According to a recently released International Energy Agency (IEA) study, recent months have seen an increase in new manufacturing projects for numerous key technologies for the clean energy transition, including solar PV, batteries, and electrolysers.
This serves to emphasise the new energy economy’s rising momentum on a worldwide scale.
According to a new special briefing from the IEA’s Energy Technology Perspectives series, since late 2022, the estimated output by 2030 from existing and announced manufacturing capacity has increased significantly.
It has increased by 60% for solar PV, by 25% for batteries, and by 20% for electrolysers, driven by policy support and growing investor interest.
The estimated output of manufacturing capacity for the five clean technologies would reach USD 790 billion annually by 2030 if all the projects that have been announced up to this point were to be completed. In such case, the level of solar PV manufacturing capacity required to achieve the IEA’s Net Zero Emissions by 2050 Scenario would be easily exceeded. The capacity for battery production would also reach the level predicted for 2030.
Clean energy technology production capability is currently very concentrated in few geography. Depending on the technology, the top three markets make up between 80% and 90% of the world’s manufacturing capacity. By 2030, the percentage of manufacturing concentrated in these markets would increase to between 70% and 95% for various technologies, assuming that all projects that have been announced throughout the world are completed.
Battery manufacturing announcements for late 2022 and early 2023 alone represent over half of the sector’s total project pipeline in the United States since the US Inflation Reduction Act was passed last year.
Battery manufacturing announcements for late 2022 and early 2023 alone represent over half of the sector’s total project pipeline in the United States since the US Inflation Reduction Act was passed last year.
The Net Zero Industry Act in the European Union and significant achievements in Japan’s Green Transformation plan are two other examples of recent flagship programmes to increase domestic industrial production. These measures, together with China’s current Five-Year Plan (2021-2025) and India’s Production Linked Incentive are transformational programme and are altering industrial policy to support sustainable energy technologies.
Building robust, secure, and sustainable supply chains is crucial for advancing the clean energy transition and reducing vulnerabilities brought on by excessive reliance, as previously acknowledged by the G7 nations. To proactively manage the risks presented to supply chains, governments can take a variety of domestic measures, such as adopting industrial policies that take use of their competitive advantages. But any progress that is to be made will need to be facilitated, accelerated, and extended through international cooperation.
As stated in the report Along with the production of clean technologies, the security of vital minerals is a problem of strategic importance to many nations and one in which there is a pressing need for international collaboration. The clean energy transition depends on these minerals; thus diversification is required to reduce supply chain interruptions or bottlenecks.
Glactik View