Importance of cost reduction

Many interviewees noted that the development of knowledge was strongly focussed on cost reduction and realisation of market potential for the emergent technology:

“Cost reduction continues. It has to and that’s driven by competition” – WPD1

An appreciation of the potential future market size was seen to be a powerful driver for knowledge development:

“I think because of the size of the market and because of the visibility of the market going forward - the pipeline of work - I believe that in 10 years we would have moved on leaps and bounds and developed a lot more in the UK. And these could be foreign companies developing in the UK, but I'm confident that there will be a lot more engineering design development coming out of the U.K. - it may be foreign money that's pumped into it, perhaps with a bit of government support. But I have confidence that we will see an increase in R&D and building knowledge in offshore wind in the UK.” – SC10

“You need a very long term view of these things.” – SC14

5.3.2 Actors, institutions and networks 5.3.2.1 Actors

Actors contributing to this function included researchers in universities, research institutes and corporate research, as well as individual researchers:

“If we look in Scotland, which is probably one of the most productive environments in Europe for actually filing patents, only about 50 percent of those come from academia. 50 percent are people in their garages, with a great idea.” – WPD63

The funders for this support were widely recognised to be critical, and these included Government, government-funded entities and companies. The effectiveness of these forms of funding was open to question:

“So obviously R&D has played a huge role but it's not the R&D that I think government thinks it is - it's not a government sponsored R&D. I don't think that's made a big difference and is responsible for the technological

The types of knowledge development and the actors typically undertaking it were closely related, as shown in Table 5-3.

Type of

knowledge development

Typical activities Wind vs Tidal Stream

and Wave Individual “Inventor” – early stage

technology development Inventors highly active in wave and tidal stream; little scope for individual innovation in wind

Supply chain

actor Development of knowledge

through learning by doing Supply chain strongly engaged in both wind and marine, with active learning by doing

Research

institute R&D activities often focussed

on specific industry challenges Active knowledge development in wind;

limited activity by research institutes in marine

University More general or “academic”

(longer term) R&D Wind OEMs forming partnerships with

organisations Funding support for R&D, test

centres (eg EMEC) Carbon Trust Offshore Wind Accelerator Government Funding support for R&D

indirectly through revenue support for projects and by leveraging industry funding

Revenue support mechanisms fund projects which drive learning by doing

Table 5-3:F2 - Actors and activities (author's analysis)

Actors in the offshore wind and marine sectors play specific roles in knowledge development. The wide participation and range of roles in the delivery of this function confirms its validity.

5.3.2.2 Institutions

Both hard and soft institutions contribute to the development of knowledge.

“Hard Institutions”

Hard institutions overlap closely with the networks described above. Hard institutions include the ORE Catapult, the Carbon Trust’s Offshore Wind Accelerator, Wave Energy Scotland, EMEC, the Marine Energy Council and many others. Their role is to facilitate knowledge development, by providing funding, intellectual resources, guidance and test facilities.

In addition, grant funding mechanisms structured to support the development of knowledge are examples of the hard institutions in place to support knowledge development. These range in size from the large EU Framework Programmes and Horizon 2020 programme, which can fund multi-million pound research projects, to the much smaller SMART awards, which are often focussed on single technology, small-scale innovation.

“Soft institutions”

The soft institutions which contribute to knowledge development include the body of Intellectual Property law, which acts to protect inventors, as well as a culture of knowledge development being valued in the UK. This culture is not without its problems:

“People tend not to look at the whole but solve one problem at a time.” - SC14

However, the coordinating effect of the hard institutions is seen to be positive for knowledge development and the development of the sector more generally.

“I think so, look at the Catapult report, with contributions from across the industry, and the industry is broadly aligned with what the Catapult is saying.” - MPD59

Watts [146] discussed the culture of knowledge development in Orkney:

“Being adaptable to changing circumstances, making and repairing things in ad hoc but effective ways, has a long island heritage” – Watts [146], p 183.

She quotes a local, making the point that this culture relies on a network of

“As islanders, we make do…if you needed a spare part, you always knew someone who could make it, from tin, woodworking. We’re practical” – Watts [146], p 183, author’s emphasis

This cultural tradition, with its obvious benefits in an isolated community, informs how marine energy activities happen in Orkney. The network of cooperation enables knowledge development, and also (as discussed in Section 5.4) diffusion of knowledge.

In conclusion on institutions, it is clear that hard and soft institutions contribute to the development of knowledge.

5.3.2.3 Networks

The networks at work in knowledge development are those deliberately coordinated by a number of industry bodies. In wind, these include the Offshore Renewable Energy Catapult, the Fraunhofer Institute, the Carbon Trust’s Offshore Wind Accelerator and others:

“There is a lot going on in the UK in terms of the ORE Catapult.” – SH43

In the marine sector, EMEC forms the nucleus of an informal network. More formally, the Marine Energy Council exists to coordinate the voice of the tidal energy sector in discussions with Government.

These networks are complemented by the informal networks of employees in these sectors, where movements between employers (which are frequently moves from developers to funders or vice versa) provide a valuable flow of information.

This is explored further in Section 5.4, as part of the function of Knowledge Diffusion and Networking.

5.3.3 Metrics, indicators and drivers

Metrics for knowledge development, as proposed by Hannon et al. [97], Hekkert et al. [95], Darmani et al. [94] and Miremadi et al. [96] are summarised in Table 5-4. This table includes some comments inferred from the interviews on the

relative levels of completion of this function by offshore wind and marine renewables.

The interviews revealed that the participants in the offshore wind and marine sector attributed little importance to these measures, preferring to emphasise the practical measures related to deployment. As Neil Kermode, the Managing Director of the European Marine Energy Centre, said in EMEC’s statement following OpenHydro’s liquidation:

“We know we just need to keep at it, keep getting metal wet, keep learning lessons from each other and those that have come before, and bring down the costs. This is the hard journey that all technologies have to travel.” [149]

Metric / Indicator / Driver

Offshore

wind Comments Marine Comments

R&D projects Wide

ranging Few formal R&D projects, but

ranging R&D projects mainly

Scientific

Learning rates High Transition from RO to CfD has driven cost reduction

Uncertain Recent work

by ORE

Significant Route to market well established,

Table 5-4: F2 metrics, indicators and drivers: offshore wind and marine (author's analysis)

As patents and scientific publishing provide some readily quantifiable insight into the level of knowledge development, these have been briefly reviewed for offshore wind and marine renewables in the following Sections 5.3.3.1 and 5.3.3.2.

5.3.3.1 Patents

Google Patents [151] provides an indication of the intensity of patenting activity.

Counting the numbers of patents by year, based on key word searches, gives some idea of the relative patenting activity in each sector. The search criteria used here were “wind energy”, “offshore wind”, “tidal energy” and “wave energy”.

Figure 5-5 shows the numbers of patents returned by a Google Patents search for each of these key word combinations from 2000 until 2017 (the last year for which full data is currently available).

It is clear that the number of patents in all areas rose fairly steadily throughout the period (although there were a one-year trend reversal in “offshore wind” from 2012-2013 and “wind energy” from 2013-2014). It is notable that the number of patents in wave energy far exceeded that in either of “offshore wind” and “tidal energy” and the reasons for this are not immediately clear. This might be an interesting area for further research but is outside the scope of this work.

Figure 5-5: Patent count (author's analysis, [151])