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Energy Innovation Evolutionary Economics and Policies


This article the important contribution of evolutionary economics has been put into focus particularly concerning policy making in environmental issue. The use of innovative energy technology is influenced by insights into evolutionary economics. Through such insights better policies can be formulated and lead to sustainable development using innovation in the use of energy resources. The necessity of this article has been demonstrated by the pin-pointing of the major ideas behind evolutionary economics and how they relate to innovation and energy. When it comes to formulation of policies for innovative energy resources, the concepts play a significant role in providing guidelines that are essential in the design of the policies. The paper is categorical in the evaluation of Dutch policies that are used to back the technologies used in energy. Within the evolutionary economics framework important advancements such as the development of fuel cells have been discussed in this paper. The three technologies have been undergoing developments and this has been captured in the article to be influenced by government policices.The article is concluded by putting emphasis on the need for government technological policies to pay attention to diversity in technologies rather than on efficiency as fundamental goals. The Dutch government has put in place energy policies that foster innovation but are in agreement with the traditional goals of development or growth.

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Investment in Energy Efficiency: Do the Characteristics of Firms Matter? By Stephen J. DeCanio University of California, Santa Barbara.

The article brings out the significance of characteristics of a firm in energy saving decision making process. Research and literature have brought out important energy saving technologies that have not been adopted by many firms because of various reasons. The articles uses the neoclassical theory to assert that firms that are profit oriented should carry out investments in energy saving technologies based on the net value that is present in such technologies. The importance of the standard theory and computation of the present value of a project is depicted to be dependent of the characteristic features of a firm. The paper has focused on testing how the characteristics of a firm can be significant in the decision making process to join important energy saving projects that can lead to more profits. Data that is gathered in both participating and the non participating firms is analyzed and important conclusions arrived at concerning the characteristics of firms and the decision to join the green light program. Through this article it is illustrated that firms are able to experience improvements especially in the efficiency of lighting. It has been established that indeed the characteristics of a firm influence the decisions to join the efficient lighting programs. These decisions are also directly connected to the commitment of firms to make investments in cost-effective energy saving technologies and programs.

Links to the Abstract scholarly articles

Assignment 2

The problem of energy is inevitable in most business organizations. This is because energy is a very essential resource that is used to drive nearly all operations in firms. Without adequate supply of energy, firms are grounded because many processes have to be powered by energy in various forms. On the basis of this assumption, it is clear that the problem of energy needs to be looked into through such research activities.

With the growing prices of fossil fuel and electricity firms have incurred high costs associated with these forms of energy. So as to maintain production and drive their firms to profitability, managers have to come up with energy saving strategies which also include alternatives that can see cost reduction on energy. This is why research on the viability of some alternative sources of energy is necessary so as to provide answers to some of the questions concerning the costs of energy. Primary data for this research would be obtained from selected firms through appropriate techniques such as observations and interviews. Information on more cost- effective energy forms is available in books and other relevant articles and would be useful in the secondary data. This research would explore into already performed research on how firms are adopting strategies towards more efficient and cost effective forms of energy. Both primary and secondary sources would provide justifications to why firms need to adopt better alternatives to electricity and fossil fuels. Given the opportunity, the research would be undertaken in a period of three months after which the report and the recommendations would be available. The recommendation made by the report would be very useful in solving the current energy problems facing many organizations.


Cutting down on costs of operations is fundamental to increased productivity and anticipated profitability in business organizations. Energy contributes a significant amount in terms of costs that most firms incur in the course of their operations to meet the demands from the consumers in the market. This is a proposal to gather information on different ways of conserving energy in firms and the viability of alternative sources of energy.

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It is obvious that firms experience the problem of energy as they carry out production activities. With this problem already identified efforts have to be put in place to find lasting solutions to the energy problem. By virtue of the fact that energy has continued to be a major factor in the production process and affects firms, it would be important to conduct the research. The recommendations can be used in future for improvements in energy conservation and best practice for production processes.

