* 57.6% of clean energy RD&D investment came from EMEA based companies, 33.8% from AMER and 8.6% from ASOC. Utility / energy companies and technology firms have the highest clean energy RD&D budgets in general, with the top 5 firms being GE, United Technologies, BP, E.ON and BASF in descending order.
* However, energy companies’ investment into clean energy RD&D still only accounts for around 2% of overall energy RD&D expenditure.
General Electric (GE) stands out among all the firms analysed (47 in total) with a RD&D budget for 2006 of $900m, which is 54% of global technology / industrial RD&D spending. Furthermore, GE has committed to increasing this budget under their ‘Ecomagination’ program to $1.5bn annually by 2010, which will be directed to the development ofrenewable energies, more efficient aircraft engines and less energy-intensive solutions to water purification and re-use.
Sector Breakdown and Analysis
Utility / Energy Sector
Spending by utilities on clean energy RD&D covered a wide variety of initiatives and developments: BP continued its research into solar, wind, hydrogen fuel cells, biofuels, combined cycle gas turbines (CCGT) and natural gas, mostly through BP Alternative Energy, which was created in 2005 with an investment of $8bn over the period 2005-2015. BP aims to build two of the world’s first industrial –scale hydrogen power plants by 2015. Shell’s RD&D was in much the same vein, though with extra focus on biofuels, which now puts Shell as the world’s leading distributor of biofuels. Endesa and Enel were pushing forward carbon capture and sequestration, while RWE maintained research into increasing the efficiency of its coal-fired plants, being well aware of its status as “Europe’s largest emitter of CO2” due to its large use of coal reserves. EDF’s main RD&D interests lay in PV, solar thermal and biomass, along with electric vehicles, of which EDF has the world’s largest fleet. As with the other French utilities (Total, Suez, and Gaz de France) a large portion of electricity production comes from nuclear power – in fact 95% of EDF’s electricity generation does not emit any greenhouse gases. The primary area of RD&D for Suez was waste and water management and since the company merged with Gaz de France, a target has been set for 10% of electricity generation to come from renewable sources by 2012 (current level: 3%). In the US, Exxon Mobil was directing the majority of its clean energy RD&D to cogeneration facilities, which reduce the company’s CO2 footprint by 10.5m tonnes/yr. Chevron was developing biofuels and hydrogen fuel cells for transport, and renewables for power generation, whereas Exelon’s spending sought further advances in clean coal technology, solar cells and wind power. Pacific Gas and Electric Company continued research into solar technology, maintaining its position as the leading solar utility in the US.
Technology Sector
As stated earlier, GE was the clear leader in clean energy RD&D in 2006. The $900m budget was spent across multiple divisions, including renewables (wind, solar and biomass), fuel efficiency of aircraft engines, efficiency of power generation and less energy-intensive solutions to water purification and re-use. Airbus also worked on the fuel efficiency of aircraft engines, along with advanced production technologies to minimise energy and water consumption during the manufacturing process. The remaining firms in this sector followed suit, with United Technologies making a significant contribution of $700m to the total figure.
Automobile Sector
The top two clean energy developers in this sector were Toyota ($240m) and Honda ($220m), with Daimler and Volkswagen also standing out ($200m and $110m respectively). As would be expected, a large share of RD&D is on biodiesel, bioethanol, hybrids and cleaner conventional engines in a bid to reduce vehicle emissions in the short term. However, there is growing research in other areas: aerodynamic and lightweight vehicles, recyclability (Volkswagen has set a goal of developing cars with 95% recyclability at the end of life-cycle), and increased efficiency in the manufacturing process (Nissan has put in place a target of reducing CO2 emissions by 2050, on 2000 levels). Last but not least, fuel cell technology is seen as a long-term solution; one that requires further development to be marketable, but one that will also replace conventional fuels and even biofuels in the long run.
Chemical Sector
This emerged as a sector where clean energy RD&D facts and figures were less available and less clearly presented. Out of the chemical businesses examined in the research for this note, BASF was not only the clearest reporter but also by far the highest spender, with a total of $600m directed to clean energy RD&D (this accounted for one third of BASF’s total RD&D budget in 2006). BASF was heavily involved in the development of new materials for organic solar cells, innovative storage media for hydrogen and advanced technologies for improved insulation such as nanopore foams. Bayer continued to research super-lightweight plastics for improved energy efficiency in vehicles along with energy efficient building design. The same trend was seen for STMicroelectronics and Dow Chemical, which has also committed to a reduction in energy intensity by 25% over the period 2005-2015. DuPont had a slightly different approach which included the development of new biofuels and the design of high performance materials such as textiles from renewable sources. AIR Liquide had a different set of research criteria still, with much work carried out on clean coal, biomass, hydrogen fuel cell and gasification technologies. As is seen across all sectors, all the chemical firms were also furthering research into efficiency on their manufacturing operations with an overall aim of reducing emissions in the long-term.
Construction Sector
The cement industry accounts for 5% of all man-made CO2 emissions around the world so it would be reasonable to expect this sector to be engaged in emission reductions and climate change mitigation research. This proved to be the case, with transparent reporting throughout. Lafarge ($120m clean energy RD&D budget) was involved in creating advanced cements and cement substitutes which are less energy intensive and developing carbon capture / storage techniques. Heidelberg Cement ($100m) looked for ways of increasing the effective use of alternative raw materials and fuels in the production of cement, while also setting a target of reducing specific emissions by 15% over the period 1990-2010. This sort of commitment was common amongst construction companies: Holcim set itself a goal of reducing specific emissions by 20% from 1990-2010 and Cemex made a pledge to reduce its specific emissions by 25% by 2015 on 1990 levels. In the steel industry, Arcelor Mittal is coordinating the Ultra-Low CO2 Steelmaking Programme between 48 industrial firms. The programme develops cutting edge technologies and aims to cut CO2 emissions in the long-term by 50%.
Retail Sector
There is limited activity within this sector on clean energy RD&D, with only Tesco providing clear data ($144m). The company is developing gasification technology to turn food waste into power and is also involved in wind, solar, biomass and combined heat and power research. Further to this, Tesco is also the UK market leader in biofuels and is intending to spend $720m on low-carbon technologies over the period 2006-2010.
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