A model-based assessment of the impact of revitalised R&D investments on the European power sector

This paper presents an analysis of the effect of enhanced research and development (R&D) efforts for a set of low-carbon power technologies on the development of the European energy sector. It applies a methodology using the concept of Two-Factor-Learning, which quantitatively links trends in technology cost to both accumulated R&D investments and production volumes. The impacts of the latter on the energy sector are then simulated in a consistent manner with the POLES global energy model. On this basis, it compares the total system costs of an assumed increase in worldwide R&D investments that for the EU are in line with proposals made in its European Strategic Energy Technology Plan to a baseline development. It finds that an increase in research efforts at a global level will contribute to reducing the costs of currently less mature low-carbon technologies, thus accelerating their market entry. When comparing two scenarios that both fulfil the EU's 2020 energy and climate objectives and differing only in their R&D investment levels, the reduced technology costs allow EU support policies for renewables and carbon values to be reduced, and the cumulative (discounted) benefit of the accelerated research efforts is positive in the long term.     

Building a low carbon society

This paper presents the strategy of the European Union in the field of energy and climate change. At the heart of the package are three commitments to be met by 2020: to reduce greenhouse gas emissions by at least 20%, to ensure that 20% of final energy consumption is met with renewable sources, and to raise energy efficiency by 20%. This strategy is based on the scientific consensus drawn by the International Panel for Climate Change, and implements the EU political strategy to limit the anthropogenic temperature rise to no more than 2 °C. A Directive for the geological storage of CO₂ is another integral part of the package. This should enable the development and subsequent deployment of zero emission power plants. From a research and technology perspective, the Strategic Energy Technology Plan (SET-Plan) lists several energy technologies which will be required to reconcile economic growth and a vision of a decarbonised society. The EU climate and energy package and the SET-Plan are part of the solution both to the climate crisis and to the current economic and financial crisis. They represent a green “new deal” which will enhance the competitiveness of EU industry in an increasingly carbon-constrained world.     

Policy analysis for energy efficiency in the built environment in Spain

Energy efficiency is considered one of the most cost effective ways to enhance security of energy supply and reduce greenhouse gas emissions. According to Europe's Energy Efficiency Plan, the biggest energy savings potential in the EU lies in the built environment. However, the many barriers to energy efficiency have prevented the implementation of the existing potential so far. This paper evaluates the existing policy instruments aimed at energy efficiency in buildings in Spain as laid down in the 2nd National Energy Efficiency Action Plan (NEEAP). The results show that the current policy package is insufficient to yield the existing energy savings potential in this sector. As much of the savings potential can be found in existing buildings and realization of this potential very much relies on voluntary action, the renovation sector is in need of an appropriate financial framework that mobilizes sufficient public and private financial resources, and transparent and efficient mechanisms to ensure the return on investment and payments from those who benefit from the renovation. Such financial framework needs to be supported by a regulatory framework that is tuned to existing buildings and an organizational framework that effectively connects the different policy layers in Spain.     

Energy research and technology development data collection strategies: The case of Greece

The European Union (EU) from the beginning of 2007 has focused its emphasis on the development of a new policy that puts energy back at the heart of EU action. Indeed, it has very often been stated that the difficulty and complexity of achieving green energy targets in the EU will require strengthened measures to promote implementation of new energy technologies (NET), as well as measures to support the related energy Research and Technology Development (R&TD). Often forgotten is the fact, that most of all, a European-wide co-ordinated forum is needed to continuously develop and sophisticate the monitoring and methodology results, bringing together specialised statisticians, energy researchers and experts on energy socio-economics. Today a nebulous picture prevails on the existence of categorized data with regards to energy Research and Technology Development (R&TD) expenditure. In this context, aim of this paper is the presentation of energy R&TD data collection strategies, as well as the related findings for the Greek energy market.     