High costs of energy are a major challenge in most manufacturing firms. With the increasing costs of energy coupled by the global economic crisis, firms have to come up with coping strategies to conserve energy and find better alternative sources of energy. The problem of energy in companies can be solved through conservation measures or finding cheaper and more environmental friendly sources of energy that can reduce the spending on energy by firms.


To accomplish the goal of solving the energy problems in firm’s data has to be gathered from both primary and secondary sources. The primary sources would comprise of first hand information from selected firms concerning the methods they use to conserve energy and how they are affected with the increasing cost of energy. This would be obtained through the use of structured questionnaires form randomly selected participants. Secondary data would also be used in the research. Specifically this would come from books, journals and other scholarly articles that bring out the effectiveness of energy conservation measures. They would also identify cases where alternatives such as biofuels have effectively been utilized in production processes. All the sources would be used to justify on the best approach firms should utilize in trying to solve the energy problem in their business activities.


I believe in my competence to fulfill the objectives of the proposed research. I have experience in energy resources management in my first job at a textile firm. I also posses the necessary academic qualifications in the field of energy resources. These resources would be very useful towards achieving the goals of the research. Five people would be employed to administer the questionnaires to the targeted respondents in the study. The five competent people would ensure that reliable and more valid data is obtained to illustrate the state of affairs in the targeted firms.


  • Research Materials $300
  • Transportation costs – $200
  • Employees – $400
  • Miscellaneous- $250

Permission would be sought form the relevant authorities to conduct the research activity. For better planning I hereby request a quick approval of this proposal so that there is adequate time allocation for all the major activities.

I hereby request the approval of this proposal so that preparation can commence to make sure that the process provides solutions to the energy problem to firms that continue to struggle with the high cost of fuel and other forms of energy.

Thank you in advance.

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Transmittal Document

The issue of energy is of major concern to most organizations. Efficient use and dependence to fossil fuels has been a challenge to organizations as they struggle to reduce the costs of energy. This paper explores into the possibilities of utilizing renewable energy sources to cut down on the costs of energy. Furthermore the need for conservation of energy especially using the assets of organization has also been captured in the research. Acknowledgment goes to all those who gave out information from various sources that have seen the success of the entire process. The recommendations of this report if well implemented would see the benefits trickle down from the various organizations to the consumers. All the efforts and contribution of all who participated in this research is highly appreciated.

Executive summary

Energy has been identified as a major problem in most business organizations especially with the rising global prices of fuel. Majority of firms have to meet their demands of production at a higher energy cost and this affects their productivity and growth. Individual organizations are developing strategies to conserve energy and reduce their expenditure on energy resources so as to survive in the global financial crisis. This paper looks into various strategies adopted by companies to reduce their costs on energy. Primary and secondary sources of data have been gathered for the sake of analysis and recommendation on the best approach towards more affordable energy alternatives that can be used to sustain production and reduce spending on energy resources. To cut down on the costs of energy there is need for technology and innovation to save energy and reduce the consumption of the existing assets. The adoption of renewable sources of energy has also been the focus of this report. This has been used in some cases and companies have reduced their spending on energy tremendously.


The global financial crisis has affected so many firms across the world. The effects have been reflected on job losses and other downsizing measures all which are geared towards reduction in operational costs. Energy as a fundamental resource in many firms has also been the cause of the increased costs of production. Firms are therefore left with no option but to look for ways of minimizing their use of energy through conservation or adoption of cheaper and renewable alternatives. The findings of this research have revealed that indeed firms are getting greener with better sources of energy that can sustain production and are also friendly to the environment. Firms are utilizing their wastes to generate energy that is used in some of the operations. Firms that have put in place conservation measures have cut down the costs of energy to significant amounts. This concerns mostly the assets that are involved in high energy consumption. Others have adopted renewable sources of energy to prevent the reliance on the fossil fuels whose prices are ever fluctuating and affecting prices of commodities.

