The report talks about the global weighted average levelized cost of electricity (LCOE) of new onshore wind projects added in 2021 fell by 15%, year‑on‑year, to USD 0.033/kWh, while that of new utility-scale solar PV fell by 13% year-on-year to USD 0.048/kWh and that of offshore wind declined 13% to USD 0.075/kWh.

High coal and fossil gas prices in 2021 and 2022 have further undermined the competitiveness of fossil fuels, making solar and wind even more attractive. With the unprecedented surge in European fossil gas prices, new fossil gas generation in Europe will increasingly become uneconomic over its lifetime, bringing the high risk of stranded assets.

Conversely, the world has witnessed a seismic shift in the competitiveness of renewable power generation options since 2010. The global weighted average levelised cost of electricity (LCOE) of newly commissioned utility-scale solar PV projects declined by 88% between 2010 and 2021, while onshore wind fell by 68%, Concentrating Solar Power (CSP) by 67% and offshore wind by 60%.

The paper provides some initial insights based on the technology-focused work of the International Renewable Energy Agency (IRENA) with countries around the world, as well as on IRENA analysis of global and regional energy transitions. The paper draws on multiple IRENA reports on power sector flexibility, hydrogen and the sustainable use of biomass. It also draws specifically on IRENA’s Innovation Landscape for a Renewable-Powered Future report (IRENA, 2019a) and supporting briefs, on the Reaching Zero with Renewables report (IRENA, 2020a) and on IRENA’s global roadmap – the World Energy Transitions Outlook (WETO) (IRENA, 2021a; IRENA, 2022b) – which is focused on a scenario consistent with limiting global temperature rise to below 1.5 degrees Celsius (°C), by eliminating global CO2 emissions between now and 2050. This paper summarises key insights from these and other analytical reports and explores their relevance to China’s specific context. The paper aims to support learning from global experiences, prompt discussions and inform the further work needed to chart the path to carbon neutrality in China by 2060.

The report series is closely related to some recent IRENA publications. The World Energy Transitions Outlook 2022 (IRENA, 2022a) provides a perspective on the role of hydrogen within the wider energy transition in a scenario in line with a 1.5°C pathway. This outlook includes all the energy sectors as well as the trade-off between hydrogen and other technology pathways (e.g. electrification, carbon capture and storage, bioenergy). The short[1]term actions required to enable global trade identified in the Global Hydrogen Trade to Meet the 1.5°C Climate Goal report series are only the beginning. While there are measures that are applicable at the global level (e.g. certification), some measures will be specific to a country, being dependent on local conditions such as energy mix, natural resources and level of mitigation ambition. Thus, the 12 global toolbox of enabling measures needs to be adapted to the local context.

Global solar PV manufacturing capacity has increasingly moved from Europe, Japan and the United States to China over the last decade. China has invested over USD 50 billion in new PV supply capacity – ten times more than Europe − and created more than 300 000 manufacturing jobs across the solar PV value chain since 2011. Today, China’s share in all the manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells and modules) exceeds 80%. This is more than double China’s share of global PV demand. In addition, the country is home to the world’s 10 top suppliers of solar PV manufacturing equipment. China has been instrumental in bringing down costs worldwide for solar PV, 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.

The report has been prepared for the Sydney Energy Forum, which the IEA is co-hosting with the Australian Government and in partnership with the Business Council of Australia.

It covers how the clean energy supply chains are central to the global energy transition. The fallout from the Covid-19 pandemic and Russia’s invasion of Ukraine has put global energy supply chains under enormous pressure, leading to soaring prices of oil, gas and coal, as well as shortages of semiconductors and the critical minerals needed to manufacture clean energy technologies.