248 Jenny Lieu et al.
Technological innovations: a starting point towards
low- carbon transitions
Each case begins with one or more technological innovations that have the
potential to support a low- carbon transition. They roughly can be summarised
under four major technology- related themes: (1) technologies to reduce emissions for incumbent, large- scale sectors that are dependent on non- renewable
resources; (2) renewable energy technologies to support a country’s mainstream
electricity generation mix; (3) energy efficiency technologies to reduce emissions, primarily in the building sector; and (4) technologies linked to livelihood
activities and the corresponding supply chains (Table 14.1).
Financial barriers to deploying technological innovations
Across the board, the narratives highlight how innovation not only needs to be
technically feasible but also financially feasible. The majority of stakeholders
identified high upfront costs and unstable market situations (compared to those
for fossil- based alternatives) as major barriers to the investment needed for both
incumbent large- scale centralised technologies and new decentralised, smallscale technologies. More specifically, investors consider investment in renewable
technologies to be a higher risk compared to incumbent technologies, which
increases the cost of borrowing capital. Investors willing to take on this risk
require reassurance, for example by revenue guarantees. This was highlighted for
both the diverse cases of geothermal in Kenya and new nuclear power in the
UK. Large- scale solar projects in the Netherlands face similar investment
challenges, and stakeholders additionally highlight the costs for changes and
upgrades to the existing electricity infrastructure. This may seriously affect the
financing capacity of both public and private stakeholders, who might look for
lower opportunity costs and higher revenues elsewhere. Private investment is
also crucial for energy efficiency measures in the building sector, yet in some
cases is not readily available. In China only some city authorities provide
funding for energy efficiency measures, while in Greece there is recognition and
will to push forward energy efficiency technologies in buildings but a lack of
public funds.
Small- scale technologies that have a direct interface with end users can
encounter cost barriers at the household level, where the upfront cost of these
technologies is born. Programmes to overcome cost barriers are often regionally
specific and have a limited timeframe. This fails to overcome challenges in
scaling up deployment of the technology, which is required to make a more
substantial impact on emissions. In Bali, the cost of biogas systems was identified
as a barrier as most farmers cannot afford biogas without a government subsidy.
While cost is not a key barrier for solar rooftop installations in the Netherlands,
households critically consider payback times and rate of return when comparing
competing investments.
Technological innovations: a starting point towards
low- carbon transitions
Each case begins with one or more technological innovations that have the
potential to support a low- carbon transition. They roughly can be summarised
under four major technology- related themes: (1) technologies to reduce emissions for incumbent, large- scale sectors that are dependent on non- renewable
resources; (2) renewable energy technologies to support a country’s mainstream
electricity generation mix; (3) energy efficiency technologies to reduce emissions, primarily in the building sector; and (4) technologies linked to livelihood
activities and the corresponding supply chains (Table 14.1).
Financial barriers to deploying technological innovations
Across the board, the narratives highlight how innovation not only needs to be
technically feasible but also financially feasible. The majority of stakeholders
identified high upfront costs and unstable market situations (compared to those
for fossil- based alternatives) as major barriers to the investment needed for both
incumbent large- scale centralised technologies and new decentralised, smallscale technologies. More specifically, investors consider investment in renewable
technologies to be a higher risk compared to incumbent technologies, which
increases the cost of borrowing capital. Investors willing to take on this risk
require reassurance, for example by revenue guarantees. This was highlighted for
both the diverse cases of geothermal in Kenya and new nuclear power in the
UK. Large- scale solar projects in the Netherlands face similar investment
challenges, and stakeholders additionally highlight the costs for changes and
upgrades to the existing electricity infrastructure. This may seriously affect the
financing capacity of both public and private stakeholders, who might look for
lower opportunity costs and higher revenues elsewhere. Private investment is
also crucial for energy efficiency measures in the building sector, yet in some
cases is not readily available. In China only some city authorities provide
funding for energy efficiency measures, while in Greece there is recognition and
will to push forward energy efficiency technologies in buildings but a lack of
public funds.
Small- scale technologies that have a direct interface with end users can
encounter cost barriers at the household level, where the upfront cost of these
technologies is born. Programmes to overcome cost barriers are often regionally
specific and have a limited timeframe. This fails to overcome challenges in
scaling up deployment of the technology, which is required to make a more
substantial impact on emissions. In Bali, the cost of biogas systems was identified
as a barrier as most farmers cannot afford biogas without a government subsidy.
While cost is not a key barrier for solar rooftop installations in the Netherlands,
households critically consider payback times and rate of return when comparing
competing investments.