Catalysing the clean energy revolution

By Elena Bou, the Innovation Director at InnoEnergy

The clean energy sector was very recently scrapping to ensure the clean energy revolution happened – at all. The crucial thing was the innovations with transformative potential were realised.

That fight was won. Now, the focus has shifted from creating innovations to accelerating their development. The elements are there: innovation, finance, an eager public, and they’re reacting correctly. Now we need to catalyse that reaction.

Forward-thinking policy

‘Innovation’ is one of the five key pillars of the European Union’s (EU) energy strategy, and alongside 2016’s Winter Package, the European Commission (EC) issued a communication titled: ‘Accelerating Clean Energy Innovation’.

Three points are particularly salient for catalysing clean energy: increasing the role of public and private finance, using public procurement to accelerate innovations and creating public support.

Finance – uniting public and private

The EC estimates €22.9 billion of private investment in Energy Union research and innovation priorities in 2014. That’s staggering but, as the EC notes, the growth must be faster to achieve objectives.

We can’t pin responsibility on private investors. Rightly, they are looking for attractive returns. But nor can we ask for endless taxpayer funds via the public-sector. This means that clean energy innovations ready for market are often left marooned.

That’s why public-sector finance, which can be justifiably used to benefit wider society, should be used to de-risk investments and unlock more private finance.

To be clear, there are already huge sums of public money invested in the clean energy transition. However, public and private finance often operate separately, rather than together to achieve more.

The EU has created several institutions to do just this. But we’re missing a shared environment where both public and private financiers can meet clean energy innovations and organically build funding consortia. By being mutually involved from the start, more effective funding partnerships are possible.

Public actors, early adopters

Another sticking point for innovative clean energy businesses is getting the first customer. Again, the private sector can be forgiven for hesitance. They may well be interested in the latest cleantech, but without an established track record, it’s probably too risky.

The public sector by contrast, can justify procuring from a business with significant environmental potential. The EC points out that European standardisation regimes can smooth this process for public sector-bodies.

For example, a municipal government such as Amsterdam might become first buyer for a new energy efficient street lighting system. Suddenly businesses that have been continuously treading water can scale quickly.

The European standardisation regime will be a key enabler here, by giving governments standards to justify procurement decisions with. However, innovative companies are used to showcasing to venture capital firms, but have less opportunity to exhibit to potential public-sector customers. Changing that will be vital.

Citizen engagement

The EC states that ‘citizens are central to the successful uptake of low-carbon innovative solutions, from smart meters in their homes to large-scale wind farms.’

Let’s look at recycling. Technology and policy was in place, but what made recycling kick-in were public engagement campaigns. It encouraged households to recycle and instilled expectations for commercial premises too.

The result? Recycling has been an undoubted success (though there’s work to be done). From 2004 to 2014, EU member states improved their average waste recycled from 37 to 44 per cent.

As the EC points out, in the energy industry, trends such as the prosumer, and smart home technologies will encourage citizens engagement. However, it will be important to actively involve people in these trends to ensure success.

Each of these elements can help but acceleration will require all of them happening in concert. We need to animate the innovation market, get the right investment in the right places and shake-up social norms that prevent more sustainable lifestyles as individual citizens.

None of that happens by coincidence though. It is through ecosystems that foster collaboration between these diverse actors to accelerate the energy transition. TBB 2017 in Amsterdam this October will bring together 160 innovative energy innovations alongside industry leaders, senior public-sector decision makers and investors – putting all the catalysts in place.