An Innovation System Perspective KLAA
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- An innovation CAPTUREsystem perspectiveACCELERATING AND STORAGE THE TECHNOLOGIES DEVELOPMENT AND DEPLOYMENT OF CARBON ACCELERATING THE DEVELOPMENT AND DEPLOYMENT OF CARBON CAPTURE AND STORAGE TECHNOLOGIES – An innovation system perspective KLAAS VAN ALPHEN KLAAS VAN ALPHEN Accelerating the Development and Deployment of Carbon Capture and Storage Technologies – An Innovation System Perspective Copyright © Klaas van Alphen 2011. All rights reserved Printed by: Proefschriftmaken.nl || Printyourthesis.com Published by: Uitgeverij BOXPress, Oisterwijk Cover design by: Claire Ginn ISBN /EAN 9789088912528 Accelerating the Development and Deployment of Carbon Capture and Storage Technologies – An Innovation System Perspective Het versnellen van de ontwikkeling en het inzetten van technologie ter bevordering van afvangst, transport en opslag van koolstofdioxide – Een innovatiesysteem benadering (met een samenvatting in het Nederlands) Proefschrift ter verkrijging van de graad van doctor aan de Universiteit Utrecht op gezag van de rector magnificus, prof.dr. G.J. van der Zwaan, ingevolge het besluit van het college voor promoties in het openbaar te verdedigen op dinsdag 29 maart 2011 des ochtend te 10.30 uur door Klaas van Alphen geboren op 16 oktober 1980 , te Amstelveen 1 Promotoren: Prof. Dr. M.P. Hekkert Prof. Dr. W.C. Turkenburg Prof. Dr. Ir. R.E. H. M. Smits This research was carried out at the Innovation Studies Group, Copernicus Institute for Sustainable Development and Innovation, Utrecht University (The Netherlands), financially supported by the Ministry of Economic Affairs of the Netherlands and consortium partners in the CATO R&D Programme. 2 Preface The work presented in this thesis has been carried out within the CATO programme (CATO: CO 2 Afvang, Transport en Opslag), partly financed by the Dutch Ministry of Economic Affairs (Nowadays called Ministry of Economic Affairs, Agriculture and Innovation). The CATO programme created the main knowledge network in the field of CO 2 Capture and Storage (CCS) in the Netherlands, developing and assessing new knowledge, technologies, systems and approaches in this field. New technologies, like CCS, meet many market and institutional barriers before becoming mature. In the recent past, rapid diffusion of sustainable innovations mainly occurred when environmental problems were considered extremely urgent. A good example is the CFC free cooling technology that was to restore the hole in the ozone layer, back in the eighties and nineties. But in many other cases – like technologies that address climate change – the market uptake is slow. The question of how to accelerate the development and implementation of CCS technologies is of great importance for technology managers and policy makers all around the world. This thesis is centered around the question of how to accelerate the development and deployment of CCS technologies, using an Innovation System perspective. After all, the innovation process is not only influenced by technological characteristics. The social- economic environment in which a technology is developed and diffused – called the ‘Technological Innovation System’ - is of great importance. A well functioning Innovation System would greatly support the final market uptake of CCS technologies. So identifying strengths and weaknesses in the present Innovation System is of crucial importance to technology managers and policy makers that wish to accelerate the innovation process. For a better understanding of the innovation processes, this thesis contains a comparison of CCS Innovation Systems in the United States, Canada, Norway, Australia, and of course the Netherlands. Such a comparison offers the possibility to learn from each other’s experiences regarding the development of CCS and strategies that could accelerate the deployment of CCS technologies in the Netherlands and abroad. Most of the analyses presented in this thesis have already been published in peer reviewed scientific journals and presented at (inter)national conferences. Furthermore, some components of this research have informed policy making on a national and international level. For example, results presented in this thesis have been used by the Global CCS Institute in its report on the Global Status of CCS for input to the Muskoka (Canada) 2010 G8 Summit. 