarbonisation: fortune or folly? In five years’ time, when people passjudgement on Arias Cañete’s tenure,there’s one question they’ll ask: Has thedevelopment and market take-up of low-carbon energy technologies helpedEurope meet its emission reductiongoals and 2030 energy targets? That would be a real game changer. Butto get there, Arias Cañete, who duringhis spare time raises bulls for fighting onhis ranches in Andalusia, will need tomuster a serious combative spirit. He faces a divided, and in some patchesunconvinced, EU. While some memberstates, in particular central and easternEuropean countries, prefer low-costenergy from coal-fired power plants tomaintain their competitiveness, others,such as Germany, would prefer Europe tobe a decarbonisation pacesetter,speeding low-carbon technologies tomarket.

Arias Cañete will be forced to hit theground running. The 2015 UN climatesummit in Paris, which is supposed toresult in a new globally binding climateagreement, is just around the corner.Were the global community to agree toan ambitious, albeit unlikely, target, he

would find it easier to push moreaggressive decarbonisation policies inEurope.

If no deal is achieved, Arias Cañete’spolicies should spread risk well to wardoff investor uncertainty, says Bruegel, aBrussels-based think tank, in a memo tothe new Commission. “To be on the safeside, Europe should support a wideportfolio of technologies, resilient to thefailure of any individual technology,” thepaper’s author, Georg Zachmann,recommends.

Two heads better than one? And finally, the great unknown: How willthe Šefčovič-Arias Cañete partnershipwork?

A new Commission architectureincluding seven powerful vice-presidentsis about checking a trend towardsexcessive EU legislation. As the seniorCommissioner, Šefčovič will have power“to stop any legislative initiatives” madeby Arias Cañete. For the almost 600,000people who signed a petition inopposition to Arias Cañete’s nomination,an institutional counterbalance is coldcomfort.

Both wear different political stripes—Šefčovič is centre-left, Arias Cañetecentre right—but in practice this mightnot present a fault line, with both partygroups, the Socialists and Democratsand the European People’s Party, incoalition in the European Parliament.

In a newly released book entitledPowers of Two: Finding the Essence ofInnovation in Creative Pairs, authorJoshua Wolf Shenk credits the “creativepair”, rather than the individual, with themost imaginative work in history. Thehope around Brussels and beyond is thatEurope’s two new energy czars can earna chapter in a future edition.

Miguel Arias Cañete

Arias Cañete’s policiesshould spread risk well to

ward off investoruncertainty... To be on the

safe side, Europe shouldsupport a wide portfolio of

technologies, resilient to thefailure of any individual

technology

The expansion of renewableenergy will slow over the nextfive years unless policyuncertainty is diminished, theInternational Energy Agencyhas stated in its third annualMedium-Term RenewableEnergy Market Reportpublished late August.

According to the report,power generation fromrenewable sources such aswind, solar and hydro grewstrongly in 2013, reachingalmost 22 per cent of globalgeneration, and was on parwith electricity from gas,whose generation remainedrelatively stable. Globalrenewable generation is seenrising by 45 per cent and

making up nearly 26 per centof global electricitygeneration by 2020. Yetannual growth in newrenewable power is seenslowing and stabilising after2014, putting renewables atrisk of falling short of theabsolute generation levelsneeded to meet globalclimate change objectives.

“Renewables are anecessary part of energysecurity. However, just whenthey are becoming a cost-competitive option in anincreasing number of cases,policy and regulatoryuncertainty is rising in somekey markets. This stems fromconcerns about the costs of


WHAT ’S N EW

A round-up of recent low-carbon energy news

Policy uncertainty ‘slowing’transition to renewables

New Commission line-upemphasises energyThe new European Commission is the first to contain twoenergy portfolios. The Commissioner for Energy Union andthe Commissioner for Climate Change and Energy both aretasked with speeding the creation of an integratedEuropean energy market and meeting 2030 roadmapgoals—reflecting growing concerns about the region’senergy security. The Commission will launch a revisedStrategic Energy Technology (SET) Plan in 2015 that takesa more systemic approach to R&D planning and makesnetwork integration technologies such as smart grids a toppriority. Both energy commissioners have portfolios thatpool energy and climate dossiers—an effort to break downsilos and enhance coordination among directorates.

Europe remains net biofuelimporter while Brazil and USstay self-sufficientEurope continues to importmore biofuels than itproduces, according to thelatest report on agriculturalproduction from theOrganisation for Economic Co-operation and Development.And that trend is expected tocontinue through to 2023.

In 2014, the OECD says theEuropean Union will produce7.5khl of fuel-grade ethanolbut will use 9khl, importing1.5khl. By 2023, it predictsconsumption will rise to13.6khl but production willstill fall short by 1.5khl,requiring the balance to befilled from imports. Forbiodiesel the predictedshortfall is even moremarked: 2.5khl in 2014 on apredicted consumption of15.9khl and 3.2khl in 2023 onconsumption of 19.1khl.

By comparison, the OECDsays that Brazil is and willremain self-sufficient inbiodiesel and is and willcontinue to be a majorexporter of ethanol, and thatthe US, which broadly coversits consumption of bothbiofuels now, will continue todo so for biodiesel but willrequire 5.9khl of importedethanol to meet its expected76.6khl consumption in 2023.

deploying renewables,” saysMaria van der Hoeven, IEAexecutive director.

“Governments mustdistinguish more clearlybetween the past, presentand future, as costs are fallingover time,” she adds. “Manyrenewables no longer needhigh incentive levels. Rather,

given their capital-intensivenature, renewables require amarket context that assures areasonable and predictablereturn for investors. This callsfor a serious reflection onmarket design needed toachieve a more sustainableworld energy mix.”

Global renewablegeneration is expected torise 45 per cent by 2020

Jean-Claude Juncker,incoming President of theEuropean Commission

Scientists have taken a majorstep forward in the productionof hydrogen from water whichcould not only provide a cheapnew, sustainable energysource, but offer a solution toEurope’s energy storagechallenge.

In a paper published on 12September in the journalScience, chemists from theUniversity of Glasgow claim anew form of hydrogenproduction which is 30 timesfaster than current methods.

Hydrogen is produced byusing electricity to break thebonds between water’sconstituent elements,hydrogen and oxygen.Currently, however, fossil fuelsare used to power theelectrolysis process. A moreadvanced method ofgenerating hydrogen usesrenewable power through amethod known as protonexchange membraneelectrolysers (PEMEs). Toreach optimum efficiency,PEMEs require precious metalcatalysts to be held in high-pressure containers and

subjected to high densities ofelectric current. The newmethod allows hydrogen to be produced at atmosphericpressure using lower powerloads.

The research team was ledby Lee Cronin of the Universityof Glasgow’s School ofChemistry. “The process uses aliquid that allows the hydrogento be locked up in a liquid-based inorganic fuel. By usinga liquid sponge known as aredox mediator that can soakup electrons and acid we’vebeen able to create a systemwhere hydrogen can beproduced in a separatechamber without anyadditional energy input afterthe electrolysis of water takesplace,” says Cronin. “The linkbetween the rate of wateroxidation and hydrogenproduction has beenovercome, allowing hydrogento be released from the water30 times faster than theleading PEME process on aper-milligram-of-catalystbasis,” he adds.

The method could help


UK scientists pioneer energystorage technology

German power utility Wemag has introduced into servicewhat it says is Europe’s first lithium ion energy flowstabilising storage unit. The 5MW facility in Schwerin isdesigned to smooth the integration of solar and windpower into the existing grid, so avoiding expensivenetwork infrastructure investments.

The 25,600-cell turbine-room sized unit, designed byBerlin-based engineering consultancy Younicos, storesenergy as it is produced by wind and solar sources, anddelivers it into the grid when demand requires it. Batterycell supplier Samsung SDI is guaranteeing the facility’spower output for 20 years.

Five four-tonne mid-voltage transformers connect theunit to the immediate power network as well as the380kV national electricity transmission system. The 5MWfacility has the same ability to regulate supply as aconventional 50MW turbine, says Clemens Triebel,cofounder of Younicos. The company is also working on asimilar 6MW facility in Leighton Buzzard in the UK, withpartners s&c Electric Europe and Samsung SDI.

Wemag says that over 80 per cent of the power itprovides now stems from wind or solar sources.

German utility deploys Europe’sfirst li-ion grid electricity store

smooth the output fromintermittent renewable powersources such as photovoltaicsolar cells or wind turbines, asit allows the use of therenewable power to producehydrogen which could then bestored and distributed. The

European Council now wantsto see 30 per cent of Europe’spower come from renewablesources by 2030. Key toachieving this aim will be tofind a way of storing theenergy for use when andwhere it is needed.

The first Formula E electricracer eprix took place inBeijing in late September on aspectacular temporary trackbuilt around the city’s iconicOlympic “Bird’s Nest”Stadium. It was won by Lucasdi Grassi.

It is hoped that Formula Ewill do the same for electricvehicle technology as Formula1 has done for petrol-enginedvehicles, stimulatinginnovations which find theirway into standard road

vehicles, as well as serve asa framework for R&D aroundthe electric vehicle,accelerating general interestin electric vehicles andpromoting sustainability.

Unfortunately the first racewas marred by a spectacularaccident on the final cornerof the final lap when the carsof race leader Nicolas Prostand Nick Heidfeld touched inthe battle for the lead,sending Heidfeld into aspectacular flying crash. He

walked away unharmed.Stage two of the inaugural

series takes place inPutrajaya, Malaysia, on 22November. The series is due

to end in London in June 2015after seeing further stages inBerlin, Buenos Aires, LongBeach, Miami, Monte Carloand Punta del Este (Uruguay).

