At the outset of the millennium, evidence-based hope for a rapid energy transition was consistently challenged by the critical matter of storage.<\/p>\n
Generating clean electricity is one thing, but storing it is another. Batteries, a technology used commercially since the early 19th century, were always a favoured solution to the storage puzzle, but there were limits. Cost, insufficient energy density and concerns over the supplies of the required rare earths and metals presented obstacles which, at times, seemed insurmountable.<\/p>\n
Now, though, the outlook looks very different. Batteries have quickly become the fastest improving clean energy technology on the planet,\u00a0exhibiting growth, cost reductions and improvements that overshadow the record-breaking rise of solar energy<\/a>. These trends show no sign of slowing. Chinese electric vehicle (EV) manufacturer, BYD, and battery manufacturing behemoth, CATL,\u00a0announced in 2024 that they would halve lithium-ion battery costs<\/a>\u00a0within the year and are gearing up for\u00a0a further 15% reduction<\/a>\u00a0on their second-generation blade batteries in 2025.<\/p>\n According to the Rocky Mountain Institute (RMI), the proliferation of battery technology could\u00a0halve global fossil fuel demand<\/a>\u00a0by the middle of this century: 18% cuts in road transport, 35% from electricity, and another 4% from other modes of transport, such as shipping. The speed at which battery technology is developing, and the speed and scale at which they might enable phasing-out of fossil fuels, make them a vital lever to delivering a just and rapid transition. However, this will be much easier if it goes alongside measures to reduce the demand for energy.<\/p>\n Scaling battery adoption globally will not be without its challenges. There are alarming environmental impacts associated with the mining of the rare earths, metals, and other elements battery manufacturing currently requires. Battery production networks are also entangled with geopolitical posturing and state-led strategies, and the justice implications of a battery-powered transition remain, where human rights and public health are often impacted.<\/p>\n As demand soars for batteries, so does extraction for its components. Over 60% of current lithium mining facilities\u00a0are less than five years old<\/a>, with investment growing by 30% year on year. In fact, battery demand is growing so fast that it is now the main driver for rare earth extraction. As the\u00a0International Energy Agency (IEA)<\/a>\u00a0made apparent, EV batteries accounted for 60% of lithium, 30% of cobalt, and 10% of nickel demand in 2022. Many of the fossil fuel incumbents, such as\u00a0ExxonMobil<\/a>, are now chasing a share of the market, signalling the further acceleration of extraction.<\/p>\n Mining rare earths and metals comes at a human and environmental cost, although the overall impact\u00a0pales in comparison<\/a>\u00a0to the scale and damage caused by ongoing fossil fuel production. Deforestation and habitat destruction, water and air pollution, radioactive contamination and exposure to toxins and pollutants\u00a0are all well-documented<\/a>\u00a0around these new sites of extraction. There have also been\u00a0eruptions of conflict, land grabs, the use of child labour, and human rights abuses at mines<\/a>, in places such as\u00a0Myanmar, Madagascar, Brazil, Finland<\/a>,\u00a0Sweden<\/a>, the\u00a0Democratic Republic of Congo<\/a>\u00a0and\u00a0Chile<\/a>. In some cases, extraction has\u00a0decimated Indigenous territories and sacred lands<\/a>, creating new\u00a0\u2018sacrificial zones\u2019<\/a>\u00a0all in the name of cutting carbon.<\/p>\n These issues highlight the need for a dual-approach to rapid transition; one that supplants fossil fuel use through adopting green technologies, while also\u00a0driving down the overall demand for energy across societies<\/a>. This approach could make all of our lives better, from warmer homes with cheaper bills, to walkable cities with cleaner air.<\/p>\n Key lessons for Rapid Transition of what works:<\/p>\n An energy system built around wind, solar and other intermittent sources of clean energy requires a profound shift in how industrial societies use energy. In order to prevent climate catastrophe, economies must move from centuries-old reliance on static stocks of energy, historically provided by biomass and peat and more recently coal, oil and gas, to flows of energy, harnessed from the wind, water and sun. To enable this shift, and eat up fossil fuel demand in the coming decades, batteries are one of the favoured bridging technologies to store clean energy alongside\u00a0pumped storage hydropower\u00a0<\/a>and other system-wide solutions, such as demand management and response, interconnections, and excess clean generation.