IEA (2023), Energy Technology Perspectives 2023, IEA, Paris https://www.iea.org/reports/energy-technology-perspectives-2023, License: CC BY 4.0
Today’s announced plans to manufacture solar PV modules, if fully realised, would be sufficient to meet 2030 demand levels in the Net Zero by 2050 (NZE) Scenario. These expansion plans fall short for other clean energy technologies, but short project lead times of one to three years – combined with further recently announced policy incentives – suggest that the gaps are not insurmountable. Investment of USD 640 billion by 2030 is needed to expand global production of mass-manufactured technologies in line with the NZE Scenario; announced projects would be equivalent to around two-thirds of this investment.
Announced EV battery manufacturing projects, mostly in China, could boost production capacity sixfold by 2030 and meet over 80% of the needs in the NZE Scenario. Project announcements suggest that manufacturing of wind components would only grow by 5-10% (onshore) and 20-55% (offshore) by 2030, compared with a quadrupling of wind turbine deployment in the NZE Scenario. Electrolyser manufacturing capacity would rise almost tenfold from today’s level to more than 100 gigawatts (GW) by 2030, around half of NZE Scenario requirements. Announced heat pump manufacturing projects could meet a third of NZE Scenario needs for 2030, with an equivalent figure of half for fuel cell trucks.
The timely rollout of large-scale, site-tailored technologies is uncertain. For example, current deployment plans are equivalent to only about 15% of NZE Scenario needs in 2030 for low-emission synthetic hydrocarbon fuels, and 20% of demand for bioenergy with carbon capture. These technologies are at early stage of development and typically involve long project lead times.
The workforce to install and manufacture clean energy technologies needs to grow substantially. Today, around 33 million people are working in clean energy. By 2030, in the NZE Scenario, an additional 8 million workers will be needed to manufacture electric vehicles and their batteries, though there is a possibility for workers currently involved in manufacturing internal combustion engine (ICE) vehicles to work in the majority of these roles. An additional 4 million workers will be needed to install (75%) and manufacture (25%) solar PV, wind and heat pump systems.
Supportive industrial policies, access to low-cost energy and materials, availability of workers and trade policies largely explain China’s globally dominant manufacturing base. Other countries are working to expand their clean energy manufacturing capacity: notable recent policy efforts include the US Inflation Reduction Act, the REPowerEU plan, Japan’s Green Transformation initiative and India’s Production Linked Incentive scheme. However, on the basis of current expansion plants, today’s level of geographical concentration appears set to remain high throughout the present decade.