The Clean Energy Manufacturing Renaissance Falsehood

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From Watts Up With That?

Essay by Eric Worrall

Clap hard people – every time you say “I don’t believe in renewables”, a Western solar manufacture company dies.

Energy Technology Perspectives 2023 highlights major market and employment opportunities, as well as the emerging risks, for countries racing to lead the clean energy industries of today and tomorrow

The world is entering a new age of clean technology manufacturing, and countries’ industrial strategies will be key to success

12 January 2023

The energy world is at the dawn of a new industrial age – the age of clean energy technology manufacturing – that is creating major new markets and millions of jobs but also raising new risks, prompting countries across the globe to devise industrial strategies to secure their place in the new global energy economy, according to a major new IEA report.

Energy Technology Perspectives 2023, the latest instalment in one of the IEA’s flagship series, serves as the world’s first global guidebook for the clean technology industries of the future. It provides a comprehensive analysis of global manufacturing of clean energy technologies today – such as solar panels, wind turbines, EV batteries, electrolysers for hydrogen and heat pumps – and their supply chains around the world, as well as mapping out how they are likely to evolve as the clean energy transition advances in the years ahead.

The analysis shows the global market for key mass-manufactured clean energy technologies will be worth around USD 650 billion a year by 2030 – more than three times today’s level – if countries worldwide fully implement their announced energy and climate pledges. The related clean energy manufacturing jobs would more than double from 6 million today to nearly 14 million by 2030 – and further rapid industrial and employment growth is expected in the following decades as transitions progress.

“The IEA highlighted almost two years ago that a new global energy economy was emerging rapidly. Today, it has become a central pillar of economic strategy and every country needs to identify how it can benefit from the opportunities and navigate the challenges. We’re talking about new clean energy technology markets worth hundreds of billions of dollars as well as millions of new jobs,” said IEA Executive Director Fatih Birol. “The encouraging news is the global project pipeline for clean energy technology manufacturing is large and growing. If everything announced as of today gets built, the investment flowing into manufacturing clean energy technologies would provide two-thirds of what is needed in a pathway to net zero emissions. The current momentum is moving us closer to meeting our international energy and climate goals – and there is almost certainly more to come.”

“At the same time, the world would benefit from more diversified clean technology supply chains,” Dr Birol added. “As we have seen with Europe’s reliance on Russian gas, when you depend too much on one company, one country or one trade route – you risk paying a heavy price if there is disruption. So, I’m pleased to see many economies around the world competing today to be leaders in the new energy economy and drive an expansion of clean technology manufacturing in the race to net zero. It’s important, though, that this competition is fair – and that there is a healthy degree of international collaboration, since no country is an energy island and energy transitions will be more costly and slow if countries do not work together.”

The report notes that major economies are acting to combine their climate, energy security and industrial policies into broader strategies for their economies. The Inflation Reduction Act in the United States is a clear example of this, but there is also the Fit for 55 package and REPowerEU plan in the European Union, Japan’s Green Transformation programme, and the Production Linked Incentive scheme in India that encourages manufacturing of solar PV and batteries – and China is working to meet and even exceed the goals of its latest Five-Year Plan.

Meanwhile, clean energy project developers and investors are watching closely for the policies that can give them a competitive edge. Relatively short lead times of around 1-3 years on average to bring manufacturing facilities online mean that the project pipeline can expand rapidly in an environment that is conducive to investment. Only 25% of the announced manufacturing projects globally for solar PV are under construction or beginning construction imminently, according to the report. The number is around 35% for EV batteries and less than 10% for electrolysers. Government policies and market developments can have a significant effect on where the rest of these projects end up. 

Amid the regional ambitions for scaling up manufacturing, ETP-2023 underscores the important role of international trade in clean energy technology supply chains. It shows that nearly 60% of solar PV modules produced worldwide are traded across borders. Trade is also important for EV batteries and wind turbine components, despite their bulkiness, with China the main net exporter today. 

The report also highlights the specific challenges related to the critical minerals needed for many clean energy technologies, noting the long lead times for developing new mines and the need for strong environmental, social and governance standards. Given the uneven geographic distribution of critical mineral resources, international collaboration and strategic partnerships will be crucial for ensuring security of supply.

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The main report (available here) identifies China being the main manufacturer of renewable components as a supply chain risk.

