New innovation institutions in the UK

Will McDowall, Anna Watson and Jim Watson

Chapter 17 in Handbook of Energy Innovation, 2026, pp 320-339 from Edward Elgar Publishing

Abstract: The UK has seen a transformation in its energy innovation policy landscape over the past 20 years. In 2000, the UK had very low rates of publicly funded energy research development and demonstration (RD&D). This was the legacy of a laissez-faire approach to energy policy that emphasised the importance of free and competitive markets in driving innovation. Since then, successive governments have recognised the need to dramatically expand publicly funded energy RD&D. Drivers include climate change, ensuring secure and affordable energy supplies as the UK's domestic oil and gas fields become depleted and the development of low-carbon industries. In order to deliver this new funding, governments in the UK have experimented with a wide variety of institutional structures. This chapter traces the history of that process, exploring the organisations that have been established to fund and carry out energy innovation in the UK over the past 15–20 years. We provide deeper analysis of three public organisations supporting and performing energy innovation: the Energy Technologies Institute, a public–private partnership now largely seen as having been a failure in terms of its institutional design and meeting its original objectives; the more successful network of Catapult centres, which were loosely inspired by Germany's network of Fraunhofer Institutes; and the institutions set up under the energy network regulator Ofgem, which authorises funding for innovation projects by regulated companies. The aim is to review these experiences and identify lessons for the future, drawing on emerging principles for the design of energy innovation institutions.

Keywords: Institutional Design; Innovation Policy; RD&D Funding (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035310401
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