(Bloomberg) -- The hosts of this year’s global climate talks will ask over 190 countries to back a Group of Seven target to increase global energy-storage capacity more than sixfold by 2030.
The draft proposal seen by Bloomberg, called the Global Green Energy Storage Pledge, will be presented at the COP29 summit in Baku, Azerbaijan, in November. It echoes the G-7 agreement signed in April, which aims to reach 1,500 gigawatts of energy-storage capacity by the end of the decade from 230 gigawatts in 2022.
That’s in line with what the International Energy Agency recommends is needed to achieve the emissions-reduction goals laid out at COP28 last year. To reach the proposed target, the world would need to add more than 158 gigawatts of energy-storage capacity on average each year through 2030.
A massive amount of batteries will be required to allow grids around the world to store excess solar and wind energy so it can be deployed at times when the sun doesn’t shine or the wind doesn’t blow. Another increasingly popular source of energy storage is pumped-hydro, where water is pushed upwards and stored at a higher elevation, then released back down to generate electricity when needed.
The world had about 179 gigawatts of pumped hydro and about 85 gigawatts of battery storage last year, according to data from the International Hydropower Association and IEA, respectively.
Batteries are now 90% cheaper than 15 years ago, according to the IEA. When paired with solar panels, batteries can make them a cheaper alternative to building coal plants in India; the combination is expected to soon challenge the cost of gas in the US and new coal in China. The average cost of lithium-ion battery packs plummeted to $139 per kilowatt-hour in 2023, from nearly $800 ten years earlier, according to BloombergNEF.
But analysts warn that prices need to fall further for the industry to take off. China-dominated supply chains also need to become more diverse. The Azerbaijani proposal encourages COP29 members to explore new types of batteries that could be cheaper to make and standardize recycling models to make it easier to reuse expired batteries.
--With assistance from Akshat Rathi.
©2024 Bloomberg L.P.
