The ETC’s Barriers to Clean Electrification series focuses on identifying the key challenges facing the transition to clean power systems globally and recommending a set of key actions to ensure the clean electricity scale-up is not derailed in the 2020s.
This Insights Briefing addresses two main questions:
- Where – and to what extent – could there be bottlenecks to clean energy supply chains, looking out to 2030?
- What are the key actions that policymakers and industry can take to mitigate these?
The path to a net zero global economy will require huge growth in clean energy technology deployment, with rapid scaling required of both clean energy supply and end-use decarbonisation technologies. Despite positive recent progress, including widespread legislated national commitments to net zero by mid-century, and some ambitious sector targets, several barriers limit the pace and scale of the transition. These include overall uncertainty about the pace of clean tech deployment in some markets, where government-backed incentives or market design play a key role, and issues around execution – including planning and permitting delays, lack of infrastructure availability (e.g. grids), and supply chain volatility. If unresolved, these barriers risk delaying and/or increasing the costs of the energy transition, putting a global net-zero emissions trajectory by mid-century at risk.
While there are no fundamental barriers to delivering the energy transition by mid-century, three key supply-side challenges must be addressed in the short to medium-term to avoid delays or increased costs:
- Scaling manufacturing and supply quickly enough to meet demand, which could be challenging for key raw materials
- Environmental and social concerns around mining and manufacturing
- Geographic concentration of clean energy supply chains
The pace and scale of clean energy deployment means that all countries should be able to benefit from growing markets and grasp new opportunities around industrial competitiveness and energy security. However, in some cases, relocation of production is likely to entail short-term cost increases for the energy transition – which will require careful balancing against political priorities.
A critical priority for governments is to set out a clear strategic vision for the energy transition, supported by sectoral targets. Overall, the more clarity over the shape and timeline of the future transition, the more likely that supply chain challenges can be solved by market competition and private investment. Ensuring a balanced approach that can support a low-cost, fast-paced global energy transition, as well as meeting domestic political priorities, is vital.