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Global Review of Battery Storage: Today's Fastest Growing Clean Energy Technology

Updated: May 29


Batteries and EBOS installed inside

The International Energy Agency’s (IEA) report "Batteries and Secure Energy Transitions" dives into the amazing progress we've made with batteries, future trends, and the challenges ahead. In 2023, battery storage in the power sector more than doubled, with big gains in utility-scale batteries, behind-the-meter storage, mini-grids, solar home systems, and electric vehicles (EVs). Lithium-ion batteries are leading the way because they've become cheaper and more efficient, thanks to policy support in many places, including Africa.

 

Looking ahead, innovations in battery chemistry and manufacturing are set to cut global lithium-ion battery costs by another 40% by 2030, and sodium-ion batteries are expected to hit the market. Batteries are crucial for balancing renewable energy sources like wind and solar. In exciting news, solar PV plus batteries is now as affordable as new coal-fired power in India, and soon, it will compete with new coal in China and new natural gas-fired power in the U.S. To meet the IEA’s net-zero goals by 2030, we need to increase battery deployment sevenfold. If all planned plants are built on time, we can hit this target and diversify our currently concentrated supply chain.

 

Batteries have become a key part of today's energy system and are the fastest-growing energy technology out there. In 2023, battery storage in the power sector grew faster than any other commercially available energy technology, doubling year-on-year. 42 GW of battery storage has been added globally, with utility-scale projects, behind-the-meter batteries, mini-grids, and solar home systems leading the way. EV battery deployment also jumped by 40%, with 14 million new electric cars hitting the roads, showing that the energy sector now uses over 90% of lithium-ion batteries annually.

 

Lithium-ion batteries are dominating because their prices have plummeted—from $1,400 per kilowatt-hour in 2010 to less than $140 in 2023—and they've gotten better in terms of energy density and lifespan. This makes them essential for both personal devices and the energy sector. By 2023, there were nearly 45 million EVs and over 85 GW of battery storage in the power sector worldwide.

 

Lithium-ion batteries' adaptability to different mineral supplies and prices is a big plus. In 2023, lithium iron phosphate (LFP) batteries made up 40% of EV sales and 80% of new battery storage. Policy support has really helped, with China leading the battery market, followed by the EU and the U.S. Battery use is also growing in emerging markets and developing economies, especially in Africa, where almost 400 million people are getting electricity through solutions like solar home systems and mini-grids.

 

To hit the COP28 targets, battery deployment needs to increase sevenfold by 2030. Batteries are crucial for moving away from fossil fuels, boosting energy efficiency through electrification, and ramping up renewable energy use. By 2030, EVs could cut the need for 8 million barrels of oil per day, more than Europe's current road transport oil consumption. Battery storage also helps shift away from coal and natural gas in the power sector, making power systems more efficient.

 

To meet 2030 goals, global energy storage needs to increase sixfold, with battery storage growing 14 times to 1,200 GW. This will require strong action from policymakers and the industry, given how quickly and flexibly battery storage can be deployed.

 

We can expect further cost declines and innovations in battery tech, making them more affordable and effective. By 2030, lithium-ion battery costs are projected to drop another 40%, with sodium-ion batteries becoming a cost-effective alternative. The battery market's value is set to quadruple by 2030, driven by huge investments and the potential to transform industries like the global car market and renewable energy sectors.

 

But rapid market growth also brings challenges, especially in scaling up the supply of critical minerals. Addressing policy and regulatory barriers is crucial to ensure we have the necessary minerals and sustainable manufacturing processes. Effective recycling can also help provide a secondary source of minerals, reducing reliance on primary supplies and minimizing environmental impacts. Policymakers need to support secure, resilient, and sustainable battery supply chains to meet our ambitious 2030 goals and beyond.


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