The power of innovation

    UK government advisors, the Technology Strategy Board, argues that now would be the wrong time to slow down investment in innovation, and sees the challenges of climate change and energy security as providing big opportunities for UK energy supply chain companies.

    Derek Allen, Technology Strategy Board, UK

    Confronted by the threat of recession, it may be tempting to batten down the hatches and put any investment in technology on hold. That would be a mistake. And in the field of energy generation and supply, it would be a costly long-term mistake à‚— costly for business and costly for society.

    We are faced with the twin challenges of climate change and security of energy supply. The evidence of the impact of climate change continues to mount, as does the need for immediate action to help mitigate it. The Stern Review, as well as underlining the importance of acting now, highlighted that innovation and technological developments will be crucial if we are to tackle climate change effectively. Time is not on our side. Climate change will not come to a halt and wait for the world’s economy to recover.

    Technologies such as the Pelamis floating offshore wave energy conversion system, which captures the power of waves and turns it into electricity, could help the UK achieve its ambitious CO2 reduction targets
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    As the UK’s reserves of oil and gas decline we are becoming increasingly dependent on imported energy. It is widely accepted that we must both optimize recovery of existing oil and gas reserves (significant amounts still remain in the North Sea) and develop a portfolio of generation technologies (renewables, fossil, nuclear) that will deliver clean, secure and affordable energy in the future. Again, time is not on our side. The threats to our energy security will continue to grow, irrespective of the economic situation.

    Secure, clean and affordable generation and supply of energy is fundamental if we are to achieve economic, political and environmental benefits for the UK. But they also offer significant opportunities for innovative UK businesses, in both the domestic and global marketplaces.

    So for environmental and security reasons we cannot afford not to invest in innovation in energy generation and supply. And there are sound economic and business reasons why companies in the UK should look to maintain, indeed increase, their investment in developing new energy technologies.

    Well placed to benefit

    UK companies are well placed to take advantage, as new energy challenges are creating market opportunities to deliver innovative solutions. A large number of UK businesses are world leaders, and have a presence along the entire energy supply chain à‚— from exploration, resource extraction and processing, to power generation, transmission, distribution and energy service provision.

    Addressing the energy challenges would also be of benefit to industries that support, or underpin, the energy sector, such as materials, electronics and engineering services. And, to complement and support this industrial and business capacity, the UK has substantial and world class academic expertize, providing the essential scientific platform for innovation.

    Technology Strategy Board

    The vision of the Technology Strategy Board is to make the UK a global leader in innovation and a magnet for innovative businesses, where technology is applied rapidly, effectively and sustainably, to create wealth and enhance the quality of life.

    The board’s role is to promote and support research into, and the development and exploitation of, technology and innovation for the benefit of UK business in order to increase economic growth and improve quality of life.

    Government-funded but business-led, the Technology Strategy Board was initially established in 2004 as an advisory body. In July 2007 it was expanded and given executive powers. It continues to advise the government on innovation policy and on removing barriers to the development and exploitation of new technologies, and has taken a leading role in promoting, and investing in, business-related science and technology research and development.

    With core funding from the Department for Innovation, Universities and Skills (DIUS) and contributions from partners such as the regional development agencies, devolved administrations and research councils, the Technology Strategy Board has à‚£1 billion ($1.57 billion) of funding available over the period 2008 to 2011.

    With a track record of leveraging both public and private sector funds, the board is confident that the total impact of its work will be investment of well over à‚£2 billion over this period, driving technology-enabled innovation in the UK.

    UK energy innovation chain

    The magnitude of the challenges the Technology Strategy Board faces, the broad portfolio of technologies needed, and the requirement for innovative solutions in energy, are such that no single organisation can realistically take responsibility for all the elements in the innovation chain. So coordination and cooperation are crucial to the effectiveness of the system.

    The board works closely with key players in the UK energy innovation chain, such the Energy Technologies Institute (ETI), the new Department of Energy and Climate Change, the Carbon Trust, research councils, regional development agencies (RDAs) and devolved administrations (DAs). Continuous dialogue allows the players to develop complementary programmes of activity, and avoid both duplication and technology gaps.

    Technology Strategy Board funding has greatly assisted the Fosar seismic survey system development process.
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    The research councils, RDAs and DAs align a proportion of their resources to invest with the Technology Strategy Board. The board’s work with relevant government departments and other funding agencies serves to drive innovation, and enables UK companies to exploit opportunities by helping to define the market opportunity and investing in innovation within it.

    It also provides 40 per cent of the public sector funding (up to à‚£20 million per year) for the Energy Technologies Institute à‚— the public/private partnership that was created last year to help accelerate the development and commercial deployment of a focused portfolio of energy technologies to increase energy efficiency, reduce greenhouse gas emissions and help to achieve energy and climate change goals.

    Energy innovation à‚— specific aims

    The Technology Strategy Board aims to stimulate innovation throughout the energy supply chain, through a number of its investment mechanisms.

    Energy generation and supply is a ‘key application area’ for the board, which means it is a priority area for investment in research and development. It covers oil and gas extraction, energy generation through fossil and low carbon sources, and distributed and centralized energy supply.

    The Technology Strategy Board wants to promote wealth creation in the UK through investment in innovation in energy generation and supply. This will also provide enhanced security of supply through maximizing the recovery of UK natural fuel resources and the development of a portfolio of low carbon energy technologies, plus reduce the environmental impact of energy technologies through the development of low-carbon technologies.

