Incumbent in Transition. Wärtsilä’s "100% Renewable Future" - Strategy and its Relation to Power-to-X

Abstract

There is a wide consensus that the world’s energy system needs decarbonising for limiting the impacts of climate change. This thesis uses the perspectives of Multilevel Perspectives (MLP) and Triple Embeddedness Framework to examine the strategy of an energy industry incumbent company Wärtsilä, where PtX is seen as one of the practical tools of reaching their decarbonising vision of “100% renewable future”. For decades Wärtsilä Energy Business has been manufacturing and constructing mainly engine power plants and associated equipment to act as base load energy producer for public and private grids, and industrial customers. With the landscape pressures of climate change, new policies related to decarbonisation and increased market share of renewable energy sources, new requirements from the markets have come up. There has risen the need to store excess renewable energy when the grid does not require it and also reduce the carbon footprint of energy intensive operations. The customers of Wärtsilä have started to change their own strategies forcing their suppliers, the energy technology industry regime incumbents, to change as well. Wärtsilä has therefore taken steps to diversify their strategy and operations to supply also energy storage solutions, optimisation software and engaging in researching other new technologies, such as PtX. PtX is a complex bundle of technologies where the main goal is to produce synthetic fuels, such as hydrogen gas, synthetic methane or methanol, with (renewable) energy and other feeds such as carbon dioxide and hydrogen. The PtX technologies have been developed in the recent years in order to respond to the decarbonising policies, such as European Union Renewable Energy Directive (RED) and on need to store excess energy produced by renewables and therefore balance the grid. Wärtsilä’s motivation is to discover ways PtX fuels could be used in Wärtsilä’s engines. The CO2 could then be further captured from the combustion process and re-used in the PtX process. There are also sceptical voices outside the industrial regime saying that synthetic fuels PtX reduces the desire to decarbonise transport sector and also it is not certain that as the world population and energy demands grows, there is enough green energy to supply PtX. There is also internal scepticism within the staff in Wärtsilä to the extent in which a 100% renewable future would also be a commercially viable future for the company. The scientific consensus on the need to slow down climate change does exist in any case, and the technical knowlede and resources of regime incumbents should rather be seen as a resource rather than an obstacle in achieving it.