BloombergNEF: Big Expansion of Battery Manufacturing Crucial for Achieving Global Net Zero Goals

  According to the latest report by BloombergNEF, there has been a significant increase in investments in energy storage, with battery manufacturing requiring the largest share of spending among clean energy technologies in order to achieve net zero by 2030.

  The report, titled ‘Energy Transition Investment Trends’ for 2024, reveals that total investment in energy transition technologies, including renewables, hydrogen, electric vehicles (EVs), and carbon capture and storage, reached record levels in 2023, totaling $1.77 trillion, a 17% increase from the previous year.

  China led the way in terms of investments, accounting for $676 billion, or 38% of the total. Electric transport received the largest share of investment by technology, with $634 billion, a 36% increase compared to the previous year. EVs surpassed renewable energy, which received $623 billion of investment in 2023.

  Although energy storage accounted for a relatively small portion of the total investment at $36 billion, it represented a significant jump of 76%. In fact, storage investments surpassed those in hydrogen ($10.4 billion) and carbon capture and storage ($11.1 billion) combined.

  To meet the net zero commitments outlined in the 2015 Paris Agreement, BloombergNEF’s modeling indicates that investment in energy storage needs to rapidly increase nearly threefold to approximately $93 billion annually for the rest of the decade. Additionally, investment in renewable energy needs to more than double to an average of $1,317 billion per year.

  The report also highlights the need for increased investment in power grids, which attracted $310 billion in 2023. However, this figure needs to more than double to $700 billion per year to meet the targets set by the Paris Accord.

  In terms of the supply chain, battery manufacturing, particularly lithium-ion (Li-ion) batteries, is crucial given the reliance of both EVs and battery energy storage systems on these technologies. Li-ion battery manufacturing plants would account for 70% of all clean energy supply chain spending if invested in to the extent required for a net zero world.

  BloombergNEF previously forecasted that global cumulative installations of grid-connected storage will reach 650GW/1,877GWh by 2030. The company has also recently released its first-ever list of Tier-1 BESS (Battery Energy Storage System) providers.