Product and process innovation in the energy industry. The development of integrated tar gasification combined cycle plants (ITGCC)

The growth in the proportion of medium and light distillates in total petroleum product demand is forcing the oil refining industry to a process of supply adaptation by means of technological reconversion. In some countries this process is already advanced, while in others it is still at the starting point. As an alternative to technological reconversion, this adaptation may be achieved through the gasification of heavy refinery residues with electricity generation (ITGCC plants). The development of ITGCC plants represents product innovation and process innovation at one and the same time, for both the oil refining industry and the electricity sector. This article analyses the nature and importance of the innovation process itself, with emphasis on these aspects: its influence on the economic performance of oil companies and on directives concerning the technological transformation of refining systems; the competitiveness of the fuel cycle in terms of electricity generation cost and environmental impact; the prospects for future development in Europe and the construction programme in Italy. © 1995.