Energy security requires long‑term R&D investment. Reacting to crises is not enough

Energy security is back at the top of the policy agenda. Rising geopolitical tensions, ongoing conflicts affecting major fossil fuel supply routes, and volatile energy prices are reinforcing a familiar lesson: economies that depend heavily on imported fossil fuels remain exposed to disruptions that they cannot control. This reality is not new. The 1973 oil embargo triggered the first major reckoning as the price of oil quadrupled and energy shortages spread across OECD economies. 

What followed, however, was instructive. Faced with the realisation that energy dependence was a strategic liability, many OECD governments sharply increased public investment in energy research and development, particularly in energy efficiency, nuclear technology, solar photovoltaics and wind power. Some of the industries that today offer the most credible routes to energy security trace their scientific origins, in large part, to that moment of crisis-driven investment. The cost of installing utility-scale solar PV, for instance, has fallen from around USD 106 per watt in 1976 to USD 0.69 per watt by 2024 — a decline of more than 99% driven by the learning-curve dynamics that sustained public research investment helped set in motion. 

That initial surge in energy R&D was not sustained. Budgets fell sharply through the 1980s as governments retreated from nuclear R&D in the wake of Three Mile Island and Chernobyl, and confidence in near-term fusion faded. While total government R&D spending across the OECD nearly tripled in real terms between 1981 and 2024, public energy R&D budgets only recently recovered to their 1981 level. 

Today, the pressures are converging again. Energy prices remain elevated, geopolitical risks to fossil fuel supply chains have intensified, and rapidly growing energy demand from AI infrastructure and data centres is adding a new dimension to the challenge. The question is whether governments will respond with sustained investment, or once again let efforts fade when the immediate pressure lifts. 

The geopolitical dimension of energy innovation extends beyond supply security. As new clean energy industries scale up, technological leadership carries growing economic weight. The countries and regions that lead in next-generation energy technologies may hold significant advantages in industrial productivity, export markets and strategic autonomy. 

The data point to a rapid shift. Scientific output from OECD countries in energy and environmental domains has stagnated in absolute terms, while China's share of the top 10% most-cited scientific publications in these fields rose from 15% in 2012 to 40% by 2022. In clean energy patenting, China's high-quality inventions increased more than eightfold between 2010 and 2022. Meanwhile, clean energy patenting in some of the traditionally strongest OECD economies has plateaued or declined from earlier peaks. 

For OECD countries, the implication is clear. Maintaining competitiveness in the industries that will define future energy systems requires not just more investment, but smarter and more sustained investment in the underlying science and innovation.

Spending more is part of the answer, but spending better may matter just as much. Until recently, policymakers had limited visibility over how public energy R&D budgets were actually allocated across technologies and stages of development. Early-stage research builds the long-term knowledge base. Demonstration projects bridge the gap between laboratory and market. Deployment support accelerates diffusion of proven technologies. An effective innovation system needs all three, but the right balance matters enormously. 

New experimental analysis using the OECD Fundstat database of project-level R&D funding awards and the IEA ETP Clean Technology Guide makes it possible to take a first step toward assessing which specific energy technologies are being funded according to the general stage of readiness of those broad technologies. 

To note, the TRLs shown here are attributes of the technology category, not of the funded projects themselves — they reflect the most advanced global example of each technology as classified by the IEA, not the maturity of the research being conducted. A project in the 'crystalline silicon PV' category will carry TRL 11 (Mature) whether the funded work is basic science or applied engineering. The distribution should therefore be read as describing where government R&D portfolios are concentrated in terms of the technological landscape, not as a measure of the research stage of individual projects. 

With this in mind, the largest share of public energy R&D funding, around 35%, is directed at energy technologies in the demonstration stage (TRLs 7–8), where these are being proven at scale but have not yet reached commercial viability. This is the stage where public investment can be most catalytic, since private capital is still reluctant, but the risks are becoming quantifiable. Roughly equal shares flow to energy technologies in earlier prototype and market uptake stages. Only around 8% goes to the earliest conceptual research. Overall, this distribution raises questions as to whether R&D support is sufficiently oriented towards technologies with high long-term promise but low technological readiness.

At the technology level, the funding landscape is dominated by electric mobility and charging infrastructure. Ultra-fast and inductive charging lead the ranking by a wide margin, possibly due to the scale of public programmes behind the EV rollout. Transactive energy systems and advanced grid monitoring also feature prominently, pointing to the centrality of grid modernisation in national innovation strategies. Hydrogen technologies appear at both early and demonstration stages, reflecting their emerging but still uncertain role. Perhaps most striking, though, is what appears to be underfunded. Energy storage and grid resilience, both critical to energy security, sit at relatively modest funding levels compared to their strategic importance.

Sustained investment is necessary but not sufficient. How governments channel support to business R&D also matters. OECD analysis using confidential national microdata finds that direct public funding for business R&D is positively associated with both firms' own R&D spending and the introduction of environmental innovations. The effect of increasingly popular R&D tax incentives is less clear. Well-targeted support appears to matter at least as much as overall spending.

The broader lesson from five decades of data is simple: there is no shortcut to energy security. It must be built steadily, through sustained and well targeted investment in research and innovation. The countries best positioned for the next energy disruption are those that have maintained strong science and innovation systems, diversified their funding across the technology pipeline, and invested in the measurement infrastructure needed to learn and adapt.

While gaps in data remain and more analysis needs to be done, tracking where public money goes, at what stage of development and in which technologies, is not merely a bookkeeping exercise. Building that capacity is a structural requirement for energy policy that holds up regardless of the oil price.