Domestic offset projects in the built environment

Emission reduction activities in the European Union (EU) in- and outside the European Trading System (ETS) thus far have largely taken place separately. One possibility to combine the two is through linking Non-ETS offset project-based crediting schemes in the form of Joint Implementation or domestic offset (DO) projects with the EU ETS. Linking would allow non-ETS offset project-based CO₂ credits to be traded within the ETS market. This paper discusses the merits and drawbacks of the implementation of a DO scheme in the built environment in the Netherlands. The built environment can be characterised as a sector with a great diversity and significant energy savings potential. Emphasis is paid on the modalities for estimating energy savings under DO projects. The authors discuss if next to existing EU, national or regional policies in the Netherlands, DO could spur initiatives in sub-sectors or market areas that are difficult to reach with conventional policy instruments. Thus, despite the existing policy framework in this sector, there could be still space for DO to reach the untapped energy savings potential. DO can support activities and technologies that are not covered by other policy instruments, either because they are not part of the instruments focus or are above the minimum requirements of the incumbent policy targets. It is expected that some lessons from this study in the Netherlands can be taken into account also by other countries facing similar market circumstances, which have implemented several policy instruments and are considering DO schemes as an alternative for capturing part of the untapped energy saving potential in their end use sectors. Another possible advantage of DO is that is has the potential to reduce public spending on existing policy goals, when it is considered in conjunction with existing public financing instruments. In order to tap into this potential, there are a series of hurdles in place, like additionality and the current CO₂ price levels, while transaction and administration costs must be kept low.     

Climate policies for road transport revisited (II): Closing the policy gap with cap-and-trade

Current policies in the road transport sector fail to deliver consistent and efficient incentives for greenhouse gas abatement (see companion article by Creutzig et al., in press). Market-based instruments such as cap-and-trade systems close this policy gap and complement traditional policies that are required where specific market failures arise. Even in presence of strong existing non-market policies, cap-and-trade delivers additional abatement and efficiency by incentivizing demand side abatement options. This paper analyzes generic design options and economic impacts of including the European road transport sector into the EU ETS. Suitable points of regulation are up- and midstream in the fuel chain to ensure effectiveness (cover all emissions and avoid double-counting), efficiency (incentivize all abatement options) and low transaction costs. Based on year 2020 marginal abatement cost curves from different models and current EU climate policy objectives we show that in contrast to conventional wisdom, road transport inclusion would not change the EU ETS allowance price. Hence, industrial carbon leakage induced by adding road transport to the EU ETS may be less important than previously estimated.     

Green electricity market development: Lessons from Europe and the US

This study compares the development and implementation of green electricity policies in Germany, the Netherlands, Sweden, and the United States, a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources. A general tendency is identified that policies shift emphasis from R&D stimulation towards dissemination and market application of renewable energy technologies. We argue that in light of the long term nature of policy goals on energy security, mitigation of climate change, and environmental protection, the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies. Clarifying policy objectives would allow careful selection of policy instruments, including support for R&D. Improved capacity building for policy implementation is also important.     

The case for a new energy research,development and promotion policy for the UK

This paper is a critical assessment of the current balance of efforts towards energy research and development (R&D) and the promotion of low-carbon electricity technologies in the UK. We review the UK's main technological options and their estimated cost ranges in the medium term. We contrast the energy R&D spending with the current and expected future cost of renewable promotion policies and point out the high cost of carbon saving through existing renewable promotion arrangements. We also note that liberalisation of the electricity sector has had significant implications for the landscape of energy R&D in the UK. We argue that there is a need for reappraisal of the soundness and balance of the energy R&D and renewable capacity deployment efforts towards new energy technologies. We suggest that the cost-effectiveness of UK deployment policies needs to be more closely analysed as associated costs are non-trivial and expected to rise. We also make a case for considering increasing the current low level of energy R&D expenditure. Much of energy R&D is a public good and we should consider whether the current organisation of R&D effort is fit for purpose. We argue that it is important to build and maintain the research capability in the UK in order to absorb spillovers of technological progress elsewhere in the world. Against this background, the recent signs that an energy R&D renaissance could be underway are therefore positive and welcome.     

South Korea's national pursuit for fuel cell electric vehicle development: The role of government R&D programs over 30 years (1989–2021)

This paper explains the role of the Korean government's National R&D Program over three decades for fuel cell electric vehicle (FCEV) development. The R&D programs had started far before FCEV was considered feasible. We call this as a national pursuit, since the R&D programs has been participated by not only car manufacturers but also various research institutions, including universities, in Korea's national innovation system. The Korean government has implemented a series of National R&D Programs throughout many stages, from selection of technology, building infrastructure and legislations, demonstration, and subsidizing mass-produced FCEVs. The authors analyzed all the government R&D programs from 1989 to 2021 to show the evolutionary changes in contexts and contents of the programs that have reflected varying expectations, government's industrial strategy, and the maturity of technologies through periods. This paper claims that Korea's FCEV development has been regarded as a long-run national industrial strategy, and the development has been persistently pursued in a national innovation systemic manner, such as combining public R&D sector with industries and strong institutional and organizational supports by government.     

Energy efficiency in the residential sector: identification of promising policy instruments and private initiatives among selected European countries

Improving residential energy efficiency is widely recognised as one of the best strategies for reducing energy demand, combating climate change, and increasing security of energy supply. However, progress has been slow to date due to a number of market and behavioural barriers that have not been adequately addressed by energy efficiency policies and programmes. This study is based on updated findings of the European Futures for Energy Efficiency Project that responds to the EU Horizon 2020 Work Programme 2014–2015 theme ‘Secure, clean and efficient energy’. This article draws on five case studies from selected European countries—Finland, Italy, Hungary, Spain, and the UK—and evaluates recent energy efficiency developments in terms of indicators, private initiatives, and policy measures in the residential sector. Our analysis shows that the UK government has implemented a better range of policies, coupled with initiatives from the private sector, aimed at improving energy efficiency. However, its existing conditions appear to be more problematic than the other countries. On the other hand, the lack of effective and targeted policies in Finland resulted in increased energy consumption, while in Hungary, Spain and Italy some interesting initiatives, especially in terms of financial and fiscal incentives, have been found.     

The diffusion of renewable electricity in the presence of climate policy and technology learning: The case of Sweden

The overall objective of this paper is to analyze the impact of climate policy and technology learning on future investments in the Swedish power sector. Methodologically we assess the lifetime engineering costs of different power generation technologies in Sweden, and analyze the impact of carbon pricing on the competitive cost position of these technologies under varying rate-of-return requirements. We also argue that technological learning in the Swedish power sector – not the least in the case of wind power – is strongly related to the presence of international learning and R&D spillovers, and for this reason capacity expansions abroad have important influences of the future cost of power generation in Sweden. The results suggest that renewable power will benefit from existing EU climate policy measures, but overall additional policy instruments (e.g., green certificate schemes) are also needed to stimulate the diffusion of renewable power. Moreover, under a recent European Commission scenario and using estimated learning rates for wind power and the combined cycle gas turbine (CCGT), wind power gains considerable competitive ground due to international technology learning impacts. These latter results are, however, very sensitive to the assumed learning-by-doing rates for wind power and CCGT, respectively.     

Overview of Gas Research Institute R&D program

Gas Research Institute (GRI) plans, manages and develops financing for a cooperative research and development (R&D) program in supply, transport, storage and end-use of gaseous fuels for the mutual benefit of the gas industry and its present and future customers. Developing new and improved technologies which maximize the value of gas energy services while minimizing the cost of supplying and delivering gaseous fuels is the most effective way to serve the mutual interests of both the industry and its customers. These mutual benefits can only be realized if the results of R&D are used; consequently, GRI makes the prospects for application of developments arising from its R&D program a critical element in pursuing projects beyond proof-of-concept stage. GRI implements its mission through both planning and managing contractor-performed R&D and in-house analyses and communications activities. The R&D program is divided into Supply Options, End Use, Gas Operations and Crosscutting Research. The R&D budget increased from about $137.8 million in 1986 to $171.0 million in 1989. This paper summarizes the objectives and strategies for the GRI R&D program.     

