Technology innovation in the pathways

A large set of energy supply and end use technologies is available and new ones may be available in the future, to meet energy needs and decarbonisation targets, as highlighted by the Strategic Energy Technology (SET) plan. The pace of this transition to a low-carbon energy system may be affected incrementally or from breakthrough innovation in these technologies, co-development or competition between them, economies of scale, market barriers, regulatory and behavioural barriers and other elements. In order to understand how the decarbonisation may happen, it is necessary to assess the role of technologies in the process, how they may impact the decarbonisation and enablers/barriers to their adoption. The results of the modelling activities highlight the pervasive challenges and opportunities related to different technologies and their impacts on investment needs and operational profiles (energy systems optimisation), related emissions (health and environmental impacts), final energy prices (energy vulnerability), Life Cycle use of resources and critical materials, use of land and water.

The study of enablers and barriers is part of the pathway design process, instead, as it helps understand which technologies may play a role and what can be expected in terms of their future developments. This analysis was led in REEEM by EIT InnoEnergy, with inputs from experts and a large network of stakeholders and industrial partners. Three technology groups were analysed: selected renewable energy technologies, expected to play a fundamental role in the decarbonisation process; selected storage technologies, representing one of the potential flexibility options to back up the variability of wind and solar (alongside smart appliances, smart grids, extension of interconnections, system integration options and fast-ramping generation) and presenting high innovation potential; energy efficiency in buildings, potentially one of the low-hanging fruits of decarbonisation. The product of the analysis consisted in three Technology and Innovation Roadmaps and three related Innovation Readiness Level assessments, one for each of the technology groups analysed. The findings of these studies are included in the pathway narratives and are turned into numerical modelling assumptions where applicable.

The Technology and Innovation Roadmap focusing on renewable energy analyses three groups of technologies, each having different potentials in accessing the European energy market. These technology groups are wind power (onshore and offshore), solar PV and ocean power (tidal and wave). For each technology group, several technological innovations and improvement opportunities have been listed in order to support the development and deployment of these technologies in the European electricity market. The outcomes shed light on possible technological innovation and market solutions that can facilitate attaining the European targets for 2030 and 2050. Stakeholder inputs for this roadmap were collected during a workshop held at InnoEnergy premises in Brussels on May 19th, 2017. The roadmap is available here. Findings on potential breakthroughs in wind offshore, in the use of floating platforms are considered in the Coalitions for a Low-carbon and Paris Agreement pathways and on Building-Integrated PV in the Local Solutions and Paris Agreement pathway. The former fits the narrative of strong changes on the side of energy supply carriers, whereas the second fits the case of deep changes towards the end uses.

The Technology and Innovation Roadmap on storage delineates into 5 different applications of storage technologies namely, grid-scale, behind-the-meter, off-grid, mobility and thermal storage applications. The essential requirements and technical characteristics of each application are discussed and highlighted. Several recommendations and actions are listed in accordance on how to increase the role and potential of energy storage technologies in the European energy market. Stakeholder inputs for this roadmap were collected during a workshop held at InnoEnergy premises in Brussels on April 17th, 2018. The roadmap is available here. Findings on potential breakthrough in Li-air batteries are considered in the Local solutions and Paris Agreement pathway, where the large penetration of technologies making use of batteries (such as electric vehicles) may push their deployment.

The Technology and Innovation Roadmap on energy efficiency in buildings focuses on technologies and market solutions that enable enhancing energy efficiency. Buildings contribute to 40% of the overall CO2 emission in Europe and accordingly, improving their energy efficiency has a high potential to reduce European emission base, especially where changes in heating and cooling demands are expected as a result of climatic changes. The roadmap sheds lights on three categories of technologies including buildings facades, heating and cooling technologies and household appliances. Based on the findings of this roadmap, a number of policy and market recommendations are listed on how to further improve the development and deployment of the markets and technologies for buildings’ energy efficiency in Europe. Stakeholder inputs for this roadmap were collected during a workshop held at InnoEnergy premises in Brussels on March 19th, 2019. The roadmap is available here. Findings on potential rates and depth of renovation of buildings as a result of a mix of measures are included in all REEEM pathways. From Coalitions for a Low-carbon path, through to Local Solutions and Paris Agreement, increasing rate and depth of renovation are considered.

