Government Tenders and Innovation in Long-Duration Energy Storage
Government tenders can incentivize innovation in long-duration energy storage through several targeted mechanisms designed to encourage research, development, and deployment of novel technologies:
Contract Rights and Incentive Structures
- Governments can use contract rights as a primary incentive, allowing innovators to secure follow-on contracts without competitive procedures once their innovation demonstrates value. This approach motivates companies to invest in innovation by providing a clearer path from prototype development to production contracting.
- Awarding bidding credits or additional score points to companies proposing innovative solutions in tender evaluations encourages unsolicited innovative proposals. Such a system, used in countries like Chile and South Korea, adjusts incentives based on the innovation’s project value, favoring breakthroughs that may be difficult to specify in traditional contracts.
Government Grants and Funding Competitions
- Innovation grants accompanying government tenders can provide vital funding to support the development phase of new energy storage technologies. These grants reduce financial risk and enable smaller or less established firms to compete and innovate.
- Rolling funding opportunities and solicitations can create continuous incentives for companies to develop and refine long-duration energy storage solutions by providing ongoing access to public funds.
Favoring Small Businesses and Emerging Innovators
- Special incentives for small businesses are common in government contracting to foster innovation from new entrants and startups which may have disruptive ideas for energy storage technologies. This can include reserved quotas, simplified procurement processes, or scoring advantages in bids.
Avoiding Bundling of R&D and Procurement
- Separating the research and development phase from the procurement phase within tenders is advised to allow fair assessment of innovation value. This means innovation efforts are rewarded on their own merit rather than bundled directly with supply contracts, promoting a focused approach to breakthrough technologies.
Summary
By combining contract rights that ensure follow-on business, targeted bidding preferences for innovative proposals, dedicated innovation grants, and incentives for small businesses, government tenders can effectively stimulate the development and deployment of advanced long-duration energy storage solutions. This multi-pronged approach tackles financial, procedural, and competitive barriers to innovation in this critical energy sector.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-government-tenders-incentivize-innovation-in-long-duration-energy-storage/