Public demonstration projects and field trials: Accelerating commercialisation of sustainable technology in solar photovoltaics

The paper considers the role of government funded demonstration projects and field trials (DTs) in accelerating the commercialisation of new energy technologies that meet a public good but do not have immediate market appeal [Sagar, A.D., van der Zwaan, B., 2006. Technological innovation in the energy sector: R&D, deployment, and learning-by-doing. Energy Policy 34, 2601–2608]. Drawing on an original database of DTs in the EU, Japan and USA from 1973 to 2004, we review the history of DTs in photovoltaic technology for electricity generation, and its subsequent take up as a commercial energy source.     

R&D investment strategy for climate change

The economic costs of stabilizing greenhouse gas concentrations over the coming century depend critically on the development of new technologies in the energy sector. Our research and development (R&D) investment strategy is the control variable for technology availability. This paper proposes an analytic framework for determining optimal R&D investment allocation and presents some numerical results to demonstrate the implementation of the methodology. The value of technological advance in three targeted areas–fossil-based generation, renewables, and carbon capture and storage–is represented by the increase in expected welfare in the presence of an emissions policy constraint of initially uncertain stringency. R&D expenditure increases the probability of advance. Optimal investment is determined by its relationship with success probability, which is assumed to exhibit decreasing returns to scale, relative to the value of success. While the numerical results are speculative, the paper offers insights into the nature of an optimal technology strategy for addressing climate change.     

A global survey of hydrogen energy research,development and policy

Several factors have led to growing interest in a hydrogen energy economy, especially for transportation. A successful transition to a major role for hydrogen will require much greater cost-effectiveness, fueling infrastructure, consumer acceptance, and a strategy for its basis in renewable energy feedstocks. Despite modest attention to the need for a sustainable hydrogen energy system in several countries, in most cases in the short to mid term hydrogen will be produced from fossil fuels. This paper surveys the global status of hydrogen energy research and development (R&D) and public policy, along with the likely energy mix for making it. The current state of hydrogen energy R&D among auto, energy and fuel-cell companies is also briefly reviewed. Just two major auto companies and two nations have specific targets and timetables for hydrogen fuel cells or vehicle production, although the EU also has an aggressive, less specific strategy. Iceland and Brazil are the only nations where renewable energy feedstocks are envisioned as the major or sole future source of hydrogen. None of these plans, however, are very certain. Thus, serious questions about the sustainability of a hydrogen economy can be raised.     

Econometric analysis of the R&D performance in the national hydrogen energy technology development for measuring relative efficiency: The fuzzy AHP/DEA integrated model approach

Hydrogen energy technology can be one of the best key players related to the sector of the United Nations Framework Convention on Climate Change (UNFCCC) and the hydrogen economy. Comparing to other technologies, hydrogen energy technology is more environmentally sound and friendly energy technology and has great potential as a future dominant energy carrier. Advanced nations including Korea have been focusing on the development of hydrogen energy technology R&D for the sustainable development and low carbon green society. In this paper, we applied the integrated fuzzy analytic hierarchy process (Fuzzy AHP) and the data envelopment analysis (DEA) for measuring the relative efficiency of the R&D performance in the national hydrogen energy technology development. On the first stage, the fuzzy AHP effectively reflects the vagueness of human thought. On the second stage, the DEA approach measures the relative efficiency of the national R&D performance in the sector of hydrogen energy technology development with economic viewpoints. The efficiency score can be the fundamental data for policymakers for the well focused R&D planning.     

