Wind turbine blades photographed at a facility in China’s Hebei province on July 15, 2022. The world’s second-largest economy is a major force in key technologies for the planned energy transition.
VCG | Visual Chinese group | Getty Images
In line with a new report from the International Energy Agency, the world is entering a “new era of clean technology manufacturing” that might be value a whole bunch of billions of dollars a 12 months, generating hundreds of thousands of jobs by the end of the decade. .
Published on Thursday morning, the IEA Energy Technology Perspectives 2023 – which referred to the “dawn of a new industrial age” – looked at the production of 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 evaluation showed that the “global marketplace for key, mass-produced clean energy technologies” might be value about $650 billion a 12 months by 2030, greater than 3 times as much as today levels.
There may be a caveat to the Paris-based organization’s forecast since it relies on countries around the world fully implementing their energy and climate commitments – a vital task that can require each political will and financial strength.
“Responsible clean energy jobs would greater than double from the current 6 million to just about 14 million by 2030,” the IEA said, “and industry and employment growth is anticipated to proceed to grow rapidly over the coming a long time as transition progresses.”
Despite the above, the IEA has noted that there are potential headwinds with supply chains, a long-standing issue that has been clearly felt by increased geopolitical tensions and the coronavirus pandemic in recent times.
Its report highlights “potentially dangerous levels of concentration in clean energy supply chains – each in the production of the technologies and the materials on which they’re based.”
China was found to dominate each the production and trade of “most clean energy technologies”.
In terms of mass-produced technologies akin to batteries, solar panels, wind, heat pumps and electrolysers, the IEA said the top three producing countries represent “at least 70% of the production capability for every technology – with China dominating all of them.”
“Meanwhile, much of the mining of critical minerals is concentrated in a small number of countries,” he added.
“For instance, the Democratic Republic of the Congo produces greater than 70% of the world’s cobalt, and just three countries — Australia, Chile and China — account for greater than 90% of the world’s lithium production.”
Commenting on the report, IEA executive director Fatih Birol said the planet “would profit from more diverse clean technology supply chains.”
“As now we have seen with Europe’s reliance on Russian gas, whenever you rely an excessive amount of on one company, one country or one trade route – you risk paying a high price in case of disruption,” he added.
This just isn’t the first time Birol has spoken about the geopolitical dimension of changing the world towards a future focused on low-carbon technologies.
In October, Birol told CNBC that the major driver of clean energy investment was energy security, not climate change.
Checking the name of the US Inflation Reduction Act and other packages in Europe, Japan and China, Birol said that “significant increase in investment in clean energy, by approx. [a] a rise of 50%”, it was evident.
“Today it’s about $1.3 trillion, and it is going to go as much as about $2 trillion,” Birol told CNBC’s Juliannie Tatelbaum.
“As a result, we’ll see clean energy, electric cars, solar, hydrogen, nuclear power slowly but surely replace fossil fuels.”
“And why do governments do that? Because of climate change, because of the environmental issues? Not at all. The major reason here is energy security.”
Birol further described energy security as “renewable energy’s biggest driver”. He also recognized the importance of other aspects, including those related to climate.
“Energy security concerns, climate commitments… industrial policy – these three together make a very powerful combination,” he said.
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