A steep decline in battery costs will be the primary driver in the transition from fossil fuels to renewable energy in the years ahead, the International Energy Agency (IEA) projected.
Battery costs have declined more than 90 percent in about a decade, according to the IEA, and by 2030 total storage costs could fall up to 40 percent.
Although the battery market is commonly associated with those used in electronic devices, the IEA found that the energy industry comprises more than 90 percent of current battery demand, with deployment in that sector more than doubling last year compared with 2022. Increased electric car sales have also been a driver of battery demand, according to the IEA.
The IEA report comes against the backdrop of an international goal of reducing greenhouse gas emissions enough to keep planetary warming below 1.5 degrees Celsius. To meet the goals laid out for 2030 at the COP28 United Nations climate summit, energy storage overall must grow to six times the current storage levels by 2030.
The agency report projects that battery storage will cover about 90 percent of that and that battery deployment must itself increase sevenfold by the end of the decade to meet the target.
Despite the growth of battery manufacturing capacity in recent years, the report names concentration of manufacturing in only a few countries as a major obstacle to deployment. The majority of raw material processing for critical minerals like lithium and cobalt is focused in China, for example.
Republican lawmakers have repeatedly called for President Biden to remove regulatory hurdles to U.S. mining of such materials, and they have blasted the Interior Department’s decision last week to block a proposed industrial road through the Alaskan wilderness for copper mining.
“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 1.5 °C,” IEA Executive Director Fatih Birol said in a statement. “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.”