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The storage method has already made great strides in recent years, the report says – growth in batteries outpaced almost all other clean energy technology in 2023, with a 130% increase in power sector deployment. This was driven in part by a fall in cost of more than 90% in 15 years, as well as innovations and supportive industrial policies.
Described by IEA as the “first comprehensive analysis of the entire battery ecosystem”, the “Special Report on Batteries and Secure Energy Transitions” sets out the role that batteries can play alongside renewables as a “competitive, secure and sustainable alternative to electricity generation from fossil fuels – while also underpinning the decarbonisation of road transport by powering electric vehicles”.
The energy sector accounts for over 90% of overall battery demand, while batteries have enabled electric car sales to surge from 3m in 2020 to 14m in 2023.
“The electricity and transport sectors are two key pillars for bringing down emissions quickly enough to meet the targets agreed at COP28 and keep open the possibility of limiting global warming to 1.5°C,” said IEA executive director Fatih Birol.
“Batteries will provide the foundations in both areas, playing an invaluable role in scaling up renewables and electrifying transport while delivering secure and sustainable energy for businesses and households.
“The combination of solar PV and batteries is today competitive with new coal plants in India. And just in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States. Batteries are changing the game before our eyes.”
Battery deployment will need to scale up significantly between now and the end of the decade to get the world on track for its energy and climate goals, according to the report. 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.
Large amounts of batteries “fundamentally change how we manage the grid,” wrote Auke Hoekstra, director of the Neon research programme at Eindhoven University of Technology, in response to the report on X. “That is clearly where we are heading.”
Battery costs need to come down further without compromising quality and technology, IEA said. Ensuring energy security also requires greater diversity in supply chains, including extracting and processing critical minerals, and manufacturing the batteries.
Global manufacturing has more than tripled in the last three years, the report said. While China produces most batteries today, 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, those economies would have nearly enough manufacturing to meet their own needs to 2030 on the path to net zero.
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