Innovation activities of renewable power generation technology providers in Germany

The impact of the German policy mix on technological and structural change in renewable power generation technologies Innovation activities of renewable power generation technology providers in Germany GRETCHEN Survey 2014 Descriptive results 1

Content Participating companies and their portfolio Policy mix Innovation activities Market conditions Outlook and contact 2

Participating companies: Geographical location Participating companies by Federal State (n=390) BW Baden-Württemberg 80 77 () BY BE Bavaria Berlin 70 60 63 (16%) 61 (16%) BB HB HH Brandenburg Bremen Hamburg Number of companies 50 40 30 20 10 0 37 (9%) 34 (9%) 22 (6%) 19 (5%) 15 (4%) 11 (3%) 9 (2%) 9 (2%) 9 (2%) 8 (2%) 7 (2%) 7 (2%) 2 (1%) HE MV NI NW RP SL SN ST SH TH Hesse Mecklenburg-West Pomerania Lower Saxony North Rhine-Westphalia Rhineland-Palatinate Saarland Saxony Saxony-Anhalt Schleswig-Holstein Thuringia BY NW BW NI HE SN TH SH BE BB MV ST RP HB HH SL More than half of the companies (51.5%) are located in the three States of BY, BW und NW. The four states of NI, HE, SN and TH are home to another 28.7% of companies. 3

Participating companies: Technological portfolio Renewable power generation technologies for which companies supply products (n=390 multiple answers possible) Number of companies 200 150 100 50 0 180 (46.2%) 117 (30%) 101 (25.9%) 79 (20.3%) 62 (15.9%) 40 (10.3%) 35 (9%) 26 (6.7%) 24 (6.2%) 12 (3.1%) Photovoltaics Bio / landfill / sewage gas Wind onshore Wind offshore Hydropower Concentrated solar power Solid biomass Ocean energy Geothermal energy Others Number of RE branches per company (n=390) 16% operating in one RE branch 67% operating in two RE branches operating in more than two RE branches Photovoltaics is the most common technology: in the portfolio of 46.2% of the companies. Biomass/-gas, onshore wind, offshore wind and hydropower rank in the middle. Two thirds of the companies are active in one RE branch; the others in two or more. 4

Participating companies: Main technologies Technologies for which survey was completed (n=390) Number of companies 150 100 50 0 145 (37.2%) 87 (22.3%) 68 (17.4%) 27 (6.9%) 22 (5.6%) 16 (4.1%) 14 (3.6%) 4 (1%) 2 (0.5%) 5 (1.3%) Hydropower Photovoltaics Bio / landfill / sewage gas Wind Onshore Wind Offshore Concentrated solar power Solid biomass Geothermal energy Ocean energy Others The survey was carried out for one specific renewable energy (RE) branch. More than half of the responses concerned PV (37.2%), biogas (22.3%) and onshore wind (17.4%). For technology-specific evaluations the following technologies were aggregated: Bioenergy = Biogas, landfill and sewage gas, solid biomass Other renewables / other = CSP, geothermal energy, ocean energy and others 5

Participating companies: Size and product type Size (n=381) Product type (n=386) 30% Microenterprises 24% Components 27% Small companies Medium-sized companies Big companies 71% 5% Final products for generating power Production plants 29% Approx. 70% of the companies are SMEs. In 2013, on average about 50% of total sales were generated by sales of the analyzed RE branch, but this figure varies a lot. Most companies focus on producing components to manufacture final products for generating power (71%). LEGEND Microenterprises Small enterprises Medium-sized enterprises Large enterprises Turnover: Employees: up to 2 million up to 9 persons up to 10 million up to 49 persons up to 50 million up to 249 persons more than 50 million more than 249 persons 6

Participating companies: Markets and innovation Geographic markets of the last three years (2011-13) for RE products (n=390 multiple answers possible) Number of answers 400 300 200 100 0 360 Germany 333 EU-/EFTAcountries 131 USA 140 China/India 192 Other countries In 2013, on average 39.5% of sales were exports (n=343). Only 11.1% (43 von 387) of companies operated exclusively on the domestic market. Focus of innovation activities over the three years (2011-13) Companies orient their innovation activities equally towards the German and the global market. on the German sales market 12% 10% on the global sales market 12% 0% 16% 40% 23% 16% 60% 80% 100% Ø=3.8 (n=384) Ø=3.7 (n=381) (low) 1 2 3 4 5 6 (high) 7

