This module assesses the level of Research & Development (R&D) investment in mitigation-relevant (low-carbon) technologies relative to overall company capital expenditure. R&D is defined as activities in connection with innovation; for example, work directed towards the innovation, introduction, and improvement of products and processes. However, deployment of new renewable capacity is not included.

Spend on non-mature (emerging) technologies (i.e. carbon reduction technologies, except the mature technologies of hydro and nuclear fission) is rated twice as useful as spend on mature technologies, because more R&D investment is needed to develop and scale-up immature technologies. The expectation is for companies to spend an amount on low-carbon R&D equivalent to at least 5% of overall capital expenditure.

46 companies score less than 20% of the available points. By contrast, Engie spend 2.8% on non-mature carbon mitigation. It has developed an ‘innovation ecosystem’ and has global partnerships with universities, laboratories, manufacturers and start-ups.

Figures for 26 companies for total mitigation R&D spend could not be found. Currently, financial and environmental reporting standards do not require companies to report a figure for R&D and so it is typically only reported when a company has another reason to do so, e.g. a high rate of R&D spend or an expectation that it will be disclosed in some markets. Even more rarely is a split between mature and non-mature technologies reported. Of the 24 companies with a publicly available figure for climate-mitigating R&D spend, only 14 provided sufficient information to work out R&D spend on non-mature technologies.

Of the companies with publicly available figures for non-mature R&D spend, the mean average spend was 0.8% relative to overall capital expenditure (but a median of just 0.3%). The main areas of spend are low-carbon generation, battery storage, carbon capture and storage (CCS), energy efficiency & smart grids, hydrogen and synthetic/biogas.

Considering the importance of CCS to the electric utilities sector and to many company’s plans, it is concerning that only Uniper, Exelon Corporation, Duke Energy & Chugoku explicitly mention research into this technology. Companies in the countries with largest coal capacity (China – 50%; USA – 12%, India – 12%) make no mention of CCS, except Exelon and Duke (both headquartered in the USA).

This lack of disclosure on R&D investments is compounded by the issue of confidentiality, which discourages reporting on this important area. Where companies do disclose R&D it is often split by the categories which the electric utilities sector uses to understand its business e.g. generation; transmission; systems; and customer facing. As the sector decarbonises a more useful split would be between fossil fuel and low-carbon energy sources.

Ranking overview

50 companies

1 ENGIE
1.1 / 2
2 Fortum
1.0 / 2
- Iberdrola
1.0 / 2
4 Électricité de France (EDF)
0.9 / 2
5 Dominion Energy
0.8 / 2
6 EDP Energias de Portugal
0.6 / 2
7 Southern Co
0.5 / 2
- Tohoku Electric Power
0.5 / 2
9 Exelon Corporation
0.4 / 2
- Vattenfall
0.4 / 2
11 Eletrobras
0.3 / 2
- Enel
0.3 / 2
13 Kansai Electric Power Company (KEPCO)
0.2 / 2
- Pacific Gas and Electric (PG&E)
0.2 / 2
15 China Three Gorges (中国长江三峡集团)
0.1 / 2
- EnBW Energie Baden-Wuerttemberg
0.1 / 2
- SSE 
0.1 / 2
- Uniper
0.1 / 2
19 AES Corporation
0.0 / 2
- AGL Energy
0.0 / 2
- American Electric Power (AEP)
0.0 / 2
- CEZ Group
0.0 / 2
- CLP Holdings (中電集團)
0.0 / 2
- China Datang Corp (中国大唐集团)
0.0 / 2
- China Energy Investment Group (CHN Energy) (国家能源投资集团)
0.0 / 2
- China Huadian Corporation (中国华电集团)
0.0 / 2
- China Huaneng Group (中国华能集团)
0.0 / 2
- Chubu Electric Power
0.0 / 2
- Chugoku Electric Power Company
0.0 / 2
- Comision Federal de Electricidad (CFE)
0.0 / 2
- Duke Energy
0.0 / 2
- E.ON
0.0 / 2
- Egyptian Electricity Holding Company (EEHC)
0.0 / 2
- Eskom Holdings
0.0 / 2
- Inter RAO
0.0 / 2
- Korea Electric Power Corporation (KEPCO/Hanjeon)
0.0 / 2
- Kyushu Electric Power
0.0 / 2
- NTPC
0.0 / 2
- NextEra Energy
0.0 / 2
- Origin Energy
0.0 / 2
- Perusahaan Listrik Negara (PLN)
0.0 / 2
- RWE
0.0 / 2
- Saudi Electricity Company (SEC)
0.0 / 2
- State Power Investment Corporation (SPIC) (国家电力投资集团)
0.0 / 2
- Taiwan Power Company (台灣電力公司)
0.0 / 2
- Tenaga Nasional
0.0 / 2
- Tokyo Electric Power Company (TEPCO)
0.0 / 2
- Vistra Energy Corp
0.0 / 2
- Xcel Energy
0.0 / 2
- Ørsted
0.0 / 2