Centre for Urban Energy
Understanding the formation and
influence of complementary innovations
in large energy technology systems:
The case of urban energy storage in
Ontario’s electricity system
Jen Hiscock, Dr. Phil Walsh,
30th USAEE /IAEE North American Conference
October 11, 2011
Overview
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Ontario Context
Research question & problem
Institutional change theories
Commercializing in an evolving industry
Complementarity in institutional change
Applying it to Ontario
Change in Ontario’s Electricity Sector
• Green Energy Act (2009)
• Feed-In Tariff program (2010)
– Focus on integrating renewable energy (wind, solar,
biomass) into the grid
• Designed with the intent to build a green economy in
Ontario, meet environmental targets, and ensure
reliable service
• Change environment: resource pressures, politics,
social pressures, technical requirements, economic
capacity
How do you integrate
urban electricity
storage?
How do you commercialize urban electricity storage?
Gans and Stern
(2003)
Commercialization
Strategy
Environments
Walsh (2011)
Environments for
Commercializing
Innovation
Institutional theory and
commercialization strategies
• Adopt the perspective of the niche innovator
Institutional
Theory
Rules, norms, routines,
beliefs Emergence, conformity,
conflict, change
Organizational embeddedness
Legitimacy
Innovation
Theory
Lock-in, path
dependence
Price; cost-benefit
Technology cycles, design
competition
Dominant design
Business &
Absorptive capacity, Diffusion;
process
technology push / pull
innovation
Resource-based views
Core-competence
Economic
Theory
Complementary assets
Non-linearity
Co-evolution of technology and society
Sociology of technology
Social order
Actors,
networks
Actor-network and
Evolutionary Theory
Commercializing in an evolving market
• Market dynamics amidst planned economy
dynamics
– Commercialization strategies integrated into
broader institutional change processes
• Institutional change models
– Large infrastructure
– Competition
– Public sector intervention
Integrated framework for TIS and MLP
Landscape
Patchwork
of regimes
Niches
(novelty)
mature
phase
Functional
analysis of
technology
innovation
systems
(Bergek et al.,
2008)
formative
phase
Multiple levels as a nested hierarchy from the multi-level
perspective of sectoral transition (Geels, 2002; 2010)
Complementary Innovations
Power quality,
asset deferral,
load
management,
ancillary
services
Reliability
from
intermittent
renewables
Decentralized
electricity
supply and
storage
The technology scope of the Smart Grid system. (Modified from: EPRI, n.d.)
Integrated framework for TIS and MLP
Landscape
Patchwork
of regimes
mature
phase
Functional
analysis of
technology
innovation
systems
(Bergek et al.,
2008)
Complementary
innovations
(Markard &
Truffer, 2008a)
Niches
(novelty)
formative
phase
Multiple levels as a nested hierarchy from the multi-level
perspective of sectoral transition (Geels, 2002; 2010)
Integrated framework in Ontario electricity
Energy consumer
networks, associations
(commercial, industrial,
residential)
Price of inputs,
Legislation, public pressure (OEB,
IESO, Ministry)
Local
distribution
companies
(TH, HO, etc.)
Electricity
generators
(OPG, Bruce
Power)
Li-ion
batteries
Smart grid
tech.
Wind / solar
e- generators
Electric
vehicles
Ontario Electricity Sector Stakeholder Map
Landscape
[OPA]
[OEB]
[IESO]
Integrated Power
System Plan
Ministry
Transitioning to a
smart grid
Directives (Hydro One, OPG)
System
Planner
System
Regulator
System
Operator
Licensing
Regulated
Prices
Generators
Wholesale
Market
Distributed
Market
Electricity
Prices
3rd Party Storage
Service
Complementary
Provider
Innovators
Distributed
Electricity
Storage
Generators
Existing
Regime
Transmitters
industry
Feed-In
Tariff
Contract
DES
Distributors & generators
Smart grid
customers
generators
Hourly Market Price
[~ ½ consumption]
customers
generators
Regulated Price
[~ ½ consumption]
Distributed
Electricity
Storage
Practical and Theoretical areas of
insight
• Practical
– Commercialization strategies that leverage
internal dynamics of institutional change
– Understanding current system performance
through functional analysis
• Theoretical
– Empirical evidence regarding the formation of and
influence of complementary innovations
• On decision making
• On pathway development
Thank you
www.cue.ryerson.ca
jhiscock@ryerson.ca
prwalsh@ryerson.ca
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Key References
Bergek, A., Jacobsson, S., Carlsson, B., Lindmark, S., & Rickne, A. (2005). Analyzing the dynamics and
functionality of sectoral innovation systems–a manual. DRUID Tenth Anniversary Summer Conference, 2729.
Bergek, A., Jacobsson, S., Carlsson, B., Lindmark, S., & Rickne, A. (2008). Analyzing the functional dynamics of
technological innovation systems: A scheme of analysis. Research Policy, 37(3), 407-429.
Boyer, R. (2005). Coherence, diversity, and the evolution of capitalisms—the institutional complementarity
hypothesis. Evolutionary and Institutional Economics Review, 2(1), 43-80.
Gans, J. S., & Stern, S. (2003). The product market and the market for“ideas”: Commercialization strategies for
technology entrepreneurs. Research Policy, 32(2), 333-350.
Geels, F. W. (2002). Technological transitions as evolutionary reconfiguration processes: A multi-level
perspective and a case-study. Research Policy, 31(8-9), 1257-1274.
Hekkert, M. P., & Negro, S. O. (2009). Functions of innovation systems as a framework to understand
sustainable technological change: Empirical evidence for earlier claims. Technological Forecasting and
Social Change, 76(4), 584-594.
Markard, J., & Truffer, B. (2008a). Actor-oriented analysis of innovation systems: Exploring micro-meso level
linkages in the case of stationary fuel cells. Technology Analysis and Strategic Management, 20(4), 443464.
Markard, J., & Truffer, B. (2008b). Technological innovation systems and the multi-level perspective: Towards an
integrated framework. Research Policy, 37(4), 596-615.
Verbong, G. P. J., & Geels, F. W. (2010). Exploring sustainability transitions in the electricity sector with sociotechnical pathways. Technological Forecasting and Social Change, 77(8), 1214-1221.
Walsh, P. R. (2011). Innovation nirvana or innovation wasteland? Identifying commercialization strategies for
small and medium renewable energy enterprises. Technovation, doi:doi:10.1016/
j.technovation.2011.09.002