Battery-led storage deployments need to sextuple globally says IEA
Cover of Batteries and Secure Energy Transitions. Courtesy IEA
Despite immense cost cuts and their deployment in the power sector last year more than doubling, batteries need to lead a sixfold increase in global energy storage deployments to enable the world to meet 2030 targets, says the International Energy Agency (IEA).
Growth in batteries outpaced almost all other clean energy technologies in 2023 as falling costs, advancing innovation and supportive industrial policies helped drive up demand for the crucial technology, finds the IEA’s Batteries and Secure Energy Transitions World Energy Outlook Special Report.
According to the report, in less than 15 years, battery costs have fallen by more than 90%, marking one of the fastest declines ever seen in clean energy technologies.
The most common type of batteries, those based on lithium-ion, have typically been associated with consumer electronics. But today, the energy sector accounts for over 90% of overall battery demand.
In 2023 alone, states the IEA, battery deployment in the power sector increased by more than 130% year-on-year, adding a total of 42GW to electricity systems around the world. In the transport sector, batteries have enabled electric car sales to surge from 3 million in 2020 to almost 14 million last year, with further strong growth expected in the coming years.
During a press debriefing, the IEA’s executive director Fatih Birol commented that the clean tech has proved “extremely important and according to our analysis…more than half of (secure) global emission cuts rely on batteries.
“Whether or not we will have a future which is sustainable and secure (both for electric cars and for power generation) will critically hinge on whether or not we will see batteries have a significant market share in the global energy system.”
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Scaling up deployments
According to the IEA, battery deployment will need to scale up significantly between now and the end of the decade to enable the world to get on track for its energy and climate goals. In this scenario, overall energy storage capacity increases sixfold by 2030 worldwide, with batteries accounting for 90% of the increase and pumped hydropower for most of the rest.
To scale up batteries globally, the report found that costs need to come down further without compromising quality and technology. Ensuring energy security also requires greater diversity in supply chains, including for extracting and processing the critical minerals used in batteries – and for manufacturing the batteries themselves.
Global battery manufacturing has more than tripled in the last three years. While China produces most batteries today, the report shows that 40% of announced plans for new battery manufacturing is in advanced economies such as the United States and the European Union.
If all those projects are built, states the report. those economies would have nearly enough manufacturing capacity to meet their own needs to 2030.
EV boom
The IEA’s battery outlook followed release of their Global EV Outlook 2024 two days prior.
The EV outlook found that EV sales continue to rise and could reach around 17 million in 2024, accounting for more than one in five cars sold worldwide.
According to the report, substantial investment in the EV supply chain, ongoing policy support, and declines in the price of EVs and their batteries are expected to produce even more significant changes in the years to come.
The Outlook finds that under today’s policy settings, every other car sold globally is set to be electric by 2035. Meanwhile, if countries’ announced energy and climate pledges are met in full and on time, two in three cars sold would be electric by 2035. In this scenario, the rapid uptake of electric vehicles – from cars to vans, trucks, buses, and two- and three-wheelers – avoids the need for around 12 million barrels of oil per day, on a par with current demand from road transport in China and Europe combined.
Commented Biroll during the press debriefing: “Just as…when we presented our report on electric vehicles, our numbers show that, mainly thanks to the decline in the cost of batteries today, 60% of the electric cars sold in China are cost competitive (with) internal combustion cars and I believe it will be going in the same direction in other markets (more rapidly).
Added Birol in a release: “The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others.
“Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth. The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers’ ambitious plans for expansion.
“As a result, the share of EVs on the roads is expected to continue to climb rapidly. Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the United States and European Union. This shift will have major ramifications for both the auto industry and the energy sector.”