<\/p>\n Battery technology is diverse and varied, comprising an array of chemistries, from the still dominant lithium-ion to the more novel iron-air; different scales, from powering EVs to complementing clean generation; and a range of functions, from enabling small scale generation and use that reduces the reliance on centralised grids, to curtailing fossil fuel use across the entire global economy.<\/p>\n Meeting the storage challenge requires scale. And scale requires mountains of investment, growing demand, successful deployment and, as a result, innovation that improves battery technologies performance and affordability, opening up new avenues for their use.\u00a0According to the RMI<\/a>, sales of batteries have been doubling every two to three years for the past thirty years, boasting a whopping\u00a033 percent average growth rate per year<\/a>. As electric vehicles (EVs) have taken off worldwide in the past five years, this growth rate is\u00a0much closer to 40 percent each year<\/a>. Investment into battery manufacturing has subsequently outgrown the combined investment into solar and wind factories,\u00a0reaching $45 billion as of 2022 compared to $33 billion according to BNEF.<\/a><\/p>\n As demand for batteries grows and greater volumes crowd into markets, economies of scale kick-in, sending costs into rapid decline and stimulating improvements in battery quality and performance. Since 1990, battery costs have been\u00a0cut by 99 percent<\/a>, while the density of top-tier battery cells\u00a0has increased fivefold<\/a>. According to the\u00a0RMI<\/a>, with every doubling of deployment of batteries, costs have fallen by 19% and energy density has improved by 7%. These trends, which are already exponential, show no sign of letting up.<\/p>\n Falling costs and improving energy density has created a\u00a0\u2018domino effect\u2019<\/i><\/a>, whereby increasing deployment and quality opens up new avenues and uses, the technology effectively jumping from one sector to the next. This is a phenomenon that\u2019s tangible to most: batteries proliferated through consumer electronics, from portable cassette players to the now ubiquitous smartphone. From there, batteries penetrated the motorbike market and are now challenging the dominance of the internal combustion engine (ICE).\u00a0Some believe<\/a>\u00a0it is only a matter of time before heavy goods vehicles and short haul flights are powered by batteries, although the latter would require a substantial reform of both flight paths and consumer expectations.<\/p>\n The stationary storage market is now the latest growth arena for battery technology. Buoyed by energy economics, which now puts the combination of solar and batteries as the cheapest source of electricity, and continued concerns over energy security in the wake of the ongoing wars in Europe and the Middle East, the stationary storage market is charging up. According to BNEF, the annual stationary storage additions have grown by over 45% per year since 2018, reaching\u00a035 gigawatt hours per year (GWh\/y) in 2022<\/a>. Installations then almost tripled in 2023 to\u00a099 GWh\/y<\/a>. Cheap generation from solar paired with improvements in battery technology now meant that, in 2022,\u00a0over 40% of planned solar projects globally came with on-site battery storage.<\/a>\u00a0In particular sunny spots, like California, it was\u00a0over 95%<\/a>\u00a0of generation projects.<\/p>\n The proliferation of battery technology, the scope of potential uses, and the level of investment into the sector has brought concerns over material consumption and circularity to the surface. Battery recycling now attracts billions in investment and breakthroughs in alternative battery chemistries, like sodium-ion, are diversifying demand for rare earths. Contrary to beliefs from both ends of the political spectrum, batteries are already far more resource efficient that the fossil fuels they seek to supplant and collection and recycling rates are\u00a0much higher than claimed<\/a>, with a 2019 study putting the estimated recycling rate at\u00a059 percent<\/a>. The same analysts now believe\u00a0the recycling rate is closer to 90 percent<\/a>\u00a0and will increase further in the years ahead (more on this below).