Energy Network Innovation for Green Transition: Economic Issues and Regulatory Options

In this age of multiple economic challenges and stimulus packages, is it a good time to heavily invest in tomorrow's energy networks and research infrastructure? The academic literature widely acknowledges that innovation is key to decarbonising the energy sector and fostering sustainable development. However, R&D and innovation have not been strongly promoted following the liberalisation of the energy sector. Is this a case of business, regulatory, or policy failure, or are there other factors involved? In this paper, we suggest reasons for the slow uptake of new technologies in energy networks and discuss some remedies for the European context, where innovation in the area of energy networks is crucial for the implementation of the Green Transition. The solutions to address this shortfall need to be considered in an overarching manner. The specific points raised are with reference to incentive regulation, the establishment of competitive funding models like Ofgem's Low Carbon Network Fund, and a large European collaborative research hub.