Energy security

Research has demonstrated that most industries depend on fossil fuels and electricity as a source of energy to drive most of their operations. Fuel is used to power machines, transportation and other necessary operations in firms. The ever increasing demand for fossil fuels and particularly petroleum products has led to increase in prices and this affects the costs of production in most industries according to research. So far know one has information concerning when the petroleum reserves would be depleted. This therefore puts the security of this form of energy into question. The rising fuel prices alongside the mystery surrounding the future supply of fossil fuels has called for research into other alternative forms of energy that are sustainable. These alternative energy forms have the capacity to solve the energy problems that companies go through. This is because they can involve using the same company resources and even wastes generated after manufacturing processes. Energy efficiency has been described by experts to be the most cost effective path towards energy security which would also reduce the environmental impact of fossil fuels. Secure energy would mean that there would be no more reliance on fossil fuels but rather the sustainable renewable energy would keep powering business organizations. (Diesendorf ,2007).


Liquid fuels that are prepared from crops and agricultural waste materials can form a major replacement of petroleum products that are used for transportation. Ethanol is an example of a bio fuel that has become common in the American markets. Companies can reduce their dependence on petroleum products for transport and instead use ethanol. This would be significant in reducing the transportation costs. (Diesendorf,2007),

Bio power

Bio power can be harnessed from the same resources that are used to power vehicles. This power can be utilized in industries to power machines and reduce the costs on energy. Research has already established that bio power contributes about 2% to the electricity in the United States. Most forest products industries are being powered by bio power in the United States. This is achieved by burning biomass alongside coal. This generates electricity that is used to power machines. ( Hasna, 2007)

Conservation and energy efficiency

On the road towards cost reductions arising from energy companies have developed innovations and strategies towards conserving energy and improving on the efficiency of their systems. This is key in solving the problem of energy especially in the manufacturing sector. Facility managers are faced with the challenge of developing products that are more energy efficient and do not place a lot of burden on the consumer in terms of energy consumption. ( Hasna, 2007)

Companies have come up with strategies of recapturing wasted energy into doing some useful work. The objective of such a strategy is to generate more revenue from the same facility. This is not a cost reduction strategy but generates more revenue that is used to replace the higher costs of energy. A good example of commitment to harness all the available energy for profitability has been demonstrated by Riverdale Mills Corporation in Massachusetts. This company harnesses energy in all of its operations so as to improve its competitive advantage. The company has internal combustion generators that are powered by natural gas and produce electricity at half the price if compared to the one that can be acquired from outside. It has also been noted that the generators also perform space heating that is used in building and manufacturing process. With such systems in place the company is in a position to save a lot on energy consumption. American Council for an Energy-Efficient Economy (2007)It is important to mention that the lower the costs of energy are reflected in the lowered prices of products as compared to the competitors. This means that companies with lower energy costs have a more competitive advantage than those who incur a lot on energy.

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According to Rusell,(2005),good policies and decisions on energy can also have an impact on non-energy expenditure. Companies like Ford Motors have witnessed non-energy benefits arising form efficient use of their energy systems especially when it comes to reducing the levels of raw materials wastage, reduced water consumption and repair and maintenance associated expenses. Ford has made use of natural vegetation in its water management system. Apart from saving the company in terms of operation costs, the system conserves the Rouge River. This can be viewed as a movement towards a greener environment as the company save on the costs of energy.(Rusell,2005)

The combustion of fossil fuels has been known to be a major contributor of carbon in the atmosphere and air pollution. Technology can be used to eliminate the effects of carbon in the atmosphere through efficiency in the energy systems adopted by industries. Through energy efficient systems the quality air targets can be achieved by manufactures as compared to using fossil fuel combustion systems. In conclusion, it is important to make it clear that research has established that it is indeed the efficient systems and practices that result in cheap, quick and clean strategies of acquiring energy supplies for business organizations.( Hasna, 2007)

Primary sources

The process of data collection in this research was undertaken using appropriate techniques that ensured that valid and reliable information was obtained. The study was conducted in selected companies that have been experiencing increased costs of energy in their production processes.Randomn sampling was s used to arrive at the participants in the study. The aim of the study was to compare in terms of costs between companies that were utilizing renewable energy sources and those that are using fossil fuels in their operations. The results obtained in the survey were analyzed using the appropriate tools.