Policy Mix: Expansion targets for renewables Germany s target for expanding the share of renewable energies to 40-45 percent of power generation up to 2025 is lower than the expansion target of the previous legislative period. 9% 27% Ø=4.1 (n=314) is very ambitious. 12% 33% Ø=4.1 (n=389) seems too low in relation to the long-term expansion target of 80% renewables by 2050. 16% 12% 29% Ø=4.0 (n=378) is a good match with other energy and climate policy targets of the German government. 12% 16% Ø=3.6 (n=379) can be achieved with the help of existing policy instruments and measures. 32% 30% 19% 8% 6% 4 Ø=2.4 (n=385) 0% 40% 60% 80% 100% (no support at all) 1 2 3 4 5 6 (fully supports) Germany s 2025 expansion target of 40-45% power generation from renewable energies is regarded as ambitious, but the existing instruments and measures appear insufficient to achieve the target. In addition, the 40-45% target for 2025 is regarded as not ambitious enough in light of the 80% expansion target for 2050. 8

Policy Mix: Instruments and measures Support of the expansion of renewable electricity generation through: Phase-out of nuclear energy by 2022 9% 8% 28% Ø=4.2 (n=385) Public R&D/innovation funding 7% 19% 30% 16% 6% Ø=3.4 (n=360) Promoting the training of skilled workers for the renewable branch 19% 26% 9% Ø=3.3 (n=340) Renewable Energy Sources Act (EEG) 8% 29% 24% 6% Ø=3.3 (n=378) Energy Industry Act (EnWG) and other policy initiatives to expand the grid 10% 24% 39% 19% 5% 2 Ø=2.9 (n=309) Federal Nature Conservation Act and its implementation 33% 31% 5 Ø=2.5 (n=301) EU Emission Trading System ( EU ETS) 34% 28% 4 4 Ø=2.3 (n=371) Policy framework conditions for fossil electricity generation 32% 31% 10% 3 3 Ø=2.3 (n=365) 0% 40% 60% 80% 100% (no support at all) 1 2 3 4 5 6 (fully supports) Nuclear phase-out supports the expansion of renewable energies the most, whereas the EU Emission Trading System seems to have little effect. The policy framework conditions for fossil electricity generation are viewed as critical as well. Public R&D funding, training skilled workers and the EEG are considered equally important instruments for the expansion of renewable energies. 9

Policy Mix: Interplay of instruments Assessment of the interaction of policy instruments to promote renewable power generation in Germany Important flanking policy regulations are missing that push the expansion of renewables. 5% 9% 6% 30% 39% Ø=4.7 (n=387) The existing policy instruments reinforce each other s positive effect on supporting renewables expansion. 28% 32% 23% 9% 5% 2 Ø=2.4 (n=383) 0% 40% 60% 80% 100% (do not agree at all) 1 2 3 4 5 6 (fully agree) More than two thirds of companies criticize the lack of important flanking policy instruments that push the expansion of renewable energies. Apparently existing policy instruments could be substantially better coordinated to generate greater synergy effects for the expansion of renewable energies. 10

Policy Mix: EEG and innovation Influence of the EEG on innovation activities in the three years (2011-13) Level of feed-in tariffs 12% 19% 30% Ø=4.0 (n=315) Annual degression of feed-in tariffs 16% Ø=3.9 (n=308) Guaranteed period of feed-in remuneration of 20 years 10% 9% 12% 25% 27% Ø=3.6 (n=304) 0% 40% 60% 80% 100% (absolutely no influence) 1 2 3 4 5 6 (very strong influence) In particular, the guaranteed payment period and the level of feed-in tariffs in the EEG had a relatively large influence on companies innovation activities (2011-2013). But the annual degression of feed-in tariffs probably also had a positive impact on corporate innovation activities. 11

Policy Mix: EEG 2.0 and markets Assessment of the negative effects of the German Renewable Energy Sources Act 2014 (EEG 2.0) on the German market Declining level of feed-in tariffs 7% 8% 16% 36% Ø=4.3 (n=383) Disadvantage for those supplying their own power 9% 36% Ø=4.2 (n=374) Introduction of tenders to determine support level 10% Ø=3.8 (n=336) Introduction of technology-specific expansion corridors 12% 16% Ø=3.6 (n=329) Stepwise introduction of mandatory direct marketing 23% 12% Ø=3.4 (n=354) 0% 40% 60% 80% 100% (no negative effect at all) 1 2 3 4 5 6 (a very negative effect) It is expected that the decline of feed-in remuneration and the disadvantage for those supplying their own power stipulated in the EEG 2.0 will have a particularly negative influence on the German RE market. Introducing tenders is viewed skeptically as well. The introduction of direct marketing is considered to have the least negative impact on the German RE market. The introduction of technology-specific expansion corridors is viewed as particularly problematic by manufacturers of products for bioenergy, PV and onshore wind. 12

