Innovation policy for future energy system
Energy policy in Sweden finds itself at the start of 2015 undergoing a process of transformation. Despite facing numerous challenges, Sweden is in many ways well equipped to respond to such challenges. However, a number of significant challenges lie on the horizon beyond 2020. According to most assessments, it is not possible to achieve the goals set for 2050 using currently agreed or planned policy instruments.
Technological, institutional as well as political innovation will be needed in order to meet the energy targets beyond 2020 and innovation policy can, if correctly designed, play an important supplementary role to other and more general policy instruments.
The main conclusions of our study are
- Stability and transparency is vital to create market conditions that allow private investments and large-scale development and deployment of new technology.
- Short term cost efficiency must be balanced against long term goal attainment. Policies should reflect the fact that innovation often takes time and appear in unpredictable patterns. A too narrow focus on cost efficiency might therefore be counter-productive.
- Attention should also be paid to the balance between established interests and challenging solutions. Innovation are often driven by small and new firms, so policy makers should strive to remove barriers that prevent these firms from growing into viable businesses.