This is according to the IEA’s ‘Batteries and Secure Energy Transitions’ report, which reveals that battery deployment more than doubled in the power sector in 2023, driven by falling costs and supportive policies.
According to the report, battery deployment in the power sector surged by more than 130% year-on-year in 2023, adding 42 gigawatts (GW) to global electricity systems, underscoring the indispensable role that batteries have in enabling the transition to clean energy and achieving climate objectives set forth at the COP28 climate conference in Dubai.
At the World Leaders Summit at COP28, more than 100 countries signed up to a commitment to keep the 1.5C pathway of the Paris Agreement alive by pledging to triple global renewable capacity and doubling energy efficiency by 2030.
Additionally, the report notes that batteries have been instrumental in driving the rise in electric vehicle (EV) sales, with numbers surging from 3 million in 2020 to nearly 14 million in 2023.
IEA’s executive director Fatih Birol 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 1.5C.
“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 report emphasises the imperative of scaling up global energy storage capacity by six-fold by 2030, with batteries accounting for 90% of this expansion. As per the IEA, achieving this target will require further reductions in battery costs while maintaining quality and technology standards.
The global battery supply chain
Ensuring energy security necessitates greater diversity in supply chains, particularly for critical minerals essential for battery production.
According to the report, China currently manages more than half of the global processing of raw materials for lithium and cobalt and possesses nearly 85% of the global capacity for battery cell production. In contrast, Europe, the US and Korea each control 10% or less of the supply chain for certain battery metals and cells at present.
While China currently dominates battery manufacturing, the report points to a considerable shift towards advanced economies such as the US and the EU, which account for 40% of announced plans for new battery manufacturing.
The report also notes that batteries are increasingly utilised in emerging markets and developing economies outside China. In Africa, around 400 million people are gaining access to electricity through decentralised solutions like solar home systems and mini-grids with batteries, aiming to achieve universal access by 2030.
By the end of the decade, the global market value of batteries is projected to quadruple on the path to achieving net-zero emissions. Presently, the global value of battery packs in EVs and storage applications stands at $120bn, set to surge to nearly $500bn in 2030 under the IEA’s net-zero emissions scenario.
Even without adjustments to current policy settings, the battery market is forecasted to expand to a total value of $330bn by 2030.
Birol added: “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 US.
“Batteries are changing the game before our eyes.”