The International Energy Agency (IEA) anticipates a significant shift from fossil fuels to renewable energy in the coming years, primarily propelled by a steep decline in battery costs.

According to the IEA, battery costs have plummeted by over 90 percent in the past decade, with projections indicating a further 40 percent reduction by 2030. While commonly associated with electronic devices, the energy sector dominates current battery demand, witnessing a doubling of deployment last year compared to 2022. The surge in electric vehicle sales has also contributed to the rising demand for batteries.

The IEA’s report aligns with international efforts to curb greenhouse gas emissions and limit global warming to 1.5 degrees Celsius, as outlined in the COP28 United Nations climate summit goals for 2030. To achieve these targets, energy storage capacity must expand sixfold by the end of the decade, with battery storage expected to cover approximately 90 percent of this growth. However, battery deployment itself must increase sevenfold to meet the ambitious goal.

Despite the growth in battery manufacturing capacity, the report identifies concentration of production in a few countries as a significant barrier to widespread deployment. Critical mineral processing, such as lithium and cobalt, remains heavily centered in China, posing challenges for global supply chains.

In the United States, Republican lawmakers have urged President Biden to ease regulatory hurdles hindering domestic mining of critical minerals. They criticized the Interior Department’s recent decision to block a proposed industrial road in Alaska for copper mining, citing the importance of securing domestic mineral resources.

IEA Executive Director Fatih Birol emphasized the pivotal role of batteries in accelerating the transition to renewable energy and electrifying transportation sectors. Batteries are poised to underpin the scaling up of renewables and provide secure and sustainable energy solutions for businesses and households alike, contributing to emissions reduction efforts and climate resilience.

By Impact Lab