Clean Energy Market Poised to Hit $2 Trillion by 2035 – IEA

  • The International Energy Agency (IEA) projects that the clean energy technology market will reach $2 trillion by 2035, up from $700 billion in 2023, driven by solar, wind, electric vehicles, and batteries.
  • China, the EU, the United States, and India dominate production and exports, while Southeast Asia, Latin America, and Africa account for less than 5% of the market.
  • IEA Executive Director Fatih Birol urges governments to implement policies that foster competitiveness, innovation, and supply chain diversification to support the global clean energy transition.

The International Energy Agency (IEA) projects that the clean energy technology market could reach $2 trillion by 2035. This projection marks a substantial increase from the current valuation of $700 billion in 2023. Rising global demand drives this growth for technologies like solar photovoltaics, wind turbines, electric vehicles (EVs), and batteries.

The IEA’s latest report, Energy Technology Perspectives 2024 (ETP-2024), focuses on six critical clean energy technologies. These technologies play a crucial role in the global energy transition. IEA Executive Director Fatih Birol states that energy, industry, and trade increasingly intertwine as nations work to lead this transition.

Investors heavily concentrate on clean energy funding in a few regions. China, the European Union (EU), the United States, and India dominate production and exports. In contrast, countries in Southeast Asia, Latin America, and Africa account for less than 5% of the value generated from these technologies.

China has significantly increased its solar production capacity, accelerating solar installations worldwide. However, manufacturers report low utilisation rates for solar component production facilities, estimated at 55% in 2023. Battery production for electric vehicles has also surged, doubling since 2021 to over 2.5 TWh. Yet, producers still see the global utilisation rate for battery cell production remains below 35%.

The wind energy sector has expanded its production capacity despite rising costs. In 2023, wind capacity installations doubled, reaching 30 GW. Meanwhile, global production capacity for wind turbine nacelles climbed to 180 GW, contributing to total global wind installations of 115 GW.

Emerging technologies like electrolysers and heat pumps attract increasing attention. Manufacturers expect heat pump production to boost global capacity by one-third, reaching 185 GW by 2030, mainly concentrated in Europe. However, the IEA warns that uncertainties around demand and cost inflation could impede this expansion.

The report also discusses the implications of this growth for international trade. Analysts expect China to remain the leading source of clean energy technology production and exports. Experts project its clean technology exports could reach $340 billion by 2035, nearly equivalent to the combined oil export revenues expected from Saudi Arabia and the United Arab Emirates this year.

Birol emphasises that governments need to adopt policies promoting competitiveness and innovation. These policies should focus on reducing costs while advancing global energy and climate goals. He highlights the importance of diversifying supply chains to strengthen the sector’s resilience and reduce reliance on specific producers.

The report illustrates that the clean energy transition affects not just local issues but also global ramifications. Nations that invest strategically in these technologies could reap significant economic benefits. Conversely, those who need to catch up may miss out on the opportunities presented by the burgeoning clean energy market.

In conclusion, the IEA’s ETP-2024 report presents a clear message: the future of clean energy technology shines bright. With investments concentrated in critical regions and increasing global demand, the market’s growth potential appears immense. However, navigating the challenges ahead will require collaboration among governments, industries, and stakeholders worldwide. Countries can only be leaders in the clean energy revolution through innovative policies and strategic investments.

Leave a Reply

Your email address will not be published. Required fields are marked *