Formula E gets off to a flying start

solar. It concludes that areliable power system basedon wind, solar, and natural-gas power plants would be 20 per cent cheaper than apower system based onnuclear.

“The winner in battle overthe cheapest means of CO2-free power generation hasbeen decided,” says PatrickGraichen, executive director

of Agora Energiewende. “Inthe future wind and solar willplay an ever greater role incountries across the world asa source of power.”


New wind and solar powersystems can generateelectricity up to 50 per centcheaper than new nuclearpower plants, according to astudy conducted by PrognosAG on behalf of AgoraEnergiewende, a Berlin-basedthink tank funded by StiftungMercator and the EuropeanClimate Foundation. Thestudy examines feed-in tariffs

for new nuclear power plantsin the UK as well as feed-intariffs for green powerprovided under Germany’sRenewable Energy Act. Thestudy concludes that nuclearpower as well as carboncapture and storage are bothmore expensive than windand solar power as a strategyfor preventing climatechange.

In addition to examiningthe specific costs of powergeneration, the studyestimates the overall costs ofa power production systemthat uses reserve-capacitypower plants fired by naturalgas to make up for weather-dependent shortfalls in powergeneration from wind and

A flexible adoption strategy,more targeted funding andthe development of deepgeological repositories arerequired for a safer and moreresponsible management ofspent nuclear fuel andradioactive waste, accordingto a report by the EU’s JointResearch Centre and theEuropean Academies ScienceAdvisory Council.

The report, published at theend of September, is

designed to help EU MemberStates implement the 2011Directive on the responsibleand safe management of spentfuel and radioactive waste. Keyconclusions were:• Approaches may differbetween countries, dependingon their national boundaryconditions.• Irrespective of the type ofnuclear fuel cycle, deepgeological repositories will be needed for some of the

waste products.• Any strategy must have ahigh degree of built-inflexibility since themanagement of spent nuclearfuel will spread out over morethan 100 years.• Properly targeted funding iscritical since the costs ofspent fuel management aresubstantial and occurprimarily after the energy hasbeen produced and therevenues earned.

Best practices outlined for handling nuclear waste

Renewables already more cost-effective than nuclear, says study

China could be sitting on the world’s largest shale gasreserves. But a number of organisations are pointing out,they may prove very hard to access. According to the USEnergy Information Administration, mainland China couldhold 36.8 trillion cubic metres of gas, around half as muchagain as the organisation estimates is in the US.

But, as Washington DC-based sustainable developmentresearcher World Resources Institute reports, more than halfof these may be in arid areas, and the availability of water iskey to the tracking techniques used to extract gas fromshale. And as the Hong Kong based energy consultancyLantau Group was reported to have said in The South ChinaMorning Post, while China has granted two rounds of tenders to explore shale gas in the past four years, they aremostly in mountainous areas in the southwest that were, atbest, second or third-tiered resources. To make mattersworse, the other area where large reserves are expected tobe found is the populous agricultural area of Sichuan.

And there are also reported to be significant geologicalchallenges. Still, the government is keen to press on with the development of any reserves there may be, and China’sNational Energy Administration has set a target for theextraction of 30 billion cubic metres of shale gas by 2020.This is, however, a slightly less ambitious goal than thatannounced in 2012, indicating perhaps a growingappreciation for the challenges involved.

China faces great challengesaccessing its shale gas

WHAT ’S N EW

Solar power tower andsurrounding heliostats at theGemasolar concentratingsolar power plant in Spain.

BY ÉANNA KELLY

Biofuel representatives andpolicymakers gathered inBrussels on Tuesday 14October to discuss the stallingpath to biofuel production inEurope, with some memberstates inclined to think that asthings stand, neither theeconomic nor theenvironmental case forpursuing biofuel productionstacks up.

The technical challenge is tofind ways to convert biologicalmaterials to biofuels cheaply,in an environmentally friendlyway, and on a large enoughscale. But a bigger barrier isthe fall-off in political supportthat followed in the wake offood crops being diverted tobiofuels after the EUintroduced incentives for theirproduction in 2009.

“If we’re going to winsupport for biofuels, we haveto fight the political game,”said a bullish SandrineDixson-Declève, vice-chair ofthe European BiofuelsTechnology Platform, whichorganised the event. “We haveto go out there and promotethe benefits of biofuels as partof the energy securitydiscussion, because that’s thegame in town right now.”

Fuel of the future There is a joke aboutadvanced biofuel that says it’sthe fuel of the future—andalways will be.

It reflects doubt overwhether second-generationbiofuels, which involvebreaking down the cellulose

that forms the structuralelements of plants, cancompete with fossil fuels. Tomake a significant dent in theamount of conventional oilthat refineries churn througheach day, biofuel factorieswould need to ramp upproduction massively.

“There’s a lot of caution outthere,” said Paul Verhoef,head of new and renewableenergy sources at theEuropean Commission’sdirectorate for Research andInnovation. “My impression isthat banks have extremedifficulties in assessing therisk of financing.”

The date for reaching“breakeven day” is a fixationfor politicians. “Everywhereyou go, people ask me,‘When will biofuels be costcompetitive?’” said RaffaelloGarofalo, Secretary General,European Biodiesel Board.“It’s a funny question andnobody knows—but there’llcome a day.”

A law agreed in theEuropean Parliament last yearimposed a 2.5 per centtarget for advanced biofuelsby 2020. But this was diluteddown to a non-binding targetof 0.5 per cent by EU energyministers, much to thedismay of the industry.

Fluctuations in fossil fuelprices will continue to have amajor effect on demand forbiofuels, added Garofalo. Thespread of fracking,meanwhile, promises tounlock new oil and gasreserves and provide an

alternative path to energyindependence.

Despite these setbacks,governments should stay thecourse with biofuel, advisedJonathan Hood, who helpscoordinate low-carbon fuelpolicy in the UK Departmentfor Transport. “It’s importantto take a long-term view withany policy; oil prices arealways going to be unstable,”he said.

Liquid fossil fuels are likelyto dominate fuel supply to2030, said Ausilio Bauen,Director of E4Tech, aconsultancy firm based inLondon. “But our forecastssay that biofuels coulddouble their contribution andmake up 10 to 15 per cent ofroad transport fuel in thattime.” Half of the growthcould come from second-generation biofuels, headded.

First-generation strifeMaterials from trees toshrubs, grasses, fungi, algaeand animal fats have beenturned into biofuels to powercars, ships and even planes.But diverting food crops tomake fuel has provokedcontroversy and givenbiofuels a bad name.

The EU’s Renewable EnergyDirective, adopted in 2009,originally required that 10 percent of energy used withinthe transport sector camefrom renewable sources.Amid concerns over thenegative impacts of crop-based fuels, the EU reduced

this to 5.75 per cent.The European Commission

has said that publicsubsidies for biofuelsproduced from food cropswill end after 2020. “This isthe Commission’s position.I’m not sure the memberstates will go with this,” saidAndreas Pilzecker, a policyofficer in the EuropeanCommission’s directorate forEnergy. The political realitiesmight be different by then,he noted.

Trying to put a lid on fraudThe reputation of the biofuelindustry is not helped byfraud. There is quite a lot ofbad-quality biodiesel thatcannot be traced back to itssource, said Garofalo. Atypical scam is when virginolive oil is labelled as usedoil, which can then be usedto make biodiesel.

“There’s a financialincentive to buy refined oil,cook a chip in it to turn it intoused cooking oil and thensell it at profit,” said TomasKåberger, professor ofindustrial energy policy atChalmers University ofTechnology, Sweden.

There is a frustratingdance over responsibility forthis kind of thing, saidGarofalo. “We go to the EU todiscuss systemic fraud andwe’re told it’s a matter formember states. We talk tomember states and they tellus it’s an EU competency,”he explained.


Energy security meanssupporting advancedbiofuels, says industry


F rom biofuels to energy storage,smart grids to sustainabletransport, opportunities for major

technological advances abound. Butprogress toward a sustainable energyfuture in Europe has been stymied by thecompeting policies, interests anddemands of 28 member states. And therush to bring new energy technologies tomarket before adapting existinginfrastructures and systems has added tothe confusion.

To speed progress, the newCommission will need to tackle obstaclesto a single EU energy market, simplifyingand rationalising a tangle of priorities,say leading researchers and energypolicy experts interviewed for this article.That is a critical first step in creating astrategy that can deliver a low-carbonfuture.

“We have to get some order into thepolicy,” says Joan MacNaughton, chair-woman of the World Energy Council’sWorld Energy Trilemma study group, anda former director general of energy forthe British government. “At the moment,you have a huge number of policies, bothat the member state level and theEuropean level, and the interactionsbetween them are not being properly

analysed and understood, and they’reresulting in some unintendedconsequences.”

While many have pushed for strong2030 targets on carbon, renewables andefficiency, others, like coal-dependentPoland, have resisted. Even those nationsthat want to move quickly are strugglingwith high costs, most notably Germany,where a nuclear phase-out and strongpush towards renewables have causedelectricity prices to spike. Those sky-rocketing bills have angered many, andworried other nations looking to emulateGermany’s low-carbon ambitions.

