Clean energy innovation policies and institutions in emerging and developing countries

The International Energy Agency (IEA) and the Indian Institute of Technology Delhi (IITD) are organizing a meeting as part of their joint initiative on “Clean Energy Innovation Policies and Institutions in Emerging and Developing Countries”. This meeting brings together experts from emerging and developing countries that are active in clean energy innovation. The meeting is the outcome of four previous group knowledge-sharing events held from October 2021, and aims to summarize findings on countries’ innovation priorities and processes for clean energy innovation policy formulation and implementation.

International Energy Agency (IEA) analysis indicates that emerging and developing economies would need to account for more than 40% of the world’s investment to shift the world on to a pathway consistent with keeping global average temperature rise to 1.5ºC, more than the 30% projected under current policies. For example, transforming the electricity sector in line with this ambition would mean that around 70% of the new solar PV and wind capacity installed through 2050 would be in the emerging and developing world. However, at the same time, IEA estimates that about half of the emissions reductions needed to achieve global climate targets will need to come from technologies that are not yet past the prototype or demonstration phases. While the majority of clean energy technologies have been developed in industrialised countries; emerging and developing economies have strong incentives to become leaders in clean energy innovation in the next decade, but they must start now. There is no shortage of good reasons, including:

• Innovation-led growth and a knowledge-based economy is a reasonable aspiration for all countries in the 2050 timeframe, and clean energy is set to be a major area of investment and skilled jobs in this period
• Much clean energy deployment will be in the emerging and developing world, giving them a strong incentive to participate in the value chains
• Technologies must be suited to the local conditions and needs in the places where they need to be deployed, not just optimised for advanced economies
• Having indigenous technologies and local suppliers amplifies the incentive to implement clean energy policies, as more of the benefits will be captured domestically
• Unless the best minds in all countries participate in clean energy technology efforts and cooperate on common challenges, we risk missing the goal of clean, sustainable, affordable energy for all.

Clean energy innovation generally has different characteristics in emerging and developing countries compared with high-income countries. The features that shape energy innovation in the former include: the prioritisation of technologies to ensure access to affordable energy; the importance of job creation and reduction of inequality; more informal innovation systems with less institutional guidance; a greater focus on equitable outcomes; and lower investment in R&D, entrepreneurship and market creation. However, only few international comparative analyses of these issues are available to inform a common understanding of energy innovation policy challenges and opportunities in these countries that could raise the level of awareness necessary to foster innovation.

The IEA’s role as the organiser of this event is facilitated through IEA’s Clean Energy Transitions in Emerging Economies programme, which has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 952363.