nergy Technology Perspectives 2024 Published. Based on current policy settings, the global clean energy technology market is set to reach a value of $2 trillion by 2035. Record wave of investments in China, the European Union, the United States, and India
IEA Guide to the Clean Technology Market Published
The market value of photovoltaics, wind energy, electric vehicles, batteries, electrolyzers, and heat pumps has nearly quadrupled globally between 2015 and 2023. And for the future, the increase will be even more astounding. This is reported in the Energy Technology Perspectives 2024 published this morning by the IEA (International Energy Agency), a comprehensive report on the clean technology market and its evolution as the transition advances.
The document provides the first analysis of its kind based on a quantitative assessment of the industrial strategies of various countries, along with granular sector details across supply chains. It conveys a clear message: “The clean technology market is set to multiply its value over the next decade, coming closer to fossil fuel markets.”
Production of Clean Energy Technologies: Economic Opportunities
Let’s start with some key figures. In 2023, the market value of clean energy technologies reached $700 billion globally, roughly half of that of natural gas. This sector includes various technologies, all marked by positive trends, but the most significant growth is linked to the surge in electric vehicles, photovoltaic systems, and wind installations.
With current policies, this market is expected to triple in value by 2035, surpassing $2 trillion, nearly matching the average value of the oil market in recent years. Note: to meet the climate commitments by 2035, an additional $500 billion is still needed.
According to Fatih Birol, Executive Director of the IEA, “The transitions to clean energy present a significant economic opportunity, as we have demonstrated, and countries are rightly seeking to capitalize on it. However, governments should strive to develop measures that also promote ongoing competition, innovation, and cost reduction, as well as progress toward their energy and climate goals.”
Clean Technology Market: Investments and Manufacturing Capacity
The Energy Technology Perspectives 2024 report devotes significant attention to investments in clean technology manufacturing. Specifically, in 2023, global spending on manufacturing grew by 50%, reaching $235 billion.
“This increase accounts for almost 10% of the growth in investments across the global economy,” emphasizes the International Energy Agency.
Photovoltaic and battery factories have driven most investments (4/5), but in nearly all segments, the added production capacity has far exceeded current distribution levels. This is evidenced, for example, by the European warehouses filled with solar panels and the latest data from IEA-PVPS on the production capacity of photovoltaic cells and modules. Despite the stockpiles, lower demand than supply, and some delays or cancellations of industrial projects, investment in manufacturing facilities will remain at high levels this year.
Where is Investment Highest?
In China, the European Union, the United States, and India. All other regions are lagging behind. It’s worth noting that Southeast Asian, Latin American, and African countries combined represent less than 5% of the value generated from clean energy technology production.
Of course, China remains a standout leader. The IEA report predicts that by 2035, its export of clean technologies will exceed $340 billion in value. To put this in perspective, it’s equivalent to summing the 2024 revenues generated by oil exports from Saudi Arabia and the United Arab Emirates. This is despite ongoing attempts to reshore production elsewhere.
Supply Chains for Clean Energy Technologies
“With around $200 billion, the value of clean technology trade is almost 30% of their global market value,” states the Agency. “The most significant component is the trade in electric vehicles, which has doubled since 2020, accounting for about one-fifth of the trade in all vehicles in 2023 in terms of value, while solar photovoltaics ranks second.” Currently, this segment is expected to reach a value of $575 billion by 2035.
As mentioned, China will remain number one in clean energy technology exports, despite the implementation of new industrial strategies in other countries. This role is not surprising considering that the Asian giant is currently the cheapest place to produce green tech. For instance, manufacturing solar panels and batteries today costs 40-45% more in Europe and the United States (despite the IRA). Beijing even beats India by a significant margin of 25 percentage points.
“Compared to other countries,” the report continues, “China has greater economies of scale, a larger domestic market, and highly integrated companies and structures along the supply chain for these technologies.”
Read the Energy Technology Perspectives 2024 HERE.
