Research on potential clean technology applications for innovation pull financing

There is an urgent need to accelerate clean energy technology demonstration, uptake, and commercialisation globally. To realise global net zero by 2050, almost half the emissions reductions will need to come from technologies that are not yet commercial (currently at the demonstration or prototype phase) (IEA 2021). Globally, we must prepare for the next phase of the transition by boosting innovation by investing in RD&D.

Most innovation support to date has utilised push mechanisms, directly subsidising the up-front RD&D costs. However, in many cases this approach has not yet sought to incentivise innovations' uptake and usage, in particular addressing factors specific to low-and middle-income countries. It is envisaged that incentive-based, pull funding for innovative clean technologies could play this role.

This tender is for a research project to address knowledge gaps on types of climate /clean technology and applications appropriate for pull financing. The research will focus on the potential scale, costs and impacts of potential Official Development Assistance (ODA) funded interventions for clean technologies in hard-to-abate sectors to inform further action and potential investment proposals.

Overarching objectives of this research activity:

• A greater understanding of the opportunity and possibility for UK Government (or others') intervention in this space through development of exemplar case studies that could demonstrate potential impact, scale, and design considerations for this funding approach, in relevant Ayrton Fund thematic challenge areas. This helps respond to wider questions on whether/how this kind of approach could be effective, at what scale, to support global climate and development goals.

• Greater insights into the broader global landscape for clean technology pull finance, through the lens of where development assistance in this form could best contribute, taking account of the status of the current offer through pull financing, any unfulfilled gaps or unknowns. This will provide the authority with a clearer picture of the positioning of the UK (and Ayrton Fund thematic challenge areas), of global markets or needs for different types of clean energy RD&D, and of UK's role as a major ODA provider in various countries. This would help respond to wider questions on whether (and where/how) this type of approach could be additional.

• Provide clear, relevant evidence from an independent source to feed into the development of internal proposals for investment.

Output 1: Exemplar Case studies Output 2: Landscape review and analysis