Webinar: Funding Ocean Energy Technology Development Using Pre-Commercial Procurement and Stage-Gate Development Processes

Financing
Webinar: Funding Ocean Energy Technology Development Using Pre-Commercial Procurement and Stage-Gate Development Processes
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5 October 2017

3:00pm (Brussels, Berlin, Paris)

2:00pm (London, Dublin, Lisbon)

 

Presentions: 

Wave Energy Scotland - Tim Hurst and David Langston

CorPower Ocean - Patrik Moller

 

Pre-commercial procurement (PCP) is an increasingly popular methodology amongst public funding organisations.  PCP involves issuing contracts for research and development services, rather than supporting innovation through grant schemes.  This allows public bodies to provide up to 100% funding whilst placing a greater level of duty on contractors than is possible through grant funding.  As their effectiveness becomes more apparent, the use of PCP schemes is becoming more widespread in the ocean energy sector.

 

Stage-gate development processes are used to ensure that innovative technologies develop fully and at a suitable rate.  The use of such processes, often in conjunction with PCP methodologies, can be of great value to organisations looking to fund innovative technology development in the ocean energy sector.  Stage-gate development processes allow the continual assessment of competing technologies against established metrics and the selection of the best performing technologies for continued support and investment.

 

This webinar investigated the use and value of PCP and stage-gate development processes in funding bodies operating in the ocean energy sector.

 

View the presentation slides.

Webinar findings 
Benefits of procurement funding

The public pre-commercial procurement (PCP) model is a powerful tool for governments and funding authorities to obtain what they want quickly and efficiently.

-          A procurement model allows for up-to 100% public funding, which is important during the R&D phase. Finding match funding can be difficult and ties developers in with their funders expectations that might not coincide with the development and required lead- and test-times of the project.  

-          PCP is a good funding model for the technologies that don’t exist yet.

-          A traditional grant-funding model commits the project developers to do certain things and produce certain deliverables to justify drawing on the grant. In a procurement model, the actual results of the tests are what need to be delivered not work programme actions. This allows the project developers more flexibility, freedom and focus to ensure results are achieved.

-          PCP provides good access to funding to small companies.

-          The competitive nature of the procurement process, pitting different solutions against each other, is a positive driver for the participating companies.

-          It is, however, necessary for the procurement authority to specify clearly what is expected; what should the device or component achieve at each phase of the process?

-          Pre-Commercial Procurement is exempted from EU Procurement Directive.

 

Benefits of establishing common models and metrics

The benefits of national and EU procurement authorities using the same models and metrics against which to measure success at each phase are two-fold:

-          Greater investor and industrial confidence is created. A device that passes a phase is guaranteed to have comparable performance to any other.

-          A device or component developer can move from country-to-country to carry out tests seeking the most appropriate or available test facilities. As the standards are the same, all results will be comparable.

 

Information sharing and feedback 

Know-how gained through public funding is available for a wider audience – it allows better knowledge transfer, encourages capturing experience from previous technology projects. Even failed projects can provide valuable lessons. Smartly tailored calls can promote cooperation between companies locally an at EU level as well as keep commercial focus.

Where possible, receiving detail feedback from the procurement authority on the evaluation of projects, even those that fall out of the programme helps technology development. Falling out of the programme may not be simply because the technology does not work, but that it is not aligned with the programme’s objectives.