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Diffusion of Renewable Energy Technologies

Private Sector Perspectives on Emerging Markets

by Christian Friebe (Author)
©2014 Thesis X, 102 Pages
Series: Finanzmärkte und Klimawandel, Volume 4

Summary

By analysing the context of emerging and developing countries, the author explores the private sector perspective on renewable energy diffusion. The evaluation of two technology case studies, namely wind farms (grid-connected renewable energy) and solar home systems (off-grid renewable energy), reveals the perspectives of highly experienced early adopters. Thereby, qualitative and quantitative data sources – including innovative methods such as conjoint analysis – are combined. A key finding is that private sector perspectives, especially of early adopters, are highly relevant for policy makers in their endeavour of designing effective and efficient framework conditions for renewable energy technologies.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author(s)/editor(s)
  • About the book
  • This eBook can be cited
  • Contents
  • Preface
  • Acknowledgements
  • List of Figures
  • List of Tables
  • 1 Introduction
  • 1.1 Purpose and scope
  • 1.2 Diffusion of innovation
  • 1.3 Research context and research question
  • 1.4 Case study method
  • 2 Renewable energy diffusion in emerging markets – The micro perspective on barriers for wind farms and solar home systems
  • 2.1 Introduction
  • 2.2 Methods and data
  • 2.2.1 Selection of technology case studies
  • 2.2.2 Data sources
  • 2.3 Deployment of wind farms (case 1)
  • 2.4 Deployment of solar home systems (case 2)
  • 2.5 Discussion
  • 2.6 Conclusion
  • 3 Exploring technology diffusion in emerging markets – the role of public policy for wind energy
  • 3.1 Introduction
  • 3.2 Conceptual background
  • 3.3 Data and methodology
  • 3.3.1 Qualitative approach: Identifying the key decision factors
  • 3.3.2 Quantitative approach: Evaluating the key decision factors
  • 3.3.3 Sample selection for and sample characteristics of the survey
  • 3.3.4 Qualitative approach: Discussing the key results during a workshop
  • 3.4 Findings
  • 3.4.1 Generic influencing factors
  • 3.4.2 Specific influencing factors
  • 3.4.3 Robustness check
  • 3.5 Discussion
  • 3.6 Conclusion
  • 4 Exploring the link between products and services in low-income markets – Evidence from solar home systems
  • 4.1 Introduction
  • 4.2 Research context
  • 4.2.1 Access to modern energy services
  • 4.2.2 Product service system – Towards further integration
  • 4.3 A PSS for SHSs in low-income markets
  • 4.3.1 Cash
  • 4.3.2 Credit
  • 4.3.3 Leasing
  • 4.3.4 Fee-for-Service
  • 4.4 Method and data
  • 4.4.1 Conjoint analysis
  • 4.4.2 Survey sample
  • 4.5 Findings
  • 4.5.1 Experimental results of the HB estimation
  • 4.5.2 Business perspective vs. limited financial resources of consumers
  • 4.6 Discussion and conclusion
  • 4.6.1 Policy implications
  • 4.6.2 Future research directions
  • 5 Conclusions
  • 5.1 Implications for policy-makers
  • 5.1.1 Grid-connected renewable energy technologies
  • 5.1.2 Off-grid renewable energy technologies
  • 5.2 Implications for managers
  • 5.3 Implications for researchers
  • Bibliography
  • Appendix
  • Appendix for Chapter 2
  • Appendix for Chapter 3
  • Series index

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Preface

In the global context of climate change and increasing energy demand, new methods of power generation and distribution are required. Renewable energy technologies could address these upcoming challenges. Moreover, they are currently becoming increasingly cost effective when compared to "conventional" fossil fuel based technologies for power generation.

The research papers specifically focus on mature renewable energy technologies in nascent markets in emerging and developing countries. Many of these countries face the challenge of delivering basic electricity services to a growing population. Worldwide, 1,5bn people do not have access to electricity services while an additional 1bn have only very limited access, although they are connected to the grid. In addition, many emerging and developing countries currently grapple with a huge increase in energy demand resulting from rapid economic development. The urgent need to overcome these challenges presents a vital opportunity to increase the share of renewable energy technologies, either in centralized “grid-connected” power systems or in decentralized “off-grid” power systems. Therefore, this set of research papers investigates a technology case study for each category, namely large-scale wind farms (grid-connected) and small-scale solar home systems (off-grid), through qualitative and quantitative methods. These two cases are further used to explore barriers of diffusion for off-grid and grid connected renewable energy technologies in general. For this purpose, innovative methods based on marketing research in consumer preferences have been selected and successfully applied. These methods are adapted to identify preferences for investment framework conditions for wind farms on one hand, and innovative business models for rural electrification on the other.

The key findings of the three research papers indicate that both technology applications face barriers which are relevant but conquerable. Some of the barriers refer to the institutional context, such as non-defined or not well adjusted regulations, uncertainties with respect to grid infrastructure developments and others. Other barriers are business- or private sector-related, such as the design of adequate products and services which address the needs of the rural population. Last but not least, several barriers result from inadequate funding mechanisms. It is concluded that, depending on the context of application, different risk and return structures of renewable energy applications require well-targeted public measures to increase the amount of private investments, thus enhancing diffusion. ← IX | X →

By analyzing the perspective of private companies that are commercially successful early adopters of renewable energy applications, this work derives some first conclusions regarding effective and efficient public policy mechanisms. Thereby, this study also contributes to the debate connecting technology diffusion and public private partnerships (PPPs) on the national or international level. The cases studied here can be used as examples which inform the current debate on such PPP funds, like the Green Climate Fund currently being designed by the international community. On an applied level, it shows how business models for companies can be adjusted to specific market conditions in emerging and developing countries, how international value chains interact, and how companies and projects might be financed in highly regulated electricity markets. Hence, this study elaborates on a discussion agenda that seems imperative for a much-needed and concrete dialogue among public policy makers and private companies and investors at the national and international levels.

August 2013

Ronald Gleich, Strascheg Institute for Innovation and Entrepreneurship (SIIE)

Paschen von Flotow, Sustainable Business Institute (SBI)

Dirk Schiereck, Technical University Darmstadt

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Acknowledgements

This thesis has been conducted as part of the research project "CFI - Climate Change, Financial Markets and Innovation" which is funded by the German Ministry for Research and Education (BMBF). Thereby, all three research papers benefited tremendously from the genuine support of Paschen von Flotow, head of the CFI research project and executive director of the Sustainable Business Institute (SBI). I would also like to thank Florian Täube, professor at the EBS University, who contributed significantly to the success of this thesis. Having two supervisors and co-authors like Paschen von Flotow and Florian Täube as well as the ongoing friendly and constructive dialogue with Ronald Gleich, head of the Strascheg Institute and professor at the EBS University, is truly the key success factor of this thesis.

Details

Pages
X, 102
Year
2014
ISBN (PDF)
9783653031119
ISBN (ePUB)
9783653995343
ISBN (MOBI)
9783653995336
ISBN (Hardcover)
9783631644447
DOI
10.3726/978-3-653-03111-9
Language
English
Publication date
2014 (February)
Keywords
Wind farms Windkraft Solar Home Systems Solarenergie Nascent markets echnology diffusion
Published
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2014. X, 102 pp., 14 b/w fig., 17 tables

Biographical notes

Christian Friebe (Author)

Christian Friebe holds a degree in mechanical engineering (Dipl.Ing.) from the University of Siegen and a Masters in European Business (MEB) from the University ESCP Europe. Prior to his PhD studies, he was awarded a Bosch Fellowship for the Postgraduate Program in International Affairs.

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