The International Energy Agency (IEA) has released a report on the progress of battery technology, noting that the price of batteries has fallen dramatically in recent years to the point that the cost of installing battery storage projects has dropped about 40 per cent since 2024.

These price declines, and policy support, have enabled the development of mega batteries, which can store energy and dispatch energy when power systems need it, helping fill voids in solar and wind generation or during usage peaks.

The power capacity of these utility-scale batteries in 2024 was more than 12 times as high as in 2020, and the IEA’s recent Electricity 2026 report finds that as a result, these batteries have become a significant source of short-term flexibility for power systems.

This strong growth is especially notable in regions with rapidly rising shares of solar and wind in electricity generation, such as California, Germany, South Australia, Texas and the UK. All of which have all seen robust deployment of utility‑scale battery storage in recent years.

A large global pipeline of announced projects indicates that interest from investors remains strong, but many utility-scale battery projects face multi-year delays in securing grid connection and permitting. Projects can also have uncertain or volatile revenue streams, and they may struggle to access affordable financing. In this context, greater efforts to reduce market barriers and address integration challenges are needed to unlock the full potential of this technology, the IEA concludes.

Added to these problems is one of materials risk; much of the world’s battery supply chains are concentrated in China and such a high geographic concentration creates considerable risks in terms of supply security, given the growing role batteries play across energy systems and the wider economy, calling for greater efforts to diversify supply chains and to boost innovation.

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