    In addition to the key application area of energy generation and supply, the board aims to invest in technologies than underpin the energy sector à‚— such as advanced materials, high-value manufacturing and electronics, photonics and electrical systems.

    Energy innovation priorities

    Taking into account the current energy innovation landscape, and looking at the Technology Strategy Board’s strategic criteria (see below), the board have identified the need for investment in technologies for energy generation and supply and investment in knowledge flow during the period 2008-2011. Working with its partners, the Technology Strategy Board’s priorities will be to:

    • directly invest in research and development for carbon abatement technologies for fossil power plants, fuel cells, hydrogen and technologies for the maximisation of oil and gas indigenous resources;
    • invest through, or jointly with, other organisations in offshore wind and marine, ensuring appropriate engagement of UK business;
    • work to identify, invest and deliver additionally into the energy generation and supply innovation chain (for example, on biofuels, microgeneration and through underpinning technologies);
    • carry out further analysis in areas where the added value of the board’s investment is currently unclear (for example bioenergy, intelligent grid management and nuclear);
    • encourage the flow of people and ideas to stimulate more innovative approaches to energy technologies;
    • focus on the support of enhanced coordination of knowledge transfer activities specifically to achieve the objectives of driving knowledge exchange in business communities and informing government of key technology needs to help shape its future programme.

    Investment criteria

    The Technology Strategy Board has to make choices as to where to invest. It does so by using the following criteria:

    1. Does the UK have the capability?
    2. Is there a large market opportunity?
    3. Is the idea ready?
    4. Can the Technology Strategy Board make a difference?

    The Technology Strategy Board makes informed decisions on where to invest, and evaluates performance. It is willing to stop investments that are not performing.

    New investment planned

    The board has recently launched two new funding competitions for research and development in energy generation and supply. The investments will be made in research and development projects where businesses work with each other, and/or with academic institutions, to develop innovative new products and services. The two new competitions are: Maximizing Recovery of UK’s Oil and Gas Reserves (opens 19 January 2009) and Fuel Cells and Hydrogen Technologies (opens 16 March 2009).

    The investment is for about à‚£15 million in innovative collaborative research and development in these areas. Further information about these competitions is available at

    The challenges of climate change and security of energy supply will not recede. They have to be faced, and we cannot wait for the economic situation to improve. While recognising the threats, we should also see these challenges as providing enormous opportunities to provide innovative solutions. The UK is well placed to take advantage. By investing in innovation enabled by technology, the Technology Strategy Board can help UK companies grasp these opportunities.

    Case Studies

    A number of promising new developments are addressing the difficult challenges of climate change and energy security. One such initiative is the world’s first floating offshore wave energy conversion system, currently being developed by a leading UK company, Pelamis Wave Power Limited (PWP).

    The company has received grant support of around à‚£1.5 million to develop a prototype device, which will enable the company to take its laboratory-based concept and turn it into a full-scale prototype. Pelamis consists of three power conversion modules linked by hinged joints to cylindrical sections. The wave-induced motion of these joints is resisted by hydraulic rams which pump high-pressure oil through hydraulic motors linked to electrical generators. The device is designed to maximize power capture from waves while maintaining system reliability and survivability.

    Stingray seismic array on its transport reel
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    Without government support PWP would not have been able to develop, or advance, this innovative wave energy concept to its current level.

    Another promising development is occuring in the field of oil and gas extraction. Today oil companies typically extract about 30 per cent of the hydrocarbons in place in an oil and gas reservoir. Increasingly they are conducting time-lapse seismic surveys over their reservoirs. These have been shown to be highly effective, identifying and accessing additional and incremental hydrocarbon reserves. But the uptake has been hampered by the high cost, poor reliability and difficult and costly deployment of existing electrical systems.

    This research and development project, led by the recently established company Stingray Geophysical Ltd, in partnership with Atlas Elektronik UK, has provided important work contributing towards the development of the Fosar fibre-optic based system.

    This system is expected to offer the potential of a cost-effective, more reliable and easier to deploy solution. Its application on producing reservoirs will improve existing production from mature fields, and will be one of the key technologies enabling total recoveries to rise from an average 30 per cent towards 50 per cent and ultimately 60 per cent.

    Board funding was instrumental in helping Stingray leverage additional industry funding, enabling it to stretch its research and development budget to meet the requirements of developing the advanced technology, and to build a full-scale simulator.

    New power projects

    As part of its support to underpinning technologies, the board is to invest over à‚£10 million into 16 new research and development projects, and into materials technologies that will help meet the UK’s energy challenges.

    These projects will include one on high-rate, high-energy batteries utilizing structured electrode materials (partners: QinetiQ, ABSL Power Solutions, Boeing). The project aims to scale up structured cathode processes that will produce high-rate, high-energy batteries for use in hybrid diesel/gas/biofuel powered electrical generation equipment.

    Another project will be on advanced ceramic matrix composites for energy generating gas turbine applications (partners: Rolls-Royce, Advanced Composites Group, Swansea University, University of Birmingham).The project will develop a high-temperature oxide/oxide-ceramic matrix composite, for use in power generating gas turbine applications. This will provide a step change in temperature capability enabling higher operating temperatures, improving engine efficiency and reducing CO2 emissions.

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