IRENA: No successful global energy transition without innovation


Our ancestors mastered the skills to create and sustain fire, revolutionising the way we live. This critical innovation helped us to survive the ice age and put us on the path to where we are today. But our current problem is not an ice age, it’s quite the opposite. Pollution from fossil fuel use kills 8.7 million people a year, largely from local air pollution. That number will rise significantly due to climate change effects if we don’t change our ways.

By Dolf Gielen and Francisco Boshell, IRENA

It will reap havoc in our daily lives and in our economies. It will result in mass migration and raise geopolitical tensions. We need a transition in the way we supply and use energy to avert and minimise such effects. The resource is out there: we see the sunrise every day, we can feel the energy that is contained in the sunlight, the main renewable energy resource. The question is how to master that resource.

The solution is again human ingenuity and innovation, but a key question is where to focus the innovation efforts. Should we wait for major breakthroughs to save the planet, or should we foster innovation into reaching commercialisation of existing technology options? This is a question that countries are currently asking while defining their strategies to decisively fight climate change.

The importance of R&D

Innovation has a technology component. At the early stages of innovation, Research and Development (R&D) efforts pave the road for game-changer solutions as observed in patent data. Using IRENA’s Patent Database INSPIRE, we see that in the last decade the quantity of renewable energy generation related patents filed has tripled for solar, wind and bioenergy technologies. Between 2001 and 2017 the CAGR for RE patents has been 16.23%, quite remarkable growth in comparison to other industrial segments. This innovation drive has resulted in dramatic cost reductions, which in turn has accelerated deployments. Solar (mainly PV) is the leading technology in the number of patents filed followed by wind and bioenergy (Figure 1). As emerging technology trends, patent data for recent years point into increased activity for enabling technologies for renewable energy, focused on electro-mobility, followed by batteries, fuel cell and hydrogen technologies.

Figure 1: Patent trends for renewables 2000-2019. Source:

The focus on an application-orientated approach

In a holistic perspective, innovation is much more than Invention and Research and Development. An urgent and broader more application-oriented approach is needed if we want the energy transition to succeed. Particularly as the pathway for innovative technologies to become mainstream technology may take long. For example, the first solar panels were used in space in the 60’s. After half a century later the technology has matured, cost of solar panels has dropped by 85% in the last decade.

Large scale solar project can provide electricity at less than USDcents/kWh 1.5 at locations with a favourable resource and a recent offer in Saudi Arabia came in at USD cent 1/kWh. It is no surprise that in recent years solar capacity additions have exceeded those of all other power generation technologies. Rapid further growth is foreseen this year with more than 150 GW solar panel demand, while supply may be in the 200-300 GW range. Solar already accounts for around 10% of all electricity generated in countries such as Germany and Japan. The state of South Australia had an 18% solar share in its generation mix in 2020

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Solar power is a variable renewable energy type: it produces when the sun shines. To deal with this variability, there are two types of enabling solutions to address such variability. Either store the electricity or adjust demand so it follows the availability of solar electricity. Both types of solutions are being deployed.

In terms of enabling technologies, battery storage is at the centre of the present energy transition efforts. Around 200 GWh Lithium-ion batteries were produced last year (about 100 GW capacity, on par with global solar capacity additions). The majority of these batteries was used for electric cars and around 5.7 GW stationary batteries were installed.   Electrification is rapidly gaining speed in the transport sector. Passenger EV sales increased from 2.1 million in 2019 to 3.1 million in 2020. Vehicle-to-grid strategies are actively pursued, utilities such as ENEL as well as car companies such as Volkswagen see a business opportunity. Battery production is projected to expand massively with Europe alone having a pipeline of 1000 GWh manufacturing capacity by 2030 (around 500 GW/yr).

For sectors that cannot be directly electrified, green hydrogen -from renewable electricity- can play a key role, if electrolysers can be operated flexibly and their cost falls enough to warrant flexible operation. This is an example of a new emerging technology option that can help to revolutionize the way we produce and consume energy. For example, green hydrogen can be used to convert iron ore into iron at the mining locations in Australia or Brazil, thus tapping into remote renewable energy resources to supply consumers in East Asia or Europe. A massive expansion of electrolysers is foreseen in the coming years.

