The drive for greater energy security is driving innovation resulting in more than 150 technology breakthroughs.

The International Energy Agency (IEA) has issued a new report which  found the world’s energy innovation landscape is entering a new phase shaped by energy security, industrialcompetitiveness and infrastructure resilience.

The Agency’s latest State of Energy Innovation report will be used to inform discussions at the 2026 IEA Energy Innovation Forum this week and  highlighted that energy technologies now represent multi-trillion dollar global markets, with the energy sector increasingly becoming an innovation powerhouse spanning batteries, transformers, turbines, motors and heat exchangers.

Around one in ten patents worldwide relates to energy – more than for chemicals, pharmaceuticals or transport – underlining the sector’s central role in national security, industrial strategy and economic performance.

The 2026 edition identifies over 150 major innovation highlights during the year, spanning solid-state air conditioning, perovskite solar cells, fusion energy, sodium-ion batteries and next-generation geothermal systems. These advances contributed to 50 upgrades in technology readiness levels among emerging energy technologies tracked by the IEA.

“Energy innovation has become a strategic priority for governments around the world,” said IEA executive director Fatih Birol. “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 added energy storage has moved to the forefront of global innovation activity, highlighting its growing role in national security and power systems as the world enters the Age of Electricity. Batteries accounted for 40% of all energy patenting in 2023 – an unprecedented share for a single technology area – and the proportion is expected to have risen further based on preliminary data for 2024 and 2025. China, Korea, and Japan remain leading sources of lithium-ion battery patents, with China’s share rising sharply over the past decade. In solar innovation, patenting has shifted toward perovskite solar cells, which now account for over 70% of solar cell patents by material.

“Comprehensive evaluations of long-running public R&D programmes indicate that economic benefits can be several times – and in some cases hundreds of times – greater than their costs, through fuel savings, lower equipment prices and stronger domestic industries,” added the IEA. “However, funding trends are now in transition. Public energy R&D spending in 2025 was estimated at $55 billion globally, down 2% from the previous year, while corporate R&D growth eased to 1% in 2024 – slower than in any year since 2015, with the exception of 2020 when activity was disrupted by the Covid-19 pandemic. Venture capital investment in energy technology start-ups fell for the third consecutive year, to $27 billion in 2025.”

The report notes that higher interest rates, macroeconomic uncertainty and strong competition from artificial intelligence ventures have weighed on energy capital flows. The share of global VC funding directed to AI rose to almost 30% in 2025, while energy’s share declined.

Nevertheless, new growth areas are emerging. Funding for fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal and low-emissions industry has expanded sharply since 2021, offsetting much of the decline in electric mobility investment.

Against a backdrop of shifting policy priorities and tighter financial conditions, the report stressed that sustained and well-targeted public support remains critical. Aligning energy innovation strategies with broader competitiveness and resilience goals will be essential, particularly where technologies can strengthen domestic supply chains or reduce strategic dependencies. Ensuring access to funding across all stages of development – especially as private capital becomes more selective – and reinforcing partnerships across research, industry and finance will be key to maintaining momentum.

Funding for fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal and low-emissions industry has expanded sharply since 2021, offsetting much of the decline in electric mobility investment.