By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010
Topic: Reinventing an Older Product Segment by Implementing State-of-the-Art Technologies
Speaker: Carsten Dickmann, Head of Marketing and Product Management, POWER WIND
Carsten addressed the question, 'What is the difference of development between a product and a service'? The answer is there is no difference because both bring solutions to clients to enable them to solve their problems. It is not enough to develop innovation; you need both hardware and software.
Consider this product segment that has been reinvented. This is the agenda.
1. Wind energy market's development
2. PowerWind56: reinvention of the sub-MW Segment
3. Comparable approaches; food for thought
4. PowerWind56's Market success
Wind Energy has had an impressive development into a global business. There has been commercial use of wind turbines for 20 years. There is a continuous race for more power output and yield. On the political landscape there is increasing support for wind energy due to climate change, energy independence, and the satisfaction of growing energy needs.
There are emerging new markets worldwide beyond traditional wind energy countries. There are exceptional growth rates and development is expected to continue. The installed capacity of wind energy is greater than nuclear power plants in Germany.
Over the years wind turbines have evolved from the experimental stage to having power plant characteristics. Systems today differ significantly from earlier concepts. To fulfill all of today's requirements, turbines have to keep up with technical developments. One key factor is grid integration.
Usually, technological progress is implemented in the next bigger generation. Thus, main development direction has been toward bigger, higher, and more rated output. Within 20 years the wind turbines' yield was increased by a factor of 100. 5 MW turbines will increase yields by another factor of 5.
Here are some comparable approaches.
Option 1: Make it bigger and create differentiation by being the first player beyond the existing power range. The plus side of this approach is clear; you are easily distinguished as a pioneer. The minus side means you are facing lots of challenges and an unknown terrain. There are high tech risks with high loads and weights. There is a need for parallel R&D with suppliers and for new components. Missing is the supporting infrastructure with logistics and cranes. There is an unclear situation regarding site permissions involving a complex certification process. The technology clearly is not proven. Project financing is complicated.
Option 2: Make it smaller by reinventing an older product segment by implanting state-of-the-art technologies. The minus side includes facing existing competitors and products. On the other hand the plus side is the transfer of known and proven technologies into an unattended segment. Risk is reduced with lower loads and weights. The supply chain is secure. There is less development time and associated costs. You can leverage the implicit benefits such as easy logistics. This is a situation where they are facing obsolete competitive products with the competitor's R&D focused on the race for size.
Power Wind selected Option 2 and did a reinvention. They transferred state-of-the-art technologies from the latest multi-MW turbines back to the older sub-MW segment: the PowerWind 56 approach. Benefits included: higher yields, increased component and machine lifetime, lower Q&M costs, high reliability due to the combination of technically proven components, compatibility with a majority of the grid requirements enabling additional grid services beyond a simple energy supply. PowerWind 56 expands the application range by enabling access to emerging wind markets. Their most important market is Italy.
These comparable approaches are food for thought. Consider the car market where the technological trend is for bigger, faster, and for better energy efficiency. It is a race for size with new technologies applied in the next bigger class.
Now contrast this to mobile phones where the technological trend is for smaller, more functions, better network integration, and longer standby-time.
Features do pay off.