Rolf Wüstenhagen

A review of international green power markets: recent experience, trends, and market drivers

Green power marketing--the act of differentially selling electricity generated wholly or in part from renewable sources--has emerged in more than a dozen countries around the world. Almost two million customers worldwide buy green power today. This paper reviews green power marketing activity in Australia, Canada, Japan, the US, and in a number of countries in Europe to gain an understanding of consumer demand for electricity generated from renewable sources. It also examines key factors that influence market penetration of green power products, such as product designs, pricing, incentives, marketing strategies, policies, and product certification.

Diffusion of green power products in Switzerland

Abstract As in many other European countries, green electricity is an emerging product in Switzerland as well. Although the market is yet to be liberalised, more than 100 of the 1200 Swiss electric utilities offer some sort of green electricity product to their customers. Successful companies like the municipal utilities of the cities of Zurich and Berne have reached customer response rates of up to 4%, while still maintaining cost-based pricing, i.e. charging their customers price premiums of 400–700% per kWh. While most of the products still rely on mainly photovoltaics, some utilities have started to introduce mixed green electricity products also including wind power. With a share of 60% in the Swiss generation mix, hydropowers role in the green electricity mix was also an issue to emerge causing controversial debate. While being renewable, hydropower is not considered environmentally benign by all the stakeholders, and unlike new renewables (solar, wind, biomass), there is little room for new hydropower generation facilities in Switzerland. The green electricity labelling scheme “Naturemade” tackles that issue. The labelling organisation has evolved from a process with broad stakeholder involvement, which included environmental NGOs, scientific institutions, green electricity providers, renewable energy advocates, government bodies and consumer organisations. The analysis in this paper is based on a diffusion theory framework. It identifies and characterises different phases of (past and future) market development, and stresses the importance of eco-labelling as a tool to facilitate the transition from niche to mass market. Finally, we also discuss conclusions that can be drawn from the Swiss case towards market development and labelling on a European level.

Do venture capitalists really invest in good industries? Risk-return perceptions and path dependence in the emerging European energy VC market

The study examines the nature of industries thatventure capitalists invest in, focusing in particular on European energytechnologies. Venture capital (VC) can have a critical role in thecommercialization of innovation, especially in new industries such as energytechnologies. The energy sector is one of the largest sectors of the economy,but reliable data on European VC investments in sustainable energy is hard tofind. The study therefore uses a qualitative approach, using data from 23semi-structured, face-to-face interviews with venture capitalists, performedbetween August 2003 and March 2004. Venture capitalists in nine countries wereinterviewed (two in North America, seven in Europe). The study also uses theresults of a written survey taken in 2003 at a key industry event for energyventure capitalists in Europe held in Switzerland. The findings point to a number of factors determining the emergence of a newmarket sector for VC investments. The findings yield a number ofindustry-specific risks: product market, technology, people, regulatory andexit risks. Perceptions of investorsconcerning these risks are discussed,and potential solutions. A number of factors influencing VC returns--theprice paid by the VC at the time of investment, the sales price at the time ofinvestment exit, and the time between investment and exit--are discussed interms of the energy industry. Early investment results point to energytechnologies as a good investment, although the VC industry has not yet fullyacknowledged it by directing their investments to this sector. The studyconcludes by noting some of the obstacles entrepreneurs, financiers, and policymakers will have to overcome in order to ensure the growth of sustainableenergy VC. (CBS)

The Effect of Life Cycle Cost Information on Consumer Investment Decisions Regarding Eco-Innovation

Life cycle cost (LCC) computations are a well-established instrument for the evaluation of intertemporal choices in organizations, but they have not been widely adopted by private consumers yet. Consumer investment decisions for products and services with higher initial costs and lower operating costs are potentially subject to numerous cognitive biases, such as present-biased preferences or framing effects. This article suggests a classification for categorizing different cost profiles for eco-innovation and a conceptual model for the influence of LCC information on consumer decisions regarding eco-innovation. It derives hypotheses on the decision-making process for eco-innovation from a theoretical perspective. To verify the hypotheses, the publication reviews empirical studies evaluating the effects of LCC information on consumer investment decisions. It can be concluded that rather than finding ways to make customers pay more for environmentally sound products, the marketing challenge for eco-innovation should be reconceptualized as one of lowering customers’ perceived initial cost and increasing awareness of LCC. Most existing studies report a positive effect of LCC information on the purchase likelihood of eco-innovations. Disclosing LCC information provides an important base for long-term thinking on the individual, corporate, and policy levels.

Sustainable innovation and entrepreneurship

In recent years our understanding of corporate sustainability has moved from exploitation to exploration, from corporate environmental management to sustainable entrepreneurship, and from efficiency to innovation. Yet current sustainability trends indicate the need for radical innovation via entrepreneurial start-ups or new ventures within existing corporations. However the financing and marketing of such schemes remains a problem. Presenting both conceptual and empirical research, this fascinating book addresses how we can combine environmental and social sustainability with economic sustainability in order to produce innovative new business models.