<\/p>\n Storing energy through batteries is not a new phenomenon.\u00a0Back in 1800<\/a>, pioneering scientist\u00a0Alessandro Volta<\/a>\u00a0invented the\u00a0voltaic pile<\/i>, consisting of alternating discs of zinc and copper separated by layers of cardboard soaked in saltwater or an acidic solution. When stacked together in a specific arrangement, the battery produced a stable and continuous electrical current. This invention paved the way for battery technology and, in honour of this Italian inventor, established the way in which we measure the force that drives electrical current,\u00a0the volt (V)<\/a>.<\/p>\n Commercial penetration for batteries came a few decades later, when\u00a0John Frederic Daniell invented the Daniell cell in 1836<\/a>. This type of wet cell battery consisted of a copper container filled with a copper sulphate solution and a zinc rod, immersed in a zinc sulphate solution. The battery provided enough of a reliable current of electricity to transmit messages over long distances in the\u00a0burgeoning telegram industry<\/a>.<\/p>\n For a technology that has been around for over 200 years, batteries really entered\u00a0mass commercialisation in the 1970s<\/a>\u00a0when innovation in the consumer markets of Japan and the United States of America (USA)<\/a>\u00a0stepped up and companies jumped on lithium-ion technology, rather than lead-acid chemistries. Some of the initial innovations in the lithium-ion space in the 1970s were spearheaded, paradoxically, by\u00a0ExxonMobil<\/a>.\u00a0Stanley Whittingham<\/a>, a chemist on Exxon\u2019s payroll, discovered that titanium disulfide could intercalate lithium ions, leading to the development of the first rechargeable lithium battery in around 1973. This workstream was swiftly abandoned when the company doubled down on fossil fuels.<\/p>\n In the 1990s, lithium-ion batteries were a gamechanger for consumer electronics. Japanese industrial titan,\u00a0Sony<\/a>, introduced lithium-ion batteries into its\u00a0handheld camcorders in 1991<\/a>, ushering in a rapid proliferation of batteries into mobile phones, laptops and other handheld devices. Happening in parallel to this were a series of breakthroughs in\u00a0solid state battery technology,<\/a>\u00a0which substituted the liquid electrolyte found in traditional batteries with a solid electrolyte.<\/p>\n Throughout the 1990s and early 2000s, researchers achieved significant advancements in solid electrolyte materials, including lithium ceramics, sulphides, and glassy electrolytes. These solid state batteries\u00a0promised a whole host of benefits over their liquid peers<\/a>: improved safety and energy density, prolonged lifespans and better performance across a wider range of temperatures, as well as being fast charging. Today, this form of battery is where\u00a0the lion\u2019s share of investment is flowing<\/a>\u00a0and where the most promise lies for charging up decarbonisation through wide scale storage.<\/p>\n Batteries have been the target of sustained research and development (R&D), driven by both private enterprise and states. In fact, analysis has shown that around\u00a055% of cell cost decline in the lithium-ion space has come from public and private R&D<\/a>, while\u00a045%<\/a>\u00a0from other drivers like economies of scale. A booming research community has blossomed around battery research, with the number of peer-reviewed journal articles on batteries\u00a0increasing five-fold over the last ten years<\/a>.<\/p>\n The more batteries that are deployed around the world, the cheaper and better they get. This, in turn, bolsters further deployment and sets in motion a self-perpetuating cycle, which \u2013\u00a0according to analysts<\/a>\u00a0\u2013 has a domino effect, whereby adoption jumps from country to country and sector to sector. Patent filings indicate the scale of the domino effect, with\u00a0annual filings up 15%t\u00a0<\/a>a year and the trend now accelerating.<\/p>\n R&D is also pushing into new battery chemistries. Breakthroughs in sodium-ion chemistries, for instance, are challenging lithium-ion\u2019s dominance within EVs due to dramatic improvements in their energy density and their small size. Chinese manufacturers are already installing sodium-ion batteries at scale on EV production lines. Innovation in new battery chemistries will also help\u00a0diversify the material inputs for battery production<\/a>. A 2025 study found that sodium-ion batteries (SIBs) are now emerging as a mainstream\u00a0viable alternative<\/a>\u00a0to lithium-ion batteries (LIBs) due to their cost-effectiveness, abundance of sodium resources, and lower environmental impact.