H2Tech - Q3 2022 - 9

BUSINESS TRENDS
A pivotal moment in the renewable
energy shift
G. AINSCOW, Reddie & Grose, London, England
Governments worldwide have pledged to limit global temperature
increase to 1.5°C, hoping this will stave off the most
severe consequences of climate change. As the biggest single
contributor to global warming, the energy sector has a huge
role to play in reducing carbon emissions and helping governments
achieve their ambitious climate change commitments.
Recent data suggests that the European Union (EU)
achieved a total energy consumption from renewable sources
of 21.3% in 20201
, a year that saw greenhouse gas (GHG)
emissions in Europe fall to an encouraging 31% below 1990
levels. However, to achieve a 1.5°C cap on global temperature
increase, it is thought that GHG emissions will have to be reduced
to between 61% and 74% below 1990 levels by 2030. It
is clear from these figures that much more is necessary in an
ever-shortening time frame.
Moreover, the geopolitical turmoil following recent events
in Ukraine is highlighting the need to reduce dependency on
foreign oil and gas and scale up renewable energy sources.
The posture of the EU's biggest economy has changed rapidly
during the Ukraine crisis, with Germany committing €200 B
to bring forward by more than a decade its goal of 100% renewable
energy.
Advancing the capabilities of energy supply technologies,
including wind and solar energy, are central to addressing
the climate crisis. However, they will rely on future developments
in enabling technology fields like energy storage and
grid management. Equally important will be the development
of end-use sectors such as electric vehicles and heating,
if they are to scale up to a level where they can replace oil
and gas. Technological development, particularly in new and
emerging areas, requires a large initial investment by firms.
Protecting innovation through patents has become increasingly
important in maintaining a company's value and establishing
a return on that initial investment.
This article explores the role of patents in developing renewable
energy technologies and provides a snapshot of patent
trends across various renewable energy technologies.
The role of patents. Innovation has a critical role to play in
reducing the energy industry's carbon footprint to avoid climate
disasters. However, it is vital that the right commercial
and legal frameworks are in place to incentivize and reward
those who contribute while ensuring that any successful developments
can be made available for global use equitably.
The patent system is designed to stimulate innovation. In
return for sharing an invention with the world, patent holders
gain exclusive rights to make, sell and use the invention, or
to license these rights to others. The promise of exclusivity
and financial reward pushes innovators to pursue technological
innovation and promotes investment. Concurrently, the
requirement for disclosure encourages knowledge sharing,
placing others in a better position to make their developments.
The patent system also provides a mechanism that allows
innovators to work in collaboration with one another to
drive forward innovation at a faster pace while also protecting
individual parties' contributions.
While the patent system works well as a way of stimulating
innovation, there are negative implications that cannot
be ignored. The exclusivity that brings a financial return for
investors can lead to high pricing that limits access to new
technologies. In some cases, a player in a dominant position
in the market can suppress competition which can, in turn,
stifle further innovation. Climate change is too important
an issue to be held back by patent rights, especially with the
2030 deadline looming. However, this is not to say that patents
should be banned or handed over to the state.
Such extreme measures would impede progress and remove
the incentive to innovate openly that the system creates.
In fact, by providing a clear mechanism for identifying
technological contributions, the patent system provides a basis
for creative solutions and policies that enable the fair use
of new technologies. For example, the energy sector could
follow the telecommunications model; we have seen policy
step in to set fair and reasonable licensing fees for patents pertaining
to technology that underpin standards ways of operating
within the industry. The potential exists for policymakers
to do the same concerning patents for technology deemed
essential to combat climate change, or to otherwise ensure
an equitable intellectual property (IP) system that rewards
inventors and benefits all parties.
The patent landscape. Looking at the subject of patent applications
filed worldwide can provide a snapshot of the energy
innovation landscape by illustrating increases in activity
and predicting the areas that will likely see progress, which is
a useful tool for investors and innovators deciding where to
target their efforts.
According to a joint report by the European Patent Office
(EPO) and the International Energy Agency (IEA)2
applications related to low-carbon energy technologies saw
, patent
H2Tech | Q3 2022 9
H2Tech - Q3 2022

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