This article reviews the concept of an energy technology innovation system (ETIS). The ETIS is a systemic perspective on innovation comprising all aspects of energy transformations (supply and demand); all stages of the technology development cycle; and all the major innovation processes, feedbacks, actors, institutions, and networks. We use it as an analytical framework to describe key features and drivers of energy innovation. A global snapshot of the ETIS is provided using investments as the main indicator. Rationales for government policy in energy innovation are discussed, and policy design guidelines for an effectively functioning ETIS are presented. The proposed guidelines are based on a survey of the literature and empirical case studies; they diverge substantially from polices implied by partial perspectives on innovation. Key research, information, and data needs are also identified. © Copyright ©2012 by Annual Reviews. All rights reserved.