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Through promotion of research and development (R&D) activities as well as demonstration projects, innovations in terms of technologies and design concepts are fostered. Research and development (R&D) is critical to drive the development of innovative technologies to contribute to mid-term and longer-term policy goals and to ensure that efficient technologies are ready for commercialisation in time. R&D funding is a key driver for innovative ideas, assists the accelerated market introduction, and reduces the incremental costs of energy efficient solutions. However, market breakthrough is often hindered by a plethora of market barriers and is thus likely to need further policy support. Through a coherent R&D policy, governments can further capacity building of comprehensive national scientific and technological research institutions on energy efficiency (GTZ et al. 2006).
The role of research and development (R&D) in changing the market development towards energy-efficient appliances is unquestionable – new technologies have played a large role in the evolution of the energy sector over recent years. Moreover, the rate at which energy-efficient technologies improve during the next 20-30 years will be an important determinant of whether low emission paths can be achieved in the future. New energy-efficient technologies realised through R&D can help raise the productivity and competitiveness of companies and national economies as well as create jobs by producing new products and improving production processes (GTZ 2006). In order to improve energy efficiency of appliances, sufficient investment and public R&D funding schemes are necessary to increase and maintain the R&D activities (Bosetti et al. 2007).
The relevance of R&D funding is already high in some countries. Nuclear technologies are a core of energy-related public R&D spending in several countries (IEA 2007) but it remains to be seen whether (after the accident in Fukushima Daiichi) government budgets will be further increased in favour of renewable energies and energy efficiency.
To realise energy efficiency in appliances, R&D is particularly relevant not only to make the existing products and processes more efficient but also, more fundamentally, to innovate new ways (e.g. systems; processes; value chains) of producing and using products in a less energy-consuming way (Dormann/Holliday 2002). Business primary drive the development of new products, but key innovations have their origin in publicly funded research.
In this context, research and development can be defined as “systematic investigatory work carried out to increase the stock of knowledge and the use of such knowledge to devise new products and processes”. R&D includes basic research, applied research and experimental development conducted by governmental departments, universities, research institutes and private companies (GTZ 2006).
Governments use different tools to support and finance energy efficiency R&D. These tools are for example; grants, contracts, tax credits and public/private partnership. The effects of these tools in stimulating energy-efficiency vary and depend on how the research programmes are structured and targeted (IPCC 2007)
For the rapid market deployment of innovative technologies a comprehensive understanding of the stage of development of a technology and the respective political support is crucial. How the stage of R&D is interlinked with the following consecutive stages of market development (“from niche up to mass markets”) and the respective types of policy support is summarized in the figure below (IEA 2010).
Research and development is also relevant for the implementation of other policies and measures. In this context R&D will be one element to prepare the next steps in raising the MEPS to levels of higher energy-efficiency and is important to set energy-efficiency requirements for labels, financial incentives etc.
R&D efforts try to improve energy efficiency by ensuring that energy-efficient and low greenhouse gas emitting technologies will be available in the future.
R&D funding can be a key driver of innovative ideas, can assist the accelerated market introduction, and reduce the incremental costs of energy efficient solutions.
Worldwide implementation status
Most countries have some sort of R&D funding but the procedure, the financing and the organisation of the R&D efforts and the funding schemes are diverse. While many countries fund research on energy efficiency, much fewer countries probably fund R&D projects on raising appliance energy efficiency.
In most cases research and development funding schemes were introduced at national level. In some cases, research and development funding was realised in a group of several countries (e.g. the European Union includes 27 countries).
Research and development funding on energy efficiency in appliances can be realised with a residential, industrial, commercial or public sector focus. It depends on the focus of the R&D programme. In principle the sectoral focus is unlimited.
In recent years energy efficiency and the technological development of appliances are getting more attention. In this context the identification of the best domestically available technologies is the start, and the development and demonstration of best not yet available technologies and their potentials are the main research fields. R&D funding aims to improve the energy efficiency of appliances through technology development and realising the innovation potential.
As funding for energy efficiency R&D is an instrument to achieve policy targets, a clear link to other relevant policies should be established to maximise the impact and efficiency of the R&D activities (IEA 2007). Therefore, R&D efforts can and should be part of an effective policy package. Market breakthrough of very energy-efficient appliances with new technologies is often hindered by a plethora of market barriers and thus likely to need further policy support.
Concrete policy instruments that should be integrated into an effective policy package are energy labels, minimum energy performance standards (MEPS) and, where appropriate, financial incentives. To be effective it is essential to establish R&D in accordance with these instruments. Once a certain market share of highly energy efficient appliances above a specific performance level is reached, MEPS can secure this level and the requirements for getting into the next market stage should be prepared by R&D activities.
Pre-conditions for R&D funding programmes are an agency or project authority and a funding scheme.
Agencies or other actors responsible for implementation
A public authority should be responsible for the assessment of R&D proposals, their approval and for funding the research activities. It should also guarantee the financial issues and the monitoring/evaluation of the policy.
