Bridging the valley of death in the EU renewable energy sector: Toward a new energy policy

Abstract

AbstractThe European Union (EU) has committed to becoming a global leader in renewable energy. Reaching this target implies fostering innovation activity to maximize the competitiveness of the European renewable industry. By relying on a case study approach based on a small number of in‐depth interviews with selected stakeholders, this paper illustrates one of the main factors hindering technological development in the renewable energy sector in Europe. More specifically, the paper focuses on the so‐called “valley of death,” which traps promising technologies in a “limbo.” While ready to be deployed from a technical standpoint, these technologies are not cost competitive and, paradoxically, only their widespread commercialization would allow to drive their cost down. The paper also identifies a mix of policy solutions that can effectively support the competitiveness of the EU renewable energy industry. While more public funding to deploy promising renewable energy technologies is certainly needed, EU policymaker should also improve synergies between EU funding programs at all stages of the research and innovation process. In addition, introducing an EU risk insurance and guarantee fund would ultimately allow to reduce deployment costs and boost commercialization of new technologies.