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always considered as part of technology innovation policy packages, they have a significant impact on research-to-market processes.

Policy instruments for non-financial support include: intellectual property rights; technology transfer policies; access-to-finance regulations; national RD&D strategy; development of research institutions and academia; standards and certification policies (including environmental regulation); policies to establish technology innovation clusters; nonfinancial prizes and awards; policy intelligence (e.g. monitoring and evaluations); industrial policies with “pull” factors (e.g. mandates and quotas); national energy strategy (e.g. deployment targets and market structure)

Direct and indirect financial support

At the micro level, policy can support energy innovation via “push” levers, namely providing financial support for the development of new technologies. “Push” policies include allocating specific public RD&D funding to a given energy technology area (e.g. investing in advanced biofuels research).

Policy instruments for direct financial support include: grants for public research institutions, centres of excellence or private sector actors; procurement programmes for RD&D and innovation; fellowships and postgraduate loans and scholarships; loans, credits or guarantees for innovation in firms; equity financing; innovation vouchers for SMEs. Instruments for indirect support include tax incentives for RD&D activities.

Overall, policy makers may use a broad range of policy instruments to accelerate energy innovation. In addition to energy RD&D funding (micro, “push”), they should consider the broader energy policy landscape (meso, “pull”), as well as the general economic and technology innovation environment (macro, “doing business” and “doing innovation”).

Assessment

Strategic planning of energy RD&D activities

Energy RD&D activities can be a strong enabler of India’s energy policy goals, while also contributing to broader national priorities (e.g. Make in India). As a result, India is strengthening its innovation efforts in a broad range of energy technology areas (e.g. cooling, electric mobility, smart grids and advanced biofuels). At present, however, only in some cases are RD&D priorities directly embedded in key energy policies to align innovation efforts with national priorities. Examples of such policies include the ICAP (2019) or the National Mission on Transformative Mobility and Battery Storage (2019), which explicitly address technology innovation considerations, as detailed in previous sections.

The opportunity exists to systematically embed RD&D components in broader energy policies, so as to: a) conduct technology innovation activities that are synergetic with policy goals; b) ensure an inclusive multi-stakeholder process in designing RD&D roadmaps; c) foster engagement with non-public stakeholders to further leverage private investment; and d) enable greater policy ambition in the long term as new and more efficient technologies emerge (e.g. more ambitious emissions reductions).

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A more impact-oriented approach to energy RD&D investments could also be promoted, that is, an approach that sets specific performance targets in key technology areas, such as the previously-mentioned India Global Cooling Prize. Other international RD&D approaches, such as the United States Advanced Research Projects Agency-Energy (ARPA-E), may provide examples of effective practices that aim to ensure the full innovation chain from lab to market is addressed.

Policy makers may benefit from laying out sectoral energy RD&D strategies and roadmaps that define priorities, desired results and monitoring processes across all technology areas, with several time horizons (for example, short and long term). Strategic planning should ideally engage with a wide range of stakeholders, including industry, academia, states and non-profits. Such a strategy could assess – based on national priorities and energy policy goals as well as capabilities and resources – whether it is best to adopt, adapt or develop energy technologies.

This holistic approach would: a) send strong signals to the broader energy innovation ecosystem as well as markets; b) improve the quality and effectiveness of domestic research institutions (both public and private); and c) foster long-term technology innovation growth, including in focus areas that may seem niche today (e.g. energy storage, net-zero buildings, CCUS, geothermal and marine energy).

Monitoring the results of energy RD&D funding appears to occur at the project level or as part of individual departmental results frameworks, and often focus on metrics such as the number of patents, citations and engagements. Data on energy-specific RD&D in India is limited, making it difficult to draw conclusions.

Key performance indicators and detailed funding history across RD&D programmes should be collected and monitored in a systematic manner, so as to adjust priorities and funding based on results. The IEA’s efforts to collect, monitor and analyse data to track performance progress may be helpful in that regard, building on best practices developed in collaboration with IEA member and partner countries.

Inter-ministerial RD&D programme co-ordination

Many ministries and departments are engaged in directing, performing and funding energy RD&D. The greater the number of public institutions involved, the more challenging the co-ordination across RD&D activities can be. Ineffective co-ordination hinders the overall impact of innovation, as it becomes difficult to ensure efficient allocation of funds, time and staff, and to provide consistent signals to industry.

The innovation ecosystem in India would benefit from enhancing mechanisms to co-ordinate energy RD&D activities across ministries and public bodies. Such mechanisms would help avoid the fragmentation of initiatives, governance or responsibility dilution, overlaps or missed opportunities due to a lack of inter-agency visibility. They could bring substantial efficiency benefits thanks to lighter, streamlined administrative processes. The PM-STIAC, established in 2018, is a step towards enhancing co-ordination.

One way to further improve co-ordination could be to establish a senior-level governance structure composed of representatives from key ministries and research bodies, as well as administrative capacity for energy RD&D planning, policy development and coordination. This structure would contribute to the long-term consolidation of all public energy RD&D efforts, facilitate engagement with industry and strengthen India’s role in

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international collaboration initiatives. The recently-announced National Research Foundation may be step towards this proposed co-ordination mechanism.

MI RD&D goals

As a percentage of GDP, public spending on RD&D in India has remained flat over the last two decades, and ranks below that of other emerging economies such as China and Brazil. The government has signalled a need to increase spending levels. For the energy sector, the country’s role in MI illustrates these commitments. Although data on energy-specific RD&D in India is limited, preliminary reporting indicates that good progress towards MI doubling targets has been achieved.

The government is encouraged to maintain strong funding levels commensurate with the essential importance of the energy sector to India’s rapid growth. Ongoing data collection on energy RD&D funding will be a key enabler in this regard and should be expanded to other levels of government, PSUs, academia and the private sector. The IEA and MST are collaborating in this context to map India’s energy innovation ecosystem, identify innovation gaps and help track RD&D outcomes and innovation investment, based on the 2018 memorandum of understanding.

Private-sector engagement to spur energy RD&D investment

A distinct feature of the Indian innovation system is the dominance of the central government as the country’s main RD&D funder. In most countries, the private sector drives RD&D spending and market-led technology innovation activities.

RD&D programming could be optimised to better spur private-sector investment and leadership. Engaging with private stakeholders is key to: a) leverage greater overall investment in technology innovation despite increasingly limited government resources; b) facilitate lab-to-market paths for key emerging technologies and accelerate deployment; and c) optimise the allocation of public funds in those specific innovation areas suffering from financing gaps due to higher risks and capital costs or longer-term returns on investment that are less appealing to private-sector actors.

The effectiveness of existing indirect measures (e.g. RD&D tax incentives) to stimulate broad-based industry innovation activity should be examined, in tandem with the current focus on targeted direct funding programmes. Intellectual property frameworks within energy RD&D programmes should also encourage private-sector participation and collaboration with public bodies and academia.

Leadership in energy RD&D international collaboration

As a co-founder of MI, co-leader of three MI challenges and participant in 11 IEA TCPs, an integral part of India’s energy RD&D efforts is its focus on international collaboration.

The government is encouraged to continue these efforts and to aim at achieving concrete results for India. International collaboration may help the country develop and deploy emerging technologies necessary to achieve national policy goals, such as clean energy access, containing air pollution in urban centres and generally supporting robust economic growth.

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