Government agencies can provide both financial and non-financial incentives to support R&D for energy-efficiency. Different types of interventions are:
Testing the energy efficiency of newly developed very energy-efficient appliances in comparison with the existing appliance models needs test procedures. Development of test procedures also needs funding and often involves R&D, e.g. for analysing reproducibility of test results with ‘round robin’ tests performed by several test laboratories on the same appliance.
The existence of a national energy roadmap is the most important precondition for a long-term target-oriented R&D strategy (IEA 2007). Next, a well-designed R&D strategy with a portfolio of R&D programmes to support energy efficiency follows. Moreover, transparency and the involvement of stakeholders in defining an R&D strategy is important (IEA 2007).
A main step is the prioritisation of different research targets and concepts. Limited resources and a multitude of opportunities requires careful attention to funding priorities harvesting comparative advantages of the specific national frame conditions and resources. The programmes should demonstrate relevance and consistency with national priorities. Innovative ideas that show promise should then be selected and funded. A monitoring of the programmes is essential to follow the development of the research activities. (IEA 2007).
Actors responsible for implementing the research and development activities can be governmental departments, universities, research institutes, private companies, and non-governmental research bodies.
The policy can and should have a quantified target. The effectiveness can be evaluated through the degree to which the energy consumption of the appliances subject to R&D has been reduced by it and if they are commercialised, by the market development of the very efficient appliances (number of units developed and sold).
Co-operation of countries
Enormous R&D investments are needed to address the significant global energy challenges, while maintaining economic growth. This calls for international collaboration on R&D.
Co-operation of countries has numerous advantages. Countries co-operate with other countries in order to “share costs, spread risks, avoid duplication, access facilities, enhance domestic capabilities, support specific economic and political objectives, harmonize standards, accelerate market learning and create goodwill” (IPCC 2007).
International collaborations can learn from an already established knowledge base and can make use of specialised expertise. Co-operations are especially helpful for countries with less experience. They have the chance to learn from other countries. In addition countries can co-operate and establish comprehensive funding schemes.
Monitoring and evaluation of R&D activities are essential to guarantee the success of each programme. Programmes must demonstrate importance, consistency with national priorities, and success (IEA 2007). More specific indicators of success can be whether the expected energy efficiency improvement has been achieved in an R&D project, whether the results are reproducible by others, and whether the very energy-efficient appliances have been successfully commercialised.
Methods for evaluation are diverse and include self-evaluation as well as evaluations by external experts. Most evaluations use statistical data and interviews with stakeholders to evaluate the success of the programme and to develop recommendations for future activities (IEA 2007).
Public R&D funding mechanisms can include sustainability criteria as a condition to receive the funding. These aspects can be water consumption, noise, waste reduction or general resource efficiency and other performance characteristics.
The following barriers are possible during the implementation of the policy:
Barriers for implementation are the risk of high initial costs. Furthermore difficulties in prioritisation are possible. The combination of limited resources and a multitude of opportunities requires careful attention to funding priorities (IEA 2007).
The following measures can be undertaken to overcome the barriers:
Scoping studies can assess the state of technology and the potential for improving energy efficiency of different types of appliances. Priorities can be set based on such studies,. An example is the MaxTech study performed by the Lawrence Berkeley National Laboratory.
The achievable energy savings depend on the technology and the innovation potential. Therefore it is difficult to make general statements about achievable energy savings.
The effectiveness depends on consistent funding, (when technologies are developed), and the commercialisation of these energy-efficient products. R&D may have high benefits in the long term (IPCC 2007).
The relevance of R&D funding in some countries is already high. For example increasing investment in R&D is one of the five priorities of the Europe 2020 strategy. EU R&D intensity has grown from 1.85% of GDP in 2007 to 2.01% in 2009 (European Commission 2011). A growing share of R&D activities is carried out but not only in the EU. Examples from other countries are the USA with 2.01%, South Korea with 2.45%, and Japan with 2.68% of GDP. “In a historic context, R&D expenditures as a percentage of GDP have gone up and down in cycles as government priorities have changed over the last 50 years” (IPCC 2007).
For an overview about publicly funded energy research and development expenditure by International Energy Agency member countries see the next figures. As the shows, energy efficiency R&D is only a minor part of this expenditure, fluctuating around US$ 1 billion a year, and R&D funding for energy efficiency in appliances is likely to be only a very small part of overall energy efficiency R&D expenditure.
The cost-effectiveness of R&D funding schemes will depend on the design of the programme and the degree of risk (IPCC 2007). In the energy sector, several appliances have long lifetimes. Therefore it can take years to commercialize the newly developed energy efficient appliances. This makes the public role for R&D even more critical (Margolis & Kammen 1999).
Try the following external libraries:
|Energy Efficiency Policy Database of the IEA|
|Energy Efficiency Policies and Measures Database of the World Energy Council|
|CLASP’s Global S&L Database|