Demo! Scalable and Replicable Demonstration Projects to Accelerate Decarbonization Worldwide

ITIF’s Center for Clean Energy Innovation co-sponsored a side event on scalable and replicable demonstration projects to accelerate decarbonization at the Global Clean Energy Action Forum. Event partners included the International Energy Agency, the Italian Ministry of Ecological Transition, the Mission Innovation Green Powered Future Mission, the International Smart Grids Action Network (ISGAN), and the United Nations Environment Programme.

About the Event

Almost 50 percent of emissions reductions needed in the IEA Net-Zero Emission by 2050 Scenario (NZE) require solutions that are at the prototype or demonstration stage. Only 25 of the USD 90 billion of public investment needed to support demonstration projects before 2030 in the NZE is mobilized. New frameworks and projects based on scalability and replicability are urgently needed to rapidly validate and commercialize innovative clean energy solutions, such as for smarter grids and hydrogen production. The event brought together international high-level experts to share learnings, challenges, and approaches to effectively leverage demonstration projects and international cooperation to accelerate clean energy transitions. Initiatives, such as GPFM Flagship Projects, the US call to invest USD 90 billion in demonstration projects by 2026, and the EU Innovation Fund will be presented. The Italy/UNEP smart grid pilot project implementation phase associated with IEA’s 3DEN Initiative will be launched by announcing the awardees.

• Demonstration represents the biggest gap in the global clean energy innovation system, and while the gap is starting to be filled it’s still not enough.
• Demonstration requires not just more investment, but also smart investment that focuses on scalability and replicability.
• It will also require international cooperation, which will lead to challenging questions about knowledge sharing and coordination.

A recap of the event follows.

Opening Remarks

After an introduction by moderator Brian Motherway, head of the Energy Efficiency Division of the International Energy Agency, David Hart, director of the Center for Clean Energy Innovation at ITIF, welcomed the participants. He emphasized that demonstration represents the biggest gap in the global clean energy innovation system. While that gap is slowly being filled, more action is needed. Meeting this challenge will require not only more investment but also smarter investment that focuses on replicability and scalability as well as international cooperation.

Kelly Cummins, Deputy Director of the U.S. Department of Energy’s Office of Clean Energy Demonstration (OCED), described her office’s mission of strengthening DOE’s management of clean energy demonstration projects, even as it executes them on a vastly expanded scale. She discussed OCED’s work to bring greater consistency to project oversight, starting with a study of past failures. The urgency of the climate crisis means that demonstration projects need to be carried out quickly. OCED is using a phased approach to speed up development. Cummins concluded by highlighting the vital importance of buying down risk in order to accelerate market adoption.

The Executive Direct of the India Smart Grid Forum (ISGF), Reena Suri, discussed the work that ISGF is doing to fill the demonstration gap in the Indian electricity sector. India plans to deploy 250 million smart meters and 500 GW of renewables across the country by 2030. She noted that it will require a massive effort to integrate new capacity into the grid, which is the focus of her organization’s activities.

Mark Radka, Chief of the Energy and Climate Branch of the UN Environment Program (UNEP), noted the tension in public funding for large-scale demonstration projects. The public sector too often has incentives to be risk-averse but if no risks are taken, innovation will never move forward. There have to be some failures to have innovations that succeed. UNEP has more flexibility to take risks than many public entities. Radka gave an example of one project undertaken with the IEA, 3DEN, where UNEP aims to entice financial institutions into investing in energy efficiency projects with a new “digital layer” added to existing energy infrastructure by showing the risks are acceptably low.

Anna Krzyzanowska, Advisor to the European Commission, discussed the role of the public and private sectors in facilitating clean energy demonstration projects. While many parties advocate for more collaboration between public and private entities, it is often not straightforward due to different constraints and motivations. One of the goals of Mission Innovation is to de-risk clean energy projects through measures like specific guarantees and blending solutions. Krzyzanowska announced that the European Union will contribute EUR 28 billion towards President Biden’s challenge to mobilize $90 billion in global public investment for large-scale clean energy demonstration projects.

Panel Discussion

The panel discussion focused on how policy can be used to manage risk and why having some failures in the demonstration portfolio can be a good sign. Kelly Cummins noted that one of the biggest risks is on the demand side—will there be enough demand for clean energy products like hydrogen? The role of programs like the hydrogen hubs is to connect technology production with end users and off-takers. Another risk is siting and permitting. These must be done in a way that allows projects to move at a fast pace without sacrificing the needs of host communities. Cummins emphasized that the role of OCED money is to be catalytic and that it must learn from any failures to improve future projects.

The focus of the discussion shifted from the general role of demonstration projects to specific examples. Reena Suri gave an overview of the 14 smart grid demonstrations ISGF has already managed. These projects revealed important lessons—proper preparation for transformative technologies, the need for green corridors to distribute renewable energy, the challenges of managing energy feedstock, and the importance of forecasting and monitoring. UNEP described demonstration projects it is funding in India as well as in Brazil, Columbia, and Morocco. The projects focus on a variety of innovative technologies from digital twin technology for an electrical distribution grid to advanced electricity measurement equipment for bottling facilities. Mark Radka explained that projects like these will help reduce the perception of technology risk and flesh out the size of the market.

Finally, Anna Krzyzanowska turned the discussion back to the importance of having some level of failure in the project portfolio. She noted that “We are willing to accept failure, but we are looking for success.” Mission Innovation believes that it can build on the failures and share that knowledge to improve future projects across the world. She also highlighted the vast number of jobs that need to be filled in the green economy. Her organization is working to define human capital needs so that there are skilled people to fill those roles.