Paths for smart specialization in sustainable energy

An analysis of renewable energy technology trends in Europe and new ideas to promote the sector regionally.

A strategy for smart specialization must be based on:

1. Real evidence of sector trends in the region
2. An entrepreneurial cradle in selected domains and the concentration of assets and stakeholders
3. Competitive advantages in a global context

These points were at the heart of our methodology. We first assessed European trends for different technologies, before focusing on the actual value chain for in place in various sectors with the most potential.

Relative position of renewable energy technologies in different European countries

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Germany has the largest renewable energy sector in Europe, with a turnover at about 30+ bion Euro in 2011. It seems however, that the German renewable energy sector has lost its momentum as the share of renewables in total GDP is stable since 2008. The renewable energy sector as a share of GDP is largest in Denmark. Maintaining the country’s positioning is however difficult. The country’s strong specialization in the wind sector is a drawback as competition worldwide intensifies, especially in the Far East. Belgium did relatively well between 2008 and 2011. In 2011 the renewable energy sector generated a turnover of approximately 3 bion euro (to be compared with only .8 bion euro in 2008). PV showed the most impressive growth but wind/biomass also grew significantly.

 Value chains of different renewable energy technologies

• An analysis of company balance sheets in the sector shows that 50% of all renewable energy sector companies in Belgium are active in manufacturing, and 50% are service-oriented.
• Many traditional manufacturing companies are diversifying into renewable energy technology and the sector is increasingly linked to the overall economy.
• Companies with an international focus tend to generate more employment that companies active locally only.
• The strongest value chains are to be found in the wind and biomass sectors.

Lessons learned: paths for smart specialization

Based on general European comparison, it is quite clear that a “copy/paste” strategy, or targeted specialization on one sector, are risky and difficult paths for regions looking to develop their renewable energy sector. Global competition, the speed of technological changes and natural resources are major concerns.

	SOLAR: the value chain has until now been heavily dependent on a favourable policy structure. A more interesting avenue in the sector other than straight manufacturing or installation could be recycling. The Flemish region is well situated within Europe to become a logistic hub and excellent players are embedded in the region already.
	OFFSHORE WIND: is another promising renewable energy technology sector for the region which already is home to leading industrial players in the sector (DEME, CMI, Fabricom, …) and has demonstrated capabilities in marine technology that are competitive at a global scale.
	BIOMASS: the value chain is already relatively strong and the port of Ghent has one of the biggest biofuel clusters in Europe.
	SMART GRIDS: know-how is already consolidated in the Energyville research hubs and several ground-breaking research and demonstration projects are taking place in the region, such as the European funded MetaPV project. There is ample room and need for further development of this type of expertise.

Find out more about our policy work