For years, climate scientists have been advising governments to switch from fossil fuels to renewable energy sources like wind and solar power. There has been a growing interest in wind and solar plants in recent years. However, both wind and solar power have a problem with reliability due to weather-related fluctuations in sunlight and wind. The solution to this issue is lots of batteries.
A new report According to the International Energy Agency (IEA), a large number of batteries will play a crucial role in determining the success of ambitious climate goals set by international experts. The prices of lithium-ion batteries have significantly decreased, making the switch to renewable energy sources more feasible for communities around the world. The IEA predicts that battery prices could drop by 40% by 2030. At the same time, the demand for battery-powered electric vehicles and energy from renewable sources is increasing. The IEA estimates that there will need to be a six-fold increase in energy storage capacity by 2030.
To meet the rising demands, battery technology will need to become even more affordable in just a few years. The IEA estimates that a six-fold increase in energy storage capacity will be needed by 2030, requiring cheaper batteries.
IEA Executive Director Fatih Birol wrote that the world's ability to scale up batteries quickly will be crucial for reducing emissions and meeting international energy and climate targets.
The costs of lithium-ion batteries have dropped more than any other energy technology.
While lithium-ion batteries were once mainly used for gadgets and consumer electronics, they now account for 90% of all battery demand in the energy sector. The size of the lithium-ion battery market has increased almost tenfold in the past eight years, with costs plummeting by 90% in the last 15 years.
According to Birol, the combination of solar PV and batteries is now competitive with new coal plants in India. In the next few years, it is expected to be cheaper than new coal in China and gas-fired power in the United States. statementCurrently, the combination of solar PV and batteries offers competitive pricing compared to new coal plants in India and is expected to become cheaper than new coal in China and gas-fired power in the United States in the near future.
Despite impressive progress, the IEA warns that it may not be enough to meet rising energy demands. In order to triple renewable energy capacity by 2030, global battery storage will need to increase by six times its current size, with deployment increasing by at least 25% every year. The IEA estimates that new innovations could reduce lithium-ion costs globally by 40% from now until 2030.
The report says if there aren't enough batteries, it could stop the shift to clean energy in the power industry.
The impact of cheaper batteries on consumers.
Using more electric cars and renewable energy is helping to reduce emissions. While the adoption of electric vehicles in the US has slowed down, the global trend is increasing. In 2023, there was a 40% increase in electric vehicle use globally, with 14 million electric vehicles on the roads. The International Energy Agency predicts that the growing number of electric vehicles could reduce the need for 8 million barrels of oil per day by the end of the decade. Cheaper batteries will lead to lower costs for electric vehicles in the near future. Many US drivers mention cost as a main reason for not switching to electric vehicles. More affordable models due to lower battery prices could encourage more drivers to switch and help achieve the Biden Administration's goal of having 50% of all new vehicle sales be electric by 2030. No change. No change. No change. No change. No change..
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Cheaper energy storage means developing countries can choose renewable options for new power plants at prices similar to non-renewable alternatives. Lower battery prices also make it possible to use renewable microgrids in areas that currently have limited access to traditional energy grids. In the US, a more reliable energy sector with batteries would enhance the country’s energy independence and reduce the need to buy fossil fuels from other countries. Renewable energy made up 19% of the US energy grid in 2020, but cheaper and more reliable storage could change that. Stanford researchers simulated the possibility of the US having a 100% renewable energy grid by 2050. No change. No change. No change..
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Cheaper batteries, as they are currently made, are not a complete solution. Currently, the global battery market relies heavily on critical minerals from a few countries. China alone processes more than half of the materials for lithium and cobalt. Extracting these minerals is hazardous and can cause significant damage to the environment and communities. New types of batteries like lithium ion phosphate (LFP) batteries, which are increasingly used in new electric vehicles, use a different chemistry that does not contain nickel or cobalt. Although lithium-ion batteries still account for the majority of battery storage, (LFP) batteries made up 80% of new batteries produced last year. Finding more efficient ways to recycle aluminum, copper, and other resources found in electronic waste could also potentially help create future batteries with less reliance on mining. Currently, less than 1% of rare earth metals from electronic waste are recycled. The cost of batteries might decrease by 40% by 2030, but additional effort is still needed. and can create its own source of damaging pollution. Massive mines can also radically alter the environment of entire communities.
New types of batteries could offer some solutions to the mineral problem. Lithium ion phosphate (LFP) batteries, which are increasingly being used in new electric vehicles, rely on a different chemistry method which does not contain nickel or cobalt. Though more mineral intensive lithium-ion batteries still make up the vast majority of battery storage, (LFP) batteries accounted for 80% of new batteries made last year. Efforts to more effectively recycle aluminum, copper, and other resources found in mounding e-waste could also potentially help build out future batteries with less intensive mining. Less than 1% of rare earth metals found in e-waste are currently recycled.
