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Archives for December 2009

The Next Big Thing - Innovative Fuel Technologies Driving Our Future

By Jonathan Wright | 12/15/2009 | 4:42 PM

Earlier this month, I met with some of my colleagues here in Singapore to discuss innovation.  One of the key messages that came from that meeting was that innovation is not just about bringing new ideas to life; it’s about those ideas adding value and making money. It's about commercializing them.

 

This is an interesting perspective when applied to sustainability, but it is still true… Innovation that improves the environment must also be commercially viable to succeed. Even the largest corporations may not have the will to sink dollar after dollar into R&D if the time to profit is long and unclear – especially given the challenges of the recession.   

 

I believe that the direct relationship between oil and GDP must eventually be broken for us to achieve sustained growth. Convergence, Next Gen broadband and the evolving digital economy will clearly have a major impact but the need for “transportation” will not disappear and the role of innovation in transport fuels must be important to us all. In a recent Accenture study titled “Betting on Science – Disruptive Technologies in Transport Fuels”, we found that there are 12 key technologies that could make a fundamental difference to supply chain management and our current reliance on oil.  This report does provide some hope and a glimmer of light!

 

The study demystifies these technologies – providing data on when and what the trajectory might be for commercial viability and highlighting the key economic challenges to bringing these technologies to market.  The report looks at technologies in three categories:  evolutionary, revolutionary, and “the game changer.”  Evolutionary fuels focus on improving efficiencies in our current technologies.  While arguably the quickest to implement, these fuel technologies do not move us away from our dependency on oil.  Revolutionary fuels, on the other hand, are not oil-based and have the additional perk of being able to use the existing fuel distribution infrastructure.  Biofuels dominate this category, sourced from plants including algae, sugarcane, corn, etc.  The “game changer” is electrification.  These technologies provide us with the most emissions-friendly options, but require the most investment to develop and implement.

 

As we look at this wide range of potential “future fuels,” a number of questions arise.  Given the extensive infrastructure of our transportation industry, are we reaching a tipping point by which a commitment to one or more future fuels is required?  And if so, which technology should policymakers, utilities, and operators get behind? 

 

If we look at current market trends, it is clear that while there is a tendency to favor technologies that leverage our current asset infrastructure in the shorter term, there is room for expansion.  Electrification, for example, is arguably one of the most widely accepted technologies for long term sustainability.  Here, there is a significant amount of coordination required across players who have not worked together before (local governments, utilities, OEMs, battery & charging companies, etc).  In current pilots of this technology, the coordination of efforts including network management, division of responsibility and revenue sharing vary greatly. 

 

Coordination of these efforts as well as determination of the standards which need to accompany new fuel technologies require global attention.  It is important for all the technologies to use common standards—whether fuel specifications, emissions, charging, etc.  Lack of standards will create inefficiencies and increase the commercialization and scale-up costs.

 

In all likelihood, not all 12 technologies investigated in this study will be brought to market or found to be commercially viable enough to succeed in the current economic climate.  However, there may still be a role for business or policy makers to take action and improve the chances of success for these fuels and fuel technologies. 

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Jonathan Wright

Jonathan Wright

Jonathan Wright is a Singapore-based senior executive in Accenture's Supply Chain Management practice with global responsibility for the company's supply chain fulfillment client work. With 17 years' experience, he is a recognized thought leader in supply chain transformation and sustainability. He joined Accenture in 1997 after five years with Exxon Mobil Corp. Since joining Accenture, Wright has worked in the retail, communications, high-tech, and aerospace and defense sectors. He is a Fellow of the Chartered Institute of Logistics and Transportation.



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