The International Energy Agency (IEA) has released its first report on the importance of battery energy storage technology in the energy transition. It found that tripling renewable energy capacity by 2030 will require 1,500 GW of battery storage.
Batteries need to lead a six-fold increase in global energy storage capacity to enable the world to meet targets by 2030, after deployment in the electricity sector more than doubles last year, the IEA said in its first assessment of the state of play in the entire battery ecosystem. . In this scenario, battery energy storage systems would account for 90% of the increase and pumped hydro for most of the rest.
In the report “Batteries and Secure Energy Transitions”, the Paris-based watchdog describes batteries as critical to delivering the climate and energy targets outlined at the COP28 climate conference in Dubai. It said that the development of batteries will surpass almost all other clean energy technologies in 2023, driven by the reduction of costs, innovation, and supporting industrial policies.
Strong growth is occurring for utility-scale battery projects, behind the meter batteries, minigrids and solar home systems, adding a total of 42 GW of battery storage capacity worldwide. , which is more than 130% annually. Meanwhile, electric vehicle (EV) battery deployment will increase by 40% in 2023, with 14 million new electric vehicles, accounting for the majority of batteries used in the energy sector.
“Despite the continued use of lithium-ion batteries in billions of personal devices worldwide, the energy sector currently accounts for more than 90% of annual lithium-ion battery demand,” the IEA report. “This is from 50% for the energy sector in 2016, when the entire lithium-ion battery market was 10 times smaller.”
In less than 15 years, battery costs have dropped by more than 90% – one of the fastest declines seen in clean energy technologies. However, the report found that costs need to come down further without compromising quality and technology to scale up batteries globally.
The expectation is that further changes in battery chemistry and manufacturing could reduce the global average cost of lithium-ion batteries by another 40% from 2023 to 2030 and bring sodium batteries- ion in the market. The IEA says that sodium-ion batteries will account for less than 10% of EV batteries by 2030, but they constitute a growing part of stationary storage batteries, because their cost is 30% lower than lithium-iron phosphate (LFP). ) batteries.
“The combination of solar PV and batteries now competes with new coal plants in India. And in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States. -or batteries are playing out before our eyes,” said IEA Executive Director Fatih Birol.
Cost reductions also make standalone battery storage more competitive with natural gas peaking options, the IEA reports.
In the most ambitious scenario, the total spending on batteries in all applications is set to increase to $800 billion by 2030, which is almost 400% from 2023. This means doubling the share of batteries in the total investment of clean energy for seven years.
Global battery production has more than tripled in the past three years. While China produces most batteries today, the report shows that 40% of all announced plans for new battery manufacturing are in advanced economies such as the United States and the European Union.
“If all projects are built, those economies will have nearly enough production to meet their own needs until 2030 on the path to net zero emissions,” the report said.
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