Jen Hiscock , Dr. Phil Walsh, 30 th USAEE /IAEE North American Conference October 11, 2011

1. Understanding the formation and influence of complementary innovations in large energy technology systems:The case of urban energy storage in Ontario’s electricity system Jen Hiscock, Dr. Phil Walsh,30th USAEE /IAEE North American Conference October 11, 2011

2. Overview • Ontario Context • Research question & problem • Institutional change theories • Commercializing in an evolving industry • Complementarity in institutional change • Applying it to Ontario

3. Change in Ontario’s Electricity Sector • Green Energy Act (2009) • Feed-In Tariff program (2010) • Focus on integrating renewable energy (wind, solar, biomass) into the grid • Designed with the intent to build a green economy in Ontario, meet environmental targets, and ensure reliable service • Change environment: resource pressures, politics, social pressures, technical requirements, economic capacity How do you integrate urban electricity storage?

4. How do you commercialize urban electricity storage? Gans and Stern (2003) Commercialization Strategy Environments Walsh (2011) Environments for Commercializing Innovation

5. Institutional theory and commercialization strategies • Adopt the perspective of the niche innovator Resource-based views Core-competence Institutional Theory Rules, norms, routines, beliefs Emergence, conformity, conflict, change Lock-in, path dependence Economic Theory Organizational embeddedness Legitimacy Price; cost-benefit Innovation Theory Technology cycles, design competition Dominant design Complementary assets Non-linearity Co-evolution of technology and society Business & process innovation Absorptive capacity, Diffusion; technology push / pull Sociology of technology Actor-network and Evolutionary Theory Social order Actors, networks

6. Commercializing in an evolving market • Market dynamics amidst planned economy dynamics • Commercialization strategies integrated into broader institutional change processes • Institutional change models • Large infrastructure • Competition • Public sector intervention

7. Integrated framework for TIS and MLP Landscape mature phase Patchwork of regimes Functional analysis of technology innovation systems (Bergek et al., 2008) Niches(novelty) formative phase Multiple levels as a nested hierarchy from the multi-level perspective of sectoral transition (Geels, 2002; 2010)

8. Reliability from intermittent renewables Decentralized electricity supply and storage Complementary Innovations Power quality, asset deferral, load management, ancillary services The technology scope of the Smart Grid system. (Modified from: EPRI, n.d.)

9. Integrated framework for TIS and MLP Landscape mature phase Patchwork of regimes Functional analysis of technology innovation systems (Bergek et al., 2008) Complementary innovations (Markard & Truffer, 2008a) Niches(novelty) formative phase Multiple levels as a nested hierarchy from the multi-level perspective of sectoral transition (Geels, 2002; 2010)

10. Integrated framework in Ontario electricity Price of inputs,Legislation, public pressure (OEB, IESO, Ministry) Energy consumer networks, associations (commercial, industrial, residential) Local distribution companies (TH, HO, etc.) Electricity generators (OPG, Bruce Power) Li-ion batteries Smart grid tech. Wind / solar e- generators Electric vehicles

11. Ontario Electricity Sector Stakeholder Map Landscape Transitioning to a smart grid Directives (Hydro One, OPG) Ministry System Planner [OPA] Integrated Power System Plan LicensingRegulated Prices System Regulator Generators [OEB] Generators Feed-In Tariff Contract WholesaleMarket Existing Regime System Operator Transmitters [IESO] industry DES Distributed Electricity Storage Market Prices Distributed Electricity Storage 3rd Party Service Provider Distributors & generators Complementary Innovators Smart grid Distributed Electricity Storage customersgenerators customersgenerators Regulated Price Hourly Market Price [~ ½ consumption] [~ ½ consumption]

12. Practical and Theoretical areas of insight • Practical • Commercialization strategies that leverage internal dynamics of institutional change • Understanding current system performance through functional analysis • Theoretical • Empirical evidence regarding the formation of and influence of complementary innovations • On decision making • On pathway development

13. Thank you www.cue.ryerson.ca jhiscock@ryerson.ca prwalsh@ryerson.ca ?

14. Key References Bergek, A., Jacobsson, S., Carlsson, B., Lindmark, S., & Rickne, A. (2005). Analyzing the dynamics and functionality of sectoral innovation systems–a manual. DRUID Tenth Anniversary Summer Conference, 27-29. Bergek, A., Jacobsson, S., Carlsson, B., Lindmark, S., & Rickne, A. (2008). Analyzing the functional dynamics of technological innovation systems: A scheme of analysis. Research Policy, 37(3), 407-429. Boyer, R. (2005). Coherence, diversity, and the evolution of capitalisms—the institutional complementarity hypothesis. Evolutionary and Institutional Economics Review, 2(1), 43-80. Gans, J. S., & Stern, S. (2003). The product market and the market for“ideas”: Commercialization strategies for technology entrepreneurs. Research Policy, 32(2), 333-350. Geels, F. W. (2002). Technological transitions as evolutionary reconfiguration processes: A multi-level perspective and a case-study. Research Policy, 31(8-9), 1257-1274. Hekkert, M. P., & Negro, S. O. (2009). Functions of innovation systems as a framework to understand sustainable technological change: Empirical evidence for earlier claims. Technological Forecasting and Social Change, 76(4), 584-594. Markard, J., & Truffer, B. (2008a). Actor-oriented analysis of innovation systems: Exploring micro-meso level linkages in the case of stationary fuel cells. Technology Analysis and Strategic Management, 20(4), 443-464. Markard, J., & Truffer, B. (2008b). Technological innovation systems and the multi-level perspective: Towards an integrated framework. Research Policy, 37(4), 596-615. Verbong, G. P. J., & Geels, F. W. (2010). Exploring sustainability transitions in the electricity sector with socio-technical pathways. Technological Forecasting and Social Change, 77(8), 1214-1221. Walsh, P. R. (2011). Innovation nirvana or innovation wasteland? Identifying commercialization strategies for small and medium renewable energy enterprises. Technovation, doi:doi:10.1016/ j.technovation.2011.09.002