3 Contents Preface 3 List of abbreviations 9 1. Introduction 11 1.1. Background 11 1.2. The development and deployment of CCS technologies: status and challenges 13 1.2.1. The (commercial) deployment of CCS technologies: a global challenge 17 1.3. Managing sustainable innovation processes: an Innovation System perspective 19 1.3.1. Innovation Systems and System Functions 20 1.3.2. System dynamics and performance 24 1.4. Research objectives & questions 26 1.5. Research design 26 1.5.1. Case study selection 26 1.5.2. Methods for analyzing Innovation System dynamics and performance 29 1.6. Thesis outline 35 References 37 Interlude A 43 2. The performance of the Norwegian CCS Innovation System 44 Abstract 44 2.1. Introduction 45 2.2. Theoretical framework: Innovation System Functions 46 2.2.1. Framework of analysis: dynamics, performance and policy intervention 47 2.3. Dynamics of the Norwegian CCS Innovation System 51 2.3.1. Period 1988–1999 51 2.3.1.1. Episode 1: pioneering activities 51 2.3.1.2. Episode 2: CCS, a fiercely debated technology 53 2.3.2. Period 2000–2007 54 2.3.2.1. Episode 3: dedication towards CCS 54 2.3.2.2. Episode 4: visions for the future 56 2.4. Current Innovation System performance 60 2.4.1. Entrepreneurial activity 60 2.4.2. Knowledge development 61 2.4.3. Knowledge diffusion 61 2.4.4. Guidance 62 2.4.5. Market creation 62 2.4.6. Resource mobilization 63 2.4.7. Creation of legitimacy 63 2.5. Identification of key policy issues 64 2.6. Discussion and conclusions 66 Acknowledgements 68 References 69 Interlude B 73 4 3. An evaluation of the transition pathway for CCS technologies in the Netherlands and strategies to accelerate the build-up of a CCS Innovation System 74 Abstract 74 3.1. Introduction 75 3.2. Technological Innovation Systems: An approach to evaluate low emission transition pathways 76 3.2.1. Research design and method: dynamics, performance and intervention strategies 78 3.3. Results: dynamics of the Dutch CCS Innovation System 81 3.3.1. Episode 1: 1988-1996: Amsterdam - the birthplace of a CCS research community 81 3.3.2. Episode 2: 1997-2004: CO 2 Reuse 82 3.3.3. Episode 3: 2005-2008: Building momentum 83 3.3.4. Episode 4: 2009: Ready to take off or a false start!? 87 3.4. Innovation System Performance 88 3.4.1. Entrepreneurial activity 90 3.4.2. Knowledge development 91 3.4.3. Knowledge diffusion 95 3.4.4. Guidance 96 3.4.5. Market formation 98 3.4.6. Mobilization of resources 99 3.4.7. Creation of legitimacy 100 3.5. Strengthening the Innovation Systems’ performance: implications for policy 102 3.5.1. Stimulate learning by doing 103 3.5.2. Create financial and market incentives 103 3.5.3. Improve regulation and legitimization 104 3.6. Discussion of results and concluding remarks 105 3.6.1. Methodological issues and implications 105 3.6.2. Reflection on CCS support strategies 106 3.6.3. Summary and conclusions 107 Acknowledgements 108 References 109 Interlude C 113 4. Evaluating the development of CCS technologies in the United States 114 Abstract 114 4.1. Introduction 115 4.2. Theoretical framework 116 4.3. Research design and methods 117 4.3.1. Part 1: Innovation System structure 117 4.3.2. Part 2: Innovation System performance and system intervention 119 4.4. The structure of the US CCS Innovation System 120 4.4.1. Institutional infrastructure 120 4.4.2. Actor networks 123 4.4.3. Technological development, demonstration and diffusion 128 4.5. Evaluation of Innovation System performance 131 4.5.1. Function 1: entrepreneurial activities 131 4.5.2. Function 2: knowledge development 132 5 4.5.3. Function 3: knowledge diffusion 133 4.5.4. Function 4: guidance 134 4.5.5. Function 5: market creation 135 4.5.6. Function 6: mobilization of resources 136 4.5.7. Function 7: creation of legitimacy 137 4.6. System intervention: implications for policy 138 4.6.1. Stimulate learning by doing (functions 1 and 2) 140 4.6.2. Facilitate coordination and collaboration (function 3) 140 4.6.3. Create financial and market incentives (functions 5 and 6) 141 4.6.4. Regulate and communicate (functions 4 and 7) 141 4.7. Discussion 142 4.8. Concluding remarks 143 Acknowledgements 144 References 145 Interlude D 149 5. Evaluating the build-up of a CCS Innovation System in Canada 150 Abstract 150 5.1. Introduction 151 5.2. Analytical framework and methods 152 5.2.1. Interviews and literature review 154 5.2.2. Project analysis 155 5.2.3. Bibliometric analysis 155 5.2.4. Social network analysis 156 5.3. Results: the performance of the Canadian CCS Innovation System 156 5.3.1. Entrepreneurial activity 157 5.3.1.1. Expert evaluation of entrepreneurial activity 159 5.3.2. Knowledge development 160 5.3.2.1. Expert evaluation of knowledge development 162 5.3.3. Knowledge diffusion 163 5.3.3.1. Expert evaluation of knowledge diffusion 168 5.3.4. Guidance 169 5.3.4.1. Expert evaluation of guidance 171 5.3.5. Market creation 171 5.3.5.1. Expert evaluation of market creation 172 5.3.6. Mobilization of resources 173 5.3.6.1. Expert evaluation of mobilization of resources 174 5.3.7. Creation of legitimacy 174 5.3.7.1. Expert evaluation of legitimacy for CCS 175 5.4. System intervention: implications for technology management and policy 176 5.4.1. Stimulate technological learning 176 5.4.2. Create financial and market incentives 178 5.4.3.