Battery Energy Storage Capacity Must Increase 6x Faster to Meet Global Climate Goals: IEA

To meet clean energy and net-zero targets by 2030, as set during COP28, the International Energy Agency (IEA) says that rapid expansion of battery storage capacity is necessary.

According to the agency, a rollout of batteries needs to increase six-fold compared to current rates in order to meet global climate goals.

IEA reported that battery costs have decreased by more than 90% over the past 15 years. Last year, battery rollout increased over 130% compared to 2022, and globally, battery capacity increased 42 gigawatts (GW). The increase in battery storage has also contributed to an increase in electric vehicle sales, which have risen from 3 million in 2020 to nearly 14 million in 2023.

“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.”

As The Guardian reported, the global investment in battery storage reached $150 billion in 2023, most of which (about $115 billion) went toward electric vehicle batteries. The biggest investments in EV batteries happened in China, the U.S. and across Europe. Investments in battery storage for electricity grids increased by about five times compared to the previous year as well.

According to the IEA’s Special Report on Batteries and Secure Energy Transitions, battery usage in the energy sector has increased, reaching about 2,400 gigawatt-hours (GWh) in 2023. This is about a fourfold increase over 2020.

While battery costs are falling, demand is increasing and storage capacity is rising, costs need to continue to decline and expansion must increase sixfold by the end of this decade to limit the worst impacts of climate change.

To increase utility-scale battery storage, IEA recommends policy changes to remove restrictions that keep battery storage from accessing energy markets as well as changes to taxing structures, which can sometimes cause double taxation on battery storage projects.

Additionally, the report addresses the need to improve recycling rates to reduce the need to extract raw materials, like lithium and cobalt, for batteries. Recycling improvements and investments in battery innovation will be needed to stabilize the supply chain and help bring costs down.

“The combination of solar PV and batteries is today competitive with new coal plants in India,” Birol said. “And just in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States. Batteries are changing the game before our eyes.”