- An expected sharp fall in battery costs for energy storage in coming years will accelerate the shift to renewable energy.
- The IEA said cheap lithium iron phosphate (LFP) batteries accounted for 80% of new storage batteries last year.
The International Energy Agency (IEA) said on Thursday, April 25, 2024, that a sharp fall in battery costs for energy storage in the coming years will accelerate the shift to renewable energy from fossil fuels.
While renewable energy is already much cheaper than coal and gas-fired plants, weather can interrupt solar and wind power, which must work together with energy storage systems to provide reliable energy sources.
The Paris-based watchdog said in its Batteries and Secure Energy Transitions report that the total capital costs of battery storage will tumble by up to 40 per cent by 2030.
IEA Executive Director Fatih Birol said that about 90 per cent of lithium-ion batteries are used in the transport sector, which focuses on dense and light units. There is more scope for cutting costs in energy storage batteries, which can be larger and heavier.
The IEA said cheap lithium iron phosphate (LFP) batteries accounted for 80% of new storage batteries last year.
It added that cheaper sodium-ion batteries will account for less than 10 per cent of electric vehicle batteries by 2030 but will make up a growing share of energy storage batteries.
Overall, global energy storage capacity will soar sixfold by 2030, with batteries accounting for 90 per cent of the rise and pumped hydropower for most of the rest.
Pumped hydropower is a system that involves pumping water to a higher reservoir during off-peak times to generate electricity at peak times.
The IEA said the slide in battery costs will also help provide electricity to millions without access. By 2030, this will cut by nearly half the average electricity costs of mini-grids with solar PV coupled with batteries.