Industrial Policy, Innovation Policy and Energy Policy: An Integrated Theoretical Framework for Policy Mix Addressing the Twin Transition

The article argues that innovation policy and energy policy are not adjacent domains but mutually enabling pillars of contemporary industrial policy. Building on institutional and transition-policy literatures, we show that the innovation-energy nexus has been treated mainly through efficiency and demand-reduction lenses, leaving a design gap when innovation policies successfully create digital-intensive ecosystems whose electricity needs grow rapidly. We propose a unified framework – Creation, Destruction, Expansion (C-D-E) – that preserves alignment, phase-out and creative-destruction insights from the policy-mix literature on sustainability transitions, while adding Expansion as an explicit dimension. Expansion requires demand-aware co-design of clean generation, grids and interconnections, flexibility, and credible market arrangements (e.g., PPAs and two-way CfDs), so that high-tech infrastructures can scale with affordable and reliable low-carbon power. An empirical and technical assessment of EU and Italian energy strategies – drawing on the integration-cost literature and on an allocation-based reconstruction of Italy's NRRP – substantiates the assessment that the policy configuration examined is simultaneously limited and limiting. A reading of NGEU/RRF and Cohesion Policy highlights how governance and sequencing condition outcomes. The framework thus aims to render policy mixes effective in meeting cost-effectiveness, security and sustainability requirements. A roadmap for evaluation and future research closes the article