The International Energy Agency has released its latest clean energy assessment ‘Energy Technology Perspectives 2024’, which maps out the current state of clean energy manufacturing and trade and how they are expected to evolve over time. Said to be a first-of-its-kind analysis, it is designed to help governments and industry identify opportunities and weigh the challenging choices ahead as they navigate the new global energy economy that is emerging.

The rapid uptake of clean energy technologies offers major opportunities for countries looking to manufacture and trade them but also presents challenging decisions for governments, which face tensions and trade-offs based on the industrial and trade policies they opt to pursue

Based on current policy settings, the global market for the top six mass-manufactured clean energy technologies (solar PV, wind turbines, electric cars, batteries, electrolysers and heat pumps) is set to rise from $700 billion in 2023 to more than $2 trillion by 2035 – close to the value of the world’s crude oil market in recent years.

Global trade in these clean technologies is also expected to rise sharply. In a decade’s time, it more than triples to reach $575 billion, more than 50% larger than the global trade in natural gas today.

The report, which also looks at key materials like steel and aluminium, contains detailed analyses on economies that are already manufacturing clean technologies at scale – mostly notably China, the United States, Europe, and increasingly India. It finds that China is set to remain the world’s clean energy manufacturing powerhouse for the foreseeable future. Under today’s policy settings, its exports of top clean technologies are on track to exceed $340 billion in 2035, which is roughly equivalent to the projected oil export revenue this year of Saudi Arabia and the United Arab Emirates combined.

Opportunities

Today, countries in Southeast Asia, Latin America and Africa account for less than 5% of the value generated from producing clean technologies. But the report shows that the door of the new clean energy economy remains open to countries at different stages of development, identifying key opportunities for emerging and developing economies based on a country-by-country assessment of more than 60 indicators.

Beyond the mining and processing of critical minerals, emerging and developing economies could draw on their competitive advantages to move up the value chain. For example, Southeast Asia could become one of the cheapest places to produce polysilicon and wafers for solar panels within the next 10 years, while Latin America – particularly Brazil – has the potential to scale up its wind turbine manufacturing for export to other markets in the Americas. North Africa has the ingredients to become an EV manufacturing hub within the next decade, while various countries in sub-Saharan Africa could produce iron with low-emissions hydrogen. 

In terms of investment, the increase in the global clean technology market has been accompanied by a record wave of investment in the manufacturing of clean technologies as countries look to bolster their energy security, maintain their economic edge and reduce emissions. Most of this spending is concentrated in the countries and regions that already have established a clear foothold in the sector and are looking to build on their positions.

In the coming years, rising trade in clean energy goods and lower fossil fuel trade could boost energy resilience, says the report. A single journey by a large container ship filled with solar PV modules can provide the means to generate the same amount of electricity as the natural gas from more than 50 large LNG tankers or the coal from more than 100 large bulk ships.

Rising trade has also introduced more significant security considerations. Today, around half of all maritime trade in clean energy technologies passes through the Strait of Malacca, which connects the Indian and Pacific Oceans, and is significantly more than the roughly 20% of fossil fuel trade that passes through the Strait of Hormuz.

‘Energy Technology Perspectives 2024’ (ETP 2024) can be downloaded as a pdf from the IEA website. More details on how the trade of clean energy technologies could evolve can be found in the interactive ‘trade explorer’ tool, which is part of the online version of the report.