Why energy innovation is now a national security game
Energy innovation is moving towards a security-focused phase amid a tense global geopolitical landscape, according to the IEA.
Published on February 20, 2026
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Mauro swapped Sardinia for Eindhoven and has been an IO+ editor for 3 years. As a GREEN+ expert, he covers the energy transition with data-driven stories.
Energy innovation is moving towards a security-focused phase amid a tense global geopolitical scenario. Security, national resilience, and industrial competitiveness are driving energy innovation, according to the International Energy Agency’s (IEA) latest State of Energy Innovation report.
Governments worldwide are flagging energy innovation as a strategic priority, according to IEA Executive Director Fatih Birol. “With energy security and industrial competitiveness at the top of the agenda, countries that sustain investment in research, demonstration, and early deployment will be best positioned to lead the next generation of energy technologies.”
The report, in its second edition, was a central focus of discussions at the IEA Energy Innovation Forum in Paris on February 18.
The motive behind the shift in energy innovation
According to the IEA’s survey of practitioners across more than 40 countries, 80% of respondents now rank energy security among the top three drivers of innovation for 2025. This is a significant departure from previous years, in which environmental targets typically ranked at the top.
Such a shift signals the way projects are assessed. Investors and policymakers are prioritizing technologies with abundant local material content and manufacturing capabilities over those that promise the lowest carbon footprint. Initiatives such as the US Genesis Mission and the EU Competitiveness Fund reflect this emphasis on securing supply chains.
An example cited in the report of the increased focus on resilience is the rapid scaling of sodium-ion batteries. The use of widely available materials, such as sodium, bypasses geopolitical bottlenecks in lithium supply chains. Major Chinese battery manufacturers such as CATL released second-generation sodium-ion products in 2025, signaling that the industry is moving quickly to diversify its material inputs. A supply chain’s security now defines the value of a technology.
The drop in global investments
Despite a shifted focus, investment levels in energy innovation have declined. Global public research and development (R&D) spending fell by 2% to $55 billion. Corporate R&D growth was the slowest since 2015, excluding 2020.
At the same time, venture capital (VC) flows have also shrunk for the third consecutive year. Analysts explain how uncertain market conditions and strong competition from AI took a toll on energy capital flows. VC funding for AI rose by 30% in 2025, as funding for energy ventures declined.
Batteries are the leading driver of innovation
This edition identified more than 150 technological breakthroughs in energy over the year. One trend stands out: energy storage is taking center stage.
Batteries accounted for 40% of all energy patenting in 2023; preliminary data for 2024 and 2025 indicate a further increase. As global energy production decarbonizes, significant efforts are underway to develop power storage technologies, providing greater flexibility for energy grids.
China has established a clear technological dominance in this domain. Whereas in 2010 its share of lithium-ion battery patents stood at 4%, it rose to nearly 40% in 2022. At the same time, the once-leader Japan has seen its share of cathode-material patents plummet from 50% in 2010 to below 10%.
As things stand, the manufacturing and intellectual property imbalance between China and the rest of the world poses significant challenges for anyone seeking to build independent battery supply chains.
Other growing technology areas
The IEA indicates seven technology areas that are seeing growth in energy VC. These are: fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal, and low-emissions industry. In fact, these domains offset most of the decline in electric mobility funding since 2021. These technology fields accounted for a third of all energy venture capital in 2025, compared to 5% in the 2015–2019 period.
Despite being a mature technology, there is plenty of activity in the solar photovoltaic (PV) space. Since 2010, patenting for crystalline silicone PV has fallen significantly. Solar perovskite surged since then, now representing 70% of all solar cell patents. Again, China takes the lion’s share.
How can the impasse be overcome?
The Forum also hosted the 2026 IEA Ministerial Meeting. In a panel discussion, energy Ministers from Canada, Norway, and Kenya were asked how to overcome the current stalling in energy innovation investments.
“Creating long-term policy certainty is on us. Then, the private sector will find the right ways to explore the opportunities,” underlined Tim Hodgson, Canada’s Minister for Energy and Natural Resources.
His Norwegian homologue, Terje Aasland, echoed him, underscoring the role of public bodies in reducing the risk. “If we don’t de-risk innovation investments, what will be the consequences tomorrow?” he stated.
There is still a strong case for energy innovation
To prove the officials’ point, the IEA report underscores that sustained, and well-targeted public support remains key. To this end, there will need to be stronger alignment between energy innovation strategies and competitiveness and resilience goals. New technologies can indeed lessen dependencies and strengthen local supply chains.
Although the geopolitical landscape is ever-changing and priorities are shifting (with higher defense spending), the case for energy innovation remains strong. Today’s breakthroughs are already having an impact, transforming society and bringing environmental and economic benefits.