Advancing the Landscape of Clean Energy Innovation
The world is experiencing an energy transition that has potential to power economic growth, while also tackling the worst impacts of climate change.
“Advancing the Landscape of Clean Energy Innovation” explores how the U.S. can be at the forefront of this transition by building on its strong tradition of collaboration along the entire chain of energy innovation – from basic research to deployment.
Breakthrough Energy commissioned this report, authored by IHS Markit and Energy Futures Initiative, because a large part of the transition to a lower carbon future will require building supportive market and policy environments. The report evaluates the range of opportunities for public and private investment in the U.S., and offers a roadmap to bringing more reliable, low-emission energy technologies to market.
What It Will Take
- Focus on developing and commercializing affordable, reliable, zero-emissions technologies that have the biggest impact. Nobody yet knows what the energy mix of tomorrow will look like. Investors, policymakers, and industry need to explore all possible paths. Public and private sector investments should favor a diverse mix of technologies to decarbonize across the sectors contributing most to global greenhouse gas (GHG) emissions: electricity, transportation, industry, agriculture, and buildings.
This report identifies a shortlist of potential “breakthrough technologies” where the U.S. is already far ahead in both science and investments. These solutions have the highest potential impact on GHG emissions and also show the most promise for deployment at scale.
- Increase and better target public investment across all innovation stages, from fundamental research through commercial scale demonstration. Many programs in the federal government research pipeline are not optimized to the technologies that will help solve the climate crisis while driving economic growth. Instead, public investments largely center on basic R&D, while not focusing enough on the timely and successful transition of those innovations into the marketplace. The government needs to better target investment in solutions that have the highest breakthrough potential, and to do so at the most critical times in their path to commercialization.
- Modernize the U.S. federal research and innovation programs to prioritize the innovation potential of possible solutions. The U.S. currently aligns federal innovation programs and dollars around fuels (nuclear, fossil, renewable, etc.) rather than around their application in the modern energy sector. Upgrading that organizing structure will better align public research priorities with private sector investment, evolving energy systems, and technology’s eventual application in the market.
- Incentivize deeper collaboration between government partners, academia, and the private sector to quickly commercialize energy technologies and build new companies and industries. The U.S. needs better and more efficient platforms for engagement between the public and private sectors. This should include building innovative partnerships across sectors, as well as designing regulatory structures that make clean energy investments more attractive.
- Ensure regional, state, local, and tribal governments can be key drivers for innovation. These governments play central roles in advancing clean energy innovation by creating markets and encouraging diffusion of new technologies across their economies. But to ensure success, governments need to modernize the way they establish best practices, build capacity, allocate resources, and update business models.
Where To Start
This is a daunting task, but there are ways to meet the challenge. The U.S. needs policies that account for the complexities of this problem. That includes understanding how to deploy the viable technologies that already exist, and also developing new solutions – all while being open to any solution that helps us avoid the worst effects of climate change.
Everyone has a role to play, and here’s what can be done right now:
Federal Government Action
- Assign federal investments in energy research, development, deployment, and diffusion (RDD&D) around a technology-neutral structure that weighs potential breakthrough technologies serving similar needs and prioritizes investment based on market potential
- Explore dedicated funding sources for energy innovation to ensure predictable and increasing levels of clean energy RDD&D
- Prioritize investments in a diverse mix of breakthrough technologies to decarbonize the economy – including energy storage, advanced nuclear, and carbon capture/utilization/storage (CCUS)
State and Local Government Action
- Adopt technology-neutral clean energy portfolio standards and zero-emissions credits to strengthen clean energy markets
- Adapt existing ratemaking principles to incentivize utilities to deploy existing clean energy technologies, test emerging energy breakthroughs, and realize value from behind-the-meter tools
Private Sector Action
- Form partnerships with other companies, investors, national labs, economic development entities, and philanthropies to expand regionally-based incubator and test-bed facilities to speed the pace of prototyping, demonstration, and commercial readiness of new technology and systems innovations
- Engage with the federal government to identify and prioritize research needs and commercialization pathways for promising technology ventures that are otherwise not commercially viable
- Encourage new ARPA-E-like approaches to targeting federal RDD&D funds in ways that can further incentivize and leverage private sector investment in energy innovation (e.g., set asides to accelerate de-risking of near-commercial technologies)