Shell’s 30-year rule for new energy technology adoption

Voser.jpgShell CEO Peter Voser has made a fascinating speech in China, where he highlights the length of time taken for new energy technologies to gain adoption.

He says Shell’s research shows it takes “30 years for new energy types to capture 1% of the market“. And he contrasts this with the electronics industry, where a new mobile phone has to be commercialised within 18 months, “to beat the competition“.

The issue is the complexity of the development process, and the sums of money involved:

• It takes 3 years to built a pilot plant, after the original scientific breakthrough
• Then start-up takes a year, and 2 – 5 years to achieve reliable operation
• It takes another 10 years to build 12 or more plants
• And then it takes another decade to gain public acceptance

Thus biofuels is only now reaching its 1% market share, after starting in 1980. Wind, which began in Denmark and the USA in the mid-1980’s, is also on track to reach 1% by 2015. Similarly nuclear power took from 1950-80 to become established.

Voser notes that “the 30-year law is not a natural law. It is a societal one“. So in principle, it should be possible to speed up the process, if governments give their support. But even so, he cautions that “there are no easy and quick successes“, even if “we all feel a sense of urgency“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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