Innovation, an imperative for Energy transition

By Mr Guillaume GILLET

 

In this column, Mr Guillaume GILLET Manager of the EU Business Unit at InnoEnergy, reflects on the Energy package adopted by the European Commission in November 2016 and stresses the need for a coordinated and multidimensional innovative approach to the energy transition. This year, the College of Europe Development Office is collaborating with InnoEnergy and EDF for the organisation of the summer course on the Energy Union taking place from 3 to 14 July 2017.  

On 30 November 2016, the European Commission adopted the “Clean Energy for All Europeans” package, a set of legislative initiatives aiming at shaping the Energy Union.

Among the numerous draft texts submitted to the European Parliament and the Council of the European Union, the European Commission gave special emphasis to the role that innovation shall play in order to support the energy transition. In its Communication “Accelerating Clean Energy Innovation”, an integral component of the package, the European Commission rightly stresses that “innovation is one of the key areas where concrete action can be strengthened in the short term, refocused and the synergies improved to support jobs, growth and investment in Europe “. And innovation is recognised as one of the 5 key pillars to build the future Energy Union on.

Actually, the European Union has many assets for boosting innovation in the field of energy. The Horizon 2020 programme is probably the most powerful Research & Innovation scheme in the world, and the most attractive one. From a political and economic point of view, as reminded by the Communication, “Europe has spearheaded global efforts to fight climate change, has been a driving force in developing renewables, and leads the world in energy-efficiency solutions for industry, transport, buildings. Europe's businesses have built a comparative advantage in many world markets – where competition from global competitors is growing (…)”.

Yet we have to admit that these strengths have not been sufficiently exploited to make the European Union the most fertile ground for innovation in the field of energy. Reasons for that are multiple: fragmentation of regulations in Europe, lack of investment from the private sector (that public money will never substitute), need for an easier access to financial instruments and for a shift towards a more “risky attitude” from the banking sector (public & private), and difficulty for innovative SMEs to scale up, to name a few.

The Communication adopted by the Commission intends to address these issues, and identifies 3 main areas of improvement: 1) setting the political ambition and creating the right business environment through targeted signals, policies, standards and regulations 2) deploying targeted financial instruments to lower the risk of private investments in untested but promising clean energy technologies or business models 3) focusing its research and innovation funding, in particular through Horizon 2020, targeting curiosity-driven and mission-oriented research, as well as demonstration projects.

The European Union has all the cards in its hands. Now, it is all about implementation. InnoEnergy, a European Public Private Partnership, has a role to play in this context, and is identified by the Communication as a key enabler for boosting innovation in the energy area.

The energy transition’s challenge could be summarised in three key points:

  • The energy transition is a systemic problem that requires a systemic solution;
  • The challenge is multidimensional (i.e. technology, business models, supply chain, human capital, regulation, industrialization, etc.) and requires a multidimensional approach. And all dimensions should be addressed at the same time, because they are interlinked;
  • The challenge is European, and requires a European solution.

In order to boost innovation, InnoEnergy has developed an ecosystemic approach, bringing the Knowledge Triangle (Research, Industry and Education) to life, through three main activities stimulating interactions within this ecosystem, while embracing entrepreneurship via:

  • innovation projects through a market-oriented selection procedure to ramp up the market uptake of promising energy technologies;
  • ventures that intend to shape the future energy landscape, towards a cheaper, greener, and more secure energy system;
  • training of “game changers” through various educational courses. 573 graduates from our Masters are already inserted into the labour market. It is thus quite natural that InnoEnergy has launched a cooperation with the College of Europe on its Summer Course on the Energy Union.

Last but not least, the following point of view of the European Commission is worth stressing: “ in the future the consumer has to be at the centre of the energy system: demanding competitive low-carbon solutions; participating as producer and manager of decentralized energy networks; acting as an investor, through decentralized platforms; and driving change through user innovation”. However, putting the end-user at the centre of the energy transition demands to start first and foremost from their perspective, re-constructing their emotional distance to the existing energy system and challenges, reflecting at the same time on the contrast between “existing” and “to be” end-users. Only by filling these gaps will the end-user commit to a sustainable future. Only by filling these gaps can the private sector successfully deploy new technologies and business models.

More than ever, especially after recent decision by President Trump to pull out of the Paris Climate Agreement, time is running out to concretise all the Energy Union objectives: building a resilient European energy policy, together with a forward-looking climate change policy and giving a new boost to jobs, growth and investment. It has, therefore, become even more important to promote and develop enabling technologies, services, business models, human capital and social innovation, thus contributing to growth and employment and making EU industries more competitive in Europe and beyond.

 

 

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