PARIS, France, 25 April 2024: The International Energy Agency (IEA) announced the publishing of Special Report on Batteries and Secure Energy Transitions. Making the announcement through a Press release, IEA said that according to the report, 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 a technology that will be critical to delivering the climate and energy targets outlined at the COP28 climate conference in Dubai. 

According to the IEA, the report is the first comprehensive analysis of the entire battery ecosystem, and it 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. 

IEA said that in less than 15 years, battery costs have fallen by more than 90%, one of the fastest declines ever seen in clean energy technologies. The Agency said the most common type of batteries, those based on lithium-ion, are typically associated with consumer electronics. But today, IEA said, the energy sector accounts for over 90% of overall battery demand, and added that in 2023 alone, battery deployment in the power sector increased by more than 130% year-on-year, adding a total of 42 gigawatts (GW) 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, IEA said. 

Fatih Birol, Executive Director, IEA, said: “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 degrees C. 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 competitive today 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.” 

IEA said 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, according to the report. In this scenario, IEA said, overall energy storage capacity will increase sixfold by 2030 worldwide, with batteries accounting for 90% of the increase and pumped hydropower for most of the rest.

By enabling greater shares of renewables in the power system and shifting electricity supply to when it’s most needed, IEA said, batteries will help advance progress on the goals set at COP28. IEA said that these include will tripling renewable energy capacity by 2030, doubling the pace of energy efficiency improvements, and transitioning away from fossil fuels. The Agency further said that to triple global renewable energy capacity by 2030, 1,500 GW of battery storage would be required, and a shortfall in deploying enough batteries would risk stalling clean energy transitions in the power sector. 

IEA said to scale up batteries globally, the report found that costs need to come down further without compromising quality and technology. IEA also said ensuring energy security requires greater diversity in supply chains, including extracting and processing the critical minerals used in batteries and manufacturing the batteries themselves. Countries are already tackling this through ambitious industrial programmes to support local manufacturing capacity with targeted policies in the United States, European Union and India, among others, IEA further said.  

IEA said global battery manufacturing has more than tripled in the last three years and added that while China produces most batteries today, the report shows that 40% of announced plans for new battery manufacturing are in advanced economies such as the United States and the European Union. The Agency further said that if all those projects are built, those economies would have nearly enough manufacturing to meet their own needs by 2030 on the path to net zero emissions.  

According to IEA, the report highlights the versatility of battery storage in supporting electricity security cost-effectively as part of clean energy transitions. In the power sector, IEA said that batteries help smooth out the variability of renewable electricity from technologies such as wind and solar. Moreover, IEA added, battery storage can alleviate grid congestion in times of high supply, offering an outlet to capture and store excess renewable electricity that would otherwise be lost, and they provide highly technical services to the grid, such as voltage and frequency control, that can help system operators.

IEA also said that batteries can play a vital role in improving access to electricity for those who still lack it. In a pathway to achieving universal energy access worldwide by 2030, IEA said, it helps 400 million people in emerging and developing economies gain electricity access through decentralised solutions like solar home systems and mini-grids with batteries.