In parallel with the technology roadmaps, three Innovation Readiness Level (IRL) assessments are carried out and relative reports issued. The IRL is a new metric introduced by InnoEnergy for measuring the innovation and diffusion potential of technologies. It includes, but expands the Technology Readiness Level (TRL) concept. The IRL combines five indicators of maturity:

• Technology Readiness Level (TRL);

• Freedom to operate (IPRL);

• Market Readiness Level (MRL);

• Consumer behaviour (CRL);

• Society (SRL).

As such, the IRL explains that technology innovation could be not the only reason explaining the success or failures of innovative technologies in accessing the markets. The IRL reports explore factors and processes that are prerequisites for successful technology development and access to a market along the five dimensions.

Similar to the roadmaps, the developed IRL reports focus on three groups of energy technologies, identical to the ones of the roadmaps. The first IRL reports focus on storage technologies, in particular, Li-ion, flow batteries, supercapacitors, compressed air energy storage and hydrogen technologies. The second IRL report focuses on renewable energy technologies and assesses IRL of onshore and offshore wind energy, solar PV and tidal and wave energy. The final IRL reports are dedicated to buildings’ energy efficiency technologies and evaluate solar tiles (as a type of smart roofs), heat pumps and wood fibre insulation materials. The findings of IRL reports highlight points in innovation processes of each of the studied technologies which can positively influence their success in accessing the markets.

For the storage technologies, a literature review was conducted to collect right techno-economic data for the REEEM models. These cost projections then have been consolidated with experts and put into the right formats in order to be integrated into the REEEM models (in particular in TIMES PanEU). The cost projections for renewable energy technologies, studied in the second roadmap, were conducted using DELPHOSTM®. DELPHOSTM® is a tool developed by InnoEnergy which studies the impact of innovation on the levelised cost of energy technologies. The results, again, have been consolidated with experts for validation and improvement. In the final roadmap on energy efficiency in buildings includes two heat saving models to provide cost projections for the energy efficiency technologies in buildings. The first model is dedicated to the energy efficiency of technologies utilised in buildings for heating and cooling by 2050 and second model focuses on heat saving potential in relation to cost as a step function.

Main insights

Message 6: Different types of barriers may hinder the development of the market

The technology innovation analysis identified several barriers and challenges and opportunities in the deployment of the analysed technologies as enablers of the decarbonisation in Europe. The barriers could be summarised and categorised into five main groups, namely: regulatory and institutional, awareness and skills, access to finance, technological and others. Below each of these groups is explained, followed by proposed actions to overcome those barriers.

• Regulatory and institutional barriers: In many cases, the set targets might be unambitious or the legislation might be characterised by a high level of bureaucracy. Also, EU and national targets and regulations might not be in line (e.g. renewable energy targets). Policies need to become more targeted and designed more from the perspective of the consumer and producer and keep the level of complexity to the minimum. • Lack of public awareness: Often, consumers are not aware of certain technologies and their benefits. This might hinder significantly market development. Therefore, to achieve energy transition, campaigns and educational programs must be launched in order for consumers to become more engaged and contribute actively to the transformation of the system. • Access to finance: Despite the need and the long-term benefits that energy storage, renewables and energy efficiency can bring, the higher investment cost that they have compared to conventional technologies can be a significant restraining factor. Therefore, the right supporting funding mechanisms must be established, making sure that those technologies find their way into the market but without creating unsustainable growth. • Technological barriers: Government support itself is not sufficient to overcome fundamental weaknesses that those technologies might have. Further technological development is needed in order to make them more cost effective, lighter (in the case of batteries), produce them at larger quantities etc. This can be achieved through R&D investments undertaken by both the public and the private sector. • Other barriers: This category encompasses any sort of barrier that cannot be classified under any of the aforementioned cases. This can be for example, cultural barriers such as the conservativeness of construction companies, lack of reliable data about innovative technologies and their actual performance or lack of interests in small-scale projects. All these examples add to the slow development of those key technologies and can be overcome through strategic actions that aim to restructure the market holistically.

Despite the barriers, consistent findings of the stakeholder workshops point at the opportunities offered by:

• The exploitation of synergies between value chains. For instance, the processes of installation of offshore wind turbines and ocean energy technologies may mutually benefit from sharing infrastructure. • New business models around low-carbon technologies, which can increase the set of technological options available, foster dynamism in the market and accelerate the emergence of new, yet market-ready technologies.