Swedish Energy Agency

How Governments Support Clean Energy Start-Ups highlights and unpacks government initiatives that help entrepreneurs get new clean energy technologies to the market, and offers recommendations to inspire innovation policy for net zero emissions. Read the report, and explore the case studies.

Government: Sweden

Responsible government entity: Swedish Energy Agency

External partner: N/A

Target type of innovator: Start-ups and small and medium-sized enterprises (SMEs) looking to test or demonstrate their technology with industrial partners

Links: www.energimyndigheten.se/en/

Key elements:

• The agency offers different packages of project funding depending on the stage of technology maturity.
• It connects start-ups with potential customers.

The Swedish government’s support for energy technology entrepreneurs goes back as far as 2004, when it identified gaps in the availability of private capital to scale up R&D outputs. The Swedish Energy Agency sought to address regulatory and market barriers, lack of awareness among investors, and the need for finance compatible with energy hardware development timelines.

The Swedish Energy Agency is currently most active in this area through grant funding. However, this has evolved from the provision of conditional loans from 2006. These loans had a grace period, which meant that payback was not required if the project failed to contribute to market entry for the product. However, this payback trigger was still too early for some of the recipients and the loans contributed to a less favourable balance sheet for the recipients.

The agency offers yearly calls, with an aim to have two calls per year. Previously, concept development grants had permanently open calls.

The Swedish Energy Agency differentiates its grants for innovators by the needs of start-ups at successive stages of development:

• Concept development. A grant of up to SEK 300 000 (Swedish kronor) (USD 33 000) for defining and developing a technology concept.
• Verification of customers. A grant of up to 45% of the eligible costs of a project, up to SEK 3 million (USD 330 000) to develop a technology prototype that meets the requirements of a potential customer.
• Pilot and demonstration. A grant of up to 45% of the eligible costs of a project that has capital costs of at least SEK 7 million (USD 770 000). The technology must be at least at technology readiness level (TRL) 5 and through the project aim to reach TRL 6-8.

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The Swedish Energy Agency funds national science parks and incubators. One such actor, Ignite Sweden, provides a network through which start-ups can identify potential partners.

The agency has market entry programmes in six countries, with accelerator programmes established in Germany, India and Indonesia based on bilateral agreements with Sweden. In other countries, as in China, the United Kingdom and the United States, the Swedish Energy Agency has established thematic programmes.

The Swedish Energy Agency evaluates recipient projects to gather feedback and improve future programmes. It evaluates start-ups’ progress using the KTH Innovation Readiness Level tool. Recipients report greenhouse gas emissions for ten years after the start-up has completed the grant-funded project and are free to use a methodology of their choice.

As part of Mission Innovation, the Swedish Energy Agency supported development of a framework (the Avoided Emissions Framework) for estimating potential avoidance of greenhouse gas emissions by innovations.

The Swedish Innovation Agency supports basic and experimental research for the stationary and mobile energy system via thematic calls.

Almi, a state-owned finance company, offers loans to companies (start-ups or established companies) with growth potential and assists in their business development. Almi Invest provides venture capital for early-stage, emerging companies with high growth potential and a scalable business concept. It also runs seminars for start-ups. The Swedish Energy Agency, Almi Invest and the European Regional Development Fund finance the operations of Almi Invest GreenTech Fund, a public venture capital operation that invests equity in companies with products and services that contribute to greenhouse emissions avoidance.

The Swedish International Development Cooperation Agency (SIDA) provides loan guarantees to help later-stage start-ups access debt for scale-up internationally.

This publication has been produced with the financial assistance of the European Union as part of the Clean Energy Transitions in Emerging Economies programme. This publication reflects the views of the International Energy Agency (IEA) Secretariat but does not necessarily reflect those of individual IEA member countries or the European Union (EU). Neither the IEA nor the EU make any representation of warranty, express or implied, in respect to the article's content (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the publication.

The Clean Energy Transitions in Emerging Economies programme has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 952363.