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Accelerating the transition to a sustainable energy system: four innovation focus areas

By State of Green, August 27, 2018

The International Renewable Energy Agency (IRENA) has authored a chapter of the recently released Global Innovation Index 2018. This overarching theme for the 2018 report is the role of energy innovation and IRENA's chapter makes four policy recommendations to scale up renewable energy deployment.

The 2018 edition, The Global Innovation Index 2018: Energizing the World With Innovation, highlights the need for expanded innovative work in climate-friendly green technology amid rising energy demands worldwide. Projections indicate that by 2040 the world will require up to 30% more energy than it needs today and conventional approaches to expanding the energy supply are unsustainable in the face of climate change.

Now in its 11th edition, the GIobal Innovation Index consists of detailed quantitative information that aims to help global decision makers better understand how to stimulate innovative activity that drives ecomomic and human development. The index, which is produced jointly by Cornell University, INSEAD and the World Intellectual Property Organisation (WIPO), ranks 126 economies based on 80 indicators, ranging from intellectual property filing rates to mobile-application creation, education spending and scientific and technical publications. With the exception of the US, which is ranked sixth, European economies took out the top ten places in this year’s index, with Switzerland retaining its first place from last year, followed by the Netherlands and Sweden. Denmark was placed eigth. For the first time, China broke into the top 20, placing 17th.

-Related news: Denmark tops Global Cleantech Innovation Index 2017

“Innovation is clearly necessary to address the energy/environment equation, but let us keep in mind that such innovation cannot be only technological. New social, economic and business models are required, including through efforts to promote smart cities, mobility solutions based on shared vehicles – and a global citizenry with better information on the impacts of various energy policies,” says Bruno Lanvin, INSEAD Executive Director for Global Indices. “Ultimately, we must ensure that the solutions to our energy challenges are suited to local needs, do not entail additional disruptions, and reduce inequalities.” Among GII findings on the state of clean-energy innovation: New technological advancements are needed across the entire energy value chain and public policy will play a central role in guiding the transition to cleaner energy.

“For the energy sector, innovation is critical to companies’ strategy. Energy executives are well aware of the shifting ground they face, how well companies innovate using new types of energy and distribution technologies will determine their ability to survive the transformation. This market will be evolving for decades to come. As our research shows, as renewables become more viable, the power industry has the potential of being a bonanza for innovation,” says Barry Jaruzelski, Principal at Strategy&, PwC’s strategy consulting business, which is one of the GII Knowledge Partners.

Priority areas for energy innovation
IRENA’s chapter, Innovation Driving the Energy Transition, outlines four central policy-level innovation recommendations that are critical to scaling-up renewable energy deployment.

The chapter also charts the development of various renewable technologies, categorising their viability and deployment progress. Applications seen as being ‘on track’ include wind and solar PV power technologies together with electric vehicle development, while areas in need of further innovations to improve their economics and adoption rates include biofuels and solar thermal heat applications, the chapter highlights.

Related news: New European innovation hub in Nordhavn, Copenhagen to become epicentre for tomorrow’s energy technologies

IRENA’s recommendations are:

1. Foster a system wide approach to innovation, beyond research and development
Innovations in technology, together with innovative approaches to enabling infrastructure, business models and system operation, must all be pursued with equal assiduousness, IRENA points out. “Leveraging synergies between innovations across all sectors and components of the energy system, and involving all actors, is crucial for the transition,” said Dolf Gielen, Director of IRENA’s Innovation and Technology Centre.

2. Strengthen international cooperation to nurture innovation
Innovation is central to decarbonising the energy sector, and international cooperation is critical to innovation, IRENA points out. To stimulate the breakthroughs necessary to advance the energy transition, existing platforms designed to foster international collaboration should be prioritised at a national level. This allows countries to share ideas, pool resources and capital, and co-develop programmes that support common interests.

3. Advance power system integration
The business case for renewable power generation is now unquestionable, with power generation costs now falling well within the fossil fuel cost range. Yet despite the strong business case, achieving the world’s full resource potential requires a significant scaling-up of the share of renewable power in global electricity systems from a quarter today, to around 85 per cent by 2050. This requires efforts to promote systems integration by increasing the flexibility of power systems in supply and demand.

4. Support a portfolio of technology options to electrify and decarbonise end-use sectors
The electrification and decarbonisation of end-use sectors such as transportation, heating, cooling and industry lags the renewables momentum for power generation, yet end-use sectors represent close to 60 per cent of energy related CO2 emissions. A combination of electrification, technology breakthroughs, and sector-specific global agreements for decarbonisation, are needed according.

Francisco Boshell, Analyst – Renewable Energy Technology, Standards and Markets at IRENA said: “Electrifying energy demand of end-use sectors represents a ‘win-win’ that can reduce emissions whilst supporting the integration of higher shares of renewable power.” IRENA indicates that pursuing electrification can double the share of electricity in final energy use in the coming decades.

View and download the report here.

Sources: IRENA, Global Innovation Index

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