«PrevSuccessful strategies for entering the world’s largest generics markets NextTen tips for economic research administration and funding compliance»

It’s only a matter of time before renewable sources of power overtake the burning of fossil fuels for generating electricity. The signs are everywhere, and in some countries, such as Canada, where more than 80% of electricity generation already comes from clean sources1 (wind, hydro, solar and nuclear), the path forward is clear. Even the United States is on a course to join Mexico and Canada in generating 50% of its electricity from non-emitting sources by 20252. In 2015, however, the majority of the world’s electricity came from the burning of fossil fuels, and a tremendous amount of innovation is still taking place in that area, according to the first installment in this series published on stateofinnovation.com. Fossil fuels are attractive because they are inexpensive, but they carry a significant cost in the environmental damage caused by the gas emissions that are a side product of the combustion process. In the second installment the innovative attempts being made by the oil and gas industry to deal with gas emissions from fossil fuel burning were explored.

While efforts to improve the environmental impact of fossil fuel burning are important and are contributing to the continued use of this power source, eventually cleaner methods of generating electricity are going to overtake them. The primary criticism of non-emitting sources of power has been that they are considerably more expensive than fossil fuel-based methods. While this has certainly been the case, recent research suggests that the price of onshore wind-based electricity will decline by over 40% by 2040, and solar photovoltaics will decline by over 60% in the same time period3. Another indicator of the role renewable energy sources will play in the future of electricity generation is the number of inventions for which patent protection is being sought in these areas.

Thomson Reuters analysts studied the current electrical-power landscape in their recent Powering the Planet 2045 report, a “compilation of strategic business insights related to how electrical power will be produced in order to preserve our planet, shrink the Digital Age’s environmental waste and reduce global warming.” One of the findings from the Powering the Planet 2045 report was that more patents have been published on developments in solar photovoltaic inventions than any other source study including fossil fuel-based ones. Figure 1 shows the publishing trend for solar photovoltaic innovations in particular:

Fig 1

Fig 1:  Solar Photovoltaic Innovation for Electricity Generation by Publication Year
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

With over 80,000 patent families from 2010 to 2015 there are more than twice as many publications on this renewable energy area than for both coal and natural gas combined. From 2011 to 2013 this area grew very rapidly, and after tapering off in 2014 it began rising again, albeit more slowly, in 2015. A similar recent growth trend in patent family publications is found for the other three major renewable energy areas as seen in Figure 2:

fig 2

Fig 2:  Hydro Wave, Nuclear & Wind Innovation for Electricity Generation by Publication Year
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

Wind-based innovations also have a very large number of publications associated with them, but growth in this area started to slow in 2012 and stopped altogether in 2014. Recently, however, it has started rising again. A similar pattern can be seen in the field of nuclear power, which grew steadily until 2014 and has tapered off in 2015. Hydro wave, or energy production based on the movement of water, is the one area that has shown continued growth in patent publications during the time period studied. This segment also shows the most significant recent growth between 2014 and 2015. These filing trends were part of the reason that hydro wave, nuclear, and solar were called out as the three most likely renewable energy sources to replace fossil fuels as the primary means for generating electricity by 2045, according to the Powering the Planet 2045 report.

Renewable Energy Leaders

Figure 3 provides details on the number of patent-family publications by segment for the top four worldwide organizations with inventions in the most promising renewable energy sources:

fig 3

Fig 3:  Top Four Renewable Energy Companies by Segment
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

Of the top four organizations, three have a reasonably diversified portfolio of interests, despite each having a single area of particular focus. Mitsubishi not only has the largest portfolio, but is also the most diversified. Its primary interest is solar photovoltaic, but the company also has a large number of inventions in wind and nuclear. Toshiba is similar, but its focus is on nuclear with sub-areas of concentration in solar photovoltaic and hydro wave. General Electric’s position in the list, as well as its technology breakdown, is skewed slightly since it is involved in a partnership with Hitachi in the area of nuclear power. This partnership appears to diminish GE’s interest in nuclear, even though this is certainly an area in which it is heavily involved. An unexpected entrant in the top four is LG, which is not traditionally seen as an energy company, but several organizations in the electronics industry are also leaders in the solar photovoltaic field based on the technology overlaps that exist between the fields of research.

fig 4

Fig 4:  Mitsubishi Patent Family Publications by Segment and Publication Year
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

Looking at Mitsubishi as the top company more closely, Figure 4 shows an interesting potential change in the priorities of the company. In 2015 solar photovoltaic was still the largest renewable energy category for the company, but the number of publications declined dramatically from 2014. Wind publications also declined while nuclear was the only segment that increased in that year. These trends suggest that Mitsubishi may be making larger investments in the nuclear field at the expense of wind.

fig 5

Fig 5:  Renewable Energy Companies Five to Eight by Segment
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

As discussed in connection with LG earlier, Sharp, Samsung, and Hitachi enter the list of top renewable energy organizations primarily based on their interest in solar photovoltaics and its complementarity with the field of electronics. Samsung and Hitachi, however, have additional interests outside of solar photovoltaics. They are interested in wind energy, especially Samsung, and Hitachi is quite diversified. As seen in Figure 6, and discussed above in regard to GE, the partnership between GE and Hitachi in nuclear power disguises some of the diversity displayed by the two companies when they are shown individually:

fig 6

Fig 6:  Renewable Energy Companies Nine to Eleven by Segment
(SOURCE: Derwent World Patents Index (DWPI) Families from Thomson Innovation)

Hitachi-GE Nuclear Energy has the highest number of publications in the nuclear field, and its inclusion in the top ten of all renewable energy companies further demonstrates the leadership role that both companies are playing in this developing field of electric power generation.

The inclusion of the Chinese Academy of Sciences is also unique and interesting, since CAS is the only academic institution represented in the list of top organizations. Its portfolio is also reasonably diversified but dominated by solar photovoltaic. China has repeatedly stated its commitment to addressing the nation's dependence on fossil fuels by investing in renewable sources, and this analysis of CAS’s patent filings in the area indicates the areas that they believe will most likely pay dividends for them in this field.

Renewable, non-emitting, and clean power sources are the future of electricity generation. Prices for electricity generated from these sources are dropping, and the number of patented inventions associated with them is growing rapidly. For investors looking to get involved in this field, the top organizations provided in this report would be a good place to start exploring. Even more details on the geopolitical, financial, and environmental impacts of the migration to renewable energy sources can be found in the full Powering the Planet 2045 report.