Policy Mix: R&D and innovation funding The public R&D/ innovation funding for renewable energies in Germany is mainly aimed at larger technological breakthroughs. 8% 24% Ø=3.6 (n=350) leads to increased cooperation with researchers from other companies and/or research organizations. 10% 19% Ø=3.6 (n=348) is available at a sufficient level. 25% 12% Ø=3.1 (n=296) should be increased at the expense of EEG support. 31% 3 Ø=3.1 (n=356) is relatively easy to obtain. 30% 9% 3 Ø=3.0 (n=322) 0% 40% 60% 80% 100% (do not agree at all) 1 2 3 4 5 6 (fully agree) Percentage of companies that received public funding for R&D and innovation projects in the RE branch between 2011 and 2013 2% 4% 77% No funding Funding from DE Funding from the EU Funding from DE and EU (n=379) Details About a quarter of the companies received public funding for their R&D projects in the RE branch from 2011-13. In total, R&D funding from Germany was higher than from the EU. Redirecting EEG funds towards more R&D funding is viewed with skepticism. 13

Policy Mix: Political processes Assessments of responsibilities, exchange of information, solutions to problems and transparency in 2014 Responsibilities are clearly regulated in the relevant Federal ministries. There is a continuous exchange of information between policymakers and manufacturers Policymakers are well informed about developments in the branch The last amendments of the EEG (2012 and today) were made in a transparent procedure The search for solutions to problems takes place in a constructive exchange between policymakers and RE representatives National and federal governments are pulling in the same direction. Policymakers always strive to remove obstacles. 19% 25% 29% 9% 4% Ø=2.8 (n=308) 19% 36% 7% Ø=2.6 (n=371) 26% 31% 12% 9% 2 Ø=2.5 (n=383) 29% 28% 26% 10% 5% 2 Ø=2.4 (n=363) 1 24% 33% 30% 2 Ø=2.4 (n=370) 39% 35% 7% 4% Ø=2.1 (n=375) 37% 34% 19% 5% 4 Ø=2.1 (n=386) Emerging problems are spotted early on by policymakers. 44% 38% 12% 4 2 Ø=1.8 (n=387) 0% (do not agree at all) 40% 60% 80% 100% 1 2 3 4 5 6 (fully agree) The vast majority of companies is rather dissatisfied with policymaking processes. The strongest criticisms are that problems are not spotted early on, obstacles are not always removed and problem solving rarely involves a constructive exchange between policymakers and RE representatives. EEG amendments could have been more transparent and responsibilities could be regulated more clearly. National and federal governments do not seem to be pulling in the same direction. 14

Policy Mix: Policy framework conditions Concerning the increase of electricity generation from renewable energies in Germany, there is high social acceptance 4% 12% 25% 24% Ø=3.9 (n=390) a broad consensus across all political parties 24% 7% Ø=3.3 (n=387) strong support on the local level 10% 27% 23% 4% Ø=3.3 (n=357) strong support from the federal states 9% 37% 8% 2 Ø=3.0 (n=369) a stable political will 34% 6% 2 Ø=2.6 (n=388) a clear political vision 23% 34% 10% 2 Ø=2.6 (n=387) unambiguous political signals 23% 31% 24% 6% 2 Ø=2.6 (n=388) strong support from the national government 25% 29% 23% 6 1 Ø=2.5 (n=375) 0% 40% 60% 80% 100% (do not agree at all) 1 2 3 4 5 6 (fully agree) The social acceptance of power generation from renewables is considered to be very high. Companies also acknowledge a broad consensus across all political parties for the expansion of electricity generation from renewable energies. However, companies are missing a stable political will and a clear political vision regarding the increase of electricity generation from renewable energies, which is also apparent in their reservations concerning the strength of government support. 15

Policy Mix: Change in political will (1) 1 = not strong at all to 6 = very strong Strength of the respective German government s political will at five points in time regarding the promotion of renewable electricity generation across all technologies (n=368) 6 5 4 3 2 1 2011/2012 2013 until 2013 Today 2015 parliamentary (Coalition agreement of (latest amendment of the (nuclear phase-out the Grand Coalition) EEG (EEG 2.0)) after Fukushima) elections (electricity price debate) (Expectation) The perceived political will to expand renewable power generation was at its peak during the nuclear phase-out after Fukushima and has decreased ever since. In 2014/2015, some stabilization could be observed, albeit at a low level. 16