Conflicts in the Ukraine and Iraq,however, have now increased the urgencyof speeding Europe’s transition to a low-carbon economy—and that’s put theintegration of network systems andregulations at the top of the politicalagenda. In September, EuropeanCommission President Jean-ClaudeJuncker appointed two commissioners tohandle energy portfolios—one for energyunion and one for energy and climate—with the goal of breaking down policysilos to speed change.

Which new technologies have the bestshot at achieving Europe’s energyroadmap goals? Experts say sustainable

E N E RGY PRIORITI E S

Speeding the energy transition: priorities for a new Commission

As the EU focuses on its post-2020 climate and energy policies,big questions remain about how to spur innovation

BY BETH GARDINER

transport and second-generationbiofuels have huge potential—but needmore research support. At the sametime, rapid expansion and upgrading ofEurope’s electricity grid is vital tointegrating renewable power generationfrom wind and solar panels—and thatshift also requires new technologies.

For 2030, MacNaughton envisions asimple, flexible regime, driven by anambitious and binding carbon dioxidereduction target. Other targets, such asthose for renewables or energy efficiency,should be secondary to that overarchinggoal, technology neutral and preferablytime-limited, especially if they includesubsidies, MacNaughton argues.

That approach, she says, would givenations the flexibility to design policiestailored to their individual circumstances,as President Obama is seeking to let USstates do under his new emissionsreduction proposal.

Also critical, MacNaughton believes,are changes to the EU Emissions TradingSystem that gradually lift the price ofcarbon, and removal of regulatory andother barriers that hamper developmentof Europe-wide markets for electricityand gas.

Europe’s weak economy has badly


undercut the Emissions Trading System,which was meant to be a centrepiece ofcarbon-cutting efforts. A glut of permitshas kept the cost of polluting too low todrive investment in low-carboninfrastructure, experts agree, noting thata well functioning system would havemade cheap American coal expensive toburn in Europe, preventing its widespreaduse.

Most experts agree that a highercarbon price, imposed either through atax or a reformed trading system, will beessential to driving innovation. Beyondthat, though, there are other steps theUnion should also be taking, particularlyin research and development, scientistssay.

Doug Arent, acting director of theStrategic Energy Analysis Center at theNational Renewable Energy Laboratory inthe US, says the EU does a good job ofsupporting energy researchers with multi-year grant awards and contracts thatenable engineers and scientists to buildup staff and pursue long-term ideas.

Where Europe has fallen short, he says,is in building an innovation pipeline likethe one that helps bring new technologiesto market in the United States. American

universities and labs, he believes, aremore aggressive about transferringtechnologies to the private sector, wherethey can be commercialised and scaledup. For example, he says, the AdvancedResearch Projects Agency-Energy lendsUS government support to early-stageideas that have the potential to betransformative, but are not yet developedenough to win private sector backing. Andthe National Renewable EnergyLaboratory helps connect smallcompanies with angel investors andventure capitalists.

“If you look at the innovation valuechain, it’s actually pretty substantial andmany, many, many steps in the UnitedStates. I’m just not aware if that exists, orhow robust it would be in Europe,” hesays. “It’s rare to find a Silicon Valley or aBoston pharmaceutical hub in Europe.Could policymakers do more toencourage that?”

Europe’s Strategic Energy TechnologyPlan, or SET-Plan, launched in 2008, wasintended to spur the development anddeployment of new technologies, but ithas got off to a slow start, in part becauseof a siloed approach to investing in newenergy technologies and the failure to

grapple with the impact of newtechnologies on the existing energysystem.

The good news is that a revised SET-Plan focused on an integrated EU energymarket is in the works, and will belaunched in 2015 (see page 22).

The EU’s Horizon 2020 research andinnovation budget includes €5.9 billionfor energy, all of which will flow to SET-Plan priorities. But that sum falls farshort of the roughly €70 billion projectedbudget needed to finance the originalSET-Plan goals.

Didier Houssin, director of sustainableenergy policy and technology at theInternational Energy Agency, says R&Dfunding for energy, although on the rise,is still insufficient given the scale of thechallenge. And beyond money, he says,Europe lacks a policy framework forencouraging critical technologies likecarbon capture and storage, even thoughCCS will clearly be needed to reduce theclimate impact of carbon-intensiveindustries.

“There are a lot of initiatives here andthere, but not enough strategic approachwith a long-term vision,” he says. “Thereare so many uncertainties for the

“There are a lot of initiatives here and there, but not enough strategic approach with a long-term vision.”

Joan MacNaughton Doug Arent Didier Houssin

Helicopter with a specialised camera searches for flaws inparabolic mirrors at the Nevada Solar One ConcentratingSolar Power plant outside Las Vegas.

industry to grapple with: What’s going tobe the electricity price? What’s going tobe the support for nuclear andrenewables? What’s going to be thecarbon price? How can you promote thelong-term vision for moving to a low-carbon economy when you have so manydifferent short-term price signals?”

Houssin also says Europe must pushharder on sustainable transport.Increased demand for mobility, he says,was the key reason why the IEA’sestimate of the cost of decarbonisingglobal energy systems jumped from $36trillion to $44 trillion in just two years.

“This warrants some more innovativesolutions—promoting rail and otherpublic transport, promoting efficienttransport modes, changing behaviours,like car-sharing systems,” Houssin says.“It’s starting to take off, but too slowly,and I think Europe is well placed to startgoing a little faster.”

Chris Somerville, alternative energyprofessor at the University of California,Berkeley, and director of the BP-fundedEnergy Biosciences Institute, saysbiofuels could play a large part indecarbonising Europe’s energy system.But policymakers must move away froma reliance on food crops and push thedevelopment of more sustainable, next-generation feedstocks like perennialgrasses.

“There’s a tremendous opportunity forinnovation in this field and an enormousnumber of unsolved problems,” he says.But to date, government R&Dprogrammes have not invested much toaddress them, he adds.

Work is needed to determine whichcrops are best suited to fuel use, and tomake each step in their processing moreefficient, Somerville says. If researcherscan cut the costs of second-generationbiofuels in half, they would becompetitive with petroleum, a

development that would have majormarket implications, he says.

“Oddly enough, although Europe hasbeen, from my perspective, rather slow inthis area, some European companies havestepped out ahead,” he says, pointing toBeta Renewables’ and Novozymes’advanced biofuels plant in northern Italy,which opened last year.

This summer, the EU announced a €3.7billion partnership with the Bio-basedIndustries Consortium, aimed atencouraging technologies that turnbiomass and organic waste into usableproducts, including fuel.

Still, Somerville says, for now, Europe islagging badly on developing second-generation, so-called cellulosic biofuels.Also clear, scientists say, is the need forbetter electricity grid connections acrossthe EU.

But while some have called for a“supergrid” that would connect southernsolar fields and coastal wind farms withcities across the continent, Mark O’Malley,professor of electrical engineering atUniversity College Dublin and director ofits Electricity Research Centre, sayssmaller-scale, regional linkups wouldprobably be a more useful place to start.

Systems approach One thing policymakers have right inpublic comments on the SET-Plan,O’Malley says, is the recognition thatEurope’s energy system must be viewedas a whole, not a set of disconnectedparts. That systems approach, he says, iskey.

“Not only electricity, but heat andtransport,” he says. “It’s one integratedenergy system, and if you do anything onone part of it, you affect the others, soyou’ve got to take an integrated approach,and that’s coming out clear, and that’sreally important.”

Improving transmission links would

help to create a single Europeanelectricity market, agrees Paul Ekins,director of the UCL Institute forSustainable Resources at UniversityCollege London. That, in turn, would helpdraw private investment into efforts tomake new technologies commerciallyviable, he says. Ekins wants to see abinding 2030 renewables target imposedon member states, and set at least 30 percent.

The EU’s 2020 renewables target hasbeen remarkably successful in spurringinnovation so far, he says, pointing to asharp drop in the cost of solar and windenergy components. That goal, he says,“has initiated and stimulated anenormous amount of activity in memberstates. In my view, that is because it was amandatory target for all states."

As the Commission sets to work on newrenewables targets and a post-2020framework, MacNaughton said, the EUmust take a big-picture view, confrontinghead-on issues like the intermittency ofwind and solar generation, and the needfor increased connectivity.

“You’ve got the situation now wheremodern gas plant is being mothballedbecause it’s not economic. And it’s noteconomic because of the way in whichyou structured the legislative frameworkfor renewables,” she said, highlighting one of the lessons learned as subsidiesproduced a rapid rise in solar and windpower production.

“One has to look at the overallelectricity system. What you can’t do is put renewables in, give them support,give them priority in the dispatch ofelectricity, and not pay attention to what that means for the overall cost of the system.”

It’s a painful lesson, but if heeded, the next phase of Europe’s energytransition should get off to a morepromising start.


Paul EkinsChris Somerville Mark O’Malley

BY JOHN CAREY

To gene sequencing pioneer J. CraigVenter, it’s obvious that the worldmust reduce its use of oil and other

fossil fuels. “Our oil-based society is notsustainable,” he says. That’s why hepowers his two Tesla electric cars withelectrons from the solar panels on hishouse. It’s why he has built the world’sfirst carbon-neutral research lab at his J.Craig Venter Institute (JCVI) in San Diego.And it’s why he and his San Diegocompany, Synthetic Genomics, havebeen working since the company’sfounding in 2005 to coax algae and othermicrobes to make renewable substitutesfor oil.

