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Innovation will be critical to complete the energy transition. The cost of solar and wind power technologies has been significantly reduced, and a similar trajectory is expected for lithium-ion battery technology. However, as these become more prominent, additional innovation supporting their integration into energy systems (including smart grids and storage) needs to advance. Continued innovation in clean technologies will be crucial for achieving a cost-effective transition to net-zero carbon emissions; many are far from being on track in terms of broad market deployment. In terms of buildings, for example, efficiency improvements and policy reforms are required, as energy demand from cooling, heating, and powered devices grows. Systemic efficiency and digitalization will be necessary to transition both buildings and the cities where they are built to a net-zero future. Faster progress is also required for applications in the manufacturing and transportation sectors, which have significant barriers to electrification - including high-temperature industrial processes, and the fuels still necessary for maritime shipping, aviation, and heavy-duty transportation. Hydrogen and advanced biofuels have shown promise for many of these applications, but related costs remain high. And, the search for hydrogen-based technical solutions means it will be necessary to deploy large-scale, clean hydrogen production and generation infrastructure in parallel. Another technology recognized for its role in addressing the climate challenge is carbon capture, utilization and storage (CCUS). All credible energy decarbonization scenarios foresee a role for CCUS, due to the significant carbon lock-in associated with current infrastructure and the difficulty in decarbonizing some industrial sectors. However, CCUS has so far not progressed much beyond the demonstration stage. Its deployment will depend on sufficient carbon price signals and other support mechanisms to facilitate viable business models by bringing capital costs down. The idea of net-zero carbon industry clusters has gained some traction; these would co-locate energy- and emissions-intensive industries, and put CCUS in place with shared infrastructure. In terms of the subsequent use of captured carbon dioxide, more research is needed to find viable use cases that go beyond niche applications. Early-stage research and deployment is also occurring with direct air capture technologies (which would be able to extract CO2 from ambient air), and biomass-based solutions for negative emissions (also known as bioenergy CCS). Taking a more holistic approach to the carbon cycle and developing a “circular carbon economy” that treats carbon as a valuable resource - and not just waste - may be required.

Driving Energy Technology Innovation

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Driving Energy Technology Innovation