The International Energy Agency (IEA) has published a new special report, “Batteries and Secure Energy Transitions,” on the growing role that batteries are playing in the global energy transition to electrification and renewables.
The report finds that despite having been traditionally linked to smartphones and other electronic devices, the energy sector now accounts for 90 per cent of the demand for lithium-ion batteries. And they’re also getting cheaper. The report says battery costs have fallen more than 90 per cent in less than 15 years.
The IEA report on batteries notes, however, that scaling up the supply of critical minerals needed to produce these batteries, as well as battery storage capacity, still needs to happen in a big way, and quickly.
Organizations
As Dr. Fatih Birol, executive director of the International Energy Agency, wrote in the foreword:
Reducing emissions and getting on track to meet international energy and climate targets will hinge on whether the world can scale up batteries fast enough. More than half the job that we need to do will rely, at least in some part, on battery deployment. Our analysis shows that energy storage more broadly will need to increase sixfold by 2030 to help meet the goals set at COP28, a target that will be met almost exclusively by batteries.
Yet, obstacles to progress remain. Costs must continue to come down to drive further uptake across a wide range of sectors. Battery manufacturing capacity has more than tripled in the last three years, but it remains too concentrated in only a few countries, as does the extraction and processing of the critical minerals on which it relies. However, the good news is that new chemistries for batteries will help reduce over-reliance on only a handful of key ingredients, and improving the recycling of raw materials will in time limit the need for new critical minerals supplies.
Governments have an important part to play in building out resilient local and international supply chains to ensure that securely and sustainably produced batteries come to market at a reasonable cost. Legislation such as the Inflation Reduction Act in the United States, the Net Zero Industry Act in the European Union and the Production Linked Incentive in India are good examples of how policy can affect real change in industry by backing technology manufacturing. But supportive policies are also needed to help speed up deployment by minimising barriers to market entry for developers and reducing red tape that can often stifle new projects.
Dr. Fatih Birol, executive director, International Energy Agency, Foreword, “Batteries and
Secure Energy
Transitions.”
Here are recommendations for policymakers from the executive summary:
For batteries to scale up as necessary to support ambitious clean energy transitions, policy makers and regulators need to take action to support their deployment and minimise barriers and bottlenecks. Policy and regulatory frameworks need to ensure that batteries are able to participate in markets and are remunerated appropriately for the services they provide to the power system. The large-scale adoption of EVs calls for wider availability of affordable models and the rollout of charging infrastructure. Promoting smart charging will be vital to integrate rising numbers of EVs into power systems and reduce the need for grid reinforcements.
“Batteries and
Secure Energy
Transitions,” International Energy Agency, April 2024
Policy makers and regulators need to work with national and international partners and with industry to support the development of battery supply chains that are secure, resilient and sustainable. Building supply chains requires a comprehensive approach that encompasses all stages from raw material extraction, refining and manufacturing through to end-of-life product management and recycling, minimising their carbon footprint. Battery recycling has the potential to be a significant secondary source of supply of critical minerals that is more sustainable and less geographically concentrated than primary supply. Targeted policies such as minimum recycled content requirements and tradeable recycling credits can foster its growth in the short term, especially if international standards can be established.
“Batteries and
Secure Energy
Transitions,” International Energy Agency, April 2024
Download the full report, originally published by the International Energy Agency on April 25, 2024, at this link.
Citation: IEA (2024), Batteries and Secure Energy Transitions, IEA, Paris https://www.iea.org/reports/batteries-and-secure-energy-transitions, Licence: CC BY 4.0
