IEA study: Europe has lost its lead in electricity grid patents

China has overtaken the European Union in the number of patents in the electricity grid sector. The strongest growth in patent numbers is in smart grids, where Japan and the United States lead. The EU is more focused on physical innovations, and the rapid rise in AI-related patents could further weaken its share of global innovation in electricity grids.

Electricity grids and their development are key to achieving decarbonisation targets. The growing share of renewable energy sources places greater demands on grid management. Electrification of areas such as transport, heating and industry will require increased grid capacity or more efficient use of existing networks.

A study by the International Energy Agency (IEA) mapped trends in patenting innovations that could facilitate the development of electricity grids.

China has overtaken the EU in innovation

Between 2009 and 2013, patent applications in the electricity grid sector boomed, with their number increasing by 30% each year. This was significantly higher than the average annual increase in patent numbers across all sectors, which reached 4%. Between 2013 and 2022, growth in the number of new patents slowed, and the European Union, which had been the leader in this area, lost its top position to China.

Smart grids drive innovation growth as Europe focuses on physical innovations

In recent years, the study says, the share of new patents in smart grids has increased, driving growth in new electricity grid patents. The study data indicate that Japan leads in these areas and, along with the United States, focuses more on this field of innovation than Europe does.

According to the study data, the number of patents involving artificial intelligence or machine learning is growing at a rate that significantly outpaces patent numbers in other areas related to processing data from electricity grids. The number of new patents using AI rose by 500% between 2017 and 2022.

If the number of new AI-related innovations continues to grow significantly, innovation in smart grid data processing and management could become the leading area for new patents. This could increase the overall share of patents from regions focused on smart grid innovation, such as Japan and the United States.