Energy innovation and the sustainability transition

This chapter examines how and why energy innovation and sustainability transitions unfold. Following an overview of what constitutes energy innovation and transitions, we offer a comparison of what progress has already been made against delivering a sustainable energy system versus what scale of transformation is required to avoid catastrophic climate change and deliver on the United Nation's Sustainable Development Goals. As such, we consider the International Energy Agency's 2018 Sustainable Development Scenario. We find that despite impressive progress against some measures, such as installed capacity and cost of renewable energy, the energy system is only at the very beginning of its sustainability transition. What is required is a step-change in the pace of innovation to ensure we meet our sustainable development goals in a timely manner. To help inform strategies to ensure that an increase in low-carbon innovation funding is forthcoming and that this is spent effectively, this chapter offers an overview of three separate but related strands of theory: (1) evolutionary economics, (2) innovation systems and (3) sociotechnical transitions. Each approach offers different insights into the dynamics of energy innovation and transitions, adopting different scales, boundaries and units of analysis. Taken together, however, they present complementary tools for conceptualising energy innovation and system change, forming an alternative perspective to neoclassical economics. They are critical to informing our view of what a sustainable energy system might look like in the future and the types of actions we need to take to realise that vision.