Energy storage and battery technologies have moved to the forefront of innovation in the global energy industry, underscoring how energy security has overtaken affordability and decarbonisation as the leading driver of innovation in the sector.
That is the headline conclusion of a new report today from the International Energy Agency (IEA), which reveals that not only did battery innovations secure an unprecedented share of patents for any single technology worldwide in 2023 – at 40 per cent – but that preliminary data indicates that share is likely to have expanded further still in 2024 and 2025.
The findings are set out in the influential agency’s second annual ‘State of Energy Innovation’ report, which highlights more than 150 technology breakthroughs in the sector last year, spanning solid-state air conditioning, perovskite solar cells, fusion energy, sodium-ion batteries and next-generation geothermal systems.
These advances contributed to 50 upgrades in technology readiness levels among emerging energy technologies tracked by the IEA, with the world’s energy innovation landscape entering a new phase shaped by energy security, industrial competitiveness and infrastructure resilience, according to the report.
As such, energy technologies such as batteries, transformers, turbines, motors and heat exchangers now represent multi-trillion-dollar global markets, with around one-in-ten patents worldwide relating to energy – more than for chemicals, pharmaceuticals or transport, underlining the energy sector’s central role in national security, industrial strategy and economic performance, the report claims.
With regards to energy storage innovations, China, South Korea, and Japan remain leading sources of lithium-ion battery patents, with China’s share rising sharply over the past decade, according to the report.
In solar innovation, meanwhile, patenting has shifted toward perovskite solar cells, which now account for more than 70 per cent of solar cell patents by material.
Despite such innovation breakthroughs, however, the report notes that higher interest rates, macroeconomic uncertainty and strong competition from artificial intelligence (AI) ventures are increasingly weighing on energy capital flows.
For instance, it found that public spending on energy R&D fell by two per cent to an estimated $55bn in 2025, while corporate R&D growth eased to one per cent in 2024 – slower than in any year since 2015, with the exception of 2020 when activity was disrupted by the Covid-19 pandemic.
Venture capital investment in energy technology start-ups also fell for the third consecutive year to $27bn in 2025, according to the report. Meanwhile, the share of global VC funding directed to AI rose to almost 30 per cent in 2025, while energy’s share declined.
Even so, the report details how funding for fusion, nuclear fission, critical minerals, geothermal, carbon dioxide removal and low-emissions industry has still expanded sharply since 2021, offsetting much of the decline in electric mobility investment.
The IEA said that regional approaches to energy innovation were also becoming increasingly distinct, with China continuing to expand its footprint across corporate R&D and patenting – particularly in energy storage and industrial efficiency – as the nation’s international patent applications have been rising sharply in recent years.
At the same time, the IEA said Europe’s public energy R&D appears to be nearing the record highs recorded in the 1980s and that – at around 0.08 per cent of GDP – it now exceeds that of other major advanced economies.
The USA remains a global leader in VC activity, meanwhile, accounting for nearly half of energy VC in 2025, while Japan remains highly specialised in batteries and has made progress in advancing in perovskite solar, hydrogen-based fuels and fusion, the report states.
Amid shifting policy priorities and tighter financial conditions, the report stressed that sustained, well-targeted public support as well as alignment with broader economic competitiveness and resilience goals remain critical for clean energy innovation.
Moreover, ensuring access to funding across all stages of development – especially as private capital becomes more selective – and reinforcing partnerships across research, industry and finance is likely to be key to maintaining momentum, it added.
“Energy innovation has become a strategic priority for governments around the world,” said Fatih Birol, the IEA’s executive director. “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.”
Today’s report builds on the IEA’s assessment of the global battery market last year, which found annual battery demand increased significantly in 2024, surpassing the “historic milestone” of one terawatt hour.
The report added that global battery manufacturing capacity reached 3TWh in 2024 and forecast that the next five years could see another tripling of production capacity if all announced projects are built.
The report’s findings also follow warnings by Birol in October that although the world may be on the cusp of an “age of electricity” driven by renewable energy and a global clean tech boom, the clean energy transition is being hampered by a “dark and long” geopolitical shadow.
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