Venter is a technology optimist. “Wecan engineer cells to replace thecomponents that come from oil, so thatit’s all renewable-based,” he says. “Wecan replace a lot of oil.” He is also a bigproponent of solar energy. Over the nextfew decades, he believes, it istechnologically possible to replace themajority of fossil fuels with renewableenergy, dramatically cutting carbonemissions and slowing climate change.

But Venter also fears that the world isfumbling these opportunities. It is failingboth to leap forward in technology andto put the right policies in place. Forinstance, the current approaches beingtaken by companies trying to makerenewable fuel from algae and othermicrobes are woefully inadequate, hesays. “The yields are at least ten tofifteen times lower than what one needsto make it even remotely economicallycompetitive,” he explains.

And even if gene-spliced microbes didproduce a flood of biofuels, that verysuccess would drive down demand—and

thus prices—for oil, making it harder forrenewable options to complete. As aresult, Venter argues, little real progressin the fight against climate change ispossible without one crucial policy—arealistic price on carbon. Yes, Europe hasa carbon-trading scheme that currentlyprices carbon emissions at about €5 perton, and some US states have a similarpolicy that pegs the price at about $5 perton. But Venter argues that the US andthe world need a simple tax on all carbonemissions.

“Until we get serious about the CO2 inthe atmosphere and put a tax on carbonthat recognises the real cost of takingcarbon out of the ground and burning it,we will never be able to come up with analternative solution,” Venter says. Theright price? Venter leaves that up to theeconomists. The US EnvironmentalProtection Agency, for example,calculates the so-called social cost ofcarbon (the price of the damage thatcarbon does) at between $12 and $235per ton, depending on discount rates andtime horizons.

Bucking the trendVenter has a long history of buckingconventional wisdom, and being provenright. A one-time self-described surf bumwho worked as a night clerk at Sears,Roebuck & Co, his ambition kicked inafter patching up wounds as a Navymedic in Vietnam. “I got a lifetime ofeducation packed into one year,” herecalls. After racing through college andhis PhD, and snaring a research post,Venter pioneered a controversial methodfor finding genes by copying the geneticmessages, messenger RNA, floatingaround in cells. Then he co-led the effortto read the human genome.

Now, at his research institute andcompany, he’s pursuing the onceunimaginable goal of creating wholeliving cells from scratch, while alsodeveloping new methods and tools forsynthesising large amounts of DNAcheaply and other tasks, while workingwith companies like Archer DanielsMidland on algal factories to makecommercial products like omega-3 fattyacids. For example, “with combinatorialDNA synthesis, we’ve made an enzymethat does not exist in nature,” he says.“We’re also working on sending biologythrough the Internet by building a digitalbiological converter that would take adigital message and convert it to DNA.We could email you proteins or evencells, and the converter would spit outthe DNA instructions for making them.”

While only a small fraction of SyntheticGenomics’ efforts have been aimedspecifically at producing biofuels usingalgae, an ExxonMobil-funded project hasgiven Venter a close view of thechallenges. In 2009, the oil giantproposed tapping into the unique algalstrains Venter had discovered on asailing voyage around the world. Exxonfigured that, with the right algal strain,the company could apply its expertise tosuccessfully scale up production of arenewable oil.

“In retrospect, it was pretty naïve,”says Venter. “People had been doing thesame experiment over and over again formore than 50 years—with the sameresult,” he says. They would grow anatural strain of algae in open ponds ona large scale, hoping to get largeamounts of renewable oil. But it neverhappened. “The yield is always nowherenear enough to be economically viable,”Venter says. “And things that grow


Carbon pricing holds the key to success in the fight againstclimate change, says gene sequencing pioneer J. Craig Venter

A technology optimistbut a policy pessimist

J. Craig Venter surrounded by thealgae he created with the aim ofproducing biofuels.

more robustly come in and kill what you are doing.”

Venter tried to convince Exxon that the only real hope lay in geneticallymodifying the algae. “From thebeginning, I argued that the only thingthat would a difference would be agenetic engineering approach,” herecalls.

But Exxon forged ahead with thetraditional method—and the projectflopped. So in 2013, Exxon pared backthe original collaboration with SyntheticGenomics and refocused the effort oncreating gene-altered algae with yieldsan order of magnitude higher. “Thelatest programme is where I wanted tostart years ago—adding a syntheticchromosome to change the genetics ofalgae,” says Venter. “It’s the onlyapproach that has significant hope.”

BreakthroughIt will take several years to test theapproach, but Venter believes suchsouped-up algae are possible. Moreimportant, a scientific breakthroughmay not translate into a successfulrenewable fuel business. The issue isthat fuel is about the last thing acompany wants to make with super-yielding algae. “Producing fuel is theabsolute bottom of the barrel,” explainsVenter. “You can produce a litre ofproteins like monoclonal antibodiesthat is worth $10 million. Or you canproduce a litre of oil, worth maybe abuck.”

So while making products likerenewable jet fuel may garnerheadlines, those efforts aren’t a viablesolution to climate change, says Venter.“The press is full of these boutiqueproof of concept productions,” he says.“But while you can burn the fuel inairplanes, it has no practicalconsequences at changing the CO2balance.”

In fact, virtually all of the originalbiofuel companies, once portrayed inthe media as bringing renewablealternatives to oil, have shifted theirfocus to products more likely to bringprofits. South San Francisco-basedSolozyme, for instance, is producinglubricants, skin care products and food.

Amyris in Emeryville, California, makesdrugs, cosmetics and fragrances.“People would be pretty dumb not toshift away from fuel to higher-valuedproducts,” Venter says. Venter’s owncompany is working not just on omega-3 fatty acids, but also onalgae-produced astaxanthin (a dietarysupplement), vaccines, and pigs withhumanised genes whose organs couldbe transplanted into humans.

Still, putting advanced biofuels onthe back burner doesn’t necessarilymean abandoning the fight to reduceCO2 emissions and to mitigate climatechange. About five per cent of theworld’s oil and gas production goes tomake plastics, for instance. And one ofSynthetic Genomics’ successes hasbeen inventing an enzyme that convertssugar into plastic for bottles and otheruses. The sugar, in turn, could comefrom plants or microbes. “We cancreate products that will have billion-dollar impacts—and more important,replace all that oil,” says Venter. Thatstrategy may be better for bothbusiness and the climate thanconverting the sugar to fuel. “To takethe same products and burn themdoesn’t seem like the wisestapproach,” Venter says.

Spurring renewable plastics andother creative ideas that can reducecarbon emissions, however, will takebetter policies and financial incentivesthan those in place now. Venter ispessimistic about the chances of suchpolicies. Because of the current flood ofrelatively inexpensive oil and naturalgas, “the only approach that makessense is a price on carbon,” he says.Yet a carbon tax is now a politicalimpossibility in the US and many othercountries.

That’s why Venter suggests that, inaddition to technological advances,“social engineering has to happen.” Ata time when people seem to be workingless for the overall good of society andmore for themselves, “can we changethe culture so people are judged byhow much they give back to society andlife versus how much they take fromit?” he asks. And more specifically, hesays, “how do we select for and build in


J. Craig Venteraddressing the OriginsSymposium at ArizonaState University.

Haemophilusinfluenzae (right)was the first livingorganism to have itsgenome decoded.

Human malekaryotype (far right)

evidence-based decision making” sothat governments make policies basedon evidence instead of ideology?

Those are questions that even Venter’sgenetic engineering wizardry may not beable to answer.

Timeline of a trailblazerJ. Craig Venter has blazed numerous new trails across the fields of biology andgenetics. After a tour of duty as a Navy Corpsman in Vietnam, a PhD from theUniversity of California at San Diego and a stint at the University of New York atBuffalo and the Roswell Park Cancer Institute, he moved to the NationalInstitutes of Health in 1984. That’s where he pioneered a powerful new strategyfor finding new genes—copying the messenger RNA floating in cells. At a timewhen discovering a single new gene typically took years of work, Ventersuddenly was able to quickly find thousands.

The method’s promise enabled Venter to snare funding in 1992 for his ownnon-profit research institute, The Institute for Genomic Research. At TIGR, hedeveloped a new technique, called whole genome shotgun sequencing, forreading the entire genetic code of a species. He and his team proved themethod’s worth in 1995 by being the first to decode the genome of a free-livingorganism, the bacterium Haemophilus influenzae.

Venter’s next bold step, at a company he founded called Celera Genomics, was successfully sequencing the entire human genome, a feat that wonheadlines in 2001.

Since then, Venter has founded another non-profit research organisation, the J. Craig Venter Institute (JCVI), as well as Synthetic Genomics, a privately heldcompany aimed at engineering new life forms. He and his scientists have createdsynthetic chromosomes, developed new tools for synthesising DNA, andgenetically modified a host of organisms, among many other accomplishments.He’s also sailed the world’s oceans, discovering millions of new genes along theway. And now, he’s hoping to solve the mysteries of ageing by sequencing thegenomes of thousand of people a year in order to pin down the genes linked tochronic illnesses like cancer, Alzheimer’s and heart disease.


“The latest programme is where I wanted to startyears ago—adding a synthetic chromosome to change

the genetics of algae. It’s the only approach that hassignificant hope.”

BY WENDY COOPER

Demand response—matching thedemand for energy with availablesupply at a given point in time—is

increasingly seen as key to a cleaner andmore secure energy supply as economiestransition to low-carbon powergeneration. And smart meters—digitaldevices equipped with two-waycommunications capabilities—are widelyviewed as key facilitators of systemefficiency.

