10:00 AM, 31 March 2017

A tale of a lost research institute

With some disappointment but also an accompanying sense of clarity in purpose, we share the sad news that a our joint Pukeroa Oruawhata Trust / HERA proposal submitted to the NZ government for the establishment of a Regional Research Institute (RRI) in Rotorua was unsuccessful.

Long-listed following our previous proposal last year, it was found our commercial case didn’t stack up in the eyes of our reviewers in the following funding assessment stages – a strong requirement for research organisations these days.  Whilst Crown support is available for the set up phase of a RRI, support tapers off after 3-4 years to a similar level of support available for business R&D of 40%, and establishment of a brand-new research facility becomes a challenge - particularly with demands to achieve a significant level of commercialisation within a tight timeframe.

For our proposed project, achieving this would have required strong investment from partner companies such as corporate energy end-users and manufacturing parties for research services such as lab scale analytical, pilot scale testing facilities and expert consulting on regional energy projects. Unfortunately, for most of our manufacturing member companies who are small to medium enterprises they can’t afford to invest much, and end-users are forever stuck in a catch twenty-two of investing either in product demonstration versus risk-based early investment in proof of concept. 

"A commercial model can only be feasible when it accounts for all industrial realities."

On a positive note, the good industry response received for our proposal helped us address the commercial research target well - a challenge we were always looking to mitigate through the demonstrated performance of an outstanding research team.

No doubt, had our institute proposal proceeded to establishment phase, it would have served the region and nation’s research needs well in energy technologies, particularly renewable energy technologies which contribute to the ‘cleaner, greener NZ’ vision.

Our institute partner Pukeroa Oruawhata Trust also share our disappointment in this outcome, however together we remain focused on delivering value to the region through our goal to create new local business opportunities for geothermal resources holder and, in the process, provide energy security via renewable and clean resources.

Regardless of the outcome, we’d like to congratulate the institutes that are going forward with a long term viable commercial model, and we hope that our heavy engineering energy industry exhibits sustainable growth in other forms in the near future.

If you’d like to know more about the research institute proposal or reflect on commercial models for your own company, please contact Industry Development Manager Dr Boaz Habib on boaz.habib@hera.org.nz or +64 9 262 4753.