The survey that was curried out in the selected firms revealed that most of the firms were affected by the increase in the global fuel prices. The burden of these fuel prices was being transferred to the consumers as can be indicated by the increase in prices of commodities that are produced in the high energy environments. In the survey, it was discovered that assets of most organizations were contributing a lot to energy consumption. Very little or no opportunities existed for the reducing of the energy consumption in the said assets. It was argued by some respondents that the cost of replacing such high energy consumption assets was high. American Council for an Energy-Efficient Economy (2007).From the research is emerged that efficiency in energy systems was instrumental in reducing the costs of supply of energy to the companies. Companies that have efficient energy systems and technologies were experiencing reduced costs. From the research in the manufacturing companies, it was clear that energy has to be recycled to make maximum use off it in the production processes. (Martin et al ,2001) Energy was found to be a significant factor in determining the prices of various commodities. Companies that use high costs of energy to produce certain products were selling them at a higher cost.

It was noted that most organizations have not yet introduced renewable sources of energy. That most of them were still dependent on the fossil fuels. Most of the companies have been affected by the global fuel prices. As the prices of world prices of oil increase, they also have to increase the prices of their products to cater for the costs of oil. Although majority of the companies depend on fossil fuels for their energy, it was evident that this form of energy does not adequately cater for all the energy needs.

In the study there was a revelation that most of the companies do not make good use of their waste materials to generate renewable sources. This has been attributed to lack of innovation in their managers who have failed to identify the opportunities in the energy that is wasted in some of the manufacturing process. From the survey, it was also discovered that companies that were making good use of energy in terms of harnessing energy.


There is need for companies to avoid the habit of making the consumer carry all the burden of increased costs of energy. This can be achieved through efficient and sustainable energy systems and technologies that make maximum use of the available energy resources. Renewable energy which includes solar energy and biofuels has begun making a contribution in the economy. They should therefore be fully utilized by various organizations to avoid over-reliance on fossil fuels which are at a threat of extinction with the increasing population and demand.

Efficient technologies and energy systems in organizations require good decision making on the part of the policy and decision makers. Without such decisions all efforts towards conservation of energy within organizations can be fruitless.Cost effective energy strategies are capable of bringing more profits to organizations than the reliance on the conventional energy systems that tend to be costly to most organizations.

The choice of facilities to be used in the production process should be based on the potential of such facilities to save high amounts of energy. This is because, the high energy saving potential is directly related to cost reduction in the overall production process.

Best practice on existing organizational assets call for low cost opportunities to reduce their energy consumption. The managements of the organizations should use innovation and creativity to come up with opportunities in which the existing company assets can reduce their consumption. Even if it calls for change in habits or practices, it is highly recommended that they be implemented to prevent the higher costs of energy from affecting the overall performance of the organization.

This report recommends that organizations should work towards making maximum use of their energy resources. Wastage of energy should never be allowed to prevail due to the high costs in the supply of energy.


American Council for an Energy-Efficient Economy (2007).

Diesendorf Mark (2007), Greenhouse solutions with sustainable energy.UNSW Press.

Finman and J. Laitner. “Industry, Energy Efficiency, and Productivity Improvements.” U.S. Environmental Agency White Paper. 2002.

Hasna, A. M. (2007), “Dimensions of sustainability”, Journal of Engineering for Sustainable Development: Energy, Environment, and Health 2 (1): 47–57.

Martin, E. Worrell, M. Ruth, L. Price, R.N. Elliott, A.M. Shipley, J. Thorne. (2001) “Emerging Energy-Efficient Industrial Technologies: New York State Edition.”

Russell. Energy Management Pathfinding. Alliance to Save Energy, 2005. Web.

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