Innovation beyond technology

But innovation extends beyond technology. New business models come into play: aggregators and peer-to-peer trading platforms, supported by digital technologies, enable small players to reap the full benefits of their rooftop solar systems, while system operators can benefit from the services of distributed energy resources. These new business models are nowadays widely deployed.

Innovation in market design has proven to be critical to accelerate transitions. New technologies come with new type of services that can be provided to energy systems. However, those services need to be properly monetised via adjusted market designs, for example higher time or geographic resolution in energy prices. For example, as an alternative to expensive upgrades to the infrastructure needed for the grid-integration of variable renewable energy sources, like solar and wind, non-wire alternatives, utility-scale batteries connected at electricity transmission systems -also called virtual power lines (VPL)- are being rolled out in several parts of the world. To unlock innovative business models that make virtual power lines more economically attractive, market designs should permit those utility-scale batteries to provide and be rewarded for a range of services including storage to reduce congestion, which would help to defer network investment, as well as ancillary and balancing services, such as frequency and voltage regulation. The Innovation Toolbox developed by IRENA shows how 30 concrete innovations -in technology, market design, business models and system operation-  can be used to transform country power systems by increasing flexibility.

The challenge we face is not a small one though. A 1.5C scenario requires 15 000 GW solar capacity by 2050, a twenty-fold increase from around 750 GW in 2020, according to IRENA analysis. Solar power generation would grow to 23 000 TWh by 2050, around 30% of all power generation.    

Figure: Power generation in the 1.5C scenario. Source:

Solar and batteries are just part of the key innovations. Offshore wind, green hydrogen, advanced biofuels, CO2 capture and use all have a role to play. We know the technology solutions; commercial-scale projects have operated successfully. But cost need to the brought down and the applications need to scale up more rapidly.

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IRENA’s analysis indicated that around 110 technologies have a key role to play in the energy transition. The good news is that most of the needed technologies are available, however, the rapid scale that is needed is a challenge. For that innovation will continue to play a critical role; in technology to improve performance, reduce cost and system integration. But equally important innovation in business models, market design and system operation to roll them out at the needed speed.

Efforts to systematically track progress in innovation, rather than the inputs to innovation (e.g. R&D investments) remain scant. IRENA, with funding from the European Commission, has embarked on a project to expand and enhance its databases on the costs and performance of renewable energy technologies and those that facilitate the energy transition (e.g. battery storage), and its databases on patents and standards to provide metrics that can be considered proxies for innovation outputs. The project that supports ‘Mission Innovation’ has also looked at how this range of indicators can be considered more holistically, to provide additional qualitative and quantitative insights into ways in which innovative energy technologies are making progress fully or in part due to RD&D activities.

Where innovation fails, transitions falter. We have seen plenty of examples such as coal gasification and nuclear power. We have also seen the opposite where innovations have opened up new avenues, such as shale gas and solar PV. We need to pay sufficient attention to innovation while recognizing that our predictive capacity of what 2050 will look like is limited. Policymakers are well-advised to mobilise the innovative forces while leaving sufficient room to experiment.

Its innovation that will drive the long-term success of the energy transition.  

About the authors:

Dolf Gielen is the director of IRENA’s Innovation and Technology Center

Francisco Boshell leads the  work on Innovation for Renewable Energy Technologies at the International Renewable Energy Agency (IRENA). He focuses primarily on providing policy advice and guidance to countries regarding technology innovation, quality control and standardisation programmes for a successful deployment of renewables. Mr Boshell analyses technology development strategies for a wider deployment of renewables in energy systems and has co-authored several reports on energy transition and energy technologies. During his 18 years professional career, Mr. Boshell has also: developed technical standards for quantifying GHG emission reductions from CDM projects and supported the climate change negotiations under UNFCCC; provided consultancy services for the development of renewable energy and energy efficiency projects at DNV GL, formerly KEMA Consulting; and designed and implemented infrastructure and energy related projects in the automotive manufacturing sector at General Motors. His background is in Mechanical Engineering and he holds a MSc. in Sustainable Energy Technology from the Eindhoven University of Technology, in the Netherlands.