Yet effective demand response alsohinges, critically, on consumers, es-pecially in distributed networks subjectto the peaks and troughs of renewableelectricity supply. And realising thepotential for better residential demandresponse is proving challenging—notleast because many people remainunconvinced that electricity is worthmore at certain times.

A lack of trust in service providers anda failure to provide appropriateincentives and to allow for learning bycustomers and providers alike are

leaving many people “baffled, frustratedand uncooperative,” says Sarah Darby,senior researcher and deputy leader ofthe Lower Carbon Futures Group atOxford University’s EnvironmentalChange Institute.

The answer: a better regulatoryenvironment and what Darby calls a“huge project of consumerengagement”. Building energy literacyand trust by making energy use morevisible through real-time display,informative billing and supportiveprogrammes helps prepare energy usersto respond to pricing signals and otherforms of demand response. And if theycan then clearly see the positiveoutcomes of smarter energy use, thewhole system can benefit.

“When talking about innovation,” says Darby, “it’s always very importantto think beyond technology to the socialaspects—and above all, to be very clear about the problem that this

is the solution for.”Effective demand response requires

some degree of automation, of course.But automation needs approaching withcare and informed consent, as it canreduce users’ awareness of their energy-related practices, along with their abilityto control usage. Darby cites recentevidence from the International EnergyAgency, for example, which shows analarming growth in standby consumptionby network-enabled home appliances.Indeed, she fears that some of thesedevices may be set to default modes thatwill use even more electricity thanbefore.

Nor, she warns, is smart metering amagic bullet. It’s a tool, and outcomeswill depend on how it’s specified andused, and how the system to which itbelongs is designed and regulated.

Darby cites the results of a recentmodelling exercise which indicated thatby 2020 carbon reductions from


Smart solutions in the spotlight

Smart technologiescould enable greenerenergy. But as OxfordUniversity’s SarahDarby cautions,educating people touse them remains achallenge

Left, digital electricity smart meter.Above, existing devices such astablets and smart phones could beused to control home energy usage.

Right, top, Samsung is looking at theuse of apps to make home automationsimpler. Right, bottom, smart metersand monitors can put consumers incontrol of their energy consumption,and allow them to track how muchgas, electricity and water they use.

electricity generation in six Europeanstates could rise from 1 to 6 per cent of abaseline value (i.e. with no smart meterrollout) to 4 to 13 per cent if more weredone to improve the regulatoryenvironment for demand response, andto encourage user understanding of andengagement with smart metering.

Regulation is a significant issue. In theUK, for example, policy is designed forlow-carbon power generators to receivepreferential prices, but there is as yet nomatching support for demand reduction.If funding structures penalise networkoperators for demand-side innovation,they won’t invest. But by changing therules for utility markets, demand andsupply side resources could compete onan equal basis.

When planning for user engagementwith the system, Darby believes thatclose attention to detail is criticallyimportant. Data privacy and systemsecurity must be maintained, andtechnology and tariff innovations need tobe thoroughly tested. Above all,consumers require transparency, via two-way interfaces, so they can actually see

the results of their efforts andparticipate in improving them.

Darby cites recent evidence fromHelsinki-based VaasaETT, an energythink tank, to suggest that if done well,through multiple channels, suchfeedback can lead to durable energysavings as well as a better under-standing of the big picture, and thusincreased consumer interest inadditional programmes. In Perth,Australia, for example, a successfulpublic awareness campaign to preparepeople for a pilot programme of smart-meter installation was expanded to othertrials, including remote control of airconditioning and an in-home display.

Such success stories remain few andfar between, to be sure. And the mostinteresting do seem to be small in scaleand consumer-owned. Case in point: the

Danish utility SEAS-NVE, which cutelectricity consumption by an average of17 per cent among customers whosigned up to a programme in which theyprovided their own meter data andreceived consumption analysis,comparison with others, advice and tips.

Nevertheless, these experiences doindicate that people will respond well tosmart metering initiatives if they feelthey are co-managers of the system—and, of course, if the price is right.

As distributed sources of energysupply come on stream, where bothdemand and supply may fluctuate,dynamic (or real-time) pricing, will beincreasingly needed, Darby observes.From the user’s perspective there’s asignificant difference between static(time-of-use) tariffs, which are stable forlong periods, and dynamic tariffs. Butbecause they reflect long-term averageexpectations of daily peak marginalcosts, static tariffs don’t provideadditional incentives to reduce demandfurther on days when the system is moststressed.

Darby believes, however, that assupply becomes more distributed, themost pressing network and gridmanagement issues will become morelocal, and this could aid publicunderstanding of the need for dynamicpricing. “We need to take people on asort of journey,” she says. It promises tobe a long one—but well worth the effort.


“When talking about innovation, it’salways very important to think beyond

technology to the social aspects.”

BY TIMOTHY SPENCE

When the European Commissionunveiled its Strategic EnergyTechnology Plan in 2008, only a

clairvoyant could have seen that within afew years, Germany would retreat fromnuclear power, trade disputes woulderupt over solar panel components, orthat a major chill would befall Europe’srelations with a key energy supplier.

Now, the job of planning Europe’senergy future has become even morecomplex—and urgent. An updated SET-Plan due for release in early 2015, a yearlater than planned, rethinks research andinnovation priorities to speed thedevelopment of a low-carbon economy,emphasising a more integrated EUenergy system and energy efficiency.

European Commission officials toldScience|Business that the update pays“special attention” to encouragingenergy efficiency through smart meteringand other technologies that giveconsumers more control overconsumption and storage, and allowthem to transfer surplus renewable

energy to public grids.The 2008 scheme was “a good strategy

at that time,” says Andreea Strachinescu,who heads the new energy technologiessection at the Commission’s energydirectorate, which is involved inrevamping the plan. “Now [the emphasisis] having an integrated view for a moresecure and affordable energy,” sheexplains, noting that renewable energyproduction has risen in recent years“without thinking how this can beefficiently integrated into transmissionand distribution networks, and notcurtailed, which happens far toofrequently.”

Energy securityStrachinescu told Science|Business that inorder to achieve Europe’s longer-termgoals of de-carbonisation and betterproductivity, the existing energy wallsneed to come down. “The idea is to seehow [the energy market] can be betterintegrated,” she says, adding: “Thesecurity of supply also can be facilitatedby an integrated energy market.”

The SET-Plan added a “technology

pillar” to the EU’s energy and climatestrategies, including the 2020 target ofgenerating 20 per cent of electricity fromrenewable sources and the 2050ambition of slashing carbon emissions by80 per cent compared with 1990 levels.The plan set out to spur researchers,policymakers and industries tocollaborate in six core areas—nuclearfission, solar, wind, bio-energy, hydrogenfuel cells, and carbon capture andstorage—with a project budget of some€71.5 billion.

Georg Menzen, a German member ofthe SET-Plan Steering Committee —comprising representatives from the 28EU countries plus Iceland, Norway,Switzerland and Turkey—notes that thescheme also sought to encourageindustrial and public cooperation inachieving a more integrated energymarket, thus building Europe’s capacityto manage trans-boundary supply anddemand.

“We cannot stop at our borders ofGermany,” says Menzen, who heads theenergy research division at the GermanMinistry for Economic Affairs and Energy.


Revised EU plan putsfocus on integrated market2015 update includesgreater priority on energy-efficiency technologies

Andreea Strachinescu Giovanni de Santi

“The development of new gridtechnologies should be one of the mostimportant technological areas where theCommission should invest and shoulddeliver results. We said to theCommission, look to those areas wherethere is a European dimension andgrids—this is without doubt atechnological area that has a Europedimension.”

The SET-Plan update will follow therollout of other key proposals this year—the Climate and Energy Framework for2030 in January, the Energy SecurityStrategy in May and the Energy EfficiencyCommunication in July.

Events unanticipated when thetechnology scheme was drafted provideample reason to assess its impact,rethink investment priorities—and stepup the pace of change. Germany’sdecision to phase out nuclear powerfollowing the 2011 Fukushima meltdown,and a brief tiff with China over solar paneltrade in 2013, both underscored theimportance of strengthening homegrowncooperation. Then came theUkraine–Russia conflict with all theattendant concerns about the security ofgas supplies.

For Giovanni De Santi, who heads theInstitute for Energy and Transport at theCommission’s Joint Research Centre(JRC), the revamped strategy will helppull together other EU initiatives onenergy security and climate change byproviding innovation and “enhance ourindependence”.

“We don’t have a silver bullet that willsolve our [energy] problem,” De Santisays. “Europe is importing too muchenergy and if we don’t improve our ownindependent energy sources, we willcontinue to increase the dependencyfrom outside Europe. So we definitelyneed to improve the technology in alldifferent energy sectors.”

The original SET-Plan has facedcriticism for being too ambitious and wasundercut by a weak commitment on thepart of national governments andindustry to finance, research andimplement projects.

It also suffered from a siloed approachto innovation that failed to anticipate theimpact of any single technology on theoverall energy system.

A JRC review of the SET-Plan’s first twoyears identified a lack of ambition bymembers states in some core researchareas and a “puzzling” lack ofcoordination on improving theinterconnectivity of electricity grids. TheOECD’s latest annual economic report onthe EU also notes that energy remainslargely within state domains, and calls for“further development of energyinterconnections” that can carry powerproduced by conventional plants as wellas wind, solar and other alternatives.

