In our last post, we took the position that wave energy technology developers have failed to correctly assess, or give priority too, technology market risk. And so, despite hundreds of millions of dollars of investment supporting their commercialization plans, no company has yet to succeed in that endeavor.
There are two phases of assessing the future commercial viability of an early-stage technology. The first step is establishing the market requirements for the eventual widespread adoption of the technology. That is, what is the market need for your technology and what are the characteristics, traits and functional requirements for systems filling that market need? The second step is the evaluation of the specific technology's ability to meet those requirements.
A much distilled market analysis for wave power systems is captured by the following short list of questions:
- What is the need for wave power systems?
- Who will be the buyers and users of such systems?
- What factors will drive potential customers to buy such systems?
- How will favorable or unfavorable market conditions affect the answers to the first three questions?
By considering the questions above, technology developers will gain insight into the key functional and fundamental requirements that will determine future commercial viability. It is these requirements and characteristics that should be the focus of an initial technology potential assessment. If such an analysis finds that a particular technology will not be able to satisfy a majority of key functional and fundamental requirements, it is likely doomed to fail and is not worth the investment required of commercialization. In contrast, those technologies that score highly and demonstrate the potential for a significant sustainable competitive advantages should be invested in.
In future posts we will provide the results from our detailed market analysis that has uncovered the market drivers and success factors that will ultimately determine the fate of early-stage wave power technologies.