Investment in cleantech has been growing steadily across most geographies and will continue to do so for the foreseeable future. Defined as “a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes”, cleantech organisations are incredibly varied and sit across many different established industries.
A report published earlier this year showed record clean investment in the US in Q4 last year ($68.7bn), quickly superseded by investment in Q1 this year ($70.76bn). The database, provided by Rhodium Group and MIT’s Center for Energy and Environmental Policy Research, highlights some interesting discrepancies between announcements made by businesses in relevant industries pertaining to planned investment, and the actual subsequent investment. The transition away from fossil fuels and the introduction of new technologies into existing environments is complex. In many situations there are limited commercial benefits in the short-medium term, so the transformation is often lower priority.
The International Energy Agency (IEA) also published a report in March this year – the first edition of the Clean Energy Market Monitor – produced to provide an “overview of clean energy deployment for 2023 for a selected group of technologies.” Growth was noticeable in advanced economies and China with additions in capacity for solar (85% growth) and wind (60% growth), and electric car sales (35% growth). Construction of nuclear reactors slowed, heat pump sales fell, and while hydrogen electrolyser capacity additions grew by more than 300%, the starting point was very low.
In Europe (including EU27, UK and Norway), the specialist economics think tank, Bruegel, has introduced a European Clean Tech Tracker that will be updated on an ongoing basis (latest update was 11th July 2024). Created to provide insight into innovation, manufacturing and deployment trends of the technology that supports Europe’s green transition, it highlights Germany as a hub for cleantech manufacturing, Sweden as the recipient of the highest funding distributed by the Innovation Fund, and both North-West Europe and the Nordic countries as leaders in overall cleantech adoption. The UK lags behind in most areas, and while venture capital investment into cleantech reached £2.6bn in 2023, this is on par with 2021 investment levels and behind the £2.8bn achieved in 2022. A full report from Cleantech for UK is available here. In a recent report published by Make UK, the trade association for manufacturers, it was revealed that the UK has fallen to 12th position in the top 15 largest manufacturing economies. At a time when a growing number of companies are pursuing a sustainability agenda, the manufacture and effective deployment of green technologies is increasingly important.
The journey to greater efficiency, improved circularity of resources, and widespread adoption of green technologies requires careful planning and corporate acceptance of the overall strategy. Driving the transformation is not straightforward and requires the right balance of stakeholder management, clarity of purpose and intent, and effective leadership. At Tenon we partner with a network of transformation leaders who have built successful careers driving critical change in challenging environments. If you’d like to discuss your organisation’s transformation journey and how we might be able to help, please get in touch.
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