The International Energy Agency (IEA) has emphasized the urgent need for a significant increase in the deployment of batteries within the global electricity industry to align with renewable energy targets. According to a report by the global energy watchdog, the rollout of batteries more than doubled last year but will need to accelerate sixfold to meet the world’s renewable energy goals.
The report reveals that a total of 42 gigawatts (GW) of new batteries were integrated into electricity systems worldwide in the previous year, marking a remarkable increase of over 130% compared to the preceding year, resulting in a total capacity of 85GW.
Despite this progress, the IEA cautions that approximately 1,500GW of energy storage will be necessary globally by the end of the decade, with 1,200GW from batteries alone, to prevent any hindrance to the global transition to clean energy and to support the UN’s net zero targets.
Batteries have emerged as one of the fastest-growing clean energy technologies globally, thanks to a 90% decrease in costs over the past 15 years, largely propelled by the rapid expansion of electric vehicles. However, the IEA emphasizes the need for further cost reductions and calls for increased diversification in the supply chains for battery manufacturing to prevent market bottlenecks.
According to Fatih Birol, Executive Director of the IEA, a battery boom holds the potential to unlock significant transformations in renewable energy uptake, fossil fuel reduction in power grids, and the acceleration of electric vehicle adoption.
“Batteries are changing the game before our eyes,” Birol stated.
The IEA report highlights that global investment in batteries reached $150 billion last year, driven by an eightfold increase in investments in car batteries and a fivefold increase in power grid battery storage. A substantial portion of the investment, approximately $115 billion, was directed towards vehicle batteries, with 90% of it concentrated in China, Europe, and the US.
The global battery boom has facilitated a surge in electric car sales from 3 million in 2020 to almost 14 million last year, with further robust growth anticipated in the coming years. Batteries are expected to play a significantly larger role in global power grids to facilitate the reduction of fossil fuels from electricity generation.
“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,” Birol asserted.
Birol further emphasized the pivotal role of the electricity and transport sectors in swiftly reducing emissions to meet the targets set at Cop28 and to maintain the possibility of limiting global warming to 1.5°C above preindustrial levels. Batteries, he stressed, will serve as the foundation in both areas, facilitating the scaling up of renewables, electrification of transport, and ensuring secure and sustainable energy for businesses and households.