IEA Report: Clean Energy Tech Investments Surge, Boosting Economy and Reaching 2030 Targets
The International Energy Agency reports that global investments in the manufacturing of five clean energy technologies - solar, wind, batteries, electrolyzers, and heat pumps - surged by 70% to $200 billion in 2023.
This represents around 0.7% of total worldwide investment and accounted for 4% of global GDP growth and nearly 10% of global investment growth.
The boom in clean energy technology investments is creating new industrial and employment opportunities, strengthening the global economy.
The text reports that investments in solar Photovoltaic (PV) manufacturing and battery production saw significant increases last year, with solar PV manufacturing capacity now sufficient for 2030 based on the International Energy Agency's (IEA) net zero emissions scenario.
Battery cell manufacturing capacity is also close to meeting net zero demand by the end of this decade with announced projects.
The IEA's Executive Director, Fatih Birol, stated that record output from solar PV and battery plants is driving clean energy transitions, and the investment pipeline for new facilities and factory expansions will continue to boost momentum in the coming years.
However, more investment is needed for certain technologies, and clean energy manufacturing could be more evenly distributed globally.
Policymakers have a significant opportunity to build industrial strategies around clean energy transitions, particularly in the area of clean energy manufacturing.
In 2023, around 40% of investments in this sector were for facilities set to open in 2024, with 70% applicable to battery manufacturing.
Battery manufacturing experienced record growth in 2023, producing over 800 gigawatt-hours and adding nearly 780 GWh of cell manufacturing capacity.
By 2030, global battery manufacturing capacity could reach 9 terawatt-hours if current announcements are met.
New manufacturing capacity for wind and electrolyzers also saw faster growth in 2023.
The IEA report states that wind energy could provide nearly 50% of Europe's electricity needs by 2030, with existing capacity and announced projects accounting for an additional 12%.
However, the current capacity can only meet around one-third of the required needs.
China leads in clean energy manufacturing, accounting for 80% of global solar PV module production capacity, and remains the lowest-cost producer for all clean energy technologies.
The manufacturing of battery cells could become less geographically concentrated by the end of the decade with announced projects.
The report also mentions a slowdown in capacity additions for heat pump manufacturing.
The International Energy Agency (IEA) reported that manufacturing facilities for batteries, wind, and solar PV are more expensive to build in India than China, and significantly more so in the US and Europe.
However, operational costs, which make up 70%-98% of total production costs, can be influenced by policy.
Other significant investors in clean energy technologies are India, Japan, and South Korea.
The report noted that investments in Africa, Central America, and South America have been negligible, and cost is not the only factor shaping investments in the sector.
The International Energy Agency (IEA) report suggests that several factors, such as the size of a domestic market, availability of skilled workers, and infrastructure readiness, influence firms' decisions to invest in clean energy manufacturing.
The IEA recommends policy interventions like training and certification schemes for workers, compressing project lead times, enlarging domestic markets, and reducing uncertainty with stable climate policies as "low regret" measures to increase incentives for investment in clean energy manufacturing, regardless of direct incentives.
The report also emphasizes the importance of research and development in growing clean energy manufacturing globally.
The International Energy Agency (IEA) emphasized the importance of both private-sector Research and Development (R&D) and direct government support to advance clean energy manufacturing.
Private investment can be encouraged through policies that promote manufacturing, but additional innovation support is necessary.
The IEA suggested various government initiatives, such as R&D grants or loans, project finance, support for rapid prototyping, and startup promotion, to accelerate clean energy manufacturing advancements.
The boom in clean energy technology investments is creating new industrial and employment opportunities, strengthening the global economy.
The text reports that investments in solar Photovoltaic (PV) manufacturing and battery production saw significant increases last year, with solar PV manufacturing capacity now sufficient for 2030 based on the International Energy Agency's (IEA) net zero emissions scenario.
Battery cell manufacturing capacity is also close to meeting net zero demand by the end of this decade with announced projects.
The IEA's Executive Director, Fatih Birol, stated that record output from solar PV and battery plants is driving clean energy transitions, and the investment pipeline for new facilities and factory expansions will continue to boost momentum in the coming years.
However, more investment is needed for certain technologies, and clean energy manufacturing could be more evenly distributed globally.
Policymakers have a significant opportunity to build industrial strategies around clean energy transitions, particularly in the area of clean energy manufacturing.
In 2023, around 40% of investments in this sector were for facilities set to open in 2024, with 70% applicable to battery manufacturing.
Battery manufacturing experienced record growth in 2023, producing over 800 gigawatt-hours and adding nearly 780 GWh of cell manufacturing capacity.
By 2030, global battery manufacturing capacity could reach 9 terawatt-hours if current announcements are met.
New manufacturing capacity for wind and electrolyzers also saw faster growth in 2023.
The IEA report states that wind energy could provide nearly 50% of Europe's electricity needs by 2030, with existing capacity and announced projects accounting for an additional 12%.
However, the current capacity can only meet around one-third of the required needs.
China leads in clean energy manufacturing, accounting for 80% of global solar PV module production capacity, and remains the lowest-cost producer for all clean energy technologies.
The manufacturing of battery cells could become less geographically concentrated by the end of the decade with announced projects.
The report also mentions a slowdown in capacity additions for heat pump manufacturing.
The International Energy Agency (IEA) reported that manufacturing facilities for batteries, wind, and solar PV are more expensive to build in India than China, and significantly more so in the US and Europe.
However, operational costs, which make up 70%-98% of total production costs, can be influenced by policy.
Other significant investors in clean energy technologies are India, Japan, and South Korea.
The report noted that investments in Africa, Central America, and South America have been negligible, and cost is not the only factor shaping investments in the sector.
The International Energy Agency (IEA) report suggests that several factors, such as the size of a domestic market, availability of skilled workers, and infrastructure readiness, influence firms' decisions to invest in clean energy manufacturing.
The IEA recommends policy interventions like training and certification schemes for workers, compressing project lead times, enlarging domestic markets, and reducing uncertainty with stable climate policies as "low regret" measures to increase incentives for investment in clean energy manufacturing, regardless of direct incentives.
The report also emphasizes the importance of research and development in growing clean energy manufacturing globally.
The International Energy Agency (IEA) emphasized the importance of both private-sector Research and Development (R&D) and direct government support to advance clean energy manufacturing.
Private investment can be encouraged through policies that promote manufacturing, but additional innovation support is necessary.
The IEA suggested various government initiatives, such as R&D grants or loans, project finance, support for rapid prototyping, and startup promotion, to accelerate clean energy manufacturing advancements.
Translation:
Translated by AI
