Energy Index Behind the Scenes: Zooming in on Climate Technology Value Chains

Capability across climate technology value chains is a key variable in our recently released flagship product, the New Energy Geopolitics Index (NEGI), which measures countries’ potential geopolitical influence as a result of the global transition from fossil fuels to renewable energy.

In a world fueled by oil, gas, and coal, access to natural resources determines geopolitical competition and influence. But with the renewable energy transition, value chains, manufacturing, and innovation will become even more important than natural resource extraction. That shift will also lead to more energy independence in countries that are farther along in the transition.

Governments are taking note and are increasingly evaluating risks and planning to secure value chains—from the raw materials to manufacturing and R&D—to mitigate potential disruption and political influence.

That is why capability is weighted so heavily in the NEGI. To provide more insight into the capability variable, we focus on the performance of top five countries in 2019 across five key indicators: natural resource extraction, electric vehicle battery manufacturing, solar photovoltaic (PV) manufacturing, wind turbine manufacturing, patents for environment-related technologies (2018 data).

China’s strength across these indicators is notable, especially when it comes to the country’s staggering dominance in the production of key minerals and solar panels (see Figures 1 and 3). It produced nearly as much of the key minerals as the next top three countries combined in 2019.

Another clear trend is the leading position of East Asian battery manufacturing companies, with the United States still lagging and European companies playing an insignificant role (see Figure 2).

When it comes to wind turbines production and patent registrations in environment-related technologies (a proxy for innovation), Europe and the United States continue to perform well. China, however, still trails behind in patent registrations, the only category where it is not in the lead (see Figures 4 and 5). 

Figure 1. Production of Key Minerals for Select Climate Technologies (in tons)

​​Note: For full list of minerals included, see methodology.

Source: US Geological Service.

Figure 2. EV Battery Shipments of Leading Manufacturers by Nationality (GWh)

Note: Data accounts for nationality of manufacturer, which may differ from country of production.

Sources: SNE Research; GGII; CBEA.

Figure 3. Solar PV Module Shipments of Leading Manufacturers by Nationality (GW)

Sources: company annual reports, press releases, and financial statements; BNEF; Lux Research; Reuters; IHS; pv-magazine; pv-tech; Wind; Global Data; Energy1; Guangfu.bjx.

Figure 4. Wind Turbine Installations of Leading Manufacturers by Nationality (GW)

Note: After Siemens and Gamesa merged in 2017, the nationality of the new entity was assigned to Germany because Siemens is the larger shareholder.

Sources: REN21 Global Status Report; BNEF; GWEC; company annual reports, press releases, and financial statements.

Figure 5. Patent Registrations for Environment-Related Technologies

Note: Patents of family size of 1 or greater.

Source: OECD.

For more information, visit the NEGI product page and read the accompanying methodology. We will be updating the index and delivering associated analysis in the future.

Ilaria Mazzocco is a Senior Research Associate at MacroPolo. You can find her work on energy and climate here.

Jianyin Roachell previously worked as a Data Analyst at MacroPolo. 

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