Recent trends in energy innovation and diffusion of technologies

Tobias S. Schmidt

Chapter 3 in Handbook of Energy Innovation, 2026, pp 36-50 from Edward Elgar Publishing

Abstract: This chapter summarizes some of the most important trends in the energy sector over the past two decades, including energy demand and supply, technological change, and innovation. While in aggregate the energy system is still dominated by fossil fuel-based technologies, important dynamics have started to play out. Yet, major differences exist between geographies and technologies. Energy innovation is relatively confined to a few regions, including the United States, Europe, and East Asia, which each lead in different energy technology fields. Few technologies – light-emitting diodes, solar photovoltaics, batteries, and electric vehicles (and to a lesser degree wind turbines) – have experienced particularly strong accelerations in terms of innovation and diffusion, enabled by and resulting in massive cost reductions. The dynamics of these technologies have been massively underestimated, whereas those of other technologies have been overestimated, as shown by a short analysis of historic forecasts by leading organizations. This is largely explained by a limited understanding of technology differences. A more recent literature argues about the importance of experience curves. The experience curves of the underestimated technologies are substantially steeper than those of the overestimated ones. Finally, I summarize the emerging literature that analyzes why we observe such stark differences in the steepness and conclude with research and policy implications.

Keywords: Technical Change; Innovation; Technology Adoption; Renewable Energy; Historic Developments; Energy Projections (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035310401
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