China was responsible for 80% of global investment in the manufacturing of photovoltaic solar modules in 2023, the International Energy Agency (IEA) reported this Monday, which ruled out a change of leadership in the medium term.
In a report on clean energy production capabilities released Monday, the IEA painted an encouraging picture of the availability of factories to produce the solar installations needed to meet 2030 climate goals around the world.
However, the scenario outlined is more worrying from a geopolitical point of view due to the enormous dependence on the Asian country, which represented three quarters of the investment in production in 2023 of all clean technologies (photovoltaic, wind, green hydrogen or heat pumps).
The proportion is lower than the 85% recorded in 2022, which is explained by the fact that the 70% increase in investment recorded worldwide last year, up to 200 billion dollars (about 185 billion euros) , The progression in the United States and the European Union (EU) was significantespecially in batteries, where these two regions tripled their 2022 values.
Globally, $110 billion (€102 billion) was spent on battery production, an annual increase of 60%, while $80 billion (€74 billion) was spent on photovoltaic modules. , more than double that in 2022.
Solar PV is the clean technology in which the geographical concentration of production is most pronounced, with more than 80% of total global capacity in 2023 in China.
And although the IEA believes that the United States and India will slightly increase their share between now and 2030, this will make little difference to China’s relative weight, which will still represent just under 80% by then.
In battery manufacturing, the current situation is very similar: China accounts for more than 80%, while the US and the EU own 5% each.
The authors of the study estimate that both the EU and the US could triple its relative weight in battery production capacities by the beginning of the next decadethanks to the respective public incentives for the sector, with China’s participation falling to 60%.
Imbalances are less pronounced in investments in electrolyzer facilities, a necessary tool to produce green hydrogen from renewable electricity. Still, China represents around 60% and forecasts indicate that this proportion will fall to 40% in 2030, while the United States’ share will increase to 20% and the EU’s will remain almost stable at 15%.
In the case of wind turbines, the concentration of capacity in China risks getting even worse: its share already exceeds 60% and is expected to approach 70% at the beginning of the next decade, to the detriment, in particular , of the European Union. , which is expected to contract to just 15%.
Not surprisingly, China is the cheapest producing country of all the clean technologies covered in this report, which evaluates data from more than 750 factories around the world.
There are other lessons, such as the fact that the cost of setting up factories for photovoltaic modules, batteries and wind turbines in the EU and the US is between 70% and 130% more per unit of production than in Chinaand this is without taking into account capital costs, which are also lower in China.
However, the IEA highlighted that this initial investment in production facilities represents only between 15 and 25% of the final production costs of photovoltaic modules, with the proportion being similar for batteries (10-20%).
Operating costs (including energy, materials, components or labor) thus represent a much larger part and the reduction of some of these factors makes it possible to reduce cost differentials with China.
Source: Observadora
