Batteries are a vital tool in enabling the transition from fossil fuels to renewable energy. For example, in the transportation sector, batteries reduce the need for combustion engines by advancing the creation of electric vehicles. In the energy sector, batteries improve the reliability of solar and wind energy by ensuring that clean energy can be stored and used irrespective of the weather conditions.

Lithium-Ion (Li-ion) batteries have become a market favourite in recent years, with demand growing by 30% annually between 2010 and 2018. Li-ion batteries are especially sought after as they are highly energy dense, low maintenance and long-lasting. This means that they are able to store a large amount of energy for a considerable amount of time at relatively low cost. The increasing demand for electric cars is also driving down the price of car batteries, which is expected to fall by almost half in the next few years. The above factors mean that batteries may hold the key to potentially vast carbon savings. According to the World Economic Forum, batteries could enable 30% of the reductions in carbon emissions in the transport and power sectors required under the Paris Agreement.

However, there are potential drawbacks to relying on batteries to drive the low carbon transition. In particular, the production of batteries causes its own environmental and climate risks. One third of the global supply of lithium (an essential component of Li-ion batteries) is produced in Chile, where extraction methods have been heavily criticised for causing environmental damage. Furthermore, the carbon footprint created by manufacturing batteries is difficult to assess, and could be considerable; although it is likely to be offset by carbon savings in the long run. Pricing could also slow progress. Whilst the price of batteries is predicted to reduce dramatically in the coming years, costs remain high, and a recent analysis by Oliver Wyman suggested that electric vehicles will remain more expensive to produce than combustion engine models for at least a decade.

In a positive step forward, the UK Government has recently acknowledged the potential of batteries by relaxing planning rules for the construction of large batteries for the storage of renewable energy from solar and wind farms.

Whilst not a "panacea", batteries are an effective means to enable the reduction of carbon emissions and will play an important role in ensuring the consistent output of renewable sources of energy.

Clyde & Co is hosting energy and infrastructure-themed tables in The Chancery Lane Project's virtual legal hackathon, running from 23 September to 18 December 2020. This post is part of a series of updates posted during the hackathon on business-relevant climate initiatives and innovative solutions to some of the challenges arising from climate change in the Energy or Infrastructure industries.