The agreement reached at the COP 28 last December marked a significant milestone in the global efforts for sustainable energy, technological innovation and international cooperation, writes Professor Mario Motta, Professor at the Department of Energy, Politecnico di Milano.
The launch of the Global Renewables and Energy Efficiency Pledge, endorsed by over 130 national governments, on the part of the COP 28 Presidency set ambitious targets: tripling the installed renewable energy generation capacity in the world and doubling the global average annual rate of energy efficiency improvement, from about 2% to over 4% every year until 2030.
A cornerstone of the transition to a decarbonised global economy is the widespread electrification of different sectors. By increasing efficiency and reducing the costs associated with renewable energy provision, electrification is a vital component for cutting carbon emissions, improving energy performance and supporting the shift to a more sustainable and resilient system.
The key role of batteries
The International Energy Agency (IEA) recently published its World Outlook technical report, titled “Batteries and Secure Energy Transition”, which draws attention to the rapid growth in . Remarkably, in 2023, battery storage was the fastest-growing energy technology commercially available, with deployment more than doubling year-on-year.
The report points out that batteries are essential for the transition away from fossil fuels, as they enable greater use of renewables and enhance energy efficiency through electrification. Achieving the Global Renewables and Energy Efficiency Pledge requires a six-fold increase in energy storage by 2030, which is critical for maintaining electricity security while expanding renewable capacity.
In the scenario for full decarbonisation by 2050, batteries play a pivotal role, as they account for about 60% of the reduction in CO2 emissions needed in the energy sector by 2030. This makes batteries indispensable for meeting shared climate goals. Battery storage, moreover, reduces reliance on imported fossil fuels, boosting self-sufficiency for many countries.
Additionally, advancements in battery chemistry and manufacturing are expected to cut battery costs by 40% by 2030, with the global market value of batteries projected to quadruple as the world advances towards net-zero emissions. The amount of battery storage capacity added by 2030 is set to exceed the total fossil fuel capacity added over the same period. It is no exaggeration to say that battery technology has a truly transformative impact on the energy sector.
Accelerating the green transition
Scaling up the supply of the critical minerals required for batteries is integral to the success of the green transition. Addressing policy and regulatory issues is, in turn, paramount to meeting the rising demand for these minerals.
To achieve full decarbonisation by 2050, the demand for critical minerals is expected to increase rapidly by 2030. While this requires new mining and refining, innovation in battery chemistries and enhanced recycling, areas where EU industries can play a significant role, could reduce the demand by about 25% by 2030.
Indeed, we should bear in mind that, without sufficient battery storage, the clean energy transition in the power sector could stall, slowing down the uptake of renewables, prolonging the use of coal and natural gas and increasing fuel import bills (on average USD 12.5 billion more per year from 2030 to 2050), especially in Europe, Korea and India.
To scale up the production of batteries, policy makers and regulators should take action to promote their deployment and minimise obstacles and bottlenecks. They should make it possible for batteries to participate in markets and be remunerated appropriately for the services they provide to the power system (i.e., making available renewable electricity when needed). Policy makers and regulators need to work in synergy with the industry to support the development of battery supply chains, an area of special relevance for the European Union (EU).
The future of the European Green Deal in the age of global competitiveness
Looking at the results of the recent elections for the European Parliament, it seems that the Green Deal enjoys less popularity than a couple of years ago. However, while political shifts are underway – especially in the narrative of center-right and right-wing political forces – no dramatic change in climate policy is likely to happen at a European level. Maintaining momentum in this critical decade for limiting the impact of climate change should remain crucial for the European Commission.
The new European Commission will be entrusted with the task of enhancing the ambition of the Green Deal in order to meet the new objectives set in Dubai at COP 28. EU policymakers and regulators will need to support electrification by overcoming barriers to the deployment of batteries and ensuring appropriate market participation and remuneration for the services batteries provide to the power system, as mentioned above.
It is also worth recalling that the recent statements by Mario Draghi – former President of the European Central Bank – at the High-Level Conference on the European Pillar of Social Rights stressed the need for the EU to adopt a more outward-looking approach to competitiveness, with the objective of strengthening its position against global competitors such as the United States and China.
Draghi’s preliminary report on the future of European competitiveness suggests a radical change in strategy, as it places emphasis on the importance of protecting clean technologies – from the most traditional to new, strategic, technologies, including batteries – from unfair foreign competition and on the development of a comprehensive industrial strategy.
It is key for the EU to define priorities and implement immediate actions in the sectors with the highest level of exposure to green, digital and security challenges. The new Commission should thus recognise as crucial the collaboration with the industry so as to devise a robust industrial strategy, starting from battery supply chains.
The pillars of the energy transition
To conclude, the outcomes of COP 28 have turned the spotlight on international cooperation, technological innovation and strategic planning in the global energy transition.
By committing to ambitious targets and supporting the deployment of essential technologies like batteries, it is possible to accelerate the shift towards a more sustainable, efficient and resilient energy system.
Creating a continental industrial strategy aiming to boost the competitiveness of the EU economy in strategic areas and to seize the opportunities of the energy transition should also become a priority.
About the Author
Professor Mario Motta is Professor at the Department of Energy, Politecnico di Milano, one of the largest technical universities in Europe and a renowned academic hub for research and scientific excellence. He is an expert on renewables and ecological transition, who has collaborated on several national panels for integrated energy/climate planning.
