The Next Wave of Energy Innovation: Which Technologies? Which Skills?

The costs of low-carbon energy fell dramatically over the past decade, leading to rapid growth in its deployment. However, many challenges remain to deploy low-carbon energy at a scale necessary to meet net-zero carbon emission targets. We argue that developing complementary technologies and skills must feature prominently in the next wave of low-carbon energy innovation. These include both improvements in physical capital, such as smart grids to aid in the integration of intermittent renewables, and human capital, to develop the skills that workers need for a low-carbon economy. We document recent trends in energy innovation and discuss the lessons learned for policy. We then discuss the need for complementary innovation in both physical capital and human capital. We provide guidelines for identifying appropriate policy tools to promote enabling technologies, and we show how a focus on job tasks can inform policy and research on the worker skills needed for the energy transition.