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EMISSIONS GAP REPORT 2018 – BRIDGING THE GAP: THE ROLE OF INNOVATION POLICY AND MARKET CREATION


Box 7.2 The Clean Energy Materials Innovation Challenge — Mission Innovation


Advanced materials – with ever-increasing performance requirements – are the fundamental components of new energy technologies, ranging from non-toxic, high-density batteries and advanced power electronics to low-cost organic solar cells and electric cars (Chu et al., 2016). Discovering and developing such materials much faster would accelerate the transition to a clean- energy future. The Clean Energy Materials Innovation Challenge is part of the larger Mission Innovation, launched at COP 21, which aims for a coalition of countries to accelerate the energy innovation needed for a low-carbon future.


The challenge aims to bring the rate of innovation in materials discovery closer to that in computing power, the ‘Moore’s Law’ of materials discovery. The goal is to combine three cutting-edge technologies (artificial intelligence, robotics, and computing) with materials sciences to accelerate the discovery of advanced materials by at least a factor of 10, from around 20 years to under two years and, eventually, a matter of months.


Mission Innovation launched the Materials Challenge in September 2016 with limited funding from the co-leading countries: Mexico and the United States of America, later joined by Canada.4


Funding was used to gather


leading scientists in academia and business, thought-leaders, government representatives, NGOs and civil society observers from 18 countries for a four-day Basic Research Needs (BRN) workshop to identify the fundamental research needs, challenges and opportunities, and define the path forward. The workshop developed the concept of an integrated Materials Acceleration Platform (Aspuru-Guzik et al., 2018), an autonomous or self-driving laboratory with smart robots that are able to rapidly design, perform and interpret experiments in the quest for new high-performance, low-cost and clean-energy materials (Tabor et al., 2018).


In May 2018, Canada and Mexico funded two international collaborative demonstration projects of US$10 million each. Additional countries are launching similar projects in collaboration with this Innovation Challenge, including India, South Korea, European Union members, and even non-Mission Innovation countries such as Singapore. As such, it is a test-bed for increased intergovernmental cooperation in mission-oriented innovation policy and effective public private partnerships.


7.3 Solar photovoltaic innovation


Innovation in solar photovoltaic (PV) technology illustrates both the nonlinear nature of innovation and how the various innovation policies reviewed above drive and shape it. PV was deployed with a compound annual growth rate of about 38 percent between 1998 and 2015 (Creutzig et al., 2017), continually exceeding forecasts (see figure 7.2a). PV diffusion spurred cost reductions through ‘learning by doing’, scale economies and R&D, but also lowered profit margins through increasing competition (Nemet, 2006; Carvalho et al., 2017), which in turn stimulated further deployment of ever-cheaper systems. However, PV innovation preceded diffusion by several decades, driving down costs dramatically. From 1975 to 2016, PV module prices fell by about 99.5 percent (figure 7.2b), and every doubling of installed capacity coincided with a 20 percent drop in costs (Kavlak et al., 2017). Public innovation policies were — and continue to be — crucial for this process throughout the innovation chain.


Governments often act as lead risk-takers. For example, the Sunshine Project launched by the Japanese Ministry of International Trade and Industry in 1974 (IEA, 2016) made Japan an early leader in PV manufacturing and deployment (Trancik et al., 2015). As for the US, the first silicon PV cell was demonstrated by researchers at Bell Telephone Labs in 1954, which benefited from large contracts with US government agencies (Chapin et al., 1954). Subsequently, the US government agencies NASA and the Advanced Research Projects Agency developed PV for satellite use (Perlin, 2002). As a result of the 1973 oil crisis, new policies were enacted and research on PV expanded in the laboratories of the newly founded US Department of Energy (DoE) (Ruegg and Thomas, 2011).


Government-funded innovation continues to this day. In a mission-oriented policy approach, the DoE launched the SunShot Initiative in 2011 with the concrete goal of reducing the cost of US solar energy systems – including the costs of installation, permitting and financing – by 75 percent to a levelized cost of US$0.06/kWh by 2020. As SunShot supported innovation that met this goal in 2017 (three years earlier than expected), the target has been revised to US$0.03/kWh by 2030 (Chu et al., 2016).


In 1990, the German parliament enacted the first PV feed-in tariff, which guaranteed the sale of all PV- generated electricity substantially above market price. The feed-in tariff subsequently became a major law, setting a direction for innovation in Germany and effectively creating a PV market. In fact, the feed-in tariff is credited with drawing many producers into the market, thereby pushing Germany to become a global leader in solar installations (Trancik et al., 2015). This built on long-standing collaborations between German PV companies and a network of public research institutes (Jacobssen and Lauber, 2006), while the German SIB,


4 Eighteen of the 24 Mission Innovation members participate in this initiative. The Materials Innovation Challenge international workshop and activities have been funded by Mexico’s Energy Innovation Funds, managed by the Ministry of Energy of Mexico (SENER), the US Department of Energy (DOE), Natural Resources Canada (NRCAN), and the Canadian Institute for Advanced Research (CIFAR).


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