Wind turbine blades are pictured at a facility in China’s Hebei Province on July 15, 2022. The world’s second-largest economy is a major force in technology that is crucial to the planned energy transition.
VCG China Visual Group | Getty Images
The world is moving into a “new era of clean technology manufacturing” that could reach hundreds of billions of dollars a year by the end of the decade, creating millions of jobs in the process, according to a new report from the International Energy Agency. .
Published Thursday morning, the IEA’s Energy Technology Perspectives 2023 report – which it calls “the dawn of a new industrial era” – looks at manufacturing technologies including wind turbines, heat pumps, batteries for electric vehicles, solar panels and electrolyzers for hydrogen.
In a statement accompanying the report, the IEA said its analysis showed that the “global market for mass-produced clean energy technologies” would be worth an estimated $650 billion annually by 2030, more than three times its current level.
There are caveats to the predictions of the Paris-based organization, as it is based on countries around the world implementing, in full, their energy and climate-related pledges – an important task that requires political will and financial muscle.
“Related clean energy manufacturing jobs will more than double from 6 million today to nearly 14 million by 2030,” the IEA said, “and faster industrial and employment growth is expected in the next decade as the transition progresses.”
Despite the above, the IEA notes there are potential headwinds related to the supply chain, a problem that has long been exacerbated by geopolitical tensions and the coronavirus pandemic has brought relief in recent years.
The report highlights “potentially dangerous levels of concentration in the clean energy supply chain – for manufacturing the technologies and materials we rely on.”
China, he said, dominates the production and trade of “the cleanest energy technologies.”
When it comes to mass-produced technologies such as batteries, solar panels, wind, heat pumps and electrolysis, the IEA says that the three largest producing countries share “at least 70% of manufacturing capacity for each technology – with China dominating in all.”
“Meanwhile, most critical mineral mining is concentrated in a few countries,” he said.
“For example, the Democratic Republic of Congo produces more than 70% of the world’s cobalt, and only three countries – Australia, Chile and China – account for more than 90% of global lithium production.”
Commenting on the report, IEA Executive Director Fatih Birol said the planet “will benefit from a wider supply chain of clean technologies.”
“As we have seen with Europe’s dependence on Russian gas, when you depend too much on one company, one country or one trade route – you risk paying a heavy price if there is a disruption,” he added.
This is not the first time Birol has spoken about the geopolitical dimensions of the world’s shift to a future focused on lower carbon technologies.
In October, Birol told CNBC that the main driver of clean energy investment is energy security rather than climate change.
Namechecking the Inflation Reduction Act in the US and other packages in Europe, Japan and China, Birol said that “a large increase in clean energy investment, approx. [a] 50% increase,” it appears.
“Today it’s about 1.3 trillion US dollars and it’s going to be about 2 trillion US dollars,” Birol told CNBC’s Julianna Tatelbaum.
“And as a result, we will see clean energy, electric cars, solar, hydrogen, nuclear power, slowly but surely, replacing fossil fuels.”
“And why is the government doing that? Because of climate change, because of greenness? Not at all. The main reason here is energy security.”
Birol went on to describe energy security as “the biggest driver of renewable energy.” He also acknowledged the importance of other factors, including those related to climate.
“Energy security concerns, climate commitments … industrial policy – these three are a very powerful combination,” he said.