Policy Mix: Change in political will (2) 1 = not strong at all to 6 = very strong and the political will of the German government as perceived by different RE branches 6 5 4 3 2 1 (n=368) 2011/2012 (nuclear phase-out after Fukushima) 2013 until parliamentary elections (electricity price debate) 2013 (Coalition agreement of the Grand Coalition) Today (latest amendment of the Renewable Energy Sources Act (EEG 2.0)) Total Onshore wind Offshore wind Solar PV Bioenergy Hydropower Other renewables 2015 (Expectation) In 2011/12 the political will to expand RE was assessed as equally strong across all RE branches this view has diversified since then. The political will is perceived to be strongest by offshore wind. PV and bioenergy are at the other end of the spectrum. 17

Innovation: Activities in 2011-2013 Percentage of companies with innovation activities in the RE branch in the three years (2011-13) (n=371) 82% More than 80% of companies engaged in innovation activities in these three years. Strong focus on internal R&D activities. Purchasing external knowledge and commissioning external R&D activities only relevant for one quarter of companies. Innovation activities in RE branch No innovation activities in RE branch Type of innovation activities performed in the three years (2011-13) (n=371 multiple answers possible) Internal R&D Purchase of machines, assets, facilities and software for innovations Other innovation activities 154 201 274 External R&D Purchase of external knowledge for innovations 94 121 0 100 200 300 Number of answers 18

Innovation: Product vs. process innovations Introduction of new or significantly improved products and processes in the RE branch in the three years (2011-13) Product innovation Yes No Process innovation Total 75% 25% (n = 349) Onshore Wind 81% 19% (n = 62) Offshore Wind 63% 38% (n = 24) Total 66% 34% (n = 347) Onshore Wind 69% 31% (n = 61) Offshore Wind 67% 33% (n = 24) PV 77% 23% (n = 132) PV 67% 33% (n = 132) Bioenergy 78% (n = 85) Bioenergy 64% 36% (n = 85) Hydro 68% 32% (n = 22) Hydro 64% 36% (n = 22) Other 63% 38% (n = 24) Other 61% 39% (n = 23) 0% 40% 60% 80% 100% 0% 40% 60% 80% 100% Three quarters of companies introduced product innovations in this period; two-thirds introduced process innovations. Onshore wind, bioenergy and PV had an above average share of product innovations. In contrast, the share of process innovations is roughly the same across all RE technologies. 19

Innovation: Protection of intellectual property Measures used to protect intellectual property in the RE branch in the three years (2011-13) (n = 386 multiple answers possible) Confidentiality 275 (71.2%) Lead-time advantages over competitors 233 (60.4%) Complex design 187 (48.4%) Patent applications 169 (43.8%) Other protective measures 89 (23.1%) Trademarks/brand names 1 (0.3%) Copyright 0 (0%) None 65 (16.8%) 0 100 200 300 Number of answers Confidentiality and lead-time advantages over competitors are used most often to protect intellectual property. Protection by patents is used by 40% of companies, while trademarks and copyrights are of no importance. 20

Innovation: Objectives Importance of objectives for activities to develop product or process innovations in the RE branch in the three years (2011-13) Improve quality of goods 2 3 8% 30% 37% Ø=4.8 (n=320) Enter new markets 5% 6% 7% 28% 41% Ø=4.8 (n=319) Comply with norms and standards 7% 4% 12% 26% 38% Ø=4.6 (n=318) Increase market share 5% 7% 25% 31% Ø=4.5 (n=317) Reduce costs per unit output 7% 7% 25% 29% Ø=4.3 (n=311) Improve health and safety 12% 19% 19% Ø=3.9 (n=312) Reduce environmental pollution 10% 19% Ø=3.7 (n=311) Increase capacity for producing goods 16% Ø=3.7 (n=309) Consideration of political targets, laws and regulations 26% Ø=3.2 (n=314) 0% 40% 60% 80% 100% (not at all important) 1 2 3 4 5 6 (very important) The most important innovation objectives from 2011 to 2013 were to improve the quality of goods and enter new markets. In addition, complying with norms & standards, increasing the market share and reducing costs played an important role. 21

