International Energy Agency
1 October 2024
Emerging developing economies have a major stake in tackling the climate challenge, including through the innovations needed to underpin the clean energy transition. In recent years, energy, climate and development policies in many emerging economies have included ambitious innovation objectives for clean energy technologies. The economic opportunity is large, and strengthening energy innovation systems in these countries is important for the pace of global energy transitions. However, the statuses and forms of these innovation systems vary widely today.
Government policies play an essential role in clean energy innovation, and it is the combination of a broad range of measures that makes them effective. Emerging economies have a wealth of policy and innovation experience to share, and all countries have much to learn about their specific challenges and commonalities.
This report presents 11 new case studies of national experiences with policy development and implementation in support of energy innovation in emerging and developing economies. The case studies, authored by national experts, cover a range of technologies and highlight distinct aspects of the energy innovation process across diverse settings in Argentina, Brazil, China, Colombia, India, Kazakhstan, Kenya, Mexico, Morocco, Nigeria and South Africa. A comparison of the case studies reveals seven key findings and a set of insights for governments, intergovernmental bodies and other partners to work on effective policy packages and stronger clean energy innovation ecosystems globally.
Common to all of these case studies is the aspiration of governments to engage in the clean energy transition, even in the face of resource constraints. A comparison of the case studies reveals a number of key findings that demonstrate the strengths of energy innovation in the countries under consideration:
Clean energy innovation has risen high up the policy agenda in developing countries, just as it has in advanced economies. The potential for economic development is a key motivating factor, as is the need to boost energy security and respond to the climate challenge. Countries including Argentina, Colombia, Kazakhstan, Nigeria and South Africa issued new national energy strategies that referenced clean energy innovation shortly after publishing their nationally determined contributions (NDCs) as part of the Paris Agreement process. However, since around 2020, industrial development and inward investment have become equally strong drivers for action.
Innovation policy can build upon and reinforce broader trends to catalyse technological change. Energy innovation outcomes are more easily achieved when they align well with national visions for economic and social development. In India, energy efficiency was boosted by the government’s priority of maintaining access to electricity for a growing population despite financial challenges for utilities. In Colombia, hydrogen technologies have the potential to address a range of emergent and pressing policy issues.
There are multiple ways to set innovation in motion. In many cases, successes at the national level have emerged through different configurations of private sector-led research, expert interaction through knowledge networks, strategic funding and policy tools, and partnerships with foreign technology suppliers. In Kenya, for example, a new cohort of producers of solar home systems were borne from a funding programme for off-grid solar PV that rewarded innovative means of adapting services to local consumers’ needs.
Institutional history exerts a powerful influence on policy choices. South Africa’s “just transition” policies have their roots in a long social and institutional history. Successful innovation policy interventions work in harmony with the existing policy landscape, and it is important that international partners are sensitive to the institutional history. Overall, the state typically plays a more prominent role in the energy sector than it does in advanced economies, and, as illustrated by nuclear innovation in Argentina, there is less reliance on market forces and private sector R&D.
Existing technical expertise can provide a springboard, including from adjacent sectors. For example, Kazakhstan’s energy technology plans promote areas that require transferable skills from the oil and gas sector, such as sustainable liquid fuels. Kenya, by contrast, became a leading innovator in solar home systems due to its prior expertise in digital finance technology. Mexico is building on its manufacturing expertise to enter technologies related to solar PV.
There are demonstrated ways to make the most of limited resources. International co-operation – whether through financial support or knowledge sharing – is a key feature across the cases. Limited resources demand prioritisation of technology options that match local capacities. Morocco has developed tools and expertise for exploring potential technologies and identifying gaps to be targeted by policy. Nurturing the innovation ecosystem and maintaining connections with international innovators is also important. The earliest solar PV manufacturing in China benefited from individuals with strong international networks and connections to diasporas.
Few countries have well-established and comparable processes for evaluating outcomes against the original policy goals. Evaluating innovation policy is complex for all governments, but it should be built into policy design at the outset, to support the process of learning. Mexico is an exception in this regard: its General Law on Climate Change mandates the evaluation of climate change policies through INECC, an institution within the Environment Ministry.
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