<\/p>\n Developments in recycling and circular approaches to battery manufacturing are increasing the lifespan of battery technologies and, ultimately, will reduce the human and non-human impacts of mining rare earths and metals.<\/p>\n As mentioned above, analysts now believe the recycling rate of batteries is closer to\u00a090 percent\u00a0<\/a>and will increase further in the years ahead, perhaps reaching full circularity. The primary driver for this is not environmental concerns, but the currently high prices of the commodities that make battery technology possible. With prices high, companies are incentivised to collect disused batteries from old phones and disused EVs and recycle the rare earths and metals they contain.<\/p>\n While this market-based mechanism is currently delivering high rates of recycling, it could change in a heartbeat. If commodity prices drop or a new battery chemistry makes a certain rare earth redundant, the progress to date on circularity could be reversed and waste grow exponentially. Strong regulatory frameworks are required to ensure this does not become a reality.<\/p>\n It should be stressed, however, that battery technologies\u2019 environmental impact is nothing compared to the environmental footprint of the fossil fuel industry. The UK\u2019s far-right politician, Nigel Farage, has quipped at EV\u2019s \u201cdirty secret<\/a>\u201d and the \u201cstrain<\/a>\u201d the rare earth and metals mining is putting on the environment. These efforts promote and promulgate fallacies that have been proved false in peer-reviewed studies\u00a0time<\/a>\u00a0and\u00a0time<\/a>\u00a0again, while underestimating industrial societies vast appetite for fossil fuels. To illustrate this point, consider the fact that a standard internal combustion vehicle (ICE) will burn an average of\u00a017,000 litres<\/a>\u00a0of oil throughout its life. That\u2019s 12.5 tonnes of oil. By 2030, over the lifespan of an EV, the battery material waste created will be around\u00a030 kilograms<\/a>\u00a0\u2013 roughly the size of a football.<\/p>\n Battery technology, and the increasingly large and complex production networks that make them possible, are a target of government support and investment. This is not solely due to their potential in curtailing emissions \u2013 it is also due to the geopolitical dimensions of the battery value chain and emergent reframings of energy security.<\/p>\n China currently dominates both the extraction and processing of rare earths,\u00a0controlling around 70 percent and 85 percent, respectively<\/a>. China also accounts\u00a092 percent\u00a0<\/a>of rare earth magnet production, essential components in batteries, missiles, stealth aircraft and radars. Such dominance would mean that the global jump towards battery storage would be highly dependent on China; a prospect both the US and EU want to avoid.<\/p>\n In response to Chinese dominance, the US government has ramped up rhetoric around \u201csecuring the supply chain\u201d for rare earths and metals, introducing a raft of measures to encourage domestic extraction and onshore processing capacity alongside recycling. As part of the recent Inflation Reduction Act (IRA),\u00a0US EV manufacturers must source at least 40 percent of their rare earths from within the United States or from its \u2018allies\u2019, rising to 80 percent by 2027<\/a>. The EU has followed a similar path through its\u00a0Critical Raw Materials Act<\/a>, which was introduced in 2023.<\/p>\n References and further reading<\/b><\/p>\n Gavin Bridge & Erika Faigen, 2023, \u2018Lithium, Brexit and Global Britain: Onshoring battery production networks in the UK\u2019,\u00a0The Extractive Industries and Society<\/i>,\u00a0https:\/\/doi.org\/10.1016\/j.exis.2023.101328<\/a><\/p>\n Rocky Mountain Institute, 2023, \u2018X-Change: Batteries: The Battery Domino Effect\u2019,\u00a0https:\/\/rmi.org\/wp-content\/uploads\/dlm_uploads\/2023\/12\/xchange_batteries_the_battery_domino_effect.pdf<\/a><\/p>\n\n
The Big Picture<\/h3>\n
Context and Background<\/h3>\n
Enabling Conditions<\/h3>\n
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