close
close

IEA: Investments in key clean energy technologies exceeded $200 billion by 2023

Investments in factories for key clean energy technologies will increase by more than 70 percent in 2023, with just five sectors collectively accounting for around four percent of total global GDP growth last year.

That’s the key finding of a new report this morning from the International Energy Agency (IEA), which tracks investments in manufacturing capacity for the solar, wind turbine, battery, electrolysis and heat pump industries.

Investments in factories and infrastructure for the five technologies reached $200 billion globally by 2023, with spending on solar energy production more than doubling year-on-year and investment in batteries rising by about 60 percent, according to the figures.

The report confirms China’s continued dominance of the global clean technology manufacturing base, as it continued its position as the lowest-cost producer for all five major clean energy technologies and home to 80 percent of global solar PV module manufacturing capacity strengthen.

But the IEA said China’s market dominance could be tested, predicting that Europe and the US could each reach 15 percent of global clean technology production capacity by 2030 if all planned battery production projects go ahead.

It also notes that policy interventions can play an important role in reducing the differences in production costs between countries, as the costs of producing batteries, wind turbines and solar energy technologies are largely related to energy and material costs, which can be contained by supportive policy.

IEA Director Fatih Birol called the latest figures a welcome sign of the momentum behind the clean energy transition, while calling on governments to introduce policies that could spur further progress.

“Record output from solar and battery plants is driving clean energy transitions – and the strong investment pipeline in new facilities and factory expansions will drive even more momentum in the coming years,” he said. “While some technologies still require greater investment – ​​and clean energy production could be more widely spread around the world – the direction in which this is moving is clear. Policymakers have a huge opportunity to design industrial strategies that center the transition to clean energy.”

Elsewhere, the report notes that solar PV production capacity today is already in line with what is needed by 2030 to achieve the IEA’s net zero emissions scenario, and that battery cell production capacity is around 90 percent of the way to meeting expected demand under a net emissions standard. counterfactual scenario at the end of this decade.

It confirms that many more clean technology factories will soon be operational, with around 40 percent of investments in clean energy production capacity in 2023 in facilities that would be operational this year.

The results will fuel hopes that recent inflationary pressures in the clean technology sector could prove short-lived, with the cost savings that have characterized recent years expected to return over the remainder of the decade. However, they will also raise alarm bells that production capacity in the electrolyser and heat pump sectors still falls short of what is needed to move the hydrogen and heating industries to a net-zero compliant decarbonisation scenario in the coming years.

As such, the report – which was prepared in response to a request from the G7 – provides policymakers with guidance on how to craft industrial strategies that can further boost investments in clean technology manufacturing in support of climate goals. .

You can now register for the fifth annual Net Zero Festival, hosted by BusinessGreen at the Business Design Center in London from October 22 to 23.