… China currently dominates the manufacturing and trade of most clean energy technologies. China’s investment in clean energy supply chains has been instrumental in bringing down costs worldwide for key technologies, with multiple benefits for clean energy transitions. At the same time, the level of geographical concentration in global supply chains also creates potential challenges that governments need to address. For mass-manufactured technologies like wind, batteries, electrolysers, solar panels and heat pumps, the three largest producer countries account for at least 70% of manufacturing capacity for each technology – with China dominant in all of them. …Read more:

The report also predicts renewable energy component prices will continue to fall, despite admitting resource constraints are driving up prices – but I can’t find a clear explanation for WHY they believe costs will continue falling, other than some vague statements about specialisation and government policy;

… The cost of wind turbines outside China has also been rising after years of decline, with the prices of inputs such as steel and copper about doubling between the first half of 2020 and the same period in 2022. Similar trends can be seen in solar PV supply chains.  … As countries make progress towards their climate pledges, with renewable electricity costs continuing their decline and electrolyser costs falling rapidly, the cost difference between regions is likely to shrink somewhat, but competitiveness gaps will remain. Carefully considering where in the supply chain to specialise domestically, and where it might be better to establish strategic partnerships or make direct investments in third countries, should form key considerations of countries’ industrial strategies. … Energy costs will continue to be a major differentiator in the competitiveness of countries’ energy-intensive industry sectors. Industrial competitiveness today is closely linked to energy costs, especially natural gas and electricity, which vary greatly between regions. …Read more:

Why is China the main exporter of renewable energy components?

The answer is devastatingly simple. China uses cheap energy to manufacture renewable energy components.

Nations which attempt to use renewable energy to manufacture renewable components cannot compete with China’s low manufacturing costs.

European solar PV manufacturing at risk from soaring power prices – Rystad

By Jules Scully
October 6, 2022

Around 35GW of PV manufacturing projects in Europe are at risk of being mothballed as elevated power prices damage the continent’s efforts to build a solar supply chain, research from Rystad Energy suggests.

Audun Martinsen, Rystad Energy’s head of energy service research, said high power prices not only pose a significant threat to European decarbonisation efforts but could also result in increased reliance on overseas manufacturing.

“Building a reliable domestic low-carbon supply chain is essential if the continent is going to stick to its goals, including the REPowerEU plan, but as things stand, that is in serious jeopardy,” he added.

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Shortly after the above was published, a French solar module plant was closed;

Maxeon closes French solar module manufacturing plant

By Jules Scully
October 7, 2022

Maxeon Solar Technologies has shut down a PV module manufacturing plant in France, citing a challenging price environment.

The facility was impacted by rising costs and taxes on raw material imports, according to a Maxeon spokesperson.

“The production price of the Porcelette plant no longer allows us to be competitive on the European market,” the spokesperson said in a statement sent to PV Tech.

Located in northeastern France, the facility was inaugurated in 2012. According to press release from that year, the plant had a 44MWp production line capable of producing 150,000 solar panels annually.

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Green politicians across the world, green politicians in the USAAustraliaEuropeBritain, are selling their supporters a false narrative that the renewable energy push will bring back manufacturing jobs. But this claim simply isn’t true.

So long as China is able to compete on the world stage, with their low cost slave labour produced fossil fuel powered factory renewable energy components, they will effortlessly undercut any manufacturer who attempts to set up in high energy cost nations which seriously attempt to use renewable energy products sold by China to try to kickstart their own sustainable manufacturing industry.

Renewable energy manufacturing is energy intensive, especially solar manufacturing, which requires refining silica mixed with coal in a blast furnace to produce silicon, zone melting the silicon to remove impurities, then slicing, doping and recombining the silicon in yet another furnace, to turn it into silicon semiconductor solar panels. At least 3x in the process of manufacturing silicon solar panels, that large amounts of material have to be heated to over a thousand degrees – not counting the manufacture of supporting components like the Alumina or steel frames.

As of 2021, 45% of the world’s solar components come from Xinjiang, the centre of China’s Uighur slave labour horror and a major coal mining province – because Xinjiang has the slave labour and cheap energy ruthless Chinese manufacturers crave, to undercut every other manufacturer of renewable energy components.

All the global renewable energy push is achieving is to add to the economic incentive for China to commit horrific human rights abuses. The alleged “new industrial revolution” manufacturing opportunity, for everywhere except low cost energy nations like China, is a pipe dream.