THE CHALLENGE? FURTHER DIVERSIFICATION OF SUPPLY CHAINS
A report by the International Renewable Energy Agency (IRENA), entitled "Solar Trade and a Bright Energy Future: Arguments in favor of an open and quality solar photovoltaic market" published in 2021 already "outlined" our Integration Coefficient IC concept.
IRENA explained: “Looking at the graph that is the subject of this publication, the rapid deployment of solar energy has given rise to a strong increase in installed capacity. Between 2005 and 2018, cumulative installed solar power capacity increased 100 times to 480 GW, thanks in large part to the emergence of a globally integrated supply chain. During the same period, the global installed capacity of renewable energy multiplied by 2.5. According to projections, the installed capacity of solar energy will continue to grow and it will reach 5,200 GW in 2030 and 14,000 GW in 2050, which would represent 43% of the total installed power generation capacity. Already in 2018, the installed capacity of solar energy increased by 100 GW, that is, at a faster rate than the combined capacity of power generation from fossil fuels and nuclear energy technologies”.
Then IRENA indicated, almost paraphrasing our IC concept: “The globalization of the solar energy market has been one of the main factors that have led to the decrease in its price. This is partly explained by the fact that the emergence of globally integrated solar value chains has enabled manufacturers of solar equipment to source goods and services from the most competitive suppliers in terms of cost, quality, skills, materials, and other location-related advantages. In addition, the integrated global market for solar equipment has expanded opportunities for solar companies to realize significant economies of scale and learn by doing, and has stimulated competition and increased incentives to invest in research and development”.
They concluded: “Looking forward further diversification of solar energy supply chains may be necessary to improve their long-term resilience to external shocks. The current dynamic driving policymakers to consider how to “build back better” offers a unique opportunity to adopt policies that facilitate trade and stimulate diversification by integrating new players into value chains. Trade policies can also accelerate the cross-border diffusion of high-quality, affordable solar energy technologies and get them from where they are produced to where they are needed. In this way, the competitiveness of solar energy in all countries could be promoted, which would contribute to strengthening the transition towards sustainable energy systems and guaranteeing the jobs associated with it”.
Our Integration Coefficient IC is designed under these premises not only at the factory level but also integrating the supply chain in the process to help improve these projections.
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