State-owned power utility Eskom’s open innovation pilot study has generated an overwhelming response from South African intelligentsia, diverse industries, government departments and organisations, research bodies, universities and businesses, with the company reporting that it is evaluat- ing the ideas with a view to their possible implementation.
“Good ideas are easy to come up with – it is in the implementation where the real innovation shines through. The focus, the hard work, the detailed project planning while keeping within budget, funding and financing solutions, management change initiatives and policy and regulation that must to be put in place are where the real work is, and the capacity for that is limited,” Eskom notes.
The utility opened its website portal for responses from innovators on June 1 this year and closed it on July 31. It is processing and assessing the myriad responses and appeals for patience from respondents.
Eskom’s evaluation of the concept of open innovation has followed a controlled approach and the utility has only called for ideas in four areas. These are proposals for smart technologies that will permanently reduce residential electricity consumption by about 10% (700 MW), for consultants and technologies to address improved water use and management for industrial processes, for experts to peer-review one of its sustainability assessment models (submissions for this challenge have not opened yet), and for technologies that will provide early detection of sagging, slipping or fallen overhead conductors used for electricity distribution and delivery.
“In this pilot study, all ideas or solutions must be related to the described challenges. The proposals for solutions are evaluated by technical panels of subject matter experts from Eskom’s business units. Depending on the success of the pilot, Eskom may decide to continue with open innovation and keep on sharing specific challenges with the public. However, it is important to control the process.”
The solutions to the four challenges would need to impact on Eskom’s service delivery, the company states.
For example, technologies for the detection of fallen conductors touched on a recombination of technologies incorporating laser, global positioning systems and software algorithms. Some of these technologies may address industrywide and national issues of cable theft.
“All proposals submitted on the website during the two-month pilot ranged from research proposals to already proven concepts. We were, however, very excited about the overwhelming response we received from South Africans.”
For example, the challenge on water technology encompassed a broad range of issues, from water conservation to waste management, including technologies focusing on zero liquid discharge.
Further, Eskom received solution proposals that included software applications and renewables technologies that could be retrofitted into homes, such as solar photovoltaic, solar thermal and energy efficient appliances, and, in particular, an energy efficient stove and hybrid heat pump technologies.
For example, some of the solutions received on the utility’s 49M campaign website, which addresses integrated demand management to promote energy efficiency, were sorted according to cost and implementation, namely zero-cost ideas requiring no investment that seek to implement behavioural change; low-cost ideas that require some investment, such as geyser blankets, compact fluorescent lamps (CFLs) or light-emitting diodes; and high-cost ideas involving long-term capital investment and benefits, such as solar-powered geysers or heat pumps.
Ideas will then be fed into the company’s research and development department and its initiatives, including the 49M campaign.
“Eskom is taking many approaches, ranging from general public awareness and advertising to actively supporting initiatives such as rolling out 43-million CFLs in South Africa, subsidising heat pumps and solar water geysers and implementing time-of-use tariffs.”
“The time-of-use tariffs initiative, which links financial systems with energy, either as a deterrent or incentive, is well advanced and seems to be the one most people say will have the greatest effect,” the utility notes.
Meanwhile, Eskom is also exploring the implementation of daylight-saving hours, which will necessitate the division of South Africa into two time zones; however, the utility warns that this, which was one of the proposals it received, is an example of a good idea that can produce significant benefits but is difficult to implement because it involves schools, television stations, airlines, industries, worker unions, cellphone rates, businesses and cross-border trade, besides many other concerns.
The power provider is trying to strike a balance between the achievability of ideas and solutions and their implementation; for example, how to use and distribute industry cogeneration capacity or changing the shift times of energy-intensive industry employees to reduce peak demand while boosting industry productivity, but taking into account how these changes can affect the workers’ home lives.
“Innovation is applied creativity. Creativity is common enough; application is tough and not that prevalent, which is where the real innovation comes in,” it emphasises.
Research and Development Recruitment
Eskom identifies 17 core areas of expertise that it aims to develop, namely fuels and combustions, emissions control, welding and non- destructive testing, asset management, materials integrity and life extension, smart grids, transmission engineering, distribution engineering, innovation, demand management, air quality and ecosystems, applied chemistry, water resources, socio-economics, health and safety, renewables technologies, energy modelling and energy statistics and decision sciences.
“These are centres of expertise that we should be world-class in. We have some way to go yet, but, in all of these areas, which cover the entire value chain of electricity supply, we are actively recruiting and training staff and spending research and development funds,” the company states.
“To grow the innovative culture of an organisation of close to 40 000 people is a process rather than a single step. Open innovation is but one of the ways [by which] we can speed up the process,” it adds.
