Battery storage in the power sector was the fastest growing energy technology in 2023 that was commercially available.
Deployment more than doubled year-on-year.
The International Energy Agency’s (IEA) Batteries and Secure Energy Transitions report released today says strong growth occurred for utility-scale battery projects, behind-the-meter batteries, mini-grids and solar home systems for electricity access.
These all added a total of 42GW of battery storage capacity globally.
Electric vehicle (EV) battery deployment increased by 40% in 2023, with 14 million new electric cars, accounting for the vast majority of batteries used in the energy sector, the report points out.
China is currently the world’s largest market for batteries and accounts for over half of all battery in use in the energy sector today.
The European Union is the next largest market, followed by the US. Smaller markets exist in the UK, Korea and Japan.
Battery use is also growing in emerging market and developing economies outside China, including in Africa, where close to 400 million people access electricity through decentralised solutions such as solar home systems and mini-grids with batteries.
“Despite the continuing use of lithium-ion batteries in billions of personal devices in the world, the energy sector now accounts for over 90% of annual lithium-ion battery demand.
“This is up from 50% for the energy sector in 2016, when the total lithium-ion battery market was 10-times smaller.
“With falling costs and improving performance, lithium-ion batteries have become a cornerstone of modern economies, underpinning the proliferation of personal electronic devices, including smart phones, as well the growth in the energy sector.
“In 2023, there were nearly 45 million EVs on the road—including cars, buses and trucks—and over 85GW of battery storage in use in the power sector globally.”
The report says strong government support for the rollout of EVs and incentives for battery storage are expanding markets for batteries around the world.
“While the global battery supply chain is complex, every step in it—from the extraction of mineral ores to the use of high-grade chemicals for the manufacture of battery components in the final battery pack—has a high degree of geographic concentration.
“Battery manufacturers are dependent on a small number of countries for the raw material supply and extraction of many critical minerals.
“China undertakes well over half of global raw material processing for lithium and cobalt and has almost 85% of global battery cell production capacity. Europe, the United States and Korea each hold 10% or less of the supply chain for some battery metals and cells today.”
Batteries are key to the transition away from fossil fuels and accelerate the pace of energy efficiency through electrification and greater use of renewables in power.
“In transport, a growing fleet of EVs on the road displaces the need for eight million barrels of oil per day by 2030 in the Net Zero Emissions by 2050 (NZE) Scenario, more than the entire oil consumption for road transport in Europe today.”
Battery storage supports transitions away from unabated coal and natural gas, while increasing the efficiency of power systems by reducing losses and congestion in electricity grids.
“In other sectors, clean electrification enabled by batteries is critical to reduce the use of oil, natural gas and coal. To triple global renewable energy capacity by 2030 while maintaining electricity security, energy storage needs to increase six-times.”
The report says that as the nature of electricity demand and supply changes, with more electrification and more variable generation from wind and solar PV, battery storage is well placed to provide short-term flexibility for periods of 1-8 hours continuously.
It is therefore able to help power system operators ensure there is enough supply to meet peak demands.
“Its fast and accurate responses to market signals, in a matter of seconds, make battery storage ideal for providing support for grid stability, and it is already being used for this purpose in many markets.
“Battery storage can also serve as critical back-up generators in case of grid outages or emergencies, ensuring uninterrupted power supplies to critical facilities such as hospitals, emergency response centres and infrastructure like grid substations and communication networks.”
But, the report notes, there are important risks for batteries that could hinder their growth and contributions to energy transitions, energy security and affordability.
“Scaling up critical minerals supply in time to meet rising needs is essential to the success of batteries and requires action to address policy and regulatory barriers.
“Failing to scale up battery storage in line with the tripling of renewables by 2030 would risk stalling clean energy transitions in the power sector.”
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.”
See the International Energy Agency’s (IEA) Batteries and Secure Energy Transitions report
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