Energy technologies now represent multi-trillion dollar global markets, with the energy sector increasingly becoming an innovator across batteries, transformers, turbines, motors and heat exchangers.

Around one in ten patents worldwide relates to underlining the sector’s central role in national security, industrial strategy and economic performance, according to the International Energy Agency (IEA) State of Energy Innovation report.

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.

At the same time, the context is shifting with security emerged as the leading driver of innovation in 2025, ahead of affordability and emissions reduction.

Energy storage has moved to the forefront of global innovation activity, highlighting its growing role in national security and power systems. Batteries accounted for 40 per cent of all energy patenting in 2023 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 per cent of solar cell patents by material.

However, funding trends are now in transition. Public energy R&D spending in 2025 was estimated at $55bn globally, down 2 per cent from the previous year, while corporate R&D growth eased to 1 per cent in 2024. Venture capital investment in energy technology start-ups fell for the third consecutive year, to $27bn in 2025. In part these falls might be explained as funding moves to latter stage development and in part due to higher interest rates, macroeconomic uncertainty and strong competition from artificial intelligence ventures.

Nevertheless, new growth areas are emerging such as fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal and low-emissions industry, offsetting much of the decline in electric mobility investment.

Meanwhile, the US has hinted it may leave the IEA if the organisation retains a focus on climate change. US Energy Secretary Chris Wright (pictured) has said that the US is sceptical of continued net-zero scenarios.

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