REM: China’s clean-tech manufacturing overcapacity – BNEF

China is manufacturing and exporting clean energy technology more than ever before, and overcapacity threatens, says a new report.

The surplus manufacturing capacity may be good for keep prices low, but it does mean a concentration in China and less domestic manufacturing elsewhere, said the report by BloombergNEF.

In two years’ time, China’s annual manufacturing capacity for solar modules and battery cells will be around twice the global demand needed for achieving net-zero emissions by 2050. And that “glut is set to persist”, said BNEF.

For example, there is $469bn of excess factories planned to come online from 2024-27.

The economic clout of China’s clean-tech expertise is clear as exports surge. In 2023, global imports of Chinese electric vehicles (EVs), solar modules and battery cells were twice as much as those as recently as 2021, said the report.

“An oversupplied world is one where costs are low,” said BNEF. The price of Chinese solar modules, EVs, batteries and wind turbines have declined due to extra manufacturing capacity, and as supply chain constraints have lessened, global decarbonisation is cheaper.