Birol: ‘new industrial age’ in clean energy technology

The world is entering a “new industrial age”, the age of clean energy technology manufacturing, which will create a global market worth around $650bn a year by 2030, the executive director of the International Energy Agency (IEA) has said.

Fatih Birol, speaking at the launch of the IEA’s Energy Technology Perspectives 2023 report, outlined that the agency’s research found that the global project pipeline for clean energy technology manufacturing has “flourished” since the early 2000s due to the aims of advancing net zero and energy security.

Birol said: “I can say that in my view, the most important conclusion of our flagship publication, Energy Technology Perspectives 2023, is that the world is entering a new industrial age, the age of clean energy technology manufacturing.”

The report found that the global market for key mass-manufactured clean energy technologies could be worth around $650bn a year by 2030 – more than three times today’s level – if countries worldwide fully implement their announced energy and climate pledges.

“Another important outcome of this report is when I look at the numbers, this new industrial age brings together a big major new market worth billions of dollars and it will create millions of jobs around the world,” Birol added.

Resilience and diversity of supply

The IEA’s report provides a comprehensive analysis of global manufacturing of clean energy technologies and their supply chains around the world.

It noted that countries are trying to increase their resilience and diversity of clean energy supply chains while also competing for huge economic opportunities. It highlighted initiatives such as Japan’s Green Transformation programme and the Production Linked Incentive scheme in India, which encourages the manufacturing of solar PV and batteries.

Birol added that if you combine all the individual investments in announced clean energy technology projects “they together already make up two-thirds of the investments we need in clean energy to reach our net-zero targets”.

However, the report found that only 25% of the announced manufacturing projects globally for solar PV are under construction or beginning construction imminently. The figure is around 35% for EV batteries and less than 10% for electrolysers.

It suggests that there are “big dividends” for countries with the right clean energy industrial strategies. “Project developers and investors are watching closely for the policies that can give them a competitive edge in different markets, and will respond to supportive policies.”