12 December 2024

Batteries Not Included: Banks Ghost Global Energy Storage Commitment

BERLIN, 12 December 2024 – At last, the list of signatories to the pledge to support global targets of 1,500 GW of energy storage and the development of 25 million kilometres of grid infrastructure by 2030 that was launched a month ago at the UN climate COP29 in Baku has been published [1]. Not a single private bank has joined over 100 countries and organisations in signing this pledge. Concomitantly, almost no financial institutions have targets for energy storage, signalling that it is either not on their radar, or it’s a responsibility they’re willing to ignore.

Last year, at the UN climate COP28, over 133 countries committed to the goal of tripling global renewable energy capacity by 2030—a target that both the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) say is essential to limit global warming to 1.5°C [2]. But further analysis by the IEA reveals that meeting the goal hinges on scaling up both grids and energy storage across the same period [3]. Without sufficient storage, such as batteries, the renewable energy system cannot fully take off [4]. 

The G7 and G20 have already committed to the six-fold increase in storage required to reach the 1,500 GW target and are now joined by the signatories to the COP29 Storage and Grids Pledge [5]. Yet, despite this growing consensus around the importance of storage in the future renewable power system, a review of the plans of the world’s 60 largest private banks reveals a troubling reality: only La Banque Postale and Royal Bank of Canada explicitly include energy storage in a financial target dedicated to the energy transition, and 52 lack any form of sustainable power financial targets whatsoever [6].

Brigitte Alarcon, Campaigner at Beyond Fossil Fuels:
“Private financial institutions have a crucial role to help finance all parts of the renewable power system, yet major banks like BNP Paribas, ING, and Barclays are notably absent from the Global Energy Storage and Grids Pledge, and most have no plan to ensure they’re financing storage. It speaks volumes about their indifference to the urgency of the energy transition. To build a European power system fully powered by renewables by 2035, we need banks to step up and ensure the needed financing flows to the full suite of sustainable power technologies.”

Rémi Hermant, Financial Institutions’ Policy Analyst at Reclaim Finance:
“The COP29 commitment to multiply storage capacity sixfold by 2030 and enhance global grids sends a clear signal that banks must act upon. They urgently need to recognise that supporting the energy transition means more than financing solar panels and wind turbines. Banks must take a comprehensive approach to financing sustainable power supply, not only including power production but also storage and grids infrastructure, and should aim for a 6:1 financing ratio in favour of sustainable power supply over fossil fuels by 2030.”

Elliot Thornton, Research Manager at ShareAction:
“Banks need to shift finance from polluting fossil fuels to renewable energy to support the net-zero transition and help prevent the worst effects of climate change. However, renewable energy rollout won’t happen at the scale and pace needed if significant investments are not made in electricity grids and storage. Our research has found that banks’ financing of these activities is far below the levels required. This shortfall not only jeopardises their net-zero commitments but could also drive up energy bills. Banks must put their money where their mouth is and use their political clout to drive positive regulation and encourage smart government investments.”

END

1. https://globalrenewablesalliance.org/news/flexible-energy-transition-gets-boost-as-over-58-nations-back-global-storage-and-grids-targets/
2. https://www.cop28.com/en/global-renewables-and-energy-efficiency-pledge
3. https://www.iea.org/reports/from-taking-stock-to-taking-action/executive-summary
4. Recent analysis by ShareAction shows that energy storage, together with grid infrastructure, should make up between 40 and 50 percent of sustainable investment in the power sector. But, in the absence of targeted action, finance from the world’s largest banks continues to fall short. Even in Europe, where the share of renewable energy in the power mix is increasing at pace, major banks allocate three quarters of clean energy finance to electricity generation, leaving just a quarter for grids and storage: https://shareaction.org/reports/mind-the-strategy-gap
5. https://cop29.az/storage/1135/COP29-Declarations-and-Pledges-Letter.pdf
6. Reclaim Finance’s sustainable finance tracker: https://sustainabilitypolicytracker.org/
7. BNP Paribas: While it has set a financial target for fossil fuel alternatives, it explicitly excludes energy storage, omitting a critical component of the energy transition.
   ING: The Dutch bank aims to triple its financing for renewable power generation by 2025 but has not included energy storage in its sustainable power targets.
   Barclays: Limited reporting on sustainable power financing indicates a lack of transparency in its commitments.
8. For their financing to credibly support the energy transition, banks need to ensure a 6:1 financing ratio in favour of sustainable power supply over fossil fuels, by 2030. This ratio is aligned with the IEA’s Net Zero Emissions by 2050 (NZE) scenario which gives only a 50% chance of limiting global warming to 1.5°C: https://beyondfossilfuels.org/wp-content/uploads/2024/02/6-1-ratio.pdf 
9. BankTrack’s false solutions tracker https://www.banktrack.org/campaign/banks_and_renewables 

Contacts:

Julia Pazos, Communications Officer, Beyond Fossil Fuels
[email protected], +1 310 994 9692

Brigitte Alarcon, campaigner, Beyond Fossil Fuels
[email protected], +33 641 288 759

About: 

Beyond Fossil Fuels is a collective civil society campaign committed to ensuring all of Europe’s electricity is generated from fossil-free, renewable energy by 2035. It expands and builds upon the Europe Beyond Coal campaign, and its goal of a coal-free Europe in power and heat by 2030 at the latest. www.beyondfossilfuels.org