Outside China, $700bn Needed For Renewable Energy Supply Chain

Negara lain daripada China akan perlu to invest $700bn in mining and manufacturing to develop their renewable energy capacity to break China's dominance in these areas, according to a study by research firm Rystad Energy.

Rystad Energy says these investments cover the mining, processing, refining and manufacturing of materials for clean energy projects including solar, wind and batteries. Nevertheless, China still dominates the solar and battery manufacturing sectors.

For example, China's annual investment in building manufacturing and processing capacity climbed from $10bn in 2016 to $140bn in 2023. As a result, China's solar PV capacity increases from 14 GWac in 2016 to 850 GWac in 2023, and battery capacity jumps from 126 GWh in 2016 to 1,550 GWh in 2023.

In comparison, total annual investment in all other countries increases from $7bn in 2016 to $20bn in 2023.

Rystad Energy suggests that if other countries are to reduce their dependence on Chinese-controlled materials, they will need to invest in processing and manufacturing facilities outside of China's sphere of influence in order to provide alternative destinations for minerals and disrupt existing trade routes in the renewable energy sector.

Rystad Energy added that projects under construction outside of China currently account for only a quarter of the capacity needed to eliminate dependence on Chinese production.

Audun Martinsen, head of supply chain research at Rystad Energy, says: "As the energy transition accelerates and demand for affordable clean energy capacity grows, the West is attempting to break down China's bulwark in the supply chain in order to increase adoption and reduce costs."

China akan teruskan ke berkembang

Chinese companies hold countless patents and lead the way in new technologies, which can slow down the EU and the US from catching up.

As a result, a regional clean energy supply chain is unlikely to take shape until at least 2030, and PV Tech reports that China is expected to account for 95 per cent of announced global n-type battery capacity by 2026.

Akhir sekali, large-scale mineral recycling, including decommissioned equipment, will be required. The EU aims to meet 25% of its mineral needs through recycling.

The U.S. Treasury Department and IRS recently released 45X Advanced Manufacturing Production Credit Proposed Guidance, which clarifies the definition of an eligible component and details the amount of tax credits available for qualifying solar parts.

In Europe, the European Parliament voted on 21 November to pass the Net Zero Industry Bill, which will seek to produce renewable energy technologies, including solar photovoltaic, battery storage and wind energy, within the European Union.

The EU said the goal of the Net Zero Industry Act is to enable Europe to meet 40 per cent of its clean energy deployment needs with products manufactured in-house. The final amendments to the bill broaden the scope to cover "the entire supply chain, including components, materials and machinery used in the production of net-zero technologies".