The International Energy Agency (IEA) has projected that the global market for clean energy technologies will reach $2 trillion in value by 2035.
The Agency disclosed this in its ‘Energy Technology Perspectives 2024’ report just released.
According to IEA, the market consists of key six mass-manufactured clean energy technologies – solar PV, wind, electric vehicles (EVs), batteries, electrolyzers, and heat pumps.
The market was said to have grown nearly fourfold between 2015 and 2023 when it surpassed $700 billion driven by surging clean technology deployment, particularly for EVs, solar PV, and wind.
“Under today’s policy settings, the market for these clean technologies is set to nearly triple by 2035 to more than USD 2 trillion. This is close to the average value of the global crude oil market in recent years,” the Agency stated.
Investment in clean tech
The Agency further revealed that global investment in clean technology manufacturing rose by 50% in 2023, reaching $235 billion.
This increase, it said, is equal to nearly 10% of the growth in investment across the entire world economy.
“Four-fifths of the clean technology manufacturing investment in 2023 went to solar PV and battery manufacturing, with EV plants accounting for a further 15%.
“The amount of manufacturing capacity being added has been comfortably outpacing current deployment levels.
“Despite some recent cancellations and postponements of solar PV and battery manufacturing projects, investment in clean technology manufacturing facilities is set to remain close to its recent record levels, at around USD 200 billion in 2024,” IEA said in the report.
China leads the global clean tech
The report noted that despite the ongoing implementation of industrial strategies in other countries, the value of China’s clean technology exports is set to exceed $340 billion in 2035, based on today’s policy settings.
- This is roughly equivalent to the projected oil export revenue of both Saudi Arabia and the United Arab Emirates combined in 2024.
- It noted, however, that there are still strong opportunities for countries all over the world to enjoy the benefits of increased clean energy manufacturing and trade, depending on the pace of clean energy deployment and the policies adopted.
- IEA also pointed out that as the energy sector transforms and energy-related trade shifts towards clean technologies, there will be long-term implications for countries.
“While supplies of fossil fuels need to be replenished as soon as they are consumed, importing clean technologies results in a durable stock of energy equipment.
“For comparison, a single journey by a large container ship filled with solar PV modules can provide the means to produce as much electricity as would be generated from the natural gas onboard more than 50 large liquefied natural gas (LNG) tankers, or from coal onboard 100 large ships,” it said.
Opportunities and challenges for countries
IEA added that the new energy economy that is emerging presents major opportunities for countries looking to manufacture clean technologies, their components, and related materials.
But it also presents challenging decisions for governments, which face tensions and trade-offs based on the industrial and trade policies they opt to pursue.
It said governments must reconcile their commitment to well-functioning markets and cost-effective clean energy transitions, on the one hand, with the need to establish secure, resilient clean technology supply chains, on the other.
