Mark Elborne: Britain must grasp the need to drive energy technology forward.
The UK has to achieve huge infrastructure upgrades over the next few years against a difficult backdrop of tough spending constraints and looming carbon targets.
It will take imagination, big thinking and a radical change to the way we do things to make progress.
We need more “big thinking” on how projects and procurement processes are structured to make maximum use of new technologies.
Firstly we must have more of a sense of “vision”. Historically this has often been an issue for new technologies. It may seem extraordinary today but the uptake of electricity as a new technology in the UK was slow and highly fragmented until industry and government collaborated to develop a joint approach in the early 20th century.
“Technologies are already planned into projects at a very early stage but there needs to be a better sense of the big picture”
Many technologies are already planned into projects at a very early stage but there needs to be a better sense of the big picture. There is still a tendency for innovation, in areas such as energy efficiency and waste management for instance, to be retrospectively shoehorned into plans at greater cost.
One practical reason why early stage collaboration is now required is the sheer pace of technological change. Many technology areas are currently moving very quickly – smart metering, lighting and decentralised power come to mind as examples where GE is involved. Lighting provides one good illustration. Recently there have been significant technological developments with the introduction of LED lighting but its next iteration, OLED, is progressing quickly and is likely to be commercialised in 12 to 24 months.
Another example is the evolution of thin film solar and its varied applications over existing technologies. Increasingly planners and contractors will need to work more closely with technology suppliers, who have traditionally appeared later down the line in the procurement process, to avoid today’s projects being built with yesterday’s technology.
For the same reasons, public procurement practices that currently inhibit rather than encourage innovation need to be examined. Effective innovation often requires upfront investment in a pilot project or the joint development of potential technologies. Sometimes private sector companies can be reluctant to risk investments in time, money and IP that can be compromised by subsequent tender processes.
“The public expects and should get value for money and transparency”
The public expects and should get value for money and transparency but sometimes these arrangements do not deliver the best results. Early stage collaboration with a number of potential partners is increasingly a more useful approach, with tendering at a later point when there has been more advanced work on the technology specification.
Another challenge is how we sell these technologies to businesses and the public. When you review how some Scandinavian markets, for instance, have managed to introduce green technologies there is often an element of mandate about the change that UK consumers might baulk at. Yet with the scale of change that has to be achieved we need to have these discussions. Effective incentives to get businesses and consumers to change their behaviours also have to be found. The achievement of energy savings will be an incentive for some businesses in some situations, but others will be even more motivated by an additional element of “cash back” on the balance sheet.
New technologies can be revolutionary, and in the current tough circumstances we need them to deliver results. However to get the best out of them will take a radical change of approach at many levels – more collaboration, better forward planning, effective procurement processes and, ultimately, a stronger understanding of what will drive change in businesses and the everyday person on the street.
- Mark Elborne is GE’s UK president and chief executive officer