IRENA calls for 'systemic innovation' to deliver energy transition

The energy transition is bringing with it the opportunities for countries to transform and modernise their energy systems and ensure that there is universal access to electricity.

However, technology alone – ultimately a tool – won't deliver the breadth of transformation required and requires innovation across the board from policy, regulation, market design and system operation to planning, and business models.

Thus innovation in the energy transition must be approached from a systemic perspective, states IRENA in its new report, commenting that real implementable solutions emerge from synergies between various innovations across multiple components of the power system, aka ‘systemic innovation’.

“The question isn't whether we can transform our energy system”, said Francesco La Camera, Director-General of IRENA. “It’s whether we will seize the moment to do it in a holistic way, leaving no one behind . 

"The energy transition is not only about availability of technology, but also about solutions which deliver social justice and avoid leaving anyone behind. With today’s report we call for a systemic innovation approach and guide policymakers with a toolkit to formulate tailored solutions.”

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The report also notes that a ‘one-size-fits-all’ solution for the future of energy systems does not exist. Optimal strategies and implementation of innovations will vary by a countries’ circumstances, as they need to account for system-specific attributes.
Countries also have different technical starting points for renewable energy deployment and grid integration.

The report identifies the 40 innovations in four areas.

Technology and infrastructure

• Flexible generation and storage: 1. Increased flexibility from existing generation assets, 2. Large-scale batteries, 3. Small-scale batteries, 4. Long-duration energy storage;
• Digital technologies: 5. Monitoring systems, 6. Smart and autonomous systems;
• Electrification of end uses and energy efficiency: 7. Energy efficient appliances, 8. Electric vehicles, 9. Green hydrogen, 10. Renewables-based electrification of heating, cooling and cooking;
• Future grids: 11. Renewable mini-grids, 12. Supergrids – green corridors.

Business models and key change agents

• Consumer at the centre: 13. Energy community, 14. Decentralised productive uses of electricity, 15. Peer-to-peer trading, 16. Aggregators, 17. Storage as a service;
• Funding models: 18. Pay as you go (PAYGO), 19. Crowdfunding and financial bundling for electricity access, 20. Corporate renewable sourcing;
• Ecosystem enablers: 21. Key change agents to support renewables-based development programmes, 22. Powering a sustainable health and education ecosystem, 23. Renewable energy synergies for modernised railway infrastructures, 24. Renewable energy for resilient agriculture and farming systems.

Market design and regulation

• Regulatory and fiscal support for renewable energy deployment: 25. Development-linked fiscal instruments, 26. Renewable energy auctions with socio-economic requirements, 27. Renewable portfolio standards;
• Empowering consumers and regulation enhancing operational reliability: 28. Time-of-use tariffs, 29. Innovative pricing for prosumers, 30. Regulation for mini-grids;
• Regulation enhancing operational reliability: 31. Regional integration, 32. Innovative ancillary services, 33. Grid connection codes.

System planning and operation

• Grid enhancing innovations: 34. Storage as virtual power lines, 35. Dynamic line rating, 36. Installing innovative compensation devices on the grid, 37. Enhanced forecasting of variable renewable generation;
• Strategic planning: 38. Electricity losses reduction, 39. Planning for harmonised grid and off-grid developments, 40. Planning for regional interconnections.

Drawing from the four areas, the innovations are then compiled into four ‘toolkits’ addressing distinct policy objectives – grid modernisation and decentralised solutions for resilience and accelerating energy access and inclusive local development.

IRENA also has identified eight strategic priorities to enable action, including fostering innovation ecosystems and engaging and empowering consumers and communities.

The report notes that barriers to the adoption of innovative renewable energy solutions must be systematically addressed through a holistic approach. 

Action is needed at every level, from multilateral institutions and regional fora to national governments and local communities. A truly just energy transition also requires prioritising inclusion and fairness, ensuring that the benefits of renewable energy reach all segments of society, especially vulnerable and marginalised groups.