"Tim Gould: "Innovation remains the key to successful clean energy transitions""

The world has not yet turned the corner on emissions, and the accumulation of these emissions in the atmosphere is having increasingly visible and destabilising effects on the global climate.

But amid all the stresses and warning signs, there are some more hopeful trends. Clean energy deployment has picked up rapidly and the latest investment data from the International Energy Agency (IEA) suggest that almost twice as much capital has gone in 2024 to clean energy projects than is going to fossil fuels. Most new power generation plants are now based on clean technologies, led by solar PV and wind. For consumers, clean choices for heating, cooling and mobility are increasingly also the cheapest ones, especially when lifetime costs are taken into account.

These positive trends are testament to the power of innovation in bringing new technologies to market and bringing down their costs, underpinned by research and development efforts, policy support, inflows of venture capital and competition between manufacturers. Innovation has brought us to a point where many key pillars of a clean energy economy are mature, proven and cost-competitive.

However, the need for continued clean energy innovation is far from over. The world does not yet have all the tools that it needs to reach net zero emissions. And there is still plenty of scope to improve the performance, cost and interoperability of many existing clean technologies.

Progress is needed across the board, but two areas merit particular attention. First, is the role of innovation in sectors such as heavy industry and long-distance transport, where low-emissions technologies and processes are not yet readily available. Second, is the need to make innovative technologies more accessible in developing economies and to support the emergence of local, self-sustaining innovation ecosystems in these markets.

On the first point, we estimate that around one-third of the emissions that need to be avoided to 2050 to limit the rise in global average temperatures to 1.5 degrees do not yet have ‘off the shelf’ technologies. That means we need a rapid pace of innovation in areas such as new battery chemistries, carbon dioxide removal technologies and low-emissions fuels for shipping and aviation. Supportive government policies remain vital, especially at a time when access to capital has become more expensive. These policies typically encompass funding for technology development and demonstration, as well as measures to create markets for new technologies via public procurement or regulatory instruments like standards.

Another major challenge is to bring innovative technologies to the developing economies that will need them most, where energy demand is rising fast and where steel, cement and other energy-intensive industrial goods will be needed to build up national infrastructure and support rising standards of living. International funding, collaboration and partnerships are indispensable to allow the brightest minds and the most creative companies in developing economies to work on the clean technologies that are best suited to local needs, and to accelerate knowledge transfer and support technology diffusion to a much wider range of countries and communities.

We don’t know exactly what mix of technologies will bring us to a safer and more sustainable energy system. But a large and complex energy system will need a wide range of solutions, embracing modular products like batteries, new fuels like low-emissions hydrogen, digital services like virtual power plants, new and imaginative building designs, new sectors like lithium extraction, and many more. The task is to give innovators the best possible conditions in which to work, to test new ideas and try out improvements to existing ones, and then open up opportunities and mechanisms for them to reach markets at scale.