The Rocky Mountain Institute (RMI) yesterday announced the release of its Breakthrough Battery Technologies report, which shows that exploding investment in battery technologies is revolutionizing the sector much faster than expected and setting in motion a seismic shift in how we will power our lives and organize energy systems through 2030.
“We can now say with confidence that the age of affordable battery technology is coming, and it’s happening faster than anyone expected,” said Madeline Tyson, senior associate at RMI and lead author of the report. “We’re incredibly excited about what this accelerating pace of change means as we fight the climate crisis. Advanced battery technologies have the power to outcompete many fossil-fueled energy systems in the near term and can help us meet ambitious carbon reduction goals on or ahead of schedule.”
Key takeaways from the RMI analysis include:
- Battery cost and performance improvements are quickly outpacing forecasts. Increasing demand for EVs, grid-tied storage, and other emerging applications are further fueling the cycle of investment and cost declines in batteries and setting the stage for mass adoption. Total manufacturing investment, both previous and planned until 2023, represents around $150 billion dollars, and analysts expect the capital cost for new planned battery-manufacturing capacity to drop by more than half from 2018 to 2023.
- These improvements spell trouble for natural gas and internal combustion engine vehicle markets. As batteries become cheaper and make renewables-plus-storage more competitive, legacy energy infrastructure will struggle to keep up. RMI finds that new and existing natural gas plants are likely to be eclipsed by clean energy portfolios as early as 2021, leading to a much greater risk of stranded assets.
- Lithium-ion, while still the leading battery technology, is likely not the universal solution of future energy storage technologies. Other technologies that are better suited for applications like long-duration energy storage, heavy trucking, aviation and EV fast-charging infrastructure will increasingly drive these emerging battery markets. Savvy companies, governments and investors should explore and support these alternative battery technologies—not just Lithium-ion—to accelerate and scale climate-critical solutions.
“It’s crucial that the investor, policymaker and regulatory ecosystem stay ahead of the curve on battery cost and technology developments in order to fully capture the enormous environmental and economic opportunities to be had,” said Charlie Bloch, principal at RMI and coauthor of the report. “Climate progress can be supercharged if these groups stay aligned with each decision they make.”
The RMI report outlines several key opportunities for a wide range of industry stakeholders to support a holistic approach to the battery-driven energy transformation. For example, national governments should find ways to incentivize component manufacturing, continued research and development, and battery deployment; manufacturers should work to improve the technology in ways that can reduce cost and reveal new use cases; and investors should consider diversifying their portfolios across promising near-term technologies as well as precommercial battery technologies.
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