How batteries could change the power
Lithium-ion batteries have been around for almost half a century – and now they are at the centre of the world’s next energy chapter.
The pressing need to address climate change and promote carbon management, coupled with technological developments and innovation, has caused global battery demand to soar and opened a window of tremendous opportunity. It’s important to identify steps to access this potential – and ensure the demand is matched by immediate and far-reaching collaborative action.
Here are three ways batteries could power social, environmental and economic change in the world, as described in the Global Battery Alliance’s new report:
• Enable 30% of the required emission reductions in power and transport sectors, key to achieving the Paris Agreement targets
• Provide 600 million people with access to electricity, reducing the number of people without electricity by approximately 70%
• Create 10 million safe and sustainable jobs and $150 billion of economic value in a fair value chain
By 2030, global battery demand is estimated to increase 14-fold, reaching 2,600 gigawatts per-hour. This surge may set in motion a sustainable cycle of growth, strengthening environmental protection and economic development, creating quality jobs and expanding access to electricity.
Realizing the full potential of batteries, however, requires a much more sustainable value chain, which can only be delivered through extensive, collaborative action under the three core areas below.
Foster a circular battery value chain
Among a range of technologies, batteries are key to reducing transportation emissions, supporting a transition to a renewable power system.
A circular battery value chain can quickly unite the transport and power sectors to ensure emissions remain within the Paris Agreement limit – for example, through smart grids and vehicle-to-grid. It would also allow us to reap more of batteries’ usage potential and end-of-life value.
Facilitate a just energy transition
and economic development
A sustainably scaled global battery value chain can play a crucial role in the achievement of many UN Sustainable Development Goals, including climate action and affordable, clean electricity. According to the report, around 600 million people will be provided with access to electricity, which would reduce the number of those lacking this resource by 70%. This could be achieved through the improved economics of solar home systems and micro-grid batteries.
At the same time, there will be substantial efforts to eradicate child labour in the value chain before 2030, especially in the Democratic Republic of the Congo, which is home to more than 70% of global cobalt reserves. Battery demand for cobalt, a key material in the battery sector, is expected to increase and it is important to address the challenges associated with artisanal, small-scale mining (ASM). A similar rationale applies to the value chains of other key raw materials, including lithium and nickel.
Transform the economy, creating additional value and new jobs
The study concludes that, with the right type of collaborative action, approximately 10 million additional, safe and good quality jobs may be created by 2030, more than half of which would be in emerging economies. This can support an energy transition that includes sustainable job creation and benefits distributed across wide geographies.
An additional component involves the creation of a supportive regulatory framework – for example, to adjust regulation for battery-enabled renewables as a dispatchable source of electricity for the grid. Discrepancies across countries and legal and regulatory flux dissuade investment and production. A sustainably scaled battery value chain, underpinned by fair and stable rules, can support the achievement of important, collective goals.
Taking collaborative steps to power change
Batteries can power change in the world, helping achieve the 2°C goal of the Paris Agreement and deliver unprecedented socioeconomic potential. But these achievements won’t occur in a vacuum. The Global Battery Alliance seeks to catalyse, connect and scale-up efforts to ensure the battery value chain is socially responsible, minimizes its environmental impact and creates economic value.
Additionally, with the commitment and engagement of over 60 members, joint efforts and activities are also needed with a wide range of sectors including academia, industry, government and NGOs. The challenges ahead are significant, but by no means insurmountable. Far-reaching, collaborative action, rooted in the values and framework outlined above, can set us on course to achieve our global sustainability ambitions.
ERG and BASF, along with other GBA members, call on leaders across the value chain to work towards this vision with the collaboration of all sectors. We support intensified efforts to develop a more comprehensive action plan that could be agreed and implemented following the World Economic Forum Annual Meeting at Davos in 2020. The time to change the trajectory of the value chain is now.
*The Global Battery Alliance report, “A vision for a sustainable battery value chain in 2030 – Unlocking the full potential to power sustainable development and climate change mitigation” was produced with the analytical support of McKinsey & Co. and SYSTEMIQ.