Battery prices are plunging around the world, signaling a crucial turning point: 'Entering a new phase of its development'
The world's battery industry appears to be supercharged.
According to a recent commentary from the International Energy Agency, we have entered a "new phase" for batteries as their costs continue to drop and demand for them skyrockets.
While the current period hasn't been officially dubbed the Battery Age yet, the ubiquitous energy storage units are at the heart of tech developments, ranging from the electrification of homes and greening of energy grids to mobile devices and electric vehicles.
Batteries are having a particularly strong impact on the world, thanks to the rising popularity of EVs, the agency reported. In 2024, EV sales rose 25% to 17 million, according to the IEA and research firm Rho Motion.
The average price for an EV's battery pack dropped below $100 per kilowatt-hour in 2024, which the IEA said was "commonly thought of as a key threshold for competing on cost" with conventional (gas-fueled) vehicles.
The more that EVs replace gas-powered models, the less air pollution will be created through transportation, reducing the health risks and planetary overheating associated with that pollution.
The IEA article mentioned another "historic milestone" in 2024, as global demand for battery storage capability soared past 1 terawatt-hours. This marks a tenfold increase in battery demand since 2018, according to an IEA newsletter version of the commentary.
For reference, 1 terawatt-hour can power 100 million homes for an hour or the state of California for about 1.5 weeks, according to the Sustainable Choice clean energy project. And batteries can be recharged.
Some of the batteries deployed worldwide are used to support solar and wind energy projects. These projects help keep the air cleaner by replacing energy sources such as coal or gas-burning power plants. The large-scale batteries store energy when the sun is shining or the wind is blowing, evening out the supply from clean energy sources.
We can use home battery systems to store power from rooftop solar panels for use at night, during outages, or to sell back to a utility in some areas.
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In its commentary, the IEA pointed to cheaper battery materials and industrial advances as key drivers of the cheaper batteries. China is leading the world in battery production, according to the report, although other nations are racing to expand their production.
Meanwhile, advancements in technology by a multitude of university and corporate researchers are also helping to make batteries lighter, smaller, safer, cheaper, more recyclable, longer-lasting, and capable of storing more energy per pound.
"You might have noticed that batteries are everywhere these days," the IEA said in the newsletter version of its commentary. These "trends point to a battery industry entering a new phase of its development."
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