Governments should use Covid-19 stimulus funds to invest in the manufacturing of batteries and hydrogen-producing electrolysers — and a failure to do so could hold back the energy transition, says the International Energy Agency (IEA).

“IEA analysis has repeatedly shown that a broad portfolio of clean energy technologies will be needed to decarbonise all parts of the economy,” the agency wrote in a note on its website. “Batteries and hydrogen-producing electrolysers stand out as two important technologies thanks to their ability to convert electricity into chemical energy and vice versa. This is why they also deserve a place in any economic stimulus packages being discussed today.”

Batteries will be needed for electric vehicles and short-term renewable-energy storage, while hydrogen produced from clean power via electrolysers ­— which use an electric current to split water molecules into H2 and oxygen — can be used for long-term renewable-energy storage, and the decarbonisation of heating, heavy industry and long-distance transport such as trucks, trains and ships.

The IEA points out that the world will need an annual battery production of about 3TWh per year by 2030 to meet climate goals, but that manufacturing capacity targets announced to date only add up to about 2.1TWh. “Time is of the essence,” it said, “as building a large-scale battery factory can take anywhere from two to five years”.

The agency admits that investing in battery and electrolyser manufacturing might not create a huge number of jobs in the short term, but “the real value of such investments would come in the form of lasting long-term benefits”.

“Both industries have the potential to create many more jobs across their entire supply chains as the use of batteries and hydrogen picks up. And support for battery and electrolyser manufacturing is also a strategic opportunity for governments to ensure that their industries come out of the Covid-19 crisis stronger than before, ready to supply future domestic and international growth markets and able to anticipate potential bottlenecks in technologies,” the IEA said.

“Putting these technologies in stimulus packages is a way to carry out essential groundwork that will enable us to accelerate clean energy transitions in the years ahead. Failure to do so risks hindering progress at a critical time.”