Publish Date: December 23, 2022

Study Shows How Public Policy Can Support Low-Carbon Energy Technology Startups

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Interested in climate tech startups in the energy sector in India? A recent study published in Nature Energy by researchers from IIT Delhi's School of Public Policy examined investment and patenting trends in low-carbon energy technology (LCET) startups, identified drivers and barriers to investment and innovation, and made recommendations for how public policy can help support startups in this space.

The researchers have found that:

(i) activity in India's LCET ecosystem is concentrated in the RE and mobility sub-sectors,

(ii) investments go towards deployment-focused startups for RE and, in recent years, manufacturing and deployment-focused startups for electric two- and three-wheelers, and

(iii) despite most investments going to RE startups, patenting is concentrated in e-mobility (in contrast to global trends where grid management and RE are more prominent).

Their findings have two major implications.

First, unlike global trends noted by Stephen Comello and Adam Bumpus, India is missing investments in distributed energy resources, efficiency, and control tech. To tap into their potential, India will need to introduce advanced retail tariff design features like demand charges and time-of-use pricing.

Second, the researchers show that in sectors with low-tech capabilities (e.g., RE in India), demand-pull policies lead to investment in deployment-oriented LCET startups. In sectors with some pre-existing capabilities (e.g. mobility), they can also spur hardware integration and patenting activity. So, to truly leverage startups for LCET innovation, market-creation policies should be paired with long-term measures to strengthen technological capabilities. This includes investing in human capital and RD&D, as well as improving linkages between universities and entrepreneurs.

The research team included Prof. Abhishek Malhotra, Prof. Ambuj Sagar, Dr. Harilal Krishna, Dr. Dwarkeshwar Dutt from the School of Public Policy, IIT Delhi and Dr. Yash Kashyap (Climate Policy Initiative, New Delhi).  

For more details, check out the full study in Nature Energy: