Energy Technology Perspectives 2024

INTERNATIONAL ENERGYAGENCY The IEA examines thefull spectrumof energy issuesincluding oil, gas andcoal supply anddemand, renewableenergy technologies,electricity markets,energy efficiency,access to energy,demand sidemanagement andmuch more. Throughits work, the IEAadvocates policies thatwill enhance thereliability, affordabilityand sustainability ofenergy in its31member countries,13associationcountries and beyond. IEA membercountries: IEA associationcountries: AustraliaAustriaBelgiumCanadaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenSwitzerlandRepublic of TürkiyeUnited KingdomUnited States ArgentinaBrazilChinaEgyptIndiaIndonesiaKenyaMoroccoSenegalSingaporeSouth AfricaThailandUkraine This publication and anymap included herein arewithout prejudice to thestatus of or sovereignty overany territory, to thedelimitation of internationalfrontiers and boundaries andto the name of any territory,city or area. The EuropeanCommission alsoparticipates in thework of the IEA Source: IEA.International Energy AgencyWebsite: www.iea.org Foreword In July 2021, the International Energy Agency (IEA) declared that a new globalenergy economy was emerging – one based on clean and modern technologiessuch as solar, wind, electric cars and others. This was a trend that had becomeclear in our data and analysis, which covers all fuels and all technologies acrossthe global energy system. Our work has continued to chart the rise of this new energy economy and itsimplications for the world. Much of this has focused on what the changes meanfor energy security, economic development and international efforts to bring downgreenhouse gas emissions. But as the adoption of clean energy technologies hassurged in many countries across the globe, other factors have increasingly comeinto play. As a new energy economy takes shape, access to a range of components andinputs for clean technologies – many of which are produced in vast factories – isrising in importance. More and more countries are enacting bold new industrialstrategies to bolster the security of clean energy supply chains and to gain aneconomic edge as demand grows. The result is that manufacturing and trade areemerging as crucial variables that will determine how our energy system developsand how quickly emissions from it will decline. The deepening connections between energy, trade, manufacturing and climateare the focus of this latest edition ofEnergy Technology Perspectives (ETP), theIEA’s flagship technology publication. Building on the comprehensive assessmentof clean energy technology supply chains set out inETP-2023, this year’s editionoffers cutting-edge analysis based on rich and detailed new data, granular surveysof industry, and a bottom-up approach to fresh modelling. Its significance isamplified by what has been, until now, a dearth of information in this space, and itwillprovide policymakers with an in-depth,quantified basis to inform theirdeliberations for years to come. One point to emphasise: the IEA does not aim to prescribe trade policy, which isnot our Agency’s role. Instead, this report is intended to provide detailed insightsthat are relevant to the conversations and considerations facing governmentsaround the world today, in line with our longstanding practice. As major economies have introduced new industrial strategies to stake out theirplacesin the growing clean energy economy,the manufacturing of cleantechnologies has boomed. This report homes in on the six major ones: solar PV,wind, electric vehicles, batteries, electrolysers and heat pumps, whose marketsize and trade value is set to soar over the next decade. It also looks at keycomponents of these technologies, as well as industries that provide importantbuilding blocks for them, such as steel, aluminium and ammonia. The remarkable growth in clean energy technologies can offer many benefits andopportunities, including new manufacturing industries, job creation, lower energybills, improved energy security, cleaner air and emissions reductions. In the caseof trade, as clean energy technologies reshape a landscape that has historicallybeen dominated by fossil fuels, resilience could improve. Fossil fuels tend to bequickly consumed, which can lead to a reliance on certain exporters for recurringsupplies. Clean energy technologies operate over longer time frames. That couldresult in less exposure to short-term supply disruptions and market volatility,shielding countries from the destabilising boom-and-bust cycles seen in someenergy markets in recent decades. However, there can also be tensions and trade-offs. We already see the intensecompetition among major economies to gain advantage in the new energyeconomy. As countries race to reap the maximum economic benefits, what arethe broader implications? Does it risk making clean energy transitions less cost-effective if