Financing has been another concerndespite promises to marshal theresources of industry, member states andthe new seven-year EU research andinnovation programme, Horizon 2020.Estimates put the gap between plannedspending on technology and the amountneeded to achieve the EU’s 2020 energyand climate change targets at between€47 billion and €60 billion, and theoutlook for slashing carbon emissions bymid-century is no better.

“In the 2050 context, these numberswill become even higher and the recenteconomic and financial crisis had afurther negative impact on the

availability of private and public funds,”according to a SET-Plan analysis byresearchers at the Florence-basedEuropean University Institute’s THINKproject, which advises the Commission onenergy matters. “Experts agree that 2050goals are technologically feasible, butthat a key challenge will be themobilisation of the required capital.”

The gulf in the financial health of EUcountries has also hurt. Since 2008, whenthe SET-Plan was unveiled, Eurostatfigures show that EU average renewableenergy has grown from 10 per cent tomore than 14 per cent of final energyconsumption. Ten EU nations havereached or exceed the bloc’s 20 per centtarget yet Cyprus, France, Ireland, Italyand Spain—those with stagnanteconomies or battered by the debt crisis—remain well short of their renewablestargets for 2020.

“These [economic and financial]differences hamper agreements for aunified approach for technologysupport,” says THINK’s analysis—A NewEU Energy Technology Policy towards2050: Which Way to Go?.

The next steps for the revamped SET-Plan are the release of an integratedroadmap at a conference in Decemberhosted by Italy, which holds the rotatingEU presidency, followed by the rollout ofan action plan in early 2015.

Those involved in the process say thedelay is partly the fault of the sheer workentailed in fielding input andrecommendations from the energy sector,researchers, environmental groups andgovernments that are represented on twoadvisory groups working on the update.The filtering process involvescompressing some 500 pages ofrecommendations into a document closerto 35 pages.

Menzen is among those who has beenconcerned about the slow pace, thoughhe acknowledged that progress has beenmade on reaching a broad agreement andthat “we feel we are on the right track onthe SET-Plan.”

“We have to look for integration of ourrenewable energies in the energysystems, and then we have to overcomethe borders and we have to look for anintegrated electrical [system] in Europe.”


“We don’t have a silver bullet that willsolve our [energy] problem.”

Just over three years ago, I received anunexpected phone call from the formerUnited States Secretary of Energy with

a unique prospect: join a startupgovernment agency focused on “changingwhat is possible” for our energy future.After 20 years of working in the privatesector, I had little understanding of whatthis might entail. However, I accepted thechallenge and have had the amazingopportunity to help develop and grow acompletely new organisation designed toexplore the uncharted territories ofenergy technology and to accelerate thepace of innovation.

The US Department of Energy’sAdvanced Research Projects Agency–Energy (ARPA-E) catalyses high-potential,high-impact energy technologies that aretoo early for private sector invest ortraditional government applied researchand development funding. ARPA-E’srigorous programme design, competitiveproject selections and hands-onengagement ensure thoughtfulexpenditures while empowering America’senergy researchers with funding,technical assistance and marketawareness.

The US Congress established ARPA-E in2007 following a recommendation by theNational Academies in the “Rising abovethe Gathering Storm” report on retainingUS leadership in science and engineering.As of August 2014, ARPA-E has funded380 projects with over $900 million. Overone-third of the funding has gone to small

business, one-third to universities and 20 per cent to large businesses, with the remaining to national labs and non-profits.

ARPA-E has created a unique, nimble,and adaptive structure, modelled on thesuccessful Defense Advanced ResearchProjects Agency (DARPA), which isresponsible for numerous innovationsincluding stealth, GPS, and the foundationof the Internet. The core of the model isthe team, particularly the programmedirectors and technology-to-marketadvisors.

ARPA-E programme directors provideawardees with technical guidance thatcombines scientific expertise and real-world experience, whiletechnology-to-market advisors supplycritical business insight and strategies tomove technologies towards the market.Programme directors and technology-to-market advisors serve limited, three- tofour-year terms, which instills a sense ofurgency to succeed and regularly providesa fresh perspective on technologies andmarket conditions.

Programme development at ARPA-E isprimarily about identifying technologygaps where high-impact, high-potentialinvestment could lead to entirely newways to generate, store and use energy.ARPA-E awards are selected through twomodels: “focused” programmes and“open” solicitations. ARPA-E “focused”programmes provide a unique bridge frombasic science to early-stage technology.These programmes draw from the latestscientific discoveries and envision a viablepath to commercial implementationthrough firm grounding in the economic

realities and changing dynamics of themarketplace.

The concept for a new “focused”programme is developed throughengagement with diverse communities,including some that may not havetraditionally been involved in the topicarea, and by examining lessons learnedfrom current ARPA-E projects. ARPA-E alsoensures that potentially transformationalideas outside the scope of “focused”programmes are not lost, by utilising“open” solicitations. Projects selectedunder “open” solicitations pursue novelapproaches to energy innovation, andwork to meet technical needs notaddressed by other parts of ARPA-E, theDepartment of Energy or the privatesector. ARPA-E works to frame problemstatements in ways that encourageinterdisciplinary thinking and bringtogether diverse combinations of skillsand partners that can approach energychallenges in new ways.

A critical component of the ARPA-Emodel is hands-on engagement withawardees. Each project includes clearlydefined technical and commercialmilestones that awardees are required tomeet. Programme directors work closelywith each awardee, through regularmeetings and on-site visits, to ensure thatmilestones are being achieved in a timelyfashion. When a project is not achievingits goals, ARPA-E works with the awardeeto rectify the issue or, in cases where theissue cannot be corrected, ARPA-Ediscontinues funding for the project.Similar to DARPA, tolerance of thepotential for technical failure, if theimpact from success is great enough, is an


Government agency plays key rolein creating America’s energy futureRigorous programme design, competitive selection and hands-onengagement accelerate country’s energy research

Dr. Cheryl Martin is the acting director of theAdvanced Research Projects Agency–Energyand is responsible for overseeing the agency.

BY CHERYL MARTIN

important part of ARPA-E’s culture, andlearning from unexpected outcomes is animportant aspect of the scientific method.As of August 2014, ARPA-E hasdiscontinued 21 projects early, but wouldonly view a project as a failure if it werenot stopped when we know that there isno longer a chance for success. Fear ofadmitting something does not work is acommon, not often discussed, barrier toprogress that we have worked hard toremove from our model.

Another unique element of the ARPA-Emodel is the technology-to-marketprogramme. The most innovativetechnologies in the world will only haveimpact if they make it to the market,which is why ARPA-E regularly asks, “If itworks, will it matter?” The ARPA-E

technology-to-market programmeprovides awardees with practical trainingand critical business information toguide technical development and helpprojects succeed.

A common pitfall of research projectsis waiting too long to think about “whathappens when the project funding isover” and not fully appreciating thevaried needs of the value chain and thetime it takes to engage partners. EachARPA-E project has a “technology tomarket plan” that maps out apreliminary path to market and isregularly refined.

The success of ARPA-E will ultimatelybe measured by the impact of itsprojects in the marketplace realised bycommercial adoption. Because the

projects ARPA-E funds seek to generatetransformational energy technologiesthat do not exist today, ARPA-E looks atvarious metrics to measure progress.These metrics include meeting technicalmilestones, patents and publicationsand, most importantly, handoffs for nextstage development, including theformation of new companies andfostering public and private partnershipsto ensure projects continue to movetowards the market.

In just a few short years, ARPA-E hasestablished a new model for government-funded energy research which framesenergy challenges to engage diversecommunities to move the impossible to the plausible, accelerating the pace of innovation.


“The success of ARPA-E willultimately be measured by the impact

of its projects in the marketplace.”

1. Integrating processengineering and biotech

Claus Crone Fuglsang, vice president,bioenergy R&D, Novozymes NorthAmerica

I believe the integrated approach ofcombining large-scale processengineering and biotechnology solutionsfor the efficient conversion of agriculturaland forestry output into biofuel andbiochemical products, is the mostimportant technological achievementgiving the most versatile solutions todeliver sustainable and affordable low-carbon energy systems in Europe.

First of all, to achieve sustainability wehave to be able to renew the resources—used agricultural and forestry output canbe regrown—and of course sequestercarbon thus completing the cycle ofcarbon. Efficient conversion with limitedextra energy consumption will furthersecure a higher level of sustainability.Taking biomass as an example, thebiochemical conversion through the use ofenzymes and micro-organisms provides avery versatile output in terms of sugar

molecules that when fermented canproduce liquid transportation fuels andchemicals. And the lignin when burnedproduces heat and electricity, i.e. itbasically has the ability to replace oil andpetrochemistry.

Affordability of this kind of technologyhas already been proven in the US cornethanol industry, which without subsidy


We asked eleven of the world’s leading energy researchersone question—and we got eleven different answers. Butthere were some commonalities

Experts corner

can compete on cost on a gallon-to-gallonbasis (and even on a BTU basis) withgasoline. On biomass the technology isconstantly improving, and we will throughoptimisation be cost-competitive to oil-based fuels in the near future as wesuccessfully integrate large-scale processunderstanding with novel enzyme technologyand novel fermentation organisms.

“The cost of low-carbonrenewable electricity is nolonger prohibitive.”

