Battery costs have fallen by 90% in less than fifteen years, according to a new IEA report

This article was originally published in English

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

According to a new report from the International Energy Agency (IEA), the cost of batteries has fallen by more than 90% over the past fifteen years.

It’s one of the fastest declines ever 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 part of consumer electronics, such as telephones and laptops, this technology is playing an increasingly important role in the energy sector, which today represents more than 90% of global battery demand.

In 2023 alone, the use of batteries in the energy sector will increase by more than 130%. They are also intensifying the buyout of electric carswith 14 million vehicles sold last year, compared to 3 million in 2020.

“The electricity and transport are two essential pillars to reduce emissions fast enough to reach the targets agreed at COP28 and to keep open the possibility of limiting global warming to 1.5°C,” said Fatih Birol, Executive director of the IEA.

“Batteries will lay the foundation in both areas and play an invaluable role in the development of renewable energy and the electrification of transport, while at the same time energy safe and sustainable for companies and households. »

At the COP28 climate summit in Dubai in December, countries agreed to triple their renewable energy capacity and double the pace of energy efficiency by 2030, 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 safe energy transitions, the first comprehensive analysis of the entire battery ecosystem.

Why are batteries so important?

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

It can also reduce grid congestion during times of high demand, by providing an outlet where excess electricity that would otherwise be lost can be captured and stored.

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 energy access worldwide by 2030, giving 400 million people in developing economies access to electricity through decentralized solutions such as THE solar home systems and mini-grids.

What does it take to increase battery capacity?

According to the IEA, battery growth will outpace that of almost all other clean energy technologies by 2023 as falling costs, innovation and supportive industrial policies helped drive demand.

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

But the use of batteries must increase significantly in the coming years if the world is to achieve its energy and climate goals.

To achieve this, total energy storage capacity will need to increase sixfold globally by 2030, with batteries accounting for 90% of the increase and hydropower plants covering most of the rest.

G7 leaders on Tuesday committed to a new global energy storage goal that aligns with that goal.

According to the IEA report, this is feasible if costs continue to fall without sacrificing quality.

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

Global battery production has more than tripled in the past three years, he added.

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