The International Energy Agency (IEA) has revealed that the rapid growth of batteries outpaced almost all other clean energy technologies in 2023, driven by declining costs, technological advancements, and supportive industrial policies. According to a new report from the IEA, this surge in battery deployment is crucial for achieving the climate and energy targets outlined at the COP28 climate conference held in Dubai.
The IEA’s Special Report on Batteries and Secure Energy Transitions offers the first comprehensive analysis of the entire battery ecosystem, emphasizing the pivotal role batteries can play alongside renewables as a competitive, secure, and sustainable alternative to fossil fuel-based electricity generation. Additionally, batteries are instrumental in decarbonizing road transport by powering electric vehicles.
Over the past 15 years, battery costs have plummeted by more than 90%, marking one of the steepest declines ever observed in clean energy technologies. While lithium-ion batteries were initially associated with consumer electronics, they now dominate the energy sector, accounting for over 90% of overall battery demand. In 2023 alone, battery deployment in the power sector surged by over 130% year-on-year, adding a total of 42 gigawatts (GW) to electricity systems worldwide. In the transport sector, batteries facilitated a remarkable increase in electric car sales from 3 million in 2020 to nearly 14 million last year, with continued strong growth anticipated in the coming years.
IEA Executive Director Fatih Birol emphasized the critical role of batteries in driving emissions reductions in both the electricity and transport sectors to meet the targets agreed upon at COP28 and limit global warming to 1.5°C. Birol stated, “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.”
However, the report underscores the need for a significant increase in battery deployment to align with energy and climate goals by the end of the decade. In this scenario, overall energy storage capacity must increase sixfold by 2030 worldwide, with batteries accounting for 90% of the increase and pumped hydropower for the remainder.
To achieve this, the report highlights the importance of further cost reductions in batteries without compromising quality and technology. Diversification of supply chains, including critical minerals extraction and battery manufacturing, is also crucial for ensuring energy security. Many countries have already initiated ambitious industrial programs to support local manufacturing capacity, with targeted policies in the United States, European Union, and India, among others.
While China currently leads global battery manufacturing, the report reveals that 40% of announced plans for new battery manufacturing are in advanced economies such as the United States and the European Union. If realized, these projects would significantly bolster manufacturing capacity, potentially meeting their own needs until 2030 on the path to achieving net zero emissions.
Overall, the report underscores the versatility of battery storage in enhancing electricity security and supporting clean energy transitions. Batteries play a crucial role in smoothing out renewable electricity variability, alleviating grid congestion, and providing technical services to the grid. Moreover, they can improve access to electricity for millions of people in emerging and developing economies through decentralized solutions like solar home systems and mini-grids with batteries.