U.S. energy research and development: Declining investment,increasing need,and the feasibility of expansion

Investment in energy research and development in the U.S. is declining despite calls for an enhancement of the nation's capacity for innovation to address environmental, geopolitical, and macroeconomic concerns. We examine investments in research and development in the energy sector, and observe broad-based declines in funding since the mid-1990s. The large reductions in investment by the private sector should be a particular area of concern for policy makers. Multiple measures of patenting activity reveal widespread declines in innovative activity that are correlated with research and development (R&D) investment—notably in the environmentally significant wind and solar areas. Trends in venture capital investment and fuel cell innovation are two promising cases that run counter to the overall trends in the sector. We draw on prior work on the optimal level of energy R&D to identify a range of values which would be adequate to address energy-related concerns. Comparing simple scenarios based on this range to past public R&D programs and industry investment data indicates that a five to ten-fold increase in energy R&D investment is both warranted and feasible.     

Prospect of hydrogen energy in Asia-Pacific: A perspective review on techno-socio-economy nexus

This paper reviews the prospect to institute the inter-state hydrogen energy system on selected countries in Asia-Pacific region, through individual evaluation from the nexus of technology, social and economy perspectives, and further utilizing the respective strengths to identify the inter-state hydrogen network strategy in Asia-Pacific region, or ‘Asia-Pacific Hydrogen Valley’. Domestic energy self-sufficiency based on the existing energy sources produced nationally is also considered in the review. In looking into the prospective of hydrogen energy system adoption, four indicators are set based on domestic energy capacity, national wealth, society development and research and development (R&D), which are generalized according to the population size of the country. Countries of assessment are Indonesia, Malaysia, Brunei Darussalam, Philippines, Singapore, Vietnam, Thailand, Japan, South Korea, Australia and New Zealand. This study reveals that nations with active hydrogen policies and high R&D capacity could lead the strategy, while countries with high capacity in primary energy supply and economy advantage would benefit the group in catering the energy and commercial resources, respectively. Social acceptance is another critical aspect, as countries with high social security index could potentially reduce the risk of public rebuttal against the energy system transformation. This paper also extensively discusses the existing energy profile, policies and strategies of each country, which become the basis in potential identification of the country to adopt the new hydrogen energy system in the future.     

Is cluster policy useful for the energy sector? Assessing self-declared hydrogen clusters in the Netherlands

Research on science-based industries has shown that it is important for organisations to be active in interorganisational networks. Cluster policy has been developed as a means to stimulate the development of these networks and thereby the success rate of these industries. Cluster policy is however not a common policy instrument in the energy sector. In this paper, we focus on three self-declared clusters active in hydrogen-related R&D in the Netherlands and address several characteristics of these clusters. We conclude that cluster policy is a useful addition to existing energy R&D policies but that monitoring whether self-declared clusters actually function as clusters and what their contribution is to the overall system is pivotal in reaping the benefits of cluster policy.     

Alternative energy development strategies for China towards 2030

The purposes, objectives and technology pathways for alternative energy development are discussed with the aim of reaching sustainable energy development in China. Special attention has been paid to alternative power and alternative vehicle fuels. Instead of limiting alternative energy to energy sources such as nuclear and renewable energy, the scope of discussion is extended to alternative technologies such as coal power with carbon capture and sequestration (CCS), electric and hydrogen vehicles. In order to take account of the fact that China’s sustainable energy development involves many dimensions, a six-dimensional indicator set has been established and applied with the aim of comprehensively evaluating different technology pathways in a uniform way. The analysis reaches the following conclusions: (a) in the power sector, wind power, nuclear power and hydro power should be developed as much as possible, while R&D of solar power and coal power with CCS should be strengthened continuously for future deployment. (b) in the transportation sector, there is no foreseeable silver bullet to replace oil on a large scale within the time frame of 20 to 30 years. To ease the severe energy security situation, expedient choices like coal derived fuels could be developed. However, its scale should be optimized in accordance to the trade-off of energy security benefits, production costs and environmental costs. Desirable alternative fuels (or technologies) like 2nd generation biofuels and electrical vehicles should be the subject of intensive R&D with the objective to be cost effective as early as possible.