Renewable energies: Identifying business opportunities in Portugal

Renewable energies: Identifying business opportunities in Portugal

• 1.
  Renewable energies: identifying business opportunities in Portugal Academic session presentation at 9 th International Business Week University of Minho School of Economics and Management Authors: Brigita Jurisic and Ana Maria Soares May 5 h 2010
• 2.
  Agenda Introduction Diffusionand adoption of innovations Cultural influence on innovation diffusion process Creating value in solar thermal market in Portugal Entrepreneurial initiatives in solar thermal market Conclusions 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares May 5 h 2010
• 3.
  1. Introduction Greenindustry gives higher level of energetic independence. Solar thermal technology is one of the most promising ones in Portugal, since it is a country which presents a warm climate with 3000 hours of sunshine (1125 heating degree days) per annum Solar water heating can supply economically about 50% to 75% of the energy consumption for water heating for an average Portuguese family (ADENE, 2009) and 13% of the total energy consumption (Rosado, 2008). = private benefit Usage of solar thermal technology reduces CO 2 emissions = public benefit May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 4.
  2. Diffusion andadoption of innovations New product adoption process: awareness, interest, evaluation, trial and adoption (or rejection). – technology diffusion S curve Market adoption of solar thermal technology is laggering (Balachandra et al., 2010) D imensions of innovation: novelty, speed, continuity and strategy (Prajogo, 2006). Impact of solar thermal technology on behavior: saves money and protects the environment. It is a complex and communicable innovation needing the support of social media and associations, who can educate consumers. Solar thermal technology is also an innovation with limited trialability. May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 5.
  Innovation diffusion processis influenced by demographics, socioeconomics, psychographics and culture. Early adopters tend to be young and possessing a high professional status, income and educational level. In collectivist cultures with frequent interpersonal communication, like Portuguese, the diffusion process proceeds faster than in individualistic cultures where people get their information from the mass media (de Mooij, 2004). Renewable energies are widely supported by social media and research institutions. 3. Cultural influence on innovation diffusion process May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 6.
  Portuguese culture hasa higher rate of uncertainty avoidance than other European countries, creating t he need to minimize the possibility of new, surprising and different situations from usual by strict laws and rules, safety and security measures (Hofstede, 2010). High uncertainty avoidance level together with a high power distance and frequent interpersonal communication create a good basis for a well-planned government and social media supported new technology introduction. 3. Cultural influence on innovation diffusion process May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 7.
  Favorable factors: Portuguesegovernment started a heavy incentive programme for solar water heaters with a budget of € 95 million in 2009. Decree-Law No. 78/2006 a National Energy Certification System and Indoor Air Quality in Buildings (SCE) was accepted, defining energy consumption of buildings and their energy costs during normal operation. Unfavorable factors: Income gap - Gini index for Portugal in 2007 was 28,5 (CIA, 2010) Historically low energy tariffs- wasteful energy usage 3. Cultural influence on innovation diffusion process May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 8.
  4. Solar thermalmarket in Portugal Is interesting from the socio-cultural and governmental incentives point of view and becomes less interesting because it is an industry in the beginning of its lifecycle. Players interested in this market are: foreign producers of solar collectors and water deposits, (mostly German, Austrian, Greek and Turkish) already existing small businesses working as installers of water or electrical systems fresh entrepreneurs with the aspiration to take advantage of this developing and promising industry adopting a market based approach. May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 9.
  4. Solar thermalmarket in Portugal Currently the following brands are being marketed: Aquaterm, Astersa, BaxiRoca, Beretta, Calpak, Chromagen, Egreen’s, Falke, Filbia, FogãoSol, Hewalex, Immosolar, Jacques Giordano, Junkers, Lentherm, Maltezos, Nau, NES, Norquente, Openplus, Rigsun, Sanitech, Solahart, Solargus, Solarinox, Solius, Solution, Sonnenkraft, Suncore, Sunset, Teknoenergy, Thermosolar, Tisun, Unisolar, Vicoren, Vulcano, Wikora, Zantia… 25% of them are Portuguese, followed by German and Turkish with 12% and 9% respectively. May 5 h 2010
• 10.
  5. Entrepreneurial initiativesin solar thermal market Figure: How business model configuration addresses challenges in commercializing sustainable energy technologies May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 11.
  Governmental support (initiatives)Legislation Regulated quality Current “green” trends (the green activists represent 35% of Portuguese population by Paço et al., 2009) THREATS STRENGTHS OPPORTUNITIES WEAKNESSES High fragmentation of the market High initial investment Weak credibility/reputation Relatively little knowledge by the general public Lack of reliable information on the sector High fragmentation of the market Environment friendly High solar exposition rate and no fossil energy in Portugal Energy independence Money and energy savvy Support by social media Low-quality solar systems from the 1 st generation installed in 80ies High volatility of new businesses on the area (many companies close fast) – problem of price dumping and reputation 6. Conclusions May 5 h 2010 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares
• 12.
  Thank you foryour attention! May 5 h 2010 Contact: Brigita Jurisic [email_address] 9 th INTERNATIONAL BUSINESS WEEK Brigita Jurisic & Ana Maria Soares