Handbook of research on energy entrepreneurship

Contents: 1. An Introduction to Energy Entrepreneurship Research Robert Wuebker and Rolf Wustenhagen PART I: THE ROLE OF START-UP FIRMS IN ENERGY ENTREPRENEURSHIP 2. Market Failure, Market Dynamics and Entrepreneurial Innovation by Environmental Ventures Elizabeth Garnsey, Nicola Dee and Simon Ford 3. Prolonged Gestation and Commitment to an Emerging Organizational Field: Energy Efficiency and Renewable Energy Businesses in Minnesota 1993-2009 Alfred Marcus, Kathleen Sutcliffe, Susan Cohen and Marc Anderson 4. Entrepreneurial Learning in Energy Technology Start-ups: A Case Study in the Biogas Market Petra Dickel and Helga Andree PART II: INTERNATIONAL ENERGY ENTREPRENEURSHIP 5. Entrepreneurial Opportunity and the Formation of Photovoltaic Clusters in Eastern Germany Matthias Brachert and Christoph Hornych 6. The Rise of Chinese Challenger Firms in the Global Solar Industry Gabrielle Meersohn and Michael W. Hansen 7. International Entrepreneurship in the Offshore Renewable Energy Industry Nicolai Lovdal and Arild Aspelund PART III: ENERGY ENTREPRENEURSHIP AND LARGE INCUMBENT FIRMS 8. Photovoltaic Business Models: Threat or Opportunity for Utilities? Jean-Marc Schoettl and Laurence Lehmann-Ortega 9. Why Corporate Venture Capital Funds Fail - Evidence from the European Energy Industry Tarja Teppo and Rolf Wustenhagen PART IV: FINANCING ENERGY ENTREPRENEURSHIP 10. Business Angels and Energy Investing: Insights from a German Panel Study Dietmar Grichnik and Christian Koropp 11. Venture Capital Investment in the Greentech Industries: A Provocative Essay Martin Kenney 12. How do Business Models Impact Financial Performance of Renewable Energy Firms? Moritz Loock PART V: COMMERCIALIZING ENERGY INNOVATION 13. Interfirm Relationships in a New Industry: The Case of Fuel Cell Technologies Stefano Pogutz, Angeloantonio Russo and Paolo Migliavacca 14. Challenges of Doing Market Research in the New Energy Market Roland Abold 15. Path Dependence, Path Creation and Creative Destruction in the Evolution of Energy Systems Raimo Lovio, Per Mickwitz and Eva Heiskanen PART VI: ENERGY ENTREPRENEURSHIP, INSTITUTIONS AND PUBLIC POLICY 16. Making, Breaking, and Remaking Markets: State Regulation, Entrepreneurship, and Photovoltaic Electricity in New Jersey David Hart 17. International Entrepreneurship and Technology Transfer: The CDM Situation in China Joao Aleluia and Joao Leitao 18. Incentive Prizes to Stimulate Energy Innovation and Entrepreneurship Neil Peretz and Zoltan Acs

More Than a Game Learning About Climate Change Through Role-Play

Educating management students on the connections between business and climate change is essential both to their careers and to society’s ability to solve the climate challenge. To impart deep and lasting learning on this topic, the authors developed a multischool negotiation simulation that is unique in its intensiveness, cross-sector design, and transdisciplinary nature. This article explains their objectives, connects the choice of a role-play format to past literature, describes the curriculum they designed, and evaluates the results of its first and second teachings. Evaluation is based on the extent to which the course met their specific objectives, how individual elements contributed to overall learning, and the overlap between this curriculum and established precepts of good sustainability teaching. In addition, they draw lessons from their experience to guide others wishing to teach on this or on related topics.

Cleantech Venture Investors and Energy Policy Risk - An Exploratory Analysis of Regulatory Risk Management Strategies

The energy industry is a typical example of a heavily regulated industry, and particularly large incumbent energy firms have developed significant expertise in non-market strategies (or corporate political activity). New entrants to the energy industry, such as clean energy technology ventures, are also exposed to regulatory risk (and opportunity), but they do not have the means to engage in non-market strategies to a similar extent as large incumbent firms. On the other hand, the success of investments in these firms significantly depends on managing regulatory risk. However, little is known empirically about how venture investors perceive energy policy risk and what they do to manage it. Based on a survey among 60 venture capital firms in Europe and North America, we attempt to close this gap in the current literature. We build on our survey data to develop a typology of regulatory risk management strategies adopted by these investment firms.

Green Power Marketing Abroad: Recent Experience and Trends

Green power marketing--the act of differentially selling electricity generated wholly or in part from renewable sources--has emerged in more than a dozen countries around the world. This report reviews green power marketing activity abroad to gain additional perspective on consumer demand and to discern key factors or policies that affect the development of green power markets. The objective is to draw lessons from experience in other countries that could be applicable to the U.S. market.

The Strength of Strong Ties in an Emerging Industry: Experimental Evidence of the Effects of Status Hierarchies and Personal Ties in Venture Capitalist Decision Making

Drawing from social network theory, scholars have identified two ways in which social ties influence venture capital investment decisions: directly through personal ties and indirectly through status hierarchies. Previous research has examined these effects independently. Our study is the first to perform a joint examination of the role of social ties and status hierarchies in venture capital decision-making. We examine the relative importance of these two mechanisms through an adaptive choice-based conjoint (ACBC) experiment comprising of 3,132 investment decisions made by 86 venture capitalists from the United States and Europe. Our experimental context allows us to explore whether, under high levels of market uncertainty, strong personal ties exert more influence over investment decisions than the presence of a high-status investor in the deal. We also explore the moderating effects that market structure and experience play in shaping these decision processes. Our findings reveal that personal ties are more important in venture capital decision-making when compared to the relative status of other venture capital firms participating in the investment syndicate. Building on our main findings, we show that the influence of personal ties is less pronounced in the European investment community, as compared to more densely networked U.S. investors. We also find a U-shaped relationship between venture capitalist experience and the influence of personal networks on investment decisions.