Energy Innovation Needs Assessments 2025

The Energy Innovation Needs Assessments (EINAs) are an independent assessment of the role of innovation in key technologies in the UK’s future energy system.

Key findings

Innovation is critical to delivering Net Zero, bringing down the cost of transition and creating business opportunities. The Energy Innovation Needs Assessments (EINAs) is intended to add to the evidence base for the prioritisation of investment and support for clean energy innovation. To achieve this, it aims to identify key innovation needs in selected clean energy technologies and understand their impact on the UK energy system and potential business opportunities. This work shows that innovation can make technologies that are not yet commercially available ready sooner and make them cheaper so they can be deployed more widely. This has significant potential to accelerate the deployment of key technologies in the UK’s transition to Net Zero.

Innovation system impacts

Energy system modelling to assess the potential impact of innovation in selected technologies was conducted using UK TIMES, a cost optimising energy system model of the UK. Technologies were assessed at three levels of innovation (low, medium and high) and across three hypothetical scenarios: Minimally Constrained, High Hydrogen and High Diversification. 

If a high level of innovation were achieved in all of the technologies studied by the EINAs (the EINAs technologies) there is the potential to cumulatively save £203bn–£348bn of UK energy system costs between 2025 and 2050 (£2022 basis) compared to low innovation scenarios, while also meeting legal requirements to deliver Net Zero by 2050. Under high innovation in EINA technologies, projected system costs in 2050 are 5–6.5% lower compared to the low innovation scenarios. Additional electricity system analysis from the highRES model indicates that high innovation across EINA technologies could reduce electricity transmission costs by 6–10% by 2050, and innovation in EINA modelled storage technologies could reduce annual electricity system costs by £2bn–£5bn in 2050.

Across individual innovation runs of specific technologies (where all other technologies are held at the baseline low innovation level), innovation in bioenergy with carbon capture and storage (BECCS), direct air carbon capture and storage (DACCS), air-source heat pumps and offshore wind lead to the largest reductions in total energy system costs compared to the respective low-innovation cases: potential cost reductions of £41bn by offshore wind, £62bn by DACCS, £75bn by BECCS, and £110bn by air-source heat pumps (cumulative cost savings between 2025 and 2050; £2022 basis). Electricity system analysis from the HighRES model suggests that innovation in interseasonal storage provides the largest system cost reduction among storage technologies within the EINA analysis.

Innovation needs and enablers

Within each technology area, the EINAs have identified specific innovation needs that will help bring down the cost of the studied technologies, address key barriers and accelerate their deployment to help unlock the levels of system cost savings identified above. These are summarised by technology in the Mapping Innovation Needs section of this report and provided in more detail in the sector specific reports.

The EINAs have also considered non-technological barriers to the deployment of these clean energy technologies. Common themes included supply chain challenges, a shortage of skills and training, need for enabling infrastructure, improved business models and the need for a stronger regulatory environment. Whilst it is critical to develop and demonstrate new technologies, these other barriers must also be addressed if the technologies investigated are to be deployed at scale and to unlock their potential environmental and economic benefits.

Energy networks were identified as a key common enabler across decarbonisation technologies, with a report dedicated to innovation opportunities within this area. Eleven highpriority technology areas were identified within energy networks, as well as the need for an integrated approach to network innovation and improved coordination across the energy system. Successful commercialisation of such innovations would lead to enhanced energy system resilience and accelerate the transition to Net Zero.

Business opportunities

Innovation can support the growth of clean energy industries in the UK. The total business opportunities (real Gross Value Added) that the 26 EINAs technologies could support grows substantially to approximately £19 billion in 2050 (2022 values). This represents a Compound Annual Growth Rate (CAGR) of 7 – 8% over the modelled period. The modelling estimates that the three technology areas that offer the largest business opportunities by 2050 are heating and buildings, offshore renewables and carbon management. This includes the construction, operation and decommissioning of new assets, related to both the domestic deployment in the UK and the potential share of the international markets that UK business may capture.

The 26 EINA technologies assessed for business opportunities could support in the region of 470,000 jobs by 2050. This estimate represents a narrower selection of technologies and sectors compared to the overall clean energy industry, with a focus on areas with highest innovation potential and needs given the scope of the EINAs. The profile of jobs is concentrated in science, research, engineering and technology professionals and skilled trades.

Read the full report below.