Questions of cash unsurprisingly dominated the agenda in the final days of the COP29 climate talks held in Baku, Azerbaijan. The issue of who pays for the effects of global warming has long been a political hot potato and was always going to be a major sticking point at this year’s conference of parties.
As it happened, the outcome of the talks was seen as a bad deal by almost all concerned, with developing nations in particular lamenting a lack of ambition in the final finance package and the COP president accusing the west of intransigence.
But away from the handwringing over climate finance, there was arguably tangible progress on the practicalities of the global energy transition in the form of an energy storage and grids pledge.
The first of its kind in these climate talks, the pledge commits signatories to increase global energy storage capacity six times above 2022 levels, to achieve a total installed base of 1.5 terawatts (TW) by 2030. Endorsing nations also commit to add or refurbish a total of more than 80 million kilometres of grid infrastructure by 2040.
All moves to promote energy storage are welcome, giving the pressing need to build more around the world in support of grid decarbonization. And the 1.5 TW pledged at COP29 represents a 36% increase on the 1.1 TW that analyst group S&P Global Commodity Insights predicts will be in place by 2030 at current rates of growth.
That said, the pledge could also be viewed as a relatively low-level win within this year’s COP process.
Launched towards the end of the first week of talks, ahead of the meatier discussions on climate finance, the COP29 Global Energy Storage and Grids Pledge was one of three announced at the COP’s energy day, with others focusing on clean hydrogen and the creation of green energy zones and corridors.
All three pledges are designed to support an earlier COP outcome: the commitment made at COP28 in the United Arab Emirates to triple the world’s installed renewable energy generation capacity to at least 11 TW by 2030. Without massive investments in energy storage and grid infrastructure, that goal cannot be reached.
Nevertheless, electricity sector leaders were quick to celebrate the storage and grids pledge.
“We welcome the ambitious COP29 grids and storage pledge announced today and stand with our governments in working toward realizing these goals,” said Afif Al Yafei, CEO of Abu Dhabi’s TAQA Transmission and co-chair of an industry group called Utilities for Net Zero Alliance.
SSE chief commercial officer Martin Pibworth added: "There hasn’t been enough focus on these vital enablers to date and we are therefore delighted, as utilities responsible for delivering these investments on the ground, to add our support to that of governments around the world for the COP29 Global Storage and Grids Pledge.”
But with only four countries—Belgium, Sweden, UK and Uruguay—backing the pledge when it was launched, it remains to be seen whether the talk at COP29 will lead to a material difference in the global energy storage market’s fortunes.
Indeed, there is a possibility that one of the biggest deals for energy storage at COP29 might be linked to a completely different announcement—that made by UK Prime Minister Kier Starmer at the start of the talks.
At a climate summit that ultimately seemed quite light on climate action, Starmer aimed to regain the initiative lost under the UK’s previous administration and unveiled a new emissions reduction target for 2035.
The 81% cut, compared to 1990 levels, builds on an existing target of a 68% reduction by 2030 and is “just within the 1.5°C compatible range,” according to the independent monitoring body Climate Action Tracker, which was still rating the UK’s overall rating on climate as “insufficient” as of November 6, 2024.
Cynics might argue that the UK’s COP announcement was a way of diverting attention away from the country’s 2030 target, which a Climate Change Committee said would not be achievable based on delivery indicators assessed in July 2024.
“Only around one third of the emissions reductions required to meet the 2030 target are covered by credible plans, mostly in the electricity supply and surface transport sectors,” said the Committee.
A more favourable reading is that Starmer’s team—including energy secretary Ed Miliband, who is seeking to build a global climate action coalition in the wake of COP29—sees climate action as a lever to regain industrial leadership that is increasingly lacking in the UK.
Sooner or later all nations will have to go through an energy transition, the reasoning might go, so if Britain gets there first it will have a major competitive advantage. This is a strategy that the UK has already used to great success with offshore wind.
The country was the world’s largest offshore wind market for a decade, from 2008 to 2018, acquiring a level of industry expertise that continues to dominate the globe. More widely, UK efforts to cut emissions have yielded significant levels of economic growth.
The government says there are now 640,000 green jobs in the UK, and employment demand is growing four times faster than the national average.
A model for economic growth?
Announcing the 2035 climate target, the UK Department for Energy Security and Net Zero trumpeted recent energy transition milestones such as lifting the ban on onshore wind in England, delivering a record number of clean energy projects through auction and consenting unprecedented amounts of solar power.
While not mentioned explicitly, one of the other areas where the UK is set to shine in pursuit of its climate goals is in energy storage.
As of 2023, the UK had 4.7 GW and 5.8 GWh of battery storage, according to the Faraday Institution, and most of the 22 GW and 44 GWh of further capacity expected by 2030 will be in the form of lithium-ion batteries.
“The UK is considered a world leader in the deployment of battery energy storage systems, with a growing industry across a number of market segments, from developers to investors to operators,” says John-Joseph Marie, the Faraday Institution’s principal analyst for energy storage.
Of course, it will take more than just energy storage for the UK to reach its climate goals. But the good thing about an aggressive decarbonisation target is that it helps drive improvements across all areas of the energy transition, from renewables to grids.
And if the UK can show that its low-carbon ambitions are driving economic growth, then it could be a model for others to follow… and a reason to celebrate the announcements at COP29.
Publish date: 28 November, 2024