Innovation vs. scalability in new renewables

Today, let's delve into an intriguing aspect of Europe's pursuit of sustainability: the delicate balance between "innovative" and "scalable" green solutions.?I'm on team scalable.

Last week I had the pleasure of participating in a Government body's industry panel on ways to support and encourage more of a home grown clean tech industry. The meeting included raw material refiners, wafer makers, battery players and downstream installers - the whole value chain. What they had in common: All need scaling.

Upstream guys want BIGGER commitments so they can build BIGGER factories at BETTER economies of scale and deploying MORE risk averse capital. Downstream guys want MORE consumer demand so they can get BETTER utilisation of warehouses, workforce and marketing. No one asked for help in innovating.

Scaling is where the game is now

Europe's dedication to pushing the boundaries of innovation is admirable. Breakthrough technologies pave the way for exciting advancements in sustainability. We wouldn't be where were are now in solar, wind and battery tech if it weren't for continuous innovation for decades on end.

While Europe's commitment to combat climate change through invention is commendable, this approach often neglects the practical imperative of scaling. It's a matter of striking the right balance, and too often have we erred on the side of waiting for BETTER, when MORE would do the trick.

The urgency of the climate crisis puts a premium on any solution that can be implemented right now. Poland's exceptional deployment of rooftop solar in 2023 is an encouraging example: In only a calendar year did the Poles install 400.000 rooftop systems and added 3 TWh per year in clean energy - none of which was planned before the energy crisis struck. This single-year deployment will remove 1.2 million tonnes of carbon emissions per year for the previously coal and gas reliant country - showing the beauty of forging ahead rather than waiting for better, more inventive or more exciting solutions.

State Aid prohibition and the inno workaround

One well intentioned measure turns out to be a distraction for the continent's ability to scale green solutions: Europe's prohibition on state aid to industry.

While it is an important policy designed to ensure fair competition within the EU, with the noblest of intentions, this approach unintentionally steers the focus toward untested innovation, betting on Gyro Gearloose rather than putting Scrooge McDuck's vast funds to use - for lack of a better image.

As a consequence, the state aid ban unintentionally gets worked around by betting on "clever but untested" solutions to Europe's widening energy transformation challenge. Europe should be honest about its needs, and construct new tools to address them, such as a deployment loan office modelled on the US Dept. of Energy Loan Program Office or by copying Energy deployment measures the Regional Development Funds do in less advantaged and peripheral regions of the Union also in the center.

Nurturing Scalable Green Solutions

From 2000 to 2021, the cost of solar modules fell by about 90 percent. In the last five years of that period solar module prices were down to about half their starting price. The prices will continue to drop, but we have such an enormous job to do in deployment that we'd better get going: This year Europe will deploy 1.8 million solar projects - but when solar is ubiquitously in place on every roof, the replacement rate alone suggests 7 million new installations per year, meaning that we need to quadruple deployment volumes only to get to our long term cruising speed.

Same goes for EV chargers, heat pumps, grid-level batteries, home energy storage and wind power. We need to get millions of them out there,

More scaling focus

As we navigate the path towards sustainability, it's vital to strike a balance between innovation and scalability. But there is no doubt that adding weight to the deployment side of the equation is the right thing now.

As far back as in 2017, prof. Mark Z. Jacobson of Stanford University charted out a path to net zero emissions for 139 countries in the world just by deploying existing tech. That exercise has been improved on and repeated since - but only in theory. Now is the time to get practical.

By rejigging the prohibition on state aid to industry and embracing a more holistic perspective, Europe can accelerate the transition to a greener future. Let's put our weight behind changing the light bulb, not just the light bulb moment.