Supply chains for many of the technologies shaping the emerging Age of Electricity remain highly concentrated in a small number of countries, underscoring the importance of strengthening industrial competitiveness and diversification, according to a new IEA report released today.
The report, Energy Technology Perspectives 2026 (ETP-2026), is the latest instalment of the IEA's flagship technology publication, which examines supply chains for mass-manufactured technologies including electric cars, batteries and renewable power equipment. The report finds that the geographical landscape of manufacturing for these technologies - of which China holds by far the largest share - is unlikely to change significantly before the end of the decade, based on committed manufacturing and mining projects and market trends.
For the first time, the report includes an 'N-1' supply chain security analysis, assessing what would happen if the single largest supplier of a technology were removed from the market. It shows that production outside the largest exporting country, which is China for most steps of the supply chains analysed, could in principle meet most demand outside of China at the final manufacturing stages. However, every major supply chain contains at least one step where less than a quarter of demand could be met without the largest manufacturer, meaning that a disruption at a single weak link could put the entire supply chain at risk.
The economic implications of disruptions vary by technology. A one-month halt in Chinese battery supply chain exports would reduce electric car factory output elsewhere by an estimated $17 billion, with more than half of losses occurring in the European Union. A similar disruption to Chinese solar supply chain exports would cut around $1 billion in monthly output from solar PV module factories outside China, with Southeast Asia and India accounting for over 40% of affected output.
"Many of the technologies central to the Age of Electricity are no longer niche markets, they are important and growing parts of the global economy. The market for them may well double over the next decade," said IEA Executive Director Fatih Birol. "While seeking to capitalise on this growth, governments and industry need to strengthen supply chain resilience and industrial competitiveness to reduce geographic concentration and ensure that the increasing deployment of these technologies also delivers energy and economic security."
Under governments' current policies, the global market for key energy technologies may grow from nearly $1.2 trillion today to around $2 trillion by 2035, roughly equivalent to the size of the global oil market last year, according to the report. Under governments' stated policies, growth could be even stronger, with the market for the technologies potentially reaching almost $3 trillion by 2035.
Growth is also evident among earlier-stage technologies. Investment in low-emissions hydrogen production projects rose by 80% year-on-year in 2025, as capital increasingly shifts towards projects with clearer policy backing and commercial structures. Deployment of carbon capture, utilisation and storage (CCUS) is also advancing, although many announced projects have yet to reach final investment decisions.
Trade remains central to energy technology markets. After dipping in 2024, the global value of gross trade in key energy technologies rebounded by around 10% in 2025, even as prices for some products declined. China remains the dominant force in clean energy technology manufacturing, accounting for 60-85% of production capacity across multiple supply chain steps. Chinese gross exports of clean energy technologies exceeded $165 billion in 2025, equivalent to about 15% of the country's overall trade surplus.
The report underscores that improving industrial competitiveness is essential for strengthening supply chain security and that cost gaps vary across technologies. For batteries, manufacturing efficiency and automation explains over 40% of China's cost advantage over Europe. In wind blade production, energy and labour costs account for 75% of the production cost gap, and for 65% in solar PV wafer and polysilicon manufacturing.
In energy-intensive upstream industries such as steel and aluminium, energy costs can represent more than two-thirds of total production costs. Access to low-cost renewables could, under certain conditions, enable hydrogen-based steelmaking to compete moving forward with conventional production in major steel-producing countries including the United States, China and India.
