Tracking Clean Energy Innovation: Focus on China

Achieving global energy and climate policy goals will require more, better and cheaper low-carbon energy technologies. Most energy technologies are not on track to provide the clean energy transitions targeted by governments, according to IEA annual monitoring. Many technologies required to lower emissions to so-called “net zero” levels are not ready for markets, notably in sectors hard to decarbonise such as heavy industry and long-distance transportation, for which large-scale low-carbon solutions are not widely available.

Governments are central to the success of clean energy innovation, and global policy support needs strengthening. In the People’s Republic of China (hereafter, “China”), support for innovation has significantly increased in the last two decades, as the country became the world’s manufacturing powerhouse for several key energy technology areas, such as solar photovoltaics (PV), wind turbines and batteries for electric vehicles (EVs). Looking forward, China’s focus on technology innovation and development is expected to strengthen, notably to deliver on long-term carbon neutrality objectives and position the country in global value chains for clean energy technologies. This has important implications for global policy discussions, as China’s ability to innovate effectively will have implications for global energy transitions.

This report serves as an extension to the chapter on “Innovation for carbon neutrality” in the IEA Energy Sector Roadmap to Carbon Neutrality in China and provides complementary analysis and information. It seeks to map the landscape of clean energy innovation in China, in a similar way to the technology innovation sections of energy country reviews for IEA member countries. It aims to identify key developments in recent years, notably since the IEA last published on the topic in 2015, and to show trends for selected metrics that may be used to track progress of innovation. This report is part of broader IEA work to support China’s vision of a carbon-neutral future, and aspires to summarise insights from China’s energy innovation story in recent years and key announcements to date for the coming period to illustrate the foundation upon which the 14th Five-Year Plan (FYP) (2021‑2025) might build.

This report takes a systemic approach to innovation, based on a four-pillar framework used to describe successful innovation systems: 1) resource push; 2) knowledge management; 3) market pull; and 4) socio‑political support. This approach acknowledges that the innovation journey is complex and uncertain, involves a wide range of actors, and can be influenced by external factors such as past policy choices, history and culture, and macroeconomics. The report focuses on selected core components and features of China’s energy innovation system, and draws on a small number of key innovation metrics. The authors note that further work would be required to provide a more complete picture and collect data for additional indicators to track progress.

Specifically, this report includes:

• Snapshots of recent trends in energy patenting, illustrating improvements in outputs of China’s innovation system, and in solar PV, a technology area in which China’s contributions to cost reductions have changed the way the world thinks about energy innovation.
• A mapping of the institutional framework for energy innovation, including key actors, priorities, policies and programmes, with a focus on FYP decision-making and energy-specific plans.
• The latest IEA estimates relating to inputs for innovation (e.g. spending in research and development [R&D], venture capital investments in energy start-ups).
• An overview of the country’s approach to knowledge management and networks, including international collaboration.
• Insights on the role of market-oriented policies in pulling innovation