The ongoing energy crisis provides an opening for adopting disruptive technologies via supporting clean energy start-ups to respond to the current energy crisis and also accelerating progress towards climate targets, according the International Energy Agency (IEA).
A new IEA report released today, March 14, 2022, on ‘How Governments Support Clean Energy Start-Ups’ reviewed the different approaches adopted in countries around the world, seeking to become home to the next Tesla, BYD or Vestas.
Start-ups with big ideas, aimed at improving country’s energy systems and reducing greenhouse gas emissions are now becoming preferred recipients of investments. Innovators such as Addionics, Evage, H2Pro, Kula Bio and PassiveLogic have raised more than US$25 million each since the start of 2022.
“New technologies are becoming more digital, electronic, consumer-focused and modular. Some of the world’s brightest and most creative minds are engaged in building the cornerstones of tomorrow’s clean energy system.”IEA
According to the IEA, in most times, measures and programmes put in place by governments have laid the foundations for success in this sector, which is sometimes referred to as “cleantech” or, more recently, “climate tech”. Public sector support to help start-ups get new clean energy technologies to the market has risen sharply since the Paris Agreement was signed in 2015.
Drawing on 14 detailed country case studies and 23 in-depth interviews, the analysis highlights the ways in which governments have stepped in to support the sector. This includes, for example, providing access to patient providers of capital and world-class laboratories, mentoring and to-peer networking, and targeting technologies or groups that can face additional obstacles to break through, including female entrepreneurs.
Gov’t Support to Clean Energy Accelerates
On the whole, government support to clean energy innovation has picked up considerably in recent years, spurred by the pursuit of net zero goals and efforts to stimulate economic recovery from the pandemic. Examples include the Japan Green Innovation Fund, the US Infrastructure Investment and Jobs Act and many initiatives in Europe and elsewhere.
If history is any guide, today’s elevated fossil fuel prices and energy security concerns could further bolster the priority governments are attaching to clean energy innovation. The oil shocks of the early 1970s presents a case in point.
Between 1974 and 1980, IEA member governments more than doubled their spending on non-fossil public energy research and development. During the mid-1990s and early 2010s, the IEA member government increased spending on fossil fuel by over 70 per cent as oil prices rose again.
Countries captured in the new report include: Chile, India, Morocco and Singapore, which have inspiring policy designs, alongside examples from Canada, Germany, Norway, Sweden, the United Kingdom, the United States and others.
According to the IEA, the report gives practical guidance on how governments can create thriving energy innovation ecosystem, alongside their more traditional role in providing direct funding for energy research and development and large scale demonstration projects.
“All of these approaches will be crucial to meet today’s energy security and climate imperatives while also creating lasting value in terms of economic activity and employment.”IEA