The International Energy Agency (IEA) has stated that for every country, the clean technology manufacturing sector brings economic security and job opportunities, contributing significantly to the clean energy transition. As of 2023, the importance of this sector has reached a level that impacts overall GDP performance: clean technology manufacturing alone accounted for about 4% of global GDP growth and nearly 10% of global investment growth. This is highlighted in the IEA's first “Energy Technology Perspectives Special Report,” a global and regional analysis aimed at assisting policymakers in preparing industrial strategies. The report focuses on five key clean energy technologies: solar photovoltaic (PV) energy, wind energy, batteries, electrolyzers, and heat pumps. Solar PV technology is leading the way towards net-zero emissions, with significant progress in battery technology and promising prospects for wind energy. The analysis is regionally segmented, with China, the United States, Europe, and India having the most significant influence. Competition will determine the relative fate of each region, with factors such as labor costs, government subsidies, market size, skilled labor availability, infrastructure readiness, permitting processes, and synergies with existing industries playing a role. Thus, policy intervention can increase the attractiveness of investing in and benefiting from specific technologies. The IEA offers recommendations to policymakers accordingly.

The Rise of Clean Tech Manufacturing

For a long time, manufacturing has been the engine of economic growth and development. Now, it is increasingly a focus of energy, climate, and economic policy considerations. Countries are racing to leverage clean technology manufacturing for economic security, job creation, and the clean energy transition. The “Energy Technology Perspectives Special Report” is intended to help policymakers develop their industrial strategies, focusing on solar PV, wind energy, batteries, electrolyzers, and heat pumps.

Investment in clean technology manufacturing is becoming increasingly important, even reflected in broad macroeconomic data. In 2023, clean technology manufacturing accounted for about 0.7% of global investment across all economic sectors, more than traditional industries like steel (0.5%). In terms of growth, its contribution is even more significant: in 2023, clean technology manufacturing alone accounted for about 4% of global GDP growth and nearly 10% of global investment growth.

Sustained Surge in Investments

According to the report's pioneering analysis, investments in clean technology manufacturing in 2023 amounted to approximately $200 billion, an increase of over 70% from 2022. Investments in solar PV and battery manufacturing plants were the highest, accounting for over 90% of the total investments over these two years. In 2023, investments in solar PV manufacturing more than doubled to about $80 billion, while battery manufacturing investments grew by about 60% to $110 billion.

In 2023, China accounted for three-quarters of global clean technology manufacturing investments, down from 85% in 2022, due to a more than twofold increase in investments in the United States and Europe, particularly in battery manufacturing. For solar PV manufacturing, investments in China more than doubled from 2022 to 2023. Outside these three main manufacturing hubs, countries like India, Japan, South Korea, and Southeast Asian nations have made significant contributions in specific areas, while regions such as Africa, Central America, and South America have seen negligible investments.

Rapid Expansion in Project Construction but Uneven Growth

The existing production capacity for solar PV modules and batteries can meet the demand under the 2030 net-zero emissions scenario—six years ahead of schedule—with a slight shortfall in upstream wafer and polysilicon production. However, the average utilization rate of global battery and module production facilities is currently about 50%, relatively low. This is mainly due to an oversupply of solar PV modules and rapid expansion of manufacturing capacity. While the sharp increase in supply has driven down module prices, promoting wider consumer acceptance, the inventory of solar PV modules continues to grow, and there are signs that capacity expansion plans are being scaled back and delayed, particularly in China.

Battery manufacturing also reached a record high in 2023, with total production exceeding 800 GWh, a 45% increase from 2022. New capacity additions surged as well, with battery manufacturing capacity nearing 780 GWh, about a quarter increase from 2022. This brings the total installed capacity to about 2.5 TWh, almost three times the current demand. If all planned projects are realized, global battery production capacity could exceed 9 TWh by 2030. In the net-zero emissions scenario, the 2030 demand for battery manufacturing deployment is imminent: over 90% of the demand can be met through announced expansion projects that have already made final investment decisions.

Geographic Concentration of Clean Energy Manufacturing Remains High

China, the United States, and the European Union together account for about 80% to 90% of the manufacturing capacity for solar PV, wind energy, batteries, electrolyzers, and heat pumps. Even if all announced projects are realized, the overall trend of concentration is unlikely to change significantly by 2030.

China alone accounts for over 80% of global solar PV module production capacity and 95% of wafer production capacity. This situation is unlikely to change much within this decade, meaning China's new capacity will catch up with or surpass the plans of other countries like the United States and India.

In battery manufacturing, the situation is somewhat different: Europe and the United States plan to increase capacity, which is expected to reduce China's current share of global capacity. If all announced projects are realized, the share of these two regions could reach about 15% each by 2030. In Europe and the United States, announced battery manufacturing capacity is sufficient to meet the domestic deployment demand for 2030 related to their climate goals.

Top BESS Manufacturers

In the context of clean technology manufacturing, Battery Energy Storage Systems (BESS) manufacturers play a critical role. As the demand for renewable energy storage grows, companies specializing in BESS are becoming pivotal in the energy transition. Some of the top BESS manufacturers leading the industry include Tesla, LG Chem, Panasonic, Samsung SDI, and BYD. These companies are at the forefront of innovation, driving advancements in battery technology, improving energy density, and reducing costs. Their contributions are essential for stabilizing power grids, enabling efficient renewable energy integration, and supporting the shift towards a more sustainable energy landscape.

By understanding these trends and supporting the growth of top BESS manufacturers, policymakers can better prepare their industrial strategies to harness the economic and environmental benefits of clean technology manufacturing.

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