A new report from the International Energy Agency (IEA) has found that total investment in renewable energy technologies and infrastructure must exceed $4.5 trillion by 2030 to meet mid-century climate goals.
The scale of investment required will require countries to develop industrial strategies to mobilize resources across regions, technologies and supply chains, reports Oilrpice.com.
The report emphasized that a significant concentration of raw materials critical for the green transition and their processing are concentrated in several countries, in particular in China. The IEA also named "bottlenecks" in politics and supply chains as obstacles to the reliable development of clean energy technologies.
"Bottlenecks can arise as a result of political and regulatory risks, lack of confidence in demonstration and first-of-a-kind projects, uncertainty about project pipelines, broader macroeconomic factors such as currency stability, and geopolitical developments," the report said.
The article emphasized that although investments in green energy are continuously growing, they must grow much more, especially in this decade. In 2022, investments in clean energy reached $1.4 trillion, which is 10% more than in 2021 and represents a 70% increase in the total volume of investments in the energy sector.
The report highlighted that despite these efforts, fossil fuels still account for 80% of the world's primary energy mix.
The authors emphasized that the energy transition depends on supply chains in clean energy technologies. A cumulative investment of $1.2 trillion will be needed to put in place enough capacity for supply chains to meet zero-emissions targets by 2030. So far, announced investments cover about 60% of this estimate.
IEA specialists noted that, taking into account the time from the decision to production, most investments will have to be made during 2023-2025. They should reach an average of $270 billion per year, which is almost seven times higher than the average investment rate for 2016-2021.
They emphasized that the world should also diversify its green energy supply chains to reduce the risks of dependence on one country.
For example, the Democratic Republic of Congo supplies 70% of cobalt, China – 60% of rare earth elements, and Indonesia – 40% of nickel. Australia accounts for 55% of lithium production, Chile – 25%. China processes 90% of REE and 60-70% of lithium and cobalt, and dominates the supply of bulk materials.
"Diversification will also require huge investments and the right supporting policies to build supply chains outside of China," the report said.
Earlier, EcoPolitic wrote, that the annual report of the International Energy Agency (IEA) showed that the growth of capacities RES will double over the next 5 years due to energy security issues after Russia's full-scale invasion of Ukraine.
As EcoPolitic previously reported, the European Union uses emergency measures for the deployment of green energy, in particular, it speeds up permitting procedures and exempts some RES projects from undergoing an environmental impact assessment.