2. The electrification of energy

Juha Kiviluoma, senior scientist at theVTT Technical Research Centre ofFinland

The cost of low-carbon renewableelectricity is no longer prohibitive. Thecritical challenge is to enable a very highshare of variable generation from windpower and photovoltaics. The mainproblem is the variability of output in thetime scale of hours and days. Flexibilityis the key, and the key to flexibility iselectrification of energy. Transport andheat in various forms consume two-thirds of energy end use and can offer

major possibilities for flexibleconsumption and storage of electricalenergy. Another important source offlexibility will be power plants with lowcapital and cycling costs.

The second critical challenge is theuneven geographical distribution ofusable resources. This requires long-distance transmission, preferably inhigh-voltage direct current due to lowerlosses and land-use issues. Control andstability of multi-terminal high-voltagedirect current connected to a meshedalternating current grid is therefore animportant research agenda.

Question: Which technology or innovation is most critical toachieving a sustainable and affordable low-carbonenergy system in Europe?

Answers:

3. System integration oflow-carbon technologies

Georg Erdmann, professor at TUBerlin, and member of Angela Merkel’sadvisory council on energy issues

One lesson from the GermanEnergiewende is that low-carbonenergy solutions cannot come from ashort list of innovations andtechnologies. Crucial is the systemintegration of low-carbontechnologies.

For example, photovoltaic hasbecome a promising technology as itsinvestment costs have sharplydeclined. Therefore the number ofcompetitive markets and market nichesare growing and solar technologieshave a bright future in a low-carbonworld. However, photovoltaics alonecannot solve the carbon emissionsfrom electricity generation because thistechnology cannot supply electricitywhenever it is needed. Innovationactivities are required that translatephotovoltaics and other low-carbonpower generation technologies into asustainable electricity system.

There are a lot of ideas andprototype technologies around thatmight fulfil this task. But as surprisesand disappointments appearinevitable, picking the winners throughcurrent political decisions is not thatpromising. A lot of real marketexperiments are needed and amultitude of concepts should be testedin order to finally achieve anacceptable solution. Redundant andperhaps duplicating research anddevelopment efforts are todayinevitable.

The already-existing share ofintermittent renewable power sourcesis not only a driver for theseexperiments but also an excellent testenvironment. With the developingdecentralisation of the electricity

4. A multiprongedapproach

Regina Palkovits, professor forHeterogeneous Catalysis and ChemicalTechnology at RWTH Aachen University

In view of the complexity of our currentenergy system, the transition to a carbonneutral future energy supply will hardlydepend on a single technology.Nevertheless, several things certainlyneed to be in place to enable thetransition to a sustainable energyproduction and economic growth.

Decoupling energy generation andCO2 emission presents a keyprerequisite. Renewable energies, e.g.based on wind, sunlight and water

power, are available. A major challengeconcerns energy distribution andsuitable energy storage systems.Stability of the power supply system andcontinued energy supply are essential,despite a dynamic energy generation viathe above-mentioned renewable energytechnologies.

Chemical energy storage bears thepotential to provide large-scale storagecapacity of high-energy density.Technologies for an efficient anddynamic electro-catalytic water splittingto hydrogen and oxygen in times ofsurplus energy, appear attractive. Tofacilitate storage and transport, catalytictransformation of hydrogen into suitableand potentially even liquid energycarriers is imperative. Biomass and CO2can serve as renewable carbon sourcesto enable closed carbon cycles.


industry the potential actors and themanifold of experiments—the searchspace—is likely to become larger.Governments should restrain fromhasty and selective marketinterventions that derogate the searchspace and they should also allow timefor system integration concepts tomature.

“The infrastructure level has to beseen in its whole complexity,

including all relevant pathways.”

5. Creating demand notbased on material want

Masaharu Komiyama, professor at thedivision of Solar Cells andEnvironmental Science at the CleanEnergy Research Center of theUniversity of Yamanashi

I analysed the most pressing challengesto the attainment of sustainability ofeconomically advanced nations. Ibelieve that Japan could provide anexample to lead them out of the presentdilemma through active promotion ofcreative consumer and societal demand.Creative demand—the development ofthe latent demand for things that have

not yet taken shape and which is notderived from material want—would bea key driver to a low-carbon society.

I also found out that an activeindustry-government-academicpartnership can provide theenvironment needed to promote suchnew creative demand. Therefore I havebeen trying to implement my ideathrough establishing a PlatinumSociety Network, as an industry-government-academic partnership inJapan, to facilitate the solution ofcommon issues through the exchangeof information and ideas. Such kind ofaction is required to stimulate newcreative demand and social innovationtowards a low-carbon society.

6. Develop the right long-term incentives

Andreas Löschel, professor of Energyand Resource Economics at theUniversity of Muenster and chairman ofthe German government’s EnergyExpert Committee

For the long-term success of theEuropean energy transformation, newtechnologies and innovations in allareas of the energy chain are necessary:from resources to energy generation,transport and storage and energy use.In the medium and short run, we havethe means to achieve ourtransformation targets for the next 10-15years. However, we have to develop theright long-term incentives. The rightpolicy architecture is critical and astrategic research agenda needs to bedeveloped at the European level. Itneeds to take account of theinteractions between Europeaninstruments such as the EU emissionstrading system, the development oftrans-European energy networks, andthe internal energy market. Moreover,these initiatives overlap with memberstate policies, e.g. in the area ofrenewable support or energy security.Only a clever policy architecture willfoster the necessary developments for asustainable and affordable low-carbonenergy system.

7. Energy systemsintegration

Doug Arent, executive director of theJoint Institute for Strategic EnergyAnalysis at the National RenewableEnergy Laboratory, US

Achieving a sustainable, affordable low-carbon energy system requires asystemic approach to innovation,stemming from basic and appliedsciences to engineering and economics.Scientists and engineers will continue tocreate more efficient ways to harnessenergy resources that provide the energyservices needed. While that continues, acritical emerging area in which we mustaccelerate our innovation enterprisefocuses on energy systems integration,

or ESI. This new innovation area seeks tooptimise the delivery of energy services,provided by low-carbon sources whilesimultaneously providing environmentalstewardship of water, land and air.

ESI innovations focus on the deliveryof energy services via all carriers (suchas electricity, thermal pathways, andfuels and water) with infrastructures(such as communications, water andtransportation) to maximise efficiencyand minimise waste. Innovative systemsolutions will emerge at a variety ofphysical scales—from individualbuildings to campuses and communitiesand to regional systems that can stretchacross continents. Innovations indevices, smart agent/cyberware,subsystems, across systems and in themarketplace will all contribute to thesenew solutions.


“The right policyarchitecture is critical and a strategic researchagenda needs to bedeveloped at theEuropean level.”

8. Virtual power plantsand smart grids

Carlos Haertel, managing directorEurope at GE Global Research

Europe is undergoing a transition withthe share of renewables in powergeneration rising continuously. Somecountries have already reachedimpressive levels, and the ambition isto achieve a fully renewable system.Yet, change takes time in an industrycharacterised by enormous capitalinvestments and a need to operateassets for decades. Hence, a mix ofpower-generation technologies based

on fossil fuels, nuclear and renewablesin their various forms is here to stay fora significant period of time. However,the greater the penetration ofrenewables, the greater the need for asmart coupling of all power generationassets to ensure system stability. Virtualpower plant technology and smart gridswill be among the key enablers here.Especially promising are novel conceptsto combine renewables with advancedgas turbines, which have low emissionsand provide both high efficiency andoperational flexibility.

“Change takes time in an industry characterisedby enormous capitalinvestments...”

10. Evening out variationswithin the transmissionnetwork

Hans Bernhoff, professor at theDepartment of Engineering Sciences,Uppsala University

The future of energy systems in Europe isstrongly interconnected withdevelopment of electric energy systems.In consumer products, we havewitnessed a long slow transition, overthe past decades, from mechanicalsystems involving chemical reactions toclean electric systems. This trend willcontinue in the arena of energy systems,where combustion of fossil fuels will bereplaced by electrical systems fed byrenewable sources of all sorts. It affectsmost areas of consumption but isperhaps especially pronounced inbuildings (electric heat pumps to heat and cool better insulated houses)and transportation (switch to

electric vehicles).The actual source will depend on local

availability. Some renewable sources arealready developed and installed, such ashydropower and to some extent onshorewind power. Others are being developednow and approach large scaleinstallation, such as solar in southernEurope and marine currents and wavepower in western parts of Europe. Allrenewable sources present a certainvariability, less pronounced forhydropower, which even allows for on-demand generation (generally notavailable from fossil or nuclear sources).Others have a potentially largeavailability, in the range of 50 per centsuch as wave and marine current power,thus making good use of the powerreserve offered by hydro and pumpedhydro. Whereas others such as wind, andeven more pronounced solar-electric,have a large variability: this rendersdevelopment of integrated or stand-alone electric storage an interestingarea. However, electric storage (such aspumped hydro, batteries or flywheels) isexpensive and difficult to develop inlarge scale. This indicates the furtherdevelopment of European power grid toallow for an evening out of localvariations, both in north-south (weatherand seasonal variation) and east-west(daylight and consumption patterns).The other option is to increase the share

of switchable loads (i.e. loads that can berun when local availability is good) in asmart-grid context.

Some new renewable sources willemerge, such as algae-based fuel (grownin saltwater dams in traditionally non-productive regions, i.e. deserts or similar)and enhanced geothermal in new areas.The renewable fuels, not only algae-basedbut also biofuels from farming, forestryand waste, will allow, if further developed,additional regulation of production tomatch demand.