Innovation: Influence of political factors Influence of demand and political factors on innovation activities in the RE branch (2011-13) Demand for innovations from customers 4% 3 23% 30% 26% Ø=4.5 (n=322) Existing support under the German Renewable Energy Sources Act (EEG) Ø=3.3 (n=317) Political expansion targets for renewable energies for 2025 12% Ø=3.2 (n=317) Existing and expected foreign support for renewable energies 28% 16% Ø=3.2 (n=308) Credible political commitment to the Energiewende 24% Ø=3.2 (n=316) Expected future support under the amended Renewable Energy Sources Act (EEG 2.0) 26% 19% 16% Ø=3.1 (n=315) R&D or innovation funding for renewables from DE and EU 23% 27% 16% 8% 5% Ø=2.8 (n=312) Other supportive laws and regulations in Germany 33% 19% 8% 6% Ø=2.6 (n=310) EU Emission Trading System (CO 2 price) 45% 27% 7% 3 4% Ø=2.1 (n=302) Policy drives innovation by generating demand. EEG and foreign equivalents, targets, and the credibility of the Energiewende considered equally important. 0% 40% 60% 80% 100% (absolutely no influence) 1 2 3 4 5 6 (very strong influence) Significance of policy framework conditions (incl. EEG) for the German sales market for renewable energies (2011-13) 0% 9% 6% 12% 42% (absolutely no influence) 40% 60% 80% 100% 1 2 3 4 5 6 (very strong influence) Ø=4.5 (n=384) 22

No innovation: Reasons Reasons for performing no innovation activities in the RE branch in the three years (2011-13) No demand for innovations 47% 53% (n=55) Economic risk too high 43% 57% (n=56) Unfavorable policy framework conditions 43% 57% (n=56) Innovation cost too high 41% 59% (n=56) Lack of finance from sources outside your company 34% 66% (n=56) Lack of qualified personnel 79% (n=56) Market dominance by established companies 79% (n=56) Lack of information 82% (n=56) Standards and norms 86% (n=56) Lack of access to property rights 7% 93% (n=55) 0% 40% 60% 80% 100% Yes, was a reason No, was not a reason The main reasons for companies not to engage in innovation activities in 2011-13 were a lack of demand for innovations, unfavorable policy framework conditions, too high economic risks and innovation costs. 23

No innovation: Political obstacles Influence of demand and political factors on the decision not to pursue any innovation activities in the RE branch (2011-13) No credible commitment to the Energiewende 8% 8% 42% Ø=4.4 (n=24) Unfavorable existing support under the EEG 8% 38% Ø=4.2 (n=24) Unfavorable expected future support under the amended Renewable Energy Sources Act (EEG 2.0) Lack of support from other laws and regulations in Germany 4% 4% 33% Ø=4.1 (n=24) Ø=3.8 (n=23) Insufficient expansion targets for renewable energies for 2025 4% 29% 8% 29% Ø=3.8 (n=24) Lack of incentives from EU Emission Trading Scheme (CO 2 price) Insufficient R&D or innovation funding for renewables (from DE and EU) 32% 9% 32% 9% 9% 32% Ø=3.7 (n=22) Ø=3.3 (n=22) Lack of demand for innovations from customers 32% 9% Ø=3.1 (n=22) Unfavorable existing and expected foreign support for for renewable energies 39% 4% 26% 9% 9% Ø=2.7 (n=23) 0% 40% 60% 80% 100% (absolutely no influence) 1 2 3 4 5 6 (very strong influence) Non-innovators most missed a credible political commitment to the Energiewende and criticized the insufficient support under the German Renewable Energy Sources Act (EEG). In contrast, lack of demand for innovations from customers and unfavorable foreign support are seen as the lowest obstacles to innovation. 24

Innovation: Expansion of production facilities Investments in the expansion of production facilities for the RE branch (2011-13) (differentiated by RE branch) Total 49% 51% (n = 385) Onshore Wind 63% 37% (n = 68) Offshore Wind 59% 41% (n = 27) Bioenergy PV 44% 56% (n = 142) 50% 50% Hydro 41% 59% Other 31% 69% (n = 100) (n = 22) (n = 26) About half the companies invested in the expansion of their production facilities during the three years (2011-13). This percentage was slightly higher (60%) for onshore and offshore wind, but considerably lower for other technologies (approx. 30%). 0% 40% 60% 80% 100% Yes No 25

