Energy Network Innovation for Green Transition: Economic Issues and Regulatory Options

Abstract

In this age of low-cost capital and stimulus packages, is it the best time to heavily invest in tomorrow's energy networks and research infrastructure? In the academic literature it is widely acknowledged that innovation is key to decarbonise the energy sector and foster sustainable development. However, post liberalisation has been struggling to promote R&D and innovation. Is this the case of business, regulatory, or policy failure, or are there other factors involved? In this paper, we discuss the reasons for slow uptake of new technologies in energy networks and propose some remedies for the European context, where innovation in the area of energy networks is crucial for the implementation of the Green Transition. The solutions to address this shortfall need to be considered in an overarching manner. The specific points raised here are based on incentive regulation, the establishment of competitive funding models like Ofgem's Low Carbon Network Fund and a large European collaborative research hub.

Energy Sector’s Green Transformation towards Sustainable Development: A Review and Future Directions

“…Due to the aforementioned strategic role of the energy sector, its transformation towards SD [36,37] and the decarbonization challenges behind it [38,39] occupy an important place in the literature. Some of the researchers working on this issue explicitly indicate that this type of transition should be called a green transition [40,41]. The main rationale behind such naming of this process is the fact indicating that the transformation of the energy sector towards SD occurs as a result of increasing the use of those renewable sources as energy sources at the expense of abandoning the use of energy resources from non-renewable sources [42].…”

Where next for the electricity distribution system operator? Evidence from a survey of European DSOs and National Regulatory Authorities

“…33.See Cambini, Congiu, and Soroush (2020) who discuss the strengths and weaknesses in European countries’ approaches to innovation funding in energy: and Jamasb et al (2020) who compare funding mechanisms for energy R+D.…”