In principle, all parts of the electricsystem can and will be enhanced inefficiency, from large scale such ashydropower all the way down to smallscale, such as increased efficiency byswitch to and further development of LEDillumination. However, history teaches usthat this efficiency will be outrun by theincreased demand for electricity as newsolutions and new products aredeveloped for industry and privateconsumption—such as improved wirelessbroadband, household robots and newhigh-speed high-efficiency modes oftransportation such as evacuated tubetransport (“Hyperlope” and similar).


9. Innovation in thegrowing of plants andbioprocessing

Angela Karp, scientific director of theRothamsted Centre for Bioenergy andClimate Change, UK

Plants extract CO2 from the atmosphereand convert it into dry matter which canbe used as a renewable feedstock.Plants are also the principal source oforganic carbon stored in soils. If we can

11. Integrated view

Brigitte Bach, head of the EnergyDepartment at the Austrian Institute ofTechnology

To achieve a sustainable and affordablelow-carbon energy system, it is mostcrucial to have an integrated view onthree key levels. On a geographic level,the planning and management approachhas to take into account the city, regionaland national domains. In addition,supply, distribution and demand have tobe considered together. Last but notleast, the infrastructure level has to beseen in its whole complexity, includingall relevant pathways, for instanceenergy together with mobility andinformation and communicationstechnologies.

optimise these two natural processeswe can provide renewable feedstocks forthe future bio-economy and mitigateclimate change. Woody feedstockprovides the ultimate opportunity forthis but we need technologicalinnovations a) in plant improvements—to enhance carbon capture and optimisecarbon partitioning above and belowground; and b) in extraction andbioprocessing—to increase yields ofusable C from lignocellulose andextractives for fuels and fine andspeciality chemicals.

“The infrastructure level has to be seen in its whole

complexity, including allrelevant pathways.”

T he supply of secure, reliable andaffordable energy to a growingglobal population is a major

challenge. And research, innovation,accelerated translation to market,education and skills development arekey to addressing it, as are strongstrategic partnerships betweenuniversities and industry.

At the University of Manchester wehave over 600 researchers working in theenergy sector, covering supply fromnuclear, oil and gas, offshore renewablesand solar, through energy networks andstorage, to energy use and climatechange. And we have active links withover 300 companies in engineering andphysical sciences, many of themconnected to the energy sector, whetherlarge global corporations or small ormedium-sized enterprises, includinglong-term partnerships withorganisations such as BP, National Grid,Rolls-Royce, EDF Energy, AMEC, Cameronand Siemens.

To us, the key to a successfulpartnership is to understand clearly thepartner’s business and what measurableeffect any research project will have ondriving the business forward both in theshort and long term. This involvessignificant effort from both sides. Thepartnership should allow for “industrial

pull”, where the industrialpartner articulates clearlythe challenges it is facing,and “science push”,where universitiespresent new ideas(generally disruptivetechnologies) which couldtransform the business. Interms of “industrial pull”,the knowledge to addressa challenge may alreadyexist within the researchbase. For example,knowledge gained fromresearch in nuclear cansometimes be used in oiland gas or aerospace, andeven in medical devices.And vice-versa.

In 2012, BP set up theInternational Centre forAdvanced Materials (BP-ICAM), with the hubbased at the University ofManchester and foundingspoke partners at the University ofCambridge, Imperial College London andthe University of Illinois at Urbana-Champaign. BP has identified research,development and fundamentalunderstanding of advanced materialsacross a variety of energy and industrialapplications as a critical component forits future business. For example, it isimportant that reliable materials andcomponents are employed, with theleast possible impact on the


The secret to successfulindustry–university partnershipsCollaboration goes beyond researchand innovation to embraceeducation, social responsibility anddeveloping new markets

“It is important for seniorstaff from both sides toagree a sensible deal on IPvery early on in thediscussion, which bringsvalue to bothorganisations.”Professor Colin Bailey, FREng, CEng,

FIStructE, FICE, MIFireE is vice president ofthe University of Manchester and dean of thefaculty of Engineering & Physical Sciences.

Colin Bailey

BY COLIN BAILEY

ManchesterUniversity’s high-voltage laboratory.

environment, at the ever-increasinghigher pressures and temperaturesencountered in the field. BP-ICAM is agreat example of an industry–universitypartnership, with the four foundingpartner universities providing a wealth ofcomplementary expertise for BP.

Although there is an extensive leadingresearch and knowledge base atManchester, we are always clear tohighlight to industrial partners that notall the expertise is located at Manchester,or indeed at any one university, but weknow where it is and will bring in otheruniversities and organisations to work onprojects if needed. It is very important foruniversities to work this way. In nuclearenergy, for instance, Manchester has aworld-leading reputation but we alsowork in partnership with otheruniversities, effectively offering ourindustrial partners a gateway into theinternational nuclear energy researchbase.

In September, the University ofManchester and National Grid signed anagreement reaffirming their commitmentto supporting energy system innovation,building on a relationship that started in2002. The National Grid Power SystemsResearch Centre, based at the university,houses the largest and best equippedhigh-voltage laboratory of any UKuniversity, allowing us to carry outresearch that supports the delivery ofreliable and sustainable supplies of

energy in increasing quantities whilemeeting the desire for reducedenvironmental impact.

Recent investment in facilities hasallowed us to develop real-timeplatforms capable of assessing theimpact of energy storage, protection,communication and sensingtechnologies in the energy system.National Grid understands that thechallenges resulting from the move to alow-carbon economy are both pressingand complex, with the role of researchand innovation central to the futuresuccess of the company, and it islooking to enhance its relationship withManchester and other universities todeliver the energy system of the future.

The ownership of intellectual property(IP) is constantly raised as an issuewhen discussing industry–universitypartnerships and I have seen someindustry-university partnerships fail dueto lack of agreement over the futurevalue of IP, leaving both partners withnothing. My experience is that it isimportant for senior staff from bothsides to agree a sensible deal on IP veryearly on in the discussion, which bringsvalue to both organisations. This may bea share in the IP, or exclusivity in acertain sector or application for thecompany leaving the university free touse it in other sectors or other research.

Industry–university partnerships arenot just about research and innovation.

A partnership can also include industrialinput into undergraduate andpostgraduate education (to ensure thatthe next generation of scientists andengineers have the correct skills), publicengagement, social responsibility,enhancing the expertise and knowledgeof current company staff andinternational strategy. At Manchester wework with industrial partners across aspectrum of activities. For example, weare working with a number of companieswho wish to develop their market incertain countries where we have existinglinks with government departments,universities, alumni and otherorganisations. We also work withcompanies in promoting the STEM(science, technology, engineering andmathematics) subjects to youngchildren, which is critical to the futureeconomy and in addressing the globalchallenges, especially in energy andsustainability.

Universities are already addressing thecurrent and future global energychallenge through research andinnovation, together with education.Industry sees research and innovation,together with a highly skilled workforce,as critical to its business. By workingtogether universities and industry willquickly find sustainable solutions to theglobal energy challenge, which will be ofbenefit to society and the economyworldwide.


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T he economic and social risksassociated with climate changeare becoming increasingly

important, as recently shown by theIntergovernmental Panel on ClimateChange’s Fifth Assessment Report. Thisrequires urgent, effective and globalaction to control greenhouse gasemissions.

As we seek strategies for climatechange mitigation, timely andmeaningful approaches to energytransition become ever more important.Fundamental changes in the world’senergy systems are necessary if we areto avoid the IPCC-predicted 1,500gigatonnes of CO2 equivalents incumulative emissions by 2050.

There are two challenges to beaddressed in responding to this energytransition challenge: technical andpolitical. First, technical: the availabilityof energy efficient and/or low-carbontechnologies and improvements to theircost and operation will influence theease of energy transitions. While thereare some disputes and holdbacks on thevarious low-carbon energy technologies,there is considerable evidence that atransition to a sustainable energy path istechnically feasible. Here the prioritieslie in developing both energy efficiencyimprovements and the uptake of low-carbon technologies, with obviouseconomic benefits for the more efficientand/or technologically advancedindustries.

Next, effective energy transition islargely stalling because of political and

COMM E NTARY

institutional dynamics. The crux of theissue is striking the right balancebetween climate change mitigationstrategies and industry competitiveness.To overcome the current obstacles toeffective energy transition, policies mustencourage the presence of newindustries and technologies that willdrive the transition to a low-carboneconomy. In addition to specificinnovation-related incentives, the maintool remains carbon pricing thatdiscourages the use of carbon-basedenergy and incentivises industry toexplore low-carbon alternatives.

As stressed by the IPCC and morerecently at the New York ClimateSummit, carbon pricing is essential toprovide incentives to develop cleanenergy options without distortingenergy markets. The removal ofsubsidies to fossil fuels is anotherimportant, closely related, option. Aninternational cooperative effort for low-carbon technology dissemination,co-funded by the Climate Green Fund, isa third important option.

Even so, increased open politicaldialogue is necessary to accelerate thetransition. Time is short. Efforts shouldbe concentrated in the upcoming yearssince emissions through 2030 willstrongly influence the options andlikelihood of keeping emissionsconcentrations within 430 to 530 partsper million of CO2 equivalents by 2100, arange consistent with a likely chance ofkeeping temperature change below 2°Crelative to preindustrial levels.

Time is short

Professor Carlo Carraro, vice chair of IPCC Working Group III, professor ofenvironmental economics at the University of Venice, and director of theSustainable Development Programme of the Fondazione Eni Enrico Mattei

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