Eskom’s research and development department is led by GM Barry MacColl.
The concept that intellectual property (IP) can be used as another form of capital to solve problems, to shorten research and development cycles, to provide another source of business revenue and to speed up time to market is gaining ground among companies, says South African open innovation com- pany the Research Institute for Innovation and Sustainability (RIIS).
Open innovation is always used to solve only a smaller part of a larger problem because, by narrowly describing and defining a problem, solutions are similarly small-scale and, hence, more easily achievable. The solutions can also be more radical or adopted from an industry far removed from a company’s sector, says RIIS CEO Dr Audrey Verhaeghe.
Eskom has partnered with the RIIS to pilot the use of open innovation in the long term.
“The knowledge economy is shifting. The previous paradigm was to appoint the cleverest people, which would give a business a competitive edge because they would come up with ideas that belong to the business. Further, the more money a business has to appoint these clever people, the greater competitive edge it will have.
“The new paradigm is that the knowledge economy is so permeable that knowledge flows across business units, through organisations and into societies, through people’s heads, from professors to students and between people through social media. This led to the current paradigm which states that it is not how much IP a business can generate and own, but how it can leverage or control IP as a tool of business,” says Verhaeghe.
“You find IP that other people own and you start leveraging that, either to solve one of your problems in your production process, as part of your product development cycle or to gain competitive advantage through the novel use of another industry’s or company’s ideas and technologies.”
However, she explains the open innovation process is premised on IP integrity and problems must be described in such a manner as to protect the ‘request for proposal’ (RFP) owner’s IP; and respondents must provide motivations for possible solutions in such a way as to protect their own IP but simultaneously convince the RFP owner of a solution’s value.
“It is a trick of the open innovation game. Open innovation can solve problems or significantly shorten the development time of products by using applicable developments or ideas from other industries, companies or individuals, and can be used to source partners or companies that can commer- cialise ideas, but there are potential risks from competitors or copycats.”
Companies usually seek solutions inside a business unit, then from inside the broader company, and then from trusted networks of consultants and suppliers before seeking help from elsewhere. Each sequential step adds to the risk of competitors finding out or exclusive IP being exposed.
Therefore, managing the process of innovation or searching for solutions makes sense to protect a company’s IP and market share.
“As soon as you select a solutions provider, you enter into an IP relationship,” she says.
This forms part of the model that Eskom is investigating, and the utility is seeking to leverage the expertise in South African industries and institutions to boost its services delivery, efficiency and capabilities, says Eskom.
The utility will also seek to partner with companies or industries to share the costs of implementing solutions that will benefit the partnership or broader industries, it adds.
“The better you can play this game, the more competitive you can become, which doesn’t necessitate ownership of the IP, but can involve controlling the IP in a partnership format,” Verhaeghe notes.
Open innovation is also an intelligence-gathering exercise and can be used to assess the progress of emerging technologies, which also means that open innovation is useful to direct research and development efforts into specific and underdeveloped research areas.
“You cannot always find an answer to your questions or problems by using open innovation, but it does give an indication of where there are areas of deficiency or underdevelop- ment, enabling companies, industries and countries to focus their research efforts, significantly reducing parallel development.”
Verhaeghe adds that the RIIS’s strategy in South Africa is to access as many expertise networks as possible, be they academic, industrial or commercial networks, and to consolidate and combine the answers into innovative solutions to the problems described by Eskom.
The answers generated in this round of open innovation will not all be discarded, and Eskom will seek to partner with, or enter into agreements with companies and individuals whose IP it wishes to use or develop.
“Safeguards have been put in place to ensure that IP is respected,” notes MacColl.
However, RIIS open innovation programme manager Dr Harry Swart warns that implementing demand-side management must not be done without gathering in-depth informa- tion on the conditions under which residents must implement initiatives.
“Without understanding the conditions under which initiatives are to be implemented, how can we expect to ensure their effectiveness?
“Rather, we should help residents to solve any potential problems in their areas using their own ideas and solutions, which will then be properly implemented and supported by the residents. This can then also form part of a bartering system, where the goals of the utility and the goals of the municipality can be discussed and objectives linked to concurrent actions from both parties,” he explains.
Verhaeghe agrees, noting that open innovation can function as a catalyst for development in an area, specifically leveraging local initiatives and solutions and merging these with solutions gathered from other parts of an open innovation network.
“By using open innovation, we can keep the resident skills in an area and add the ideas and solutions gathered from across the world. By tapping into these networks, regions will be enabled to develop their industries and their people in the area without losing the skills present in the area, because opportunities will be available for the skilled people to apply their expertise locally, or globally, through open innovation networks,” she concludes.