Elsevier

Energy Policy

Volume 34, Issue 13, September 2006, Pages 1697-1708
Energy Policy

System failure, innovation policy and patents: Fuel cells and related hydrogen technology in Norway 1990–2002

https://doi.org/10.1016/j.enpol.2004.12.016Get rights and content

Abstract

The empirical focus of this article is technological innovation activities in the emerging field of fuel cells and related hydrogen technology in Norway from 1990 to 2002. In this period, four comparatively large-scale research and development projects and a number of smaller projects aimed at development of fuel cells technology were undertaken, resulting in many inventions that were subsequently patented. Although this creativity may be considered an indication of success, only one of the projects became successful in an innovation perspective. All the large projects were initiated and funded for divergent political and economic reasons. An important reason in the late 1980s was the prospect of using Norway's abundant supply of natural gas in fuel cells for electric power generation. The large R&D projects that attempted to develop fuel cells based on natural gas as energy source failed. In contrast, the successful project was undertaken by military R&D, i.e. in a different system of innovation than the projects that failed. Analysis of these cases points to the importance of a systemic approach to innovations—and to policy making. One challenge for policy makers is to decide how they should promote this development which is crucial for the vision of a future “Hydrogen Economy”, i.e. what kind of policy incentives should be introduced to spur efficiency in technological development and diffusion. Theoretically, many options are available; however, understanding the innovation dynamics in this sector is fundamental for making choices. In this article, focus will be set on policy aspects using an innovation systemic approach to analyze development of fuel cells and related hydrogen technology in Norway.

Introduction

In visions of a future “Hydrogen Society”, new energy systems based on hydrogen and fuel cells have captured the imagination of many political leaders, industry executives and environmental activists, as evident in the IPHE—International Partnership for Hydrogen Economy1 promoted by the current Bush administration in USA and a number of other large scale research, development and demonstration (RD&D) programs. One challenge for policy makers is to decide how they should promote this development, i.e. what kind of incentives should be introduced to spur efficiency in technological development and diffusion. Theoretically, many options are available; however, understanding the innovation dynamics in this sector is fundamental for making choices. In this article, focus will be set on policy aspects using an innovation systemic approach to analyze development of fuel cells and related hydrogen technology in Norway.

In 1838, the Welsh lawyer William Robert Grove (1811–1896) invented fuel cells, but only during the last decades this technology has attracted real interest in terms of RD&D and resources for further development. In spite of many successful achievements in these endeavors, there are still numerous non-trivial obstacles and problems ahead that will require considerable R&D effort.

Fuel cells and use of hydrogen may be considered as potentially radical innovations because of a number of reasons,2 such as

  • no emission of carbon dioxide (green house gasses) and other pollutants—and no noise,

  • an alternative source of energy that will make society less dependent on fossil fuels—and capricious supplier nations,

  • provide new ways of configuring energy systems in order to increase reliability and make societies less vulnerable.

Hydrogen technology3 and fuel cells are inter-related technologies, so that important innovations in one of these fields have implications for the other. Due to its emerging character however, this technology has not been widely studied, especially not from an innovation standpoint. Emerging technologies, or potentially radical innovations such as fuel cells and related hydrogen technology may be subject to market failure, i.e. the market is not capable of developing the technology through coordination of resources between private and public actors. This means that “sometimes there are reasons to complement the market and capitalist firm through public intervention” (Edquist et al., 2004, p. 429). In order to develop and promote a novel technology, policy makers may support and initiate large technological programmes. An important aspect in the analysis is therefore on the role of the government in enabling or constraining firms’ possibilities for innovation. In a systemic approach to innovations, a main tenet is that innovation occurs as a result of interaction between actors within the ‘innovation system’, i.e. in a country, a region, a sector, or a technological field.

The empirical focus of this article is technological innovation activities in the emerging field of fuel cells and related hydrogen technology in Norway from 1990 to 2002. In this period, four comparatively large-scale research and development projects and a number of smaller projects aimed at development of fuel cells technology were undertaken, resulting in many inventions that were subsequently patented. Although this creativity may be considered an indication of success, only one of the projects became successful in an innovation perspective. All the large projects were initiated and funded for divergent political reasons. An important reason in the late 1980s was the prospect of using Norway's abundant supply of natural gas in fuel cells for electric power generation. This was envisioned as an attractive alternative or supplement to gas turbine power plants with high emission of green house gases. For decades, Norway's inability to develop an industry or a domestic market using natural gas from the North Sea has been (and still is) an unresolved policy issue. The large R&D projects that attempted to develop fuel cells based on natural gas as energy source failed. In contrast, the successful project was undertaken by military R&D, i.e. in a different system of innovation than the projects that failed. As these results emerged, the energy sector was deregulated, in Norway as in many other OECD-countries. As a result, public innovation policy became more market oriented; innovation had now become a matter for the markets to “pick winners”, not policy makers. Subsequently, public support for RD&D on fuel cells and hydrogen technology was scaled down. Analysis of these cases points to the importance of a systemic approach to innovations—and to policy making.

