Why Innovate? 

Importance of low carbon innovation

The UK has ambitious targets to cut carbon emissions while sustaining security of supply and improving energy affordability. The 2008 Climate Change Act led to adoption of a legally binding 80% reduction target by 2050 and new carbon budgets are being introduced for each five year period, with ceilings set by the independent Committee on Climate Change (CCC).

Delivering this low carbon economy will require a radical transformation of the UK’s energy infrastructure, underpinned by a portfolio of low carbon technologies capable of being deployed cost effectively and at scale. This will require significant investment in innovation and rapid deployment.

The private sector will play the major role in development and diffusion of new low carbon technologies. However, there are particular barriers which mean that the market may not deliver low carbon solutions sufficiently quickly to meet UK carbon reduction targets.

In particular, the lack of certainty in future carbon pricing and regulation often acts as a barrier to the significant scale of investment required to bring new energy technologies to market. The time to market for such technologies is also exceptionally long and there are significant displacement costs in competing with incumbent technologies.

Targeted public sector support, in partnership with the private sector, is vital to ensure progress at the pace required to meet our carbon reduction, security of supply and affordability objectives.
 

Delivering technologies for a low carbon future

Developing low carbon technologies is a complex, multi-faceted challenge. Taking a new technology from initial concept to market-ready product involves an iterative, non-linear process typically including laboratory research, prototyping, sub-scale demonstration, full scale demonstration, manufacturing scale-up and market rollout.

But successful innovation needs much more than just technology development; it also requires the development of viable commercial businesses, creation of new markets and appropriate changes to the surrounding regulatory framework .

In addition to technical progress, successful innovation therefore requires business models to support commercialisation, removal of market barriers, building new skills and capacity and links into government policy formulation.

In order to deliver the technologies for a low carbon future, the UK needs wide ranging support for these different aspects of energy innovation. To be effective, this support needs to:

• Span the full innovation journey – to ensure integrated support from R&D to full market deployment;
   
• Build on existing skills and networks – to capture ideas from across the diverse spectrum of the UK science and research base; and
   
• Leverage industrial capabilities – to access large scale private sector expertise and resources.