IEA says world ‘at dawn of new industrial era’

According to a new report by the International Energy Agency, the world is transitioning into a “new era of clean technology production” that could be worth hundreds of billions of dollars a year by the end of the decade, generating millions more. employment in the process. .

Published on Thursday morning, the IEA’s Energy Technology Outlook 2023 report – referring to the “dawn of the new industrial age” – looked at manufacturing technologies including wind turbines , heat pumps, batteries for electric vehicles, solar panels and electrolyzers for hydrogen.

In a statement accompanying its report, the IEA said its analysis showed that the “global market for mass-produced clean energy technologies” will be worth approximately $650 billion annually by 2030. , more than three times the current level.

One caveat from the Paris-based organization’s forecast is that it is based on the full implementation of the world’s countries on energy and climate commitments – an important task that requires both political will and financial strength.

“Clean energy-related jobs will more than double from 6 million today to nearly 14 million by 2030,” the IEA said, “and faster-than-expected industrial and job growth. ​in the following decades as the transition takes place.”

Despite the foregoing, the IEA notes that there are potential headwinds related to the supply chain, a long-standing issue that has increased geopolitical tensions, and the coronavirus pandemic has plummeted in recent years. this.

Its report highlights “the extent of potential risk concentration in clean energy supply chains – both for the production of the technologies and the materials on which they are based.”

It says China is dominating both the production and trade of “most clean energy technologies”.

When it comes to mass-production technologies such as batteries, solar panels, wind, heat pumps and electrolyzers, the IEA says the three largest producing countries represent “at least 70% of production capacity.” for each technology – in which China dominates in all of them. .”

“Meanwhile, much of the important mining activity is concentrated in a few countries,” it added.

“For example, the Democratic Republic of the Congo produces more than 70% of the world’s cobalt, and just three countries – Australia, Chile and China – account for more than 90% of global lithium production.”

Commenting on the report, IEA Executive Director Fatih Birol said the planet “will benefit from a more diverse clean technology supply chain”.

“As we have seen with Europe’s dependence on Russian gas, when you depend too much on one company, one country or one trade route – you run the risk of paying a heavy price if something goes wrong. interruption,” he added.

This is not the first time Birol has talked about the geopolitical aspect of the world’s transition to a future centered on lower carbon technologies.

In October, Birol told CNBC that the main driver of clean energy investment is energy security rather than climate change.

Examining the Inflation Reduction Act in the US and other packages in Europe, Japan and China, Birol said “a huge increase in clean energy investment, about [a] 50% increase,” was seen.

Birol told CNBC’s Julianna Tatelbaum: “Today it’s about $1.3 trillion and it’s going to grow to about $2 trillion.

“And as a result, we will see clean energy, electric cars, solar, hydrogen, nuclear power, gradually but surely, replacing fossil fuels.”

“And why are governments doing this? Because of climate change, because of the greenness of the problem? Not at all. The main reason here is energy security.”

Birol went on to describe energy security as “renewables’ biggest driver.” He also acknowledged the importance of other factors, including those related to climate.

“Concerns about energy security, climate commitments…industrial policies – the three together are a very powerful combination,” he said.