Strategies for the diffusion of sustainable energy technologies in developing countries

Strategies for the diffusion of sustainable energy technologies in developing countries

in 't Veld, Yvar (TU Delft Technology, Policy and Management)

Kamp, L.M. (mentor)
Roosenboom-Kwee, Z. (mentor)
Ortt, J.R. (mentor)

Delft University of Technology

Management of Technology (MoT)

2020-03-16

In recent years, there are growing concerns over climate change and future energy supply. Sustainable energy technologies (SETs) can be implemented to decrease the human impact on the environment and to ensure future energy supply. However, firms that develop SETs face barriers to the large-scale diffusion of their product in the market. This research identifies barriers and strategies for the diffusion of SETs in developing countries. Ortt et al. (2013) developed a framework to assess the market situation based on influencing factors (IF) and core factors (CF). The framework focuses on the diffusion of high-tech products in developed countries. This research uses an improved and later version of this framework that was developed by Kamp et al. (2017) and Ortt & Kamp (2018) as a starting point. This framework is used as a basis and it has been adapted in this research to better suit analyses focusing on the diffusion of SETs in developing countries. For this purpose, some CFs and IFs have been adapted and new factor categories have been added. In the context of this research, the combination of an IF and a CF forms a barrier-set and an individual barrier is defined as an issue that is causing an underdeveloped state of a factor. The goal of the framework of Ortt et al. (2013) is to couple barrier-sets to niche strategies. By adopting niche strategies, firms can circumvent or remove barrier-sets and the large-scale diffusion of their high-tech product is made possible. The framework of Ortt et al. (2013) is focused on developed countries and therefore it has been adapted in this research to better suit the typical constraints of developing countries. In addition, the original framework only focuses on the identification of niche strategies that a firm can adopt. The original framework is extended in this research by incorporating the intervening effect of other actors that can influence the process of circumventing or removing barrier-sets that prevent the large-scale diffusion of SETs. These actors can provide support or they can counteract a firm in this process. In this research, issues that prevent the diffusion of SETs in developing countries have been identified and categorized based on factor descriptions that Ortt & Kamp (2018) formulated. In addition, a new methodology is developed to link barrier-sets to strategies. To conclude, the original framework is extended and a preliminary test of this extended framework is performed. A literature review is performed for the identification and categorization of all the issues, but also for the development of the new methodology and the extension of the framework. The extended framework is tested by performing a case study. The case study shows how the extended framework can be applied. New insights from this case study have further improved the extended framework. The results of this research provide several contributions to the scientific literature. First, 101 issues that prevent the large-scale diffusion of SETs in developing countries have been identified. Second, the process of categorizing all the issues revealed that new factor categories were required to fully capture all the issues, which resulted in formulating 2 new IFs and 2 new CFs. New IFs are: ‘’Environmental, ecological and geographical aspects’’ and ‘’Organizational capacity’’. New CFs are: ‘’Infrastructure’’ and ‘’Data availability’’. The new factor categories ‘’Environmental, ecological and geographical aspects’’ and ‘’Data availability’’ can be adopted in the original framework that Ortt et al. (2013) developed. In addition, all of these new factor categories can be adopted in an adapted framework focusing on developing countries. These additions improve the frameworks and make them more comprehensive. Third, this research provides a new methodology to identify linkages between barrier-sets and strategies. This methodology explores a barrier-set more thoroughly than when the original framework of Ortt et al. (2013) is applied. An advantage of this new methodology is that core problems of the barrier-set are identified and in some cases this may lead to the selection of a more accurate and effective strategy. Fourth, the extended framework that incorporates the intervening effect of other actors in the process of circumventing or removing a barrier-set is developed and this improves the comprehensiveness of the framework. Possible supportive and counteracting strategies of other actors have been identified. The strategy identification process revealed that most actors have nothing to gain by adopting a counteracting position towards firms that sell SETs. Thus, this implies that most actors will take a neutral or supportive position towards such firms. The combined results of the literature review and the case study show that entrepreneurs who are able to engage in network activities and maintain good contact with other actors have higher chances on circumventing or removing barrier-sets and have more strategic options. Partnerships can be very important because this may lead to cost reductions and it may provide access to a larger potential market. This research has academic and practical implications. The tool that this research provides is an extended version of the framework that Ortt et al. (2013) developed. Firms can possibly use this tool to anticipate and investigate what strategies other actors may adopt in order to increase the chance of selecting a successful niche strategy. This tool can also serve an academic purpose. The framework can be used to investigate the large-scale diffusion of SETs in developing countries, but it can also be used for analyses focusing on other types of technologies in other countries. There are also several opportunities for future research. An example is that a study could identify drivers for the diffusion of SETs. These drivers can be converted to issues through logical reasoning and this could provide additional issues to improve the comprehensiveness of the extended framework. Another example is that a study could focus on identifying more counteracting strategies for specific actors to identify more strategic options for firms. Note that the extended framework that this research provides should be tested before using it in practice.

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Student theses

master thesis

© 2020 Yvar in 't Veld