Innovation: Innovation potential until 2020 Assessment of the innovation potential of products in the RE branch until 2020 Total 4% 8% 23% 27% 24% Ø=4.0 (n=384) Other renewables 4% 12% 48% 16% Ø=4.3 (n=25) Offshore Wind 4% 8% 19% 23% 27% 19% PV 4% 7% 24% 24% Ø=4.2 (n=26) Ø=4.2 (n=143) Solid biomass/solid refuse 7% 43% Ø=4.1 (n=14) Onshore Wind 1 7% 25% 31% 31% 4% Ø=4.0 (n=68) Hydro 5% 27% 23% Ø=3.9 (n=22) Bio /Landfill /Sewage gas 5% 10% 33% 23% 7% Ø=3.7 (n=86) 0% 40% 60% 80% 100% (absolutely no potential) 1 2 3 4 5 6 (very high potential) Companies think products in their RE branch have a relatively high innovation potential until 2020. The biggest potential is expected for offshore wind, PV and other renewable electricity generation technologies; the smallest for biogas and hydro. 26

Market: Price development RE products Change in sales prices in 2013 Total 45% 38% 16% (n =380) Onshore Wind 35% 52% (n = 66) Offshore Wind 44% 40% 16% (n = 25) PV 69% 23% 9% (n = 140) Bioenergy 26% 51% 23% (n = 100) Hydro 41% 41% (n = 22) Other renewables 44% 37% 19% (n = 27) 0% 40% 60% 80% 100% Decrease of sales prices Sales prices remained unchanged Increase of sales prices Sales prices for RE products have fallen for the majority of companies (45%); the highest share reporting such a decrease are companies active in PV (69%). In contrast, only 16% of the companies indicated an increase of sales prices. On average, sales prices for RE products had decreased about 6% in 2013. 27

Market: Price development inputs Change in energy prices in 2013 Change in material prices in 2013 Total 8 32% 60% (n = 344) Total 40% 44% (n = 349) Onshore Wind 9 32% 60% (n = 57) Onshore Wind 7 44% 49% (n = 59) Offshore Wind 8 77% (n = 26) Offshore Wind 30% 30% 39% (n = 23) PV 12 37% 52% (n = 120) PV 23% 46% 31% (n = 125 Bioenergy 4 32% 63% (n = 93) Bioenergy 10 32% 59% (n = 94) Hydro 36% 64% (n = 22) Hydro 9 41% 50% (n = 22) Other 12 27% 62% (n = 26) Other 10 42% 46% (n = 26) 0% 20 40 60 80 100 0% 20 40 60 80 100 Prices have fallen Prices remained the same Prices have risen Particularly the input prices for energy increased for the majority of companies (60%) in 2013 on average by about 3.1%. The input prices for materials also increased for almost half the companies (44%) in 2013 on average by about 1.7%. 28

Market: Competitive environment Characteristics of the competitive environment of companies The demand for our products depends on political framework conditions. 8% 6% 9% 12% 27% 38% Ø=4.6 (n=387) There is a high level of acceptance of our products in society. 2 8% 19% 34% 23% Ø=4.4 (n=366) There is strong competition from foreign suppliers. 19% 23% Ø=3.7 (n=389) The products can easily be substituted by alternative products. 12% 27% 12% 9% Ø=3.3 (n=389) 0% 40% 60% 80% 100% (do not agree at all) 1 2 3 4 5 6 (fully agree) The most decisive characteristic of the competitive environment in RE branches is the dependence on political framework conditions, followed by a high level of social acceptance. About half the companies view the competition by foreign suppliers as strong. Competition intensity is probably moderated to some extent as RE products are not easily substituted by competing products. 29

Outlook: Innovation impact of the Policy Mix Further analyses indicate that the following aspects of the policy mix play a statistically significant role for the level of innovation expenditure by manufacturers of renewable energy power generation technologies: Changes in domestic and foreign demand Public R&D funding of previous years (from DE and EU) Alignment of political instruments with expansion targets Credible political commitment to the Energiewende Source: Rogge, K.S. and Schleich, J. (2015): Do policy mix characteristics matter for (eco-)innovation? A survey-based exploration for manufacturers of renewable power generation technologies in Germany. Presentation at the 5th EU-SPRI Forum, June 2015, Helsinki. 30

Contact and further information We would like to thank all companies for participating in the GRETCHEN innovation survey! Please send any comments, questions and other feedback about the results presented here to: info@projekt-gretchen.de Further information about the GRETCHEN project sponsored by the BMBF can be found under: www.project-gretchen.de The GRETCHEN project was sponsored by the German Federal Ministry of Education and Research (BMBF) within the funding priority Economics of Climate Change under the funding label Econ-C-026. 31