The innovation imperative: An interview with Steve Lewis
Economist Intelligence Unit: What would you say are the key energy challenges facing Europe?
Steve Lewis: A primary challenge for energy is that solutions are not developed in a collaborative manner. You can design and build an aircraft in a specific manner, but not energy infrastructure. More time needs to be spent on simulation and modelling to unlock comprehensive solutions, otherwise we develop inefficient energy processes. Secondly, due to antiquated regulation, cities are structured around centralisation of infrastructure as opposed to delivering local solutions which require distribution networks — innovation means working across professional silos and educational disciplines.
What are the main barriers to innovation in the energy sector?
In the energy industry we are addicted to conventional thinking. Architects, engineers and consultants, for example, are taught using traditional curricula that allow for incremental change along a legacy path, yet preclude the harnessing of innovation and disruptive technologies. Few engineers train in multidisciplinary environments, using network software and informatics. Another barrier is finance. There is a disproportionate investment focus on capex (expenses incurred to create future benefit) as opposed to opex (expenses required for the day-to-day functioning of the business). Developing comprehensive simulation models would allow a better understanding of operational expenses over a life-cycle and ensure better pre-planning so that infrastructure assets are deployed more efficiently.
What stimulates innovation in the energy sector and how can it be nurtured?
While large firms certainly contribute innovative ideas, small and medium enterprises (SMEs) are the catalysts for solutions, in that they provide disruptive technology which isn’t constrained by existing models. We need greater co-ordination between universities and SMEs and affordable ways for SMEs of accessing research. Government support of SMEs through regulatory means and economic incentives can support creative technologists in pursuing their ideas and thus making an impact in the energy sector.
Which existing technologies offer the best chance of increasing energy supply while reducing carbon emissions?
A key area for improvement is waste water which is made up of 70% of latent energy. By harnessing this through the use of energy-generating microbes, we can reduce embedded carbon emissions that go into designing and building infrastructure, and transporting waste from home. From a consumer perspective, we need to educate and create awareness of the cost of energy and the limitations of existing technology. We also have to provide incentives so that the consumer is prepared to take the risk of buying innovative products to allow for more efficient consumption of energy.
Which countries in Europe are leading the way in technology innovation in the energy sector? Can their efforts be rolled out elsewhere?
Sweden, Denmark, Norway and Germany are making significant efforts in developing clean energy production technology. In Northern Portugal, we at Living PlanIT are working on a variety of clean energy innovations including microbial fuel cells and organisms to enhance the production of energy — a technology which can be applied globally. The key is being able to commoditise innovation so that goods incorporating energy solutions are purchased by consumers. If a well-known brand such as GE or Samsung manufactures an innovative product, it gains greater credibility in the eyes of consumers and is likely to be taken up more quickly.
This interview is part of a series managed by the Economist Intelligence Unit for Chevron.