Innovation in all its forms in spotlight at first Energy Innovation Forum at IEA Ministerial

The global energy technology landscape has been transformed over the 50 years since the IEA’s founding in 1974 – and the expansion of key clean energy technologies such as solar PV and electric vehicles is now unstoppable. But while a host of new technologies is now readily available, clean energy innovation is more necessary than ever before – and it needs to accelerate.

To address this challenge, the IEA convened some 250 entrepreneurs, business leaders, investors and policy makers from around 45 countries this week at its Energy Innovation Forum, which kicked off the 2024 IEA Ministerial Meeting in Paris this week and marked the Agency’s 50^th Anniversary.

“In the IEA’s Net Zero by 2050 Scenario, 35% of emissions reductions come from low-emissions technologies that are not yet at market scale. By 2030, a suite of major demonstration projects will need to have been financed, built and operated, to become a bankable, first-choice investment around the world,” said IEA Executive Director Fatih Birol, who opened the Forum with Ireland’s Minister Eamonn Ryan and US Special Presidential Envoy for Climate John Kerry. “There is a need for every government around the world to sit in the driving seat of innovation, providing leadership, strategy and also the necessary framework for the private sector and other investors and innovators to be incentivised.”

The importance of the IEA’s work on technology innovation was recognised by key actors such as Bill Gates, philanthropist and founder of Breakthrough Energy, and Jim Skea, Chair of the Intergovernmental Panel on Climate Change, as well as innovators from around the world, in a video produced for the Forum. And the discussion outcomes were delivered directly to ministers of IEA member countries to inform two noteworthy paragraphs in the Ministerial communique published on 14 February.

Across a series of plenary sessions and breakout workshops, delegates emphasised how the past 50 years of technology development have provided invaluable lessons about the crucial role of government in fostering innovation and supporting new technologies through to commercialisation.

Governments can create enabling environments that can establish new markets, encourage healthy competition, decrease investment risks and spur both incremental and radical innovation. Participants recognised that governments play an important role in funding foundational R&D and education in the public interest by providing dedicated support for first-of-a-kind projects and facilitating cooperation between researchers and industry.

Today, energy innovation policy is evolving rapidly, with many good examples around the world of creative policy measures that directly support entrepreneurs in reaching commercialisation faster or support manufacturing and industrialisation, with early-stage debt, for example. However, participants highlighted some priority areas in the innovation ecosystem that policy needs to address, including further work on standards and bank guarantees, and the importance of fostering a social license for new technologies. The latest IEA data on global venture capital (VC) funding for energy start-ups shows that there is no room for complacency among stakeholders that have the necessary enabling tools. Despite remaining well above 2020 level, VC investment in this area fell by 23% in 2023 to just over USD 35 billion.

Among the technology priorities raised by ministers and corporate leaders were large-scale industrial processes for which commercialisation of known low-emissions technologies remains a challenge in key sectors such as iron and steel or cement production. Attendees also highlighted the potential contribution from new mass-produced products and software, including artificial intelligence for energy networks and batteries with lower critical mineral demands. A dedicated breakout session on decarbonising industrial heat highlighted recent progress towards a range of electrification options for different high-temperature heating needs. In this area, there is significant potential for collaborations between countries, industrial sectors and even among competitors at different stages of maturity. But large-scale investment depends heavily on available infrastructure and competitively priced electricity, or access to low-emissions hydrogen.

An issue that received broad support during the discussions was the importance of clean energy innovation for emerging and developing economies – including energy access and clean cooking – with a focus on fostering domestic innovation within these countries. Clean energy technology can be a cornerstone of industrial development, bringing growth and job opportunities. In some cases, emerging and developing economies could ‘leapfrog’ into new value chains, capitalising on rapid infrastructure expansion, common needs for affordable solutions across these markets, world-leading digital skills, and excellent renewable energy resources. However, current ambition levels are often not aligned to seize these opportunities and the high cost of capital in developing economies still stymies innovation spending.

The Forum was convened following a request to the IEA in the G7 Leaders’ Clean Energy Economy Action Plan, published in 2023 under Japan's G7 Presidency, to convene an international forum on the topic of energy innovation. With its Technology Collaboration Programmes, and through its tracking of more than 550 clean energy technologies in the Clean Tech Guide and demonstration projects, the IEA is well placed to convene actors across the energy innovation system and around the world. Participants noted that the influence and convening power of the IEA could be more fully utilised to drive forward the innovation agenda. Through its analysis and tracking, as well as its regular engagement with non-government experts worldwide, the IEA stands ready to continue working towards this aim in the coming years.