The International Energy Agency (IEA) has published an analysis showing that the global market for clean energy technologies is set to rise from $700 billion in 2023 to more than $2 trillion by 2035 (£540 billion up to £1.5 trillion).
In what it claims in the first analysis of its kind, the IEA’s Energy Technology Perspectives 2024 (ETP) focuses on the outlook for the top six mass-manufactured clean energy technologies: solar PV, wind turbines, electric cars, batteries, electrolysers and heat pumps.
By 2035, the value of the global market for these clean energy technologies will be equivalent to the value of the crude oil market in recent years. Trade in clean technologies is also expected to rise sharply. In the next decade it is projected to triple to reach $575 billion, more than 50% larger than the global trade in natural gas today.
In one of the scenarios explored by the IEA, global demand for electric cars could grow from nearly 14 million in 2023 to 58 million in 2035, in part spurred by incoming bans on new internal combustion engine (ICE) registrations, the likes of the one planned to come into full effect in the UK in 2035.
IEA says the rapid uptake of clean energy technologies offers major opportunities but also presents “challenging decisions” for governments. The report intends to demonstrate the complex interplay between energy, industrial and trade policies as the world establishes clean energy technology supply chains, providing a framework for policymakers.
The ETP notes that more climate ambition does not necessarily mean more clean energy technology trade and that a fair, inclusive transition will require capacity co-located with demand in emerging markets and developing economies (EMDEs). Further, while the total investment needs for manufacturing are unlikely to be a barrier to the transition, more than 20% of the necessary investment will be in EMDEs.
IEA executive director Faith Birol said: “Clean energy transitions present a major economic opportunity, as we have shown, and countries are rightly seeking to capitalise on that. However, governments should strive to develop measures that also foster continued competition, innovation and cost reductions, as well as progress towards their energy and climate goals.”
Clean tech manufacturing in the UK
One of the five key functions of Great British Energy, Labour’s flagship publicly owned energy company, is to build supply chains across the UK, boosting energy independence and creating jobs.
Last week (23 October), the Department for Business and Trade (DBT) announced it will fund a £1 million market access programme designed to generate new opportunities for UK companies to export offshore wind products and services globally.
The project aims to position the UK’s offshore wind supply chain as a partner of choice while also scoping capabilities, infrastructure and key requirements for international locations; this work aims to identify opportunities for UK businesses.
On 17 September, minister for industry and decarbonisation Sarah Jones revealed £88 million of joint government and industry investment was awarded to various projects focusing on zero emissions vehicle (ZEV) technologies. Jones called the automotive industry “the jewel in the crown of our manufacturing base”.
The Faraday Institution predicts that 270,000 UK jobs could be supported by the EV and battery industry to 2040. According to the institution’s research, the UK will need to be manufacturing around 110GWh of battery every year by 2030; the UK is an attractive location for battery manufacturing, but expansion will be needed in line with European investments, it said.