Despite the predictability and power of wave energy, by 2022, there was not a single industry-standard technology for converting wave energy to electricity. A new company, C-Power, had developed a product designed to generate levels of power from wave energy that could compete with solar, wind, and fossil-fuel power sources. In 2016, it began a contract with the US government to develop a reliable wave-based power source for deep-sea fiber-optic networks. Now it had an opportunity to work with oil companies to power deep-sea oil rigs. Reenst Lesemann, C-Power’s CEO, recognized that C-Power had a once-in-a-generation opportunity to reshape the renewable energy landscape – and to make money doing it.
Lesemann needed to decide several things. First, should C-Power explore ocean-economy opportunities or stay focused and move as quickly as possible to high-power, grid-scale solutions? Second, which of C-Power’s two main products would be appropriate for which applications? And if C-Power decided to service the hydrocarbon extraction market, how would it price its products and services? C-Power lacked the kind of large salesforce that would be necessary to engage in what might amount to a long sales process with many different potential customers simultaneously. Finally, how would working with oil companies impact C-Power’s attempts to enter the much larger commercial power grid market at a later date?
The case is taught at Darden in the first-year (required) Marketing course in the MBA program. It is also suitable for courses or modules focused on pricing or renewable energy.
