The global energy innovation landscape is entering a new phase driven by energy security, industrial competitiveness and infrastructure resilience, the International Energy Agency (IEA) said in its latest State of Energy Innovation report.
The 2026 edition finds energy technologies now represent multi-trillion-dollar markets, with roughly one in ten patents worldwide linked to the sector.
The report identifies more than 150 major innovation developments spanning solid-state air conditioning, perovskite solar cells, fusion energy, sodium-ion batteries and next-generation geothermal systems.
Energy security emerged as the leading driver of innovation activity in 2025, ahead of affordability and emissions reduction, the agency said.
IEA executive director Fatih Birol said the shift reflects growing geopolitical and industrial pressures.
“Energy innovation has become a strategic priority for governments around the world,” Birol said. “With energy security and industrial competitiveness at the top of the agenda, countries that sustain investment in research, demonstration and early deployment will be best positioned to lead the next generation of energy technologies.”
The report highlights the critical role of public support in advancing technologies such as floating liquefied natural gas, lithium-ion batteries and next-generation geothermal.
Energy storage has moved to the forefront of innovation activity, with batteries accounting for 40% of all energy patenting in 2023 and expected to gain further share. China, Korea and Japan remain dominant sources of lithium-ion battery patents, while perovskite solar cells now represent more than 70% of solar cell patents by material.
The IEA said evaluations of public research and development programmes show economic benefits several times greater than their costs.
However, investment momentum is showing signs of strain. Public energy R&D spending fell 2% in 2025 to $55bn, while corporate R&D growth slowed to 1% in 2024. Venture capital investment in energy technology start-ups declined for a third consecutive year to $27bn in 2025, with artificial intelligence attracting a larger share of funding.
New growth areas are emerging across fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal and low-emissions industry, the report said.
Regional innovation paths are diverging, with China expanding its presence in storage and industrial efficiency, Europe approaching record public R&D intensity and the United States maintaining its position as a global venture capital leader. Japan continues to specialise in batteries while advancing in perovskite solar, hydrogen-based fuels and fusion.
The IEA stressed that sustained and well-targeted public support will be essential to align innovation strategies with broader competitiveness and resilience goals, adding that strategic backing for energy innovation can deliver transformative economic and security benefits over the coming decades.
The findings will be presented at the 2026 IEA Energy Innovation Forum on 18 February alongside the IEA Ministerial Meeting.
