Table of contents
“We've embarked on the beginning of the last days of the age of oil. Embrace the future and recognize the growing demand for a wide range of fuels or ignore reality and slowly—but surely—be left behind.” -Mike Bowlin, chairman and CEO of ARCO (now BP),
speech in Houston, 9 Feb 1999
As the quotation already clearifies alternative fuels are nessecary to support our energy demand. This paper will focus on one of the alternative fueles, namely: wind energy, within the Dutch market with special focus on innovation. Innovations will include product, process, transaction and business model innovations as defined by Jacobs (2007). In order to be able to study the market and the corresponding innovations we took Nuon as focal company to represent the main actor in the industry; the energy producer/supplier. This will help us answer our main question: How important is innovation in the wind energy market? In order to be able to answer this question we had several interviews with different players from different positions in the market and used different scientific models to assess the power balance in the market and the driving force to change/innovate. After assessing the most important lessons from these models we will come up with a conclusion on the importance of innovation in the wind energy market. Although we tried to give an complete view, we couldn’t include all information we found due to restrictions in time and size. In our research we primarily used interviews (both direct and indirect) to get specific data from companies. We succeeded to interview the most important actors in the industry, with exception of the Dutch parliament. Interviews were taped, issued, translated and included in appendices. In this process of issuing some simplifications had to be made to create a coherent image of the interview. Next to interviews we used secondary data mostly from internet. Main sources here were CBS.nl (for statistics), EWEA.org (windmill branch association) and nuon.com. These secondary sources enabled us to get an additional view on the data we gathered.
The Total energy market in Holland demands 119.226 GwH per year (CBS, 2008; also in appendix Definitive numbers durable Electricity 2008). Just a small part of this energy demand is fulfilled by renewable energy sources; about 7.5% (8.988 GwH). In the renewable energy sources there are two large segments biomass and wind energy, together they control 98.4% of the market for durable energy. Wind energy possesses 47.5% of the market for durable energy sources. This equals 3.6% of the total demand for energy and is the market we will conduct our research in. We will look at it from the perspective of the energy producer and supplier.
Since energy production from wind started in 2006 at sea, it took a larger portion of the wind energy production every year, although the growth is declining. (CBS, 2008)
In the years since 2000 the capacity of wind energy has grown a average of 18.5%. In the recent 5 years growth has slowed down to an average of 13.3% with a clear decline in growth in capacity in 2009 of just 3.8%. This could be an consequence of the financial crisis, since there is a clear decline in the investment in windmills, as can be seen in a decline in extra rotor surface and the decline of turbines in operation (CBS, 2008). This may be caused by a decline in the ability to finance investments, although other reasons can’t be excluded, such as change in subsidies, since subsidy regimes change a lot (interview Nuon/Provincie/Energy valley). Other possibilities are lower oil prices or a changed subsidypolicy.
A recent development is decreasing costs. The previous decades the costs for wind energy have decreased by five percent each year. The expectation is that this recent trend will persevere. Expectations are that in 2020 the costs for wind energy on land comes...
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