Executive summary

Energy storage technologies will play a critical role in the decarbonisation of the power and transportation sectors. The Group of Twenty (G20) countries have led such climate action, representing a cumulative share of 86 and 89 per cent of global renewable energy (RE) capacity and battery electric vehicle (BEV) stock, respectively, in 2020. Although there are various types of energy storage technologies, like mechanical, chemical, thermal, electric, and electrochemical (Figure ES1), electrochemical technologies (batteries) have attracted particular attention from industry and consumers alike due to their modularity and deployment versatility. Electrochemical batteries are further classified as lead-acid, nickel-cadmium, lithium-ion-based, sodium-ion-based, redox flow, solid-state, and metal-air. Many of these batteries are classified as advanced cell chemistry (ACC) batteries.

The traditional batteries have found use in power and transport sector but numerous other applications, such as the electrification of aircraft, ships, and spacecrafts, can be unlocked by improving the technological gaps of the available batteries, including performance and safety. On advancements, even existing applications can potentially witness further scale up. Performance gaps are inextricably linked to the context that batteries are expected to perform in. For example, a high gravimetric energy density may be desirable for batteries used in mobile applications while a high cycle life may be required for energy applications using stationary storage. Safety gaps are linked to the inability of batteries to manage temperature fluctuations or internal heat dissipation, which lead to battery failures and fires. Such accidents also have direct implications for the safety of humans.

Beyond these technological considerations, the current generation of batteries is also plagued with supply chain and raw material gaps. Battery manufacturing is a complex, multi-step process involving mineral extraction, refining, active component manufacturing (electrodes and electrolytes), cell manufacturing, and assembly. Cost-effective scaling of these value chains requires significant technical expertise and efficient production processes. Furthermore, there could be significant gestation periods necessary for building new capacity, which can result in supply–demand mismatches. Figure ES2 shows the timelines to bring online different stages of a lithium-ion battery (LIB) production supply chain. Lastly, the current mineral processing and battery production have significant emissions – new ACC battery supply chains must have a low energy footprint and circular processes.

Several of the available batteries use minerals that have limited reserves (for instance, platinum) or are concentrated in a few geographies (such as cobalt). Future ACC batteries should be designed using abundant minerals that can be mined and refined using environmentally sustainable processes.

Figure ES 1 Types of energy storage technologies

Source: Authors’ analysis

Figure ES 2 Timelines for the different stages of the lithium-ion battery production supply chain

Source: Authors’ recreation from IEA (2022c)

We have categorised the most significant technological gaps across five indicators and developed associated metrics to assess and track the progress of ACC batteries (Figure ES3):

• Battery cost, often perceived as a proxy for viability, could be evaluated based on the upfront or annualised (energy or power) costs. These are further dependent on the price of raw materials and production and maintenance costs. Hence, batteries should be compared using an appropriate cost metric, depending on the application and typical use period.
• The performance of a battery determines its suitability for an application. Hence, although there are several indicators to measure the same, only a few matters to identifying an optimum battery for a specific application.
• The environment, health and safety impacts of battery technologies can also be tracked. This includes production, usage, and end-of-life stages.
• The scalability of a battery refers to the ease of manufacturing. This can be tracked by technology and manufacturing readiness levels (TRL and MRL), the complementarity of the production processes with the existing facilities, the criticality of the raw materials used, and access to intellectual property (IP).
• Circularity is an emerging but important indicator for tracking battery progress that focuses on material intensity, design, and ease of reuse and recycling. Batteries that use fewer materials and are easy to disassemble for reuse or recycling could be preferred over others that use complex materials and compounds, which makes subsequent stages energy-or time- intensive.

Figure ES 3 Indicators for tracking the progress of ACC batteries

Source: Authors’ analysis

Figure ES 4 Innovations in the battery supply chains for ACC batteries

Source: Authors’ analysis

Several innovations in processes across the value chain – mineral processing, designing, manufacturing, packing, and deployment – enable the development of new ACC batteries (Figure ES4). Majority of the listed innovations improve performance first, followed by scalability and cost. Circularity is still a novel indicator that only a few innovations are achieving. G20 countries should come together to support these innovations and draw them from the margins to the mainstream.