Based on this, this article will attempt to elucidate the following questions:

  • What characterized fuel cells and related hydrogen technology innovation activities in Norway during this period covered by the patent analysis?

  • How can variation be maintained and duplication avoided in a national innovation system, or is a sectorial system approach more fertile?

  • What is the role of a national innovation system in an international (e.g. European) context?

In the article, the following sections will attempt to elucidate these questions:

  • Section 2 presents the analytical framework based on systemic approaches to innovations,

  • Section 3 presents the mapping of the innovation system for fuel cells and related hydrogen technology in Norway 1990–2002,

  • Section 4 presents a patent analysis and explains actor relations and interaction between them in developing fuel cells and related hydrogen technology,

  • Section 5 discusses some policy implications of the empirical material,

  • Section 6 presents some concluding remarks.

Section snippets

Systemic approaches to understanding innovation

In innovation theories, using systemic approaches for understanding how innovations emerge—or explaining why some potential innovations fail to emerge—have gained recognition. The fertility of this reflects a recognition that innovations evolve because of a complex set of interrelated factors and dynamics, i.e. innovations are systemic. However, in spite of this common basic understanding, in analysis and explanations, analysts focus on different system aspects.

Introduction: four large fuel cells projects

Spanning over two decade, from the middle of the 1980s to the end of the 1990s, four comparatively large fuel cells development projects were undertaken in Norway. Three of these were aimed at development of a solid oxide fuel cell (SOFC) using natural gas as feedstock. The fourth fuel cell project, Hugin, was part of a larger military project for development of an unmanned submarine. Initially, there was just one, single SOFC-project known as NorCell. This project was formally started in 1988

Patents and the system of innovation

In this section, the focus will be set on knowledge flows and interactions involved in the patents presented above. The focus will set the actors in the system of innovation through formal and informal mechanisms, such as inter-firm research projects, personal networks between inventors and other people, and career patterns, i.e. how knowledge and expertise have moved around following various careers. Knowledge interaction is an important aspect for diffusion of knowledge in the SI. This

Innovation policy implications

According to a number of informants who were involved in the NorCell projects, the meager outcome of these and Mjøllner was due to lack of a strong strategic leadership on a national level and a lack of long-term commitment by the stakeholders. In claiming this, they point to the accomplishment of large development projects by FFI (the Norwegian Defense Research Establishment) that have achieved success because these have had a strong leadership capable of focusing large resources and

Concluding remarks

The main objective in this article was to analyze the innovation processes that were evident in fuel cells and related hydrogen technology in Norway in the period from 1990 to 2002. The empirical evidence has shown technological creativity in terms of patents and a significant flow of knowledge as the actors co-operate with other firms in developing technology. As a result, technological capabilities have been built in the area of fuel cells SOFC, a preferred solution for energy production and

References (10)

There are more references available in the full text version of this article.

Cited by (28)

  • A hybrid perspective on energy transition pathways: Is hydrogen the key for Norway?

    2021, Energy Research and Social Science
    Citation Excerpt :

    At the same time, the corporatist orientation [49] may be conducive to hydrogen. When Norway began R&D on hydrogen energy, the prospect of using natural gas for electric power was an important reason [54]. Substantial innovation activity from 1990 to the early 2000 s was linked to two different technological trajectories: Statoil (now Equinor) seeking new applications for natural gas, and Norsk Hydro focusing on electrolysis to produce hydrogen from hydroelectric power [54].

  • Optimal licensing schemes for a mixed ownership firm when facing uncertain R&D outcomes and technology spillover

    2018, International Review of Economics and Finance
    Citation Excerpt :

    For example, in the late1990s and early 2000s, with the purpose of developing fuel cells and related hydrogen technologies, Norway carried out a variety of R&D projects, with the participation of many state-owned firms such as Statoil.4 The new technologies that came from successful projects were soon licensed by these state-owned firms to other firms for commercial production (Godoe & Nygaard, 2006; Godø, Nerdrum, Rapmund, & Nygaard, 2003). Another example comes from China.

  • The role of lock-in mechanisms in transition processes: The case of energy for road transport

    2015, Environmental Innovation and Societal Transitions
    Citation Excerpt :

    These learning effects come from two different technological trajectories: Statoil was mainly interested in using natural gas to produce hydrogen, while Norsk Hydro focussed on electrolysis to produce hydrogen from abundant hydroelectric power. Since the 1980s and 1990s, Norwegian companies have engaged in R&D on different fuel cell types, hydrogen production technology and hydrogen storage, with Statoil, Norsk Hydro and Kværner being the most prominent companies (Godoe and Nygaard, 2006; Klitkou et al., 2007). In the 1990s, despite co-funding from the public research funding agency, NTNF, the big industrial R&D projects – NorCell I and II and Mjøllner – failed (Godoe and Nygaard, 2006).

View all citing articles on Scopus
View full text