Manufacturing Surge to Support Renewable Energy Transition, IEA Says

According to a report by the International Energy Agency, the surge of new projects in the manufacture of core technologies such as solar photovoltaics, batteries and electric precipitators has contributed to the global trend of transforming the global cleanup energy mix. The International Energy Agency, for its part, pointed out in its report on the state of cleanup technology manufacturing that such improvements are driven by policy support and elevated investor interest. Since the end of last year to date, the possible production of renewable energy technologies by 2030 has increased, in which solar photovoltaic production of electricity accounted for 60%, rechargeable batteries accounted for 25%, and electric dust collectors accounted for 20%.

If we look at the new projects that have been built or planned at this stage around the world, China will enhance its leadership in a particular green energy technology, etc., said Fatih Biro, chairman of the supervisory board of the International Energy Agency, with a smile. Efficient international exchange and further diversification is necessary to ensure safe and resilient technology supply chain management to accomplish the world's overall climate goals so that every country can enjoy the economic benefits of the development of a new world energy economy.

The IEA indicates that if all announced projects are completed, by the end of this decade, the manufacturing capacity of the five cleanup technologies - solar photovoltaic, wind, rechargeable batteries, electric dust collectors and heat pump units - is expected to do $790 billion per year. This agency indicates that this means that by 2050, the world's solar photovoltaic manufacturing capacity will break through the IEA net zero emissions scenario needs, while rechargeable battery manufacturing capacity is expected to break through the 2030 target.

The IEA 2022, for its part, states in its World Energy Outlook that investment in renewable energy projects must double by the end of this decade, to about $400 million, to meet the overall net-zero emissions target by 2050. While not all of the new projects announced will go ahead, the short delivery date represents that there is still room for significant growth in the 2030 pipeline in the near future. At this stage, green energy technology manufacturing capacity is concentrated in several key sales markets, accounting for 80 to 90 percent of world capacity.

If all of the announced projects are realized, the manufacturing market share in such markets will rise to 70 to 95 percent by the end of this decade. the IEA indicates that the diligence to diversify the manufacturing sector has so far been driven by major policy announcements in many countries over the past year, which began with the expansion of supply chain management in each location. The agency shows that the Foreign Inflation Reduction Act introduced in 2022 caused a surge in rechargeable battery manufacturing public announcements in late 2022 and early this year in 2023, essentially accounting for half of the total new project pipeline in the sector in their countries.

The IRA gives a series of tax incentives for wind, solar power, hydroelectric power plants and other renewable energy sources, and promotes having new energy electric vehicles. According to Goldman Sachs, IRAs will stimulate about $3 trillion in investment in renewable energy technology projects. The investment bank pointed out in a report last month that it can make more than a decade ago foreign shale revolution caused by the doubling of the amount of energy.