Jim Brown, Cass Business School
Market entry for sustainable energy technologies is widely seen as being through ‘distributed generation’, and specifically through opportunities to supply ‘combined heat-power’ (CHP). This contrasts with wind power directly connected into the grid, which is more amenable to the prevailing centralised generating model. Market entry in stationary power, however, is highly dependent on country-specific conditions because of industry and market structures, patterns of consumer use, and the regulated nature of the electricity industry. Some countries may offer more favourable opportunities and become ‘lead countries’ in technology and market development (Beise, 2004; Jacob, 2003). Companies – most likely indigenous, but also foreign firms – that have latched onto such opportunities will similarly benefit and become leaders in the new technology. We compare the opportunity for residential CHP and fuel cells in the UK, Germany, USA and Japan, drawing on extensive published sources, interviews and case notes.
The prospects for fuel cells in the residential CHP market in each country are analysed in terms of industry structure, government-aided market creation, institutional change (including subsidies, R&D, and financial incentives for renewable sources), and the promotion of technology coalitions. This broadly follows Jacobsson and Bergek’s (2004) conditions for supporting change in technological systems. Japan scores most highly on all counts, offering the most favourable conditions for fuel cells in residential CHP, with Germany next most promising. The analysis suggests the importance of looking for a confluence of factors at the system (technology, industry and country) and company levels in predicting transformations from one technological system to another.
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