IEA Report: Battery Costs Plummet by 90% in 15 Years, Boosting Renewable Energy Progress

2024-05-02 19:46:47

This article was originally published in English

To achieve our energy targets for 2030, global storage capacity must be increased sixfold. The batteries will do most of the work.

ADVERTISING

The cost of batteries has fallen by more than 90% in the last 15 years, according to a new report from the International Energy Agency (IEA).

It’s one of the fastest-ever declines in clean energy technology, and it gives hope that batteries can help the world meet its renewable energy goals.

Although we still tend to think of lithium-ion batteries as a component of consumer electronics devices, for example telephone and laptops, this technology plays an increasingly important role in the energy sector, representing more than 90% of global battery demand today.

In 2023 alone, battery deployment in the energy sector will increase by more than 130%. They are contributing significantly to buy-outs electric carsand 14 million vehicles were sold last year, compared to 3 million in 2020.

“The electricity and transportation they are two essential pillars to reduce emissions fast enough to meet the targets agreed at COP28 and to keep open the possibility of limiting global warming to 1.5°C,” says IEA Executive Director Fatih Birol.

“Batteries will lay the groundwork in both areas, and will play an invaluable role in the development of renewable energy and the electrification of transport, providing energy safe and sustainable for businesses and families. »

At the COP28 climate summit in Dubai in December, countries agreed to triple their renewable energy capacity by 2030 and double the pace of energy efficiency, while moving away from climate-damaging fossil fuels.

Batteries are at the heart of this ambition, as the IEA explains in its special report on batteries and secure energy transitions, the first comprehensive analysis of the entire battery ecosystem.

Why are batteries so important?

Since solar and wind energy are variable renewable sources, the battery storage necessary to facilitate the supply of electricity from these green sources.

It can also relieve grid congestion during periods of high demand, by providing an outlet to capture and store excess electricity that would otherwise be lost.

To triple global renewable energy capacity by 2030, the IEA estimates that 1,500 GW of energy storage will be needed, including 1,200 GW from batteries.

Batteries can also help achieve universal access to energy worldwide by 2030, providing access to electricity for 400 million people in developing economies through decentralized solutions such as THE solar home systems and mini grid.

What is needed to increase battery capacity?

Battery growth was higher than that of almost all other clean energy technologies in 2023, according to the IEA, as reduced costs, innovation and supportive industrial policies helped drive demand.

“The combination of photovoltaics and batteries is now competitive with new coal-fired power plants in India,” explains Dr Birol. “And in the next few years alone, it will be cheaper than new coal in China and gas power in the United States. Batteries are changing the game before our eyes. »

But battery deployment must increase significantly in the coming years if the world is to meet its energy and climate goals.

To do this, it will be necessary to increase the total energy storage capacity by 2030 worldwide, with batteries responsible for 90% of the increase and pumped hydropower covering most of the rest.

G7 leaders committed Tuesday to a new global energy storage goal that matches that goal.

The IEA report believes that this can be achieved if costs continue to fall without compromising quality.

ADVERTISING

Ensuring energy security also requires greater diversity in supply chains, including for the extraction and processing of critical minerals used in batteries, and for the manufacture of the batteries themselves.

Global battery manufacturing has more than tripled in the past three years, he says.

Although China produces most of the batteries today, the report shows that 40% of the projects announced to manufacture new batteries are in advanced economies such as the United States and the European Union.