Rapid advancements in battery technology are poised to accelerate the pace of the global energy transition and play a major role in addressing the climate crisis.
Investments in battery manufacturing has increased substantially – more than $1.4 billion was invested in battery technologies in the first half of 2019 alone. This investment is leading to steady advances in technology, which are set to shift how we will organise energy systems as soon as 2030.
According to evidence detailed in Rocky Mountain Institute’s (RMI) Breakthrough Batteries Report, cost and performance improvements are quickly outpacing forecasts. Increased demand for electric vehicles (EVs), grid-tied storage, and other emerging applications are further fuelling the cycle of investment and setting the stage for mass adoption.
As the battery market continues to grow, battery technology will contribute to the replacement of natural gas plants and gain a foothold in other new market segments – including heavy trucking and short-range aviation. With this transition, legacy infrastructure across the fossil fuel value chain risks becoming stranded, including gas pipelines and internal combustion engine manufacturing plants. Already, the declining cost of battery technology is contributing to planned natural gas power generation being cancelled.
It is clear that breakthrough battery technologies will play a central role in our energy system sooner than previously thought possible.
RMI’s analysis identifies the implications of these breakthrough battery technologies for investors, regulators, policymakers, and other energy industry players. It also identifies risk mitigation and investment strategies that can reduce potential stranded asset risks. It outlines strategies to encourage faster adoption and globally scaled manufacturing of innovative battery and storage technology ecosystems.
It is clear that breakthrough battery technologies will play a central role in our energy system sooner than previously thought possible. This will create diverse opportunities for value creation and capture in the transition to a clean energy economy.
Capturing the vast potential requires a holistic approach from public and private sectors alike. Collaborative, systems-based strategies to developing battery-enabled markets will provide an opportunity to hasten the rapid and economic transition to resilient, clean, and affordable energy systems.
The Emerging Solutions team collaboratively shape RMI’s approach to the global energy transition through cross-program learning and idea incubation. Learn more about their work here.