Report

The commercialisation of CSIRO energy efficiency policy adoption diffusion modelling

25 Nov 2018
Description

This paper is a review of the potential commercialisation and adoption pathways for a suite of energy efficiency policy-uptake modelling capabilities from the Commonwealth Scientific and Industrial Research Organisation’s (CSIRO). Common Capital undertook this review for the Cooperative Research Centre (CRC) for Low Carbon Living and CSIRO.
The authors reviewed the maturity of the capabilities as products and considered them against the potential markets they address. The authors compared them against competitor products in these markets. The authors then generated potential products and business models for the commercial deployment of these capabilities. The authors tested products and business models in interviews with 11 potential users from a cross-section of potential market segments. The authors then analysed and refined the business models testing them against a high-level financial analysis and CSIRO’s commercial and impact objectives, and developed a high-level roadmap for commercialisation and adoption.
This review finds that the CSIRO has high-quality research capability and significant domain expertise in behavioural economics (BE) driven agent-based modelling (ABM). This includes an adaptable modelling framework, application development process along with potentially valuable underpinning data. CSIRO has also developed four domain-specific applications that are at varying levels of maturity.
These capabilities potentially have some distinct advantages over alternative products on the market, subject to the demonstration to customers of the validity of forecasts. More work is also needed to reach a scalable commercial product. The deployment of these capabilities for new use-cases currently requires non-insignificant customisation which is reliant on the expertise that are narrowly held within CSIRO. If they were to be commercialised, products would also require the further user testing, as well as a more formal user interface, hosting platform, software security, IP management, product and end-user documentation, licensing framework and customer support.
The authors considered a matrix of potential business models through which the capabilities could be developed into products and deployed. The preliminary consultations with users reduced these to four possible (and potentially complementary) business models that warrant deeper investigation. These are bespoke single-purpose applications, a generic multi-purpose framework, consulting services, and data licensing. The authors identified three priority customers segments, with users in each that have a strong interest in collaborating with CSIRO on further product testing and development. These are:

  • Energy and water Corporates and utilities with a range of potential use cases for bespoke applications and data, for use on energy product development and marketing (incl. non limited to energy and water efficiency);
  • Niche energy consultancies interested in a generic framework and data that they can adapt and incorporate into their existing modelling tools to support their modelling of energy market demand for utilities and government; and
  • Energy and environment policy makers interested in a generic framework and data that they can adapt and incorporate into their existing modelling tools.

In the short term, there is an opportunity and need for consulting services from CSIRO to support product development and testing, and user-capability building. The authors' high-level financial analysis estimates a potential profit in the order of $86,000-$125,000 per annum for successfully commercialisation. However, the cost and revenue estimates need to be tested robustly through an extensive user needs assessment, which was out of scope for the review.
The authors set out a three-year road map to clearly identify the next steps, questions, and decisions points to refine these options with potential users and partners. Depending on the outcomes of investigations, the road map provides three alternative pathways:

  1. Free download – Non-commercial, impact-focused release of the capabilities. Complete existing research and consulting obligations to provide proof of concept and engage early adaptors, then make the framework and data available royalty-free.
  2. License the framework and data – continue development of the framework and BE data using existing CRC funding and co-investment consulting. In parallel, engage with niche consultants to ensure the framework development leads to a product that they value sufficiently to pay for a license.
  3. Royalties from bespoke applications – applications ranging from demand forecasting for asset management or operations planning through to real-time customer engagement recommendations. Enterprise software vendors such as ERP and CRM solutions will be channel partners and fund the application build.
  4. The next step is to engage with the organisations that expressed interest to quantify the commercial opportunities, the investment required and the likelihood of success. Based on this, the CSIRO can refine the financial model provided to assess whether to wind the research project down or proceed with licensing the framework and data. If framework licensing proceeds, the outcomes will inform a second Go / No-go decision to proceed with bespoke applications.

 

Language: 
English
Peer Reviewed: 
Yes