Release of the Special Report on Clean Energy Innovation

– Heat pumps and efficient air conditioners are a cornerstone of buildings sector decarbonisation, and can benefit from spill-over innovation mechanisms

On July 2 IEA released the first part of the Energy Technology Perspectives 2020 – The Special Report on Clean Energy Innovation

The unprecedented health emergency and economic crisis triggered by the Covid-19 pandemic risks to be a setback for clean energy innovation efforts at a time in which faster progress is needed. The report quantifies the needs for technology innovation and investment for a cleaner and more resilient energy sector at net-zero emissions. It identifies key technology attributes that can help accelerate innovation cycles.

Without a major acceleration in clean energy innovation, net-zero emissions targets will not be achievable. Energy efficiency and renewables are fundamental for achieving climate goals, but there are large portions of emissions that will require the use of other technologies. Innovation is the key to fostering new technologies and advancing existing ones.

Heat pumps and ACs are cornerstones
According to the report heat pumps and efficient air conditioners are a cornerstone of buildings sector decarbonisation, enabling almost a quarter of the cumulative additional CO2 emissions reductions through to 2070 in the Sustainable Development Scenario compared to the Stated Policies Scenario. Both heat pumps and air-conditioners can benefit from spill-over innovation mechanisms. Hence, synergies between air conditioners and heat pumps mean that heat pumps achieve an additional 15% cost reduction thanks to spill overs from cooling applications in 2070 in the Sustainable Development Scenario. These improvements in cost and performance would result in heat pumps gaining half of the heating market share globally, mainly in countries like the

Russian Federation and the People’s Republic of China, where the incumbent heating technology is direct, or district use of natural gas or coal.

Heat pump stimulus packages due to Covid-19
In addition, the report tells that the Covid-19 outbreak has affected critical electricity-based technologies. Heat pumps sales reported for 2020 suggest a temporary levelling off or decrease in some markets. However, governments are seizing the opportunity to include heat pumping technology in Covid-19 stimulus packages: for example, the Italian “Super Eco-bonus” provides a 110% fiscal incentive (up to EUR 30 000) for A-class heating and cooling systems, on top of other renovation measures. Aligning investment cycles with net-zero targets can create large markets for new technologies and avoid huge amounts of “locked in” emissions.

But nevertheless, it is important to continue investing in research and development. Delaying R&D investment, prototype testing and demonstration of innovative heat pumps results in the Reduced Innovation Case in a 60% decrease in related installed thermal output capacity in 2030 globally compared to the Sustainable Development Scenario.

The IEA proposes five key innovation principles
For governments aiming to achieve net-zero emissions goals while maintaining energy security, these principles primarily address national policy challenges in the context of global needs, but are relevant to all policy makers and strategists concerned with energy technologies and transitions:

  1. Prioritise, track and adjust. Review the processes for selecting technology portfolios for public support to ensure that they are rigorous, collective, flexible and aligned with local advantages.
  2. Raise public R&D and market-led private innovation. Use a range of tools – from public research and development to market incentives – to expand funding according to the different technologies.
  3. Address all links in the value chain. Look at the bigger picture to ensure that all components of key value chains are advancing evenly towards the next market application and exploiting spill overs.
  4. Build enabling infrastructure. Mobilise private finance to help bridge the “valley of death” by sharing the investment risks of network enhancements and commercial-scale demonstrators.
  5. Work globally for regional success. Co-operate to share best practices, experiences and resources to tackle urgent and global technology challenges, including via existing multilateral platforms

Some of the recommended policy actions by the IEA for a sustainable recovery plan for the energy sector are to

  • Implement appliance turnover schemes to replace inefficient appliances, install heat pumps and renewable energy systems that use solar water heaters and biomass boilers
  • Incentivise industrial energy efficiency, especially light-industry electric motor and process heat pumps upgrades
  • Fund purchase incentives for integrated designs, such as PV, heat pumps and storage.
  • Fund field trials of heat pump and air conditioning operation in response to demand-response incentives.


The full Special Report on Clean Energy Innovation can be found here: