Bioenergy Scenarios 2033 - a Platform for the Innovation

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This is an electronic reprint of the original article. This reprint may differ from the original in pagination and typographic detail.

Please cite the original version: Kettunen, J. ; Meristö, T. & Laitinen, J. (2015) Bioenergy Scenarios 2033 - a Platform for the Innovation. In Eelko Huizingh; Marko Torkkeli; Steffen Conn & Iain Bitran (Eds.) 2015 Proceedings of the XXVI ISPIM Innovation Conference - Shaping the Frontiers of Innovation Management, 14-17 June 2015, Budapest, Hungary. International Society for Professional Innovation Management.

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Bioenergy Scenarios 2033 – a Platform for the Innovation

Jyrki Kettunen

Da Wo Ltd

Bollbölentie 384, 21610 Kirjala, Finland E-mail: jyrki.kettunen@kolumbus.fi

Tarja Meristö*

Laurea University of Applied Sciences

c/o ElektroCity, Tykistökatu 4 B, 20520 Turku, Finland E-mail: tarja.meristo@laurea.fi

Jukka Laitinen

Laurea University of Applied Sciences

c/o ElektroCity, Tykistökatu 4 B, 20520 Turku, Finland E-mail: jukka.laitinen @laurea.fi

* Corresponding author

Abstract: Bioenergy in global context has a minor role, less than 10% of all energy use. However, in local and regional context it can have a significant role especially in the areas, where the solar energy is limited and where also agriculture produces a lot of waste which is useable in bioenergy production.

For example, in Finland the share of bioenergy of all energy production is almost 30%. Therefore, in 2013-2014 in Finland the research project focusing on the future of bioenergy was carried out by industrial consortium consisting of energy and technology companies. In the project, six alternative scenarios to the year 2033 were created and potential innovation needs in each scenario were formulated. In order to implement the findings to the practise, the Finnish industry needs e.g. international co-operation with global giant companies, piloting of their own and finally, continuous follow-up in bioenergy ecosystem, including R&D, globally.

Keywords: system innovation; sustainable energy; bioenergy; waste management; scenario; radical innovation; creative disruption;

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This paper was presented at The XXVI ISPIM Conference – Shaping the Frontiers of Innovation Management, Budapest, Hungary on 14-17 June 2015. The publication is available to ISPIM

members at www.ispim.org.

in local and regional context it can have a significant role especially in the areas, where the solar energy is limited and where also agriculture produces a lot of waste which is useable in bioenergy production. For example, in Finland the share of bioenergy of all energy production is almost 30%. Therefore, in 2013-2014 in Finland the research project focusing on the future of bioenergy was carried out by industrial consortium consisting of energy and technology companies.

Finland is in energy issues in a quite exceptional position. Finland is a cold northern country with scattered houses. This means a high energy need as a whole in a country with only a few energy alternatives of its own, like water power or peat. Nuclear power plants will guarantee 30% of the energy supply especially to the industry consisting of energy intensive factories like pulp and paper, technology industry and chemical industry, which are in the main role in Finnish export structure. Logistics, industry as well as the location of population need effective energy solutions implemented to the Finnish operational environment. One of the key elements in this puzzle are forest assets, as well as exploitation of that, especially the chemical pulp industry with its effective production capacity. The side product flow from this industry will give at the moment a significant amount of electricity and heat. This will include growth potential itself, but also concerning gasoline and energy products concerning logistics, like biodiesel or other opportunities. Companies operating in this field consist of two basic types: first, traditional forest companies producing energy products too and second, machinery companies acting as process coordinator in the network supplying solutions to the market outside Finland, globally.

This paper is based on the research project carried out in BEST program in 11/2013 – 11/2014, hosted by two Finnish Strategic Excellence Centres Fibic Ltd and Cleen Ltd, financed by Tekes (the Finnish Funding Agency for Innovation) and industry. The workshops and other activities of the project have taken place in keen co-operation with Finnish Industry Companies as follows:

• Ekokem (waste management company)

• Fortum (energy company)

• Indufor (consulting company)

• Metsä Group (forest product company)

• Neste Oil (petrochemical company)

• Stora Enso (forest product company)

• Valmet (pulp & paper machinery company)

The practical work was carried out by Da Wo Ltd as a leader prof. Jyrki Kettunen and Laurea University of Applied Sciences FuturesLab CoFi as facilitators Dr. Tarja Meristö and researcher Jukka Laitinen, who are also writers in this article.

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2) What are the innovation needs in alternative scenarios?

3) How can R&D&I help to achieve the success in sustainable way in these challenges?

