The State of Energy Innovation: 2026 Report Launch

Why It Matters

Falling public and private investment risks slowing development of technologies needed for energy security and decarbonization just as geopolitical pressures rise; policymakers and investors must plug funding gaps and align incentives to ensure long-term competitiveness and resilient energy systems.

Summary

The IIA’s 2026 State of Energy Innovation report, framed by recent Nobel-winning work on long-run innovation, finds energy security is now the top driver of innovation but warns funding is slowing just as geopolitical risks rise. Global public energy R&D fell in 2024 and preliminary 2025 data show continued declines, venture capital into energy tech has dropped for a third straight year as AI captured about one-third of VC funding, and corporate energy R&D growth stalled at just 1% in 2024. Despite the funding squeeze, energy remains an innovation powerhouse—battery patents now account for nearly half of energy patents, China leads in energy patents, and analysts identified 150 notable advances and over 50 emerging technologies moving toward commercialization in 2025. For 2026 the report calls for strategic alignment of R&D and finance with industrial opportunities, targeted supply-chain investment, clearer funding strategies to compete with AI, and stronger partnerships to bring first-of-a-kind projects to market.

Original Description

Discover the key findings from the 2026 edition of the State of Energy Innovation Report and read teh full report at: https://www.iea.org/reports/the-state-of-energy-innovation-2026

The second edition of The State of Energy Innovation turns the spotlight on the technologies, policies and funders at the forefront of energy technology development. It provides a comprehensive assessment of recent progress and emerging challenges in energy technology innovation, drawing on over 150 innovation highlights from 2025 and a survey of practitioners across more than 40 countries. It analyses trends in public and corporate R&D spending, venture capital flows, patenting and policy, as well as providing an update on progress towards the 18 IEA Races to First in energy innovation. This data-driven approach informs policy makers, industry and other stakeholders on the state of energy innovation worldwide and the importance of sustaining innovation momentum over the long term.

The report finds that the context for energy innovation is tilting towards competitiveness and security. Many of the innovation-relevant policies launched in 2025 promote technological strength for economic competitiveness and energy security. The share of all patents that are related to energy is growing, and over 320 new energy start-ups raised their first funding in 2025. These are signals of an active ecosystem but innovators depend on a predictable funding and policy framework. The report shows that the value of spending on energy innovation can be seen in market outcomes, with public energy innovation support behind some recent, major steps forward in the energy sector. The report includes several timely policy recommendations and in-depth chapters on two dynamic fields, namely technologies to enhance electricity grid resilience and advance fusion energy.