IEA: Energy Technology Outlook in 2023

IEA: Energy Technology Outlook in 2023

According to a new report of the International Energy Agency (IEA), the geographical distribution of key mineral resources used in the clean energy supply chain is uneven, which makes international cooperation and strategic partnership crucial.

According to the report, the three largest producers account for at least 70% of the production capacity of solar modules, wind energy, electric vehicle batteries, electrolyzers and heat pump-related technologies. China dominates in all these fields.

Most of the mining of key minerals is concentrated in a few countries. For example, the Democratic Republic of the Congo accounts for more than 70% of the global cobalt production, and Australia, Chile and China account for more than 90% of the global lithium production.

In the Energy Technology Outlook 2023, the International Energy Agency has made a comprehensive analysis of the global manufacturing status and supply chain of clean energy technologies. The report also describes how they will evolve with the advancement of energy transformation.

The report highlights the specific challenges faced by the key minerals required for various clean energy technologies, and points out that the long time required for the development of new mines constitutes an obstacle to the need for strong environmental, social and governance standards.

The IEA report said that the risk of supply chain tension in turn led to the rise in the price of clean technology, which made the energy transformation of countries more difficult and more expensive.

The rising prices of cobalt, lithium and nickel have led to the rise in the price of electric vehicle batteries. In 2022, the global battery price will jump by nearly 10%. After years of decline, the cost of wind turbines outside China has been rising, and solar PV has also shown a similar trend.

Industrial strategies of large economies

Fatih Birol, Executive Director of the International Energy Agency, said that the new global energy economy has become the core pillar of economic strategy, and each country needs to determine how to benefit from opportunities and manage challenges.

The report points out that large economies are integrating climate, energy security and industrial policies into broader economic strategies.

For example, the United States' Inflation Reduction Act (IRA), the EU's Fit for 55 package plan and REPowerEU plan, Japan's green transformation plan and India's capacity-linked incentive plan all encourage the manufacturing of solar PV and batteries.

According to the report, China is striving to achieve and even surpass its latest five-year plan.

This region has the ambition to expand the scale of manufacturing industry. The report highlights the importance of international trade in the supply chain of clean energy technologies.

Nearly 60% of solar PV modules produced globally are traded across borders. Trade is also important for electric vehicle batteries and wind turbine components, and China is currently a major net exporter.

Future weather and achieving net zero target

The report points out that if countries around the world fully implement their announced energy and climate commitments, the market value of large-scale manufacturing of global core clean energy technologies will reach about 650 billion dollars per year by 2030, three times the current level.

"If all the projects announced today are completed, the investment in clean energy technology manufacturing will provide two-thirds of the investment needed to achieve net zero emissions," he said

However, the report found that only 25% of the solar photovoltaic manufacturing projects announced globally are under construction or have started construction. The battery of electric vehicle is about 35%, and the electrolytic cell is less than 10%.