Key:
APS: Announced pledges scenario
NZE: Net-zero emissions by 2050 scenario
STEPS: Stated policies scenario
Today’s growth rates for deployment of electric vehicles (EVs) and batteries (and solar PV and wind) would, if maintained, lead to a much faster energy transformation than previously projected, according to the International Energy Agency in its 2022 World Energy Outlook.
Battery storage and demand side response has become increasingly important, with each set to provide a quarter of the flexibility needs in 2050 in the so-called Announced Pledges Scenario (APS), it said.
Battery highlights:
- In the EV sector, the expansion of battery manufacturing reflects the shift in the automotive industry. At times it has moved faster than governments in setting e-mobility targets.
- High reliance on countries such as China for critical mineral supplies is a risk. So too are diversification options closing off trade.
- Russia produces around 20% of the world’s Class 1 nickel (battery grade) and has over 40% of global uranium enrichment capacity. It is the world’s second largest cobalt and aluminium producer, and the fourth largest graphite source.
- Getting on track for the net zero emissions by 2050 scenario will require a tripling in spending on clean energy and infrastructure to 2030.
- Maintaining electricity security calls for flexibility. Grid infrastructure will need to be strengthened and digitalised. More variability in electricity supply and demand means that the requirement for flexibility will quadruple by mid-century.
- Battery storage and demand-side response will become increasingly important, each providing a quarter of the flexibility needs in 2050 in the APS.
The 524-page report states that by 2030, global battery capacity will reach 780 GW in the NZE scenario and account for about 15% of all dispatchable power capacity.
By 2035, battery capacity will surpass natural gas-fired capacity as the principal source of flexibility in many markets. Batteries and demand-side response will meet more than half of the flexibility needs in 2050.
Aircraft
Advances in battery technologies are expected to open regional flights to battery electric aircraft. They will meet 3% of aviation energy demand by 2050 in the NZE scenario.
Prices
Despite the recent commodity price surge, battery prices declined 6% in 2021, according to the Bloomberg New Energy Finance annual battery price survey.
- Current metal prices could pose upward cost pressure on lithium-ion battery packs of around 35% from 2021.
- Annual battery demand will increase from 340 GWh in 2021 to 5,600 GWh by 2030 in the NZE scenario.
Demand
Battery demand will be driven by electric cars which account for 75% of the projected total by 2030. That requires the additional output of around 150 Gigafactories of 35 GWh annual production at full capacity.
- Battery production factories can be built in under two years, but raw material extraction requires investment long before. Investments in new mines will need to increase quickly and significantly to meet the rapid demand growth.
- Innovative battery chemistries will help minimise battery metals demand.
Flexibility and security
All scenarios show battery storage emerging as an important flexibility option in power systems. Deployment will pick up dramatically:
- Global battery storage capacity will increase nearly 50-fold in the STEPS, rising to more than about 1,000 GW by 2050. Announced pledges put this 80% higher to about 2,300 GW by 2050.
- Increasing the utilisation of each EV could reduce mineral demand. Policy measures and investments in public transport and infrastructure could encourage a shift away from private cars to shared mobility and public transport.
Investment
Battery storage annual investment will increase more than three-fold to $33 billion by 2030. It is projected to be the fastest growing source of power system flexibility in all scenarios.
Local utility-scale battery provision may also reduce the need for investment in new transmission and distribution infrastructure.
Battery storage
Installed battery storage capacity totalled more than 27 GW at end-2021. Capacity rose to more than 9 GW (nearly 90% higher compared to 2020).
- Deployment is set to grow significantly: global battery storage capacity will increase nearly 50‐fold in the STEPS, rising to more than 1,000 GW by 2050. In the announced pledges scenario, doubles to more than 2,000 GW, with more than 400 GW installed by 2030.
- Strongest growth occurs in the net-zero emission by 2050 scenario, which sees about 780 GW installed in 2030 and over 3,500 GW by 2050.
- Continuing innovation in battery chemistry and economies of scale supports that.
Spill-over benefits
The automotive industry is set to provide grid storage benefit. This stems from the growing pool of EV batteries with second-life energy storage applications.
- Spent batteries typically maintain 80% of their total usable capacity.
- Initial trials for second-life batteries have begun. Clear guidance on the repackaging, certification, standardisation and warranty liability of used EV batteries will be needed.