3 Research design

The scenario work was carried out in 11/2013-11/2014 and it is a part of the joint research program called BEST, owned by two Finnish Strategic Excellence Centres Fibic Ltd and Cleen Ltd. The bioenergy scenario process consisted of eight workshops with 10 industrial participants from the different parts of the energy value chain. Several web surveys were conducted among a wider audience including also partners from universities and research institutes. The results are reported in Finland not only in business community but also in research community to implement them into practice on both sides.

The framework and methods are based on futures research methodology, especially on scenario approach, but also on innovation management approach concerning radical innovations (Meristö et al. 2007) and renewal of the industries.

Data collection consists of multidisciplinary parts, including literature review related to global energy assessments (e.g. IEA, OECD, NASA, UN, Shell Scenarios, Ausubel 2014). Also Sustainable Community Scenarios (Tuohimaa et al 2011) were used as background information. Expert opinions collected by four different web surveys during the process, Visionary knowledge creation in seven participatory workshops with industry representatives as well as Media scanning in selected magazines and newspapers as well as eNewsletter during the project period from November 2013 to November 2014.

The whole process is described in the figure as follows with detailed content and time table information as well. The final report was published in the closing seminar in November 2014.

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Figure 1 The BEST bioenergy scenario process, phases, content and time table.

4 Results

Six scenarios were created. The scenarios are based on “from the world to Finland”,

“from European Union to the world” and “from Finland to the world”. For each scenario, the business potential and time span of the realization were estimated as well as the navigation marks. An essential part of the results is information about what must be done in any case, irrespective of the scenario.

Innovation needs in alternative scenarios were identified both from offensive and defensive perspectives to the future (Meristö et al. 2011). In the figure as follows the offensive actions concerning the innovations in alternative scenarios are reported.

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gasoline and diesel oil are offensive action options in scenario 6. Mixed bioenergy.

It is essential that the technology of the field is developed and available. The weakness of the innovation chain is related to adapting, piloting, example investments and global commercialising.

The identified opportunities were divided into two groups: 1) the ones which the whole company group has to carry out and 2) the ones which are advantageous mainly for one company or for smaller consortium. The second divider is the necessity of the opportunity in the alternative scenarios: the opportunities which are needed in several scenarios, are higher on the preference list.

The opportunities for the whole company group

• The international standardisation of the ecologically sustainable bioenergy products must be developed. Only this makes the global innovations possible. The

certification of the raw material chain can also be connected to this because the raw

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• The solar energy is becoming the basic solution of the sustainable energy supported partly with a wind power. The share of the bioenergy as a whole is minor apart from exceptions. It is important to find ways with which the services offered by the bioenergy rise more significant than the numbers show. The utilising of the waste material is an example of this.

• In traditional industrial countries the demand for energy is decreasing. The key question is how to operate in diminishing market which emphasises the development potential of the systems and networks.

• From Finland’s point of view it is essential that only small fraction of development work related to the renewable energy is made in Finland. Regarding the success, the close organised follow-up of the international development and searching for application ideas is more rewarding than an own basic research.

The opportunities for individual companies or smaller consortiums

These opportunities are based mainly on the information which is created in the above mentioned common exertions.

• For decades, the road transportation will still need the diesel oil which will mainly be made from bio materials. It is a question of company level products in the devices as well as in oil itself. There will be several solutions and technologically the most eminent one, does not necessarily win the innovation competition. The advantage of scale and the suitability to the prevailing infrastructure are essential factors.

• Multi-product plants which in addition to the energy products produce something else, for example cellulose, are probable but they require a system technical consideration to solve the irregular development of the market. The problems will be emphasised when the scale increases which is on the other hand necessary to ensure the profitability. The company consortiums which dominate the different markets can be at least a part of the solution.

• The modernisation of energy plants will offer the huge market nearly everywhere when the energy efficiency is taken as an objective instead of the output. The use of bio materials, e.g. waste, can be naturally connected to the modernisation.

• From the point of view of countries that have plenty of forest reserves, it is useful to develop totally new ways to use tree as an energy. The weaknesses of the present uses are known and there is new available technology for equipment as well as for the products. The key question will be logistics because the costs of current logistics solutions are too high for large-scale operation. The solutions probably signify the reassessment of the refining chain.

5 Conclusions and practical implications

The innovation community will find interest the use of scenarios as a platform for innovations in a systematic way in an industrial context. Taboos and basic beliefs

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In the project, six alternative scenarios to the year 2033 were created and potential innovation needs in each scenario were formulated. In order to implement the findings to the practise, the Finnish industry needs e.g. international co-operation with global giant companies, piloting of their own and finally, continuous follow-up in bioenergy ecosystem, including R&D, globally.

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