Surging investment in manufacturing of clean energy technologies is supporting economic growth – News – IEA

Global manufacturing capacity for solar PV and batteries meets net zero pathway

Introduction

Investment in the manufacturing of clean energy technologies, particularly solar PV and batteries, is rapidly increasing and becoming a significant driver of economic growth worldwide. This report from the International Energy Agency (IEA) highlights the growth and potential of clean energy manufacturing, emphasizing its role in creating new industrial opportunities and employment.

Key Findings

1. Global investment in clean energy manufacturing of solar PV, wind, batteries, electrolysers, and heat pumps reached USD 200 billion in 2023, representing a 70% increase from the previous year and contributing to around 4% of global GDP growth.
2. Spending on solar PV manufacturing doubled in 2023, while investment in battery manufacturing increased by approximately 60%. As a result, solar PV module manufacturing capacity already aligns with the requirements projected for 2030 based on the IEA’s net zero emissions scenario. Battery cell manufacturing capacity is also on track to meet 90% of the net zero demand by the end of this decade.
3. Many clean energy manufacturing projects are in the pipeline and expected to be operational soon. Around 40% of investments made in 2023 are for facilities scheduled to come online in 2024, with this percentage rising to 70% for battery manufacturing.

Implications and Opportunities

The record output from solar PV and battery plants is driving clean energy transitions, and the strong investment pipeline in new facilities and expansions will further accelerate this momentum. The report emphasizes the need for greater investment in certain technologies and the potential for clean energy manufacturing to be more geographically diverse. Policymakers have a significant opportunity to design industrial strategies that prioritize clean energy transitions.

Regional Dominance and Cost Analysis

• China currently accounts for over 80% of global solar PV module manufacturing capacity, highlighting its dominance in clean energy manufacturing. However, the report suggests that battery cell manufacturing could become less geographically concentrated by 2030, with Europe and the United States potentially reaching around 15% of global installed capacity each.
• China remains the lowest-cost producer of all clean energy technologies, while India experiences higher costs for battery, wind, and solar PV manufacturing facilities. The United States and Europe face even higher costs compared to China. However, the majority of production costs for these technologies come from operational expenses, indicating that policy interventions can influence and reduce production cost gaps.

Policy Recommendations

This report, produced in response to a request from G7 Leaders in 2023, provides guidance for policymakers as they develop industrial strategies with a strong focus on clean energy manufacturing. While there is no one-size-fits-all approach, the report offers guiding principles to inform future planning.

Methodology and Sources

The report incorporates insights gathered during a high-level dialogue on diversifying clean technology manufacturing held at the IEA’s headquarters in Paris in November 2023. It builds on analysis conducted as part of the IEA’s flagship technology publication, Energy Technology Perspectives, and two special briefings on clean technology manufacturing published last year.

SDGs, Targets, and Indicators

1. SDGs Addressed

   • SDG 7: Affordable and Clean Energy
   • SDG 9: Industry, Innovation, and Infrastructure
   • SDG 13: Climate Action

2. Targets Identified

   • SDG 7.2: Increase the share of renewable energy in the global energy mix
   • SDG 9.2: Promote inclusive and sustainable industrialization and foster innovation
   • SDG 13.2: Integrate climate change measures into national policies, strategies, and planning

3. Indicators

   • Investment in clean energy technologies
   • Solar PV manufacturing capacity
   • Battery manufacturing capacity
   • Percentage of investments in clean energy manufacturing due to come online in the near future
   • Geographical concentration of battery cell manufacturing
   • Cost of building clean energy manufacturing facilities in different regions

Table: SDGs, Targets, and Indicators

Analysis

The article highlights the booming investment in the manufacturing of clean energy technologies, specifically solar PV and batteries, which is connected to several Sustainable Development Goals (SDGs).

SDG 7: Affordable and Clean Energy

The article addresses SDG 7 by discussing the increase in investment in clean energy technologies, such as solar PV and batteries. This investment contributes to the goal of increasing the share of renewable energy in the global energy mix (SDG 7.2).

SDG 9: Industry, Innovation, and Infrastructure

The article is also connected to SDG 9, which focuses on promoting inclusive and sustainable industrialization and fostering innovation. The investment in clean energy technologies, particularly solar PV and batteries, drives industrial growth and creates new employment opportunities. This aligns with the target of SDG 9.2.

SDG 13: Climate Action

SDG 13, which aims to take urgent action to combat climate change and its impacts, is addressed in the article. The manufacturing of clean energy technologies, such as solar PV and batteries, contributes to climate action by reducing greenhouse gas emissions. The integration of climate change measures into national policies, strategies, and planning (SDG 13.2) is relevant to the article’s discussion.

The article provides specific targets and indicators related to the identified SDGs:

Targets

• SDG 7.2: Increase the share of renewable energy in the global energy mix
• SDG 9.2: Promote inclusive and sustainable industrialization and foster innovation
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning

Indicators

• Investment in clean energy technologies
• Solar PV manufacturing capacity
• Battery manufacturing capacity
• Percentage of investments in clean energy manufacturing due to come online in the near future
• Geographical concentration of battery cell manufacturing
• Cost of building clean energy manufacturing facilities in different regions

The article mentions that global investment in the manufacturing of clean energy technologies has increased, specifically in solar PV and batteries. This investment serves as an indicator of progress towards the targets of SDG 7.2 and SDG 9.2.

The article also states that solar PV module manufacturing capacity is already in line with what is needed in 2030 based on the IEA’s net zero emissions scenario. This indicates progress towards the target of increasing the share of renewable energy in the global energy mix (SDG 7.2).

Regarding battery manufacturing, the article mentions that manufacturing capacity is 90% of the way towards meeting net zero demand at the end of this decade if announced projects are included. This demonstrates progress towards the target of integrating climate change measures into national policies, strategies, and planning (SDG 13.2).

The article further highlights the geographical concentration of battery cell manufacturing, with China currently being home to more than 80% of global solar PV module manufacturing capacity. However, the report suggests that this concentration could become less pronounced by the end of this decade, with Europe and the United States potentially reaching around 15% of global installed capacity by 2030. This information provides an indicator for measuring progress towards the target of integrating climate change measures into national policies, strategies, and planning (SDG 13.2).

Additionally, the article mentions the cost of building clean energy manufacturing facilities in different regions. It states that battery, wind, and solar PV manufacturing facilities are typically more expensive to build in India, the United States, and Europe compared to China. This cost difference can be considered an indicator for assessing progress towards the target of promoting inclusive and sustainable industrialization and fostering innovation (SDG 9.2).

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Fuente: iea.org

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