Canada’s NDP Leader Jagmeet Singh advanced a motion in the House of Commons, keeping the carbon pricing debate alive by urging Prime Minister Justin Trudeau to permanently remove the GST (Federal Goods and Services Tax) from all forms of home heating.
Meanwhile, concerns were also raised about missing Canada’s emission reductions target as revealed by a recent audit. The debate between the two parties on carving-out the carbon tax seems to impact the nation in reaching its climate goals.
A ‘Flip-Flop’ Stance
NDP’s move, focused on affordability, aligns with the New Democrats’ ongoing advocacy but has gained renewed attention. That is due to the recent controversies surrounding the Liberals’ exemptions for home heating oil and rural rebate enhancements.
Singh’s proposal is non-binding, meaning it won’t compel the government to act even if it passes. It aims to achieve three major objectives:
- Remove the GST from all home heating forms,
- Ensure easy access to eco-energy retrofits and heat pumps for low-income and middle-class Canadians
- Fund these initiatives through a tax on the excess profits of major oil and gas corporations.
The motion was debated with the vote expected later in the week.
Despite the NDP’s support for the Conservative carbon tax motion, there’s uncertainty about the reciprocity of support from the Conservative caucus for the NDP’s current motion.
During the House debate, Conservative Leader Pierre Poilievre criticized the NDP for “yet another flip-flop” in their stance on the tax issue.
Singh responded by challenging the corporate-controlled Conservatives to support the motion. He further highlighted their priorities in protecting big oil and gas profits over helping Canadians lower their costs and combat the climate crisis.
The Liberals have consistently advocated for carbon pricing based on its universal application. The purpose of the tax is to discourage planet-warming emissions by making them more costly to bear. This policy would allow Canadians only to pay based on how much carbon they’re releasing into the air.
The current administration, for example, charges $65/tonne of CO2. That translates to 14 cents for each liter of gasoline, 10 cents for propane, and $145/tonne of high-grade coal.
‘Ax The Tax’
The tax exemption, a.k.a. ‘carve-out’, further complicated the Liberals’ established stance that any inequalities resulting from the tax could be corrected with targeted rebates.
The concept means that all Canadians would face the same fuel prices. However, those with lower incomes or residing in rural areas without public transportation would receive a proportionately larger portion of the refund.
With the exemption, the Liberals provided a pardon for an exceptionally polluting fossil fuel that could predominantly benefit the wealthy. That’s according to the findings of an economist, noting that it would favour “households with large houses MORE than low-income households living in higher density homes”.
As for the Conservatives, abolishing the tax is one of their major lobbies. The party has mentioned the never-heard-of phrase in over 150 years in the House of Commons’ transcripts – ‘ax the tax’ – more than 100 times.
Meanwhile, the Senate also advanced Bill C-234, suggesting further exemptions in the carbon price for specific fuels used in farming. The bill, if passed, would create exemptions for natural gas and propane as qualifying farming fuels from the carbon tax.
Sen. Pat Duncan particularly noted by asking that:
“Will allowing this rebate and passing Bill C-234 make a tremendous difference to Canada reaching the climate change goals?”
That question points to another significant result of the federal environment commissioner’s recent audit. That is Canada’s plan to achieve its 2030 greenhouse gas emissions targets falls short of the mark.
Missing The Target
Canada’s emission reductions plan, published last year, is a requirement under the federal net zero accountability law passed in 2021. The following chart shows Canada’s 2030 Emissions Reduction Plan per sector.
According to the audit, while the plan represents an improvement over previous versions, it still lacks in critical areas. Key policies have experienced delays, the functionality of established measures remains unclear, and the country is several million tonnes away from its emissions goal.
The auditor, Jerry DeMarco, emphasized the urgency of reversing Canada’s GHG emission trajectory, stressing that the issue demands immediate attention.
- The nation aims to reduce emissions by 40% – 45% from 2005 levels by 2030. That calls for a ⅓ reduction in Canada’s current emissions by the same period.
However, the measures outlined in the plan are projected to achieve just a quarter of the reduction by decade’s end. That happens due to relying on government modelling which DeMarco referred to as “overly optimistic assumptions”.
Though the plan identifies more than 80 policies and programs, less than 50% have set timelines for implementation. In fact, only 4 of them have specific targets for emissions reduction.
- In comparison with other G7 nations, Canada’s emissions have only decreased by around 8% compared to 2005 levels. As such, the country is the least successful in cutting emissions within the group.
In response to the findings, Environment Minister Steven Guilbeault acknowledged the existing gap between the target and necessary policy actions. He pledged the government’s commitment to accelerating efforts and improving transparency in its modelling to show how it intends to achieve the 2030 target.
Guilbeault also hinted at positive developments in the upcoming progress report due before the year’s end.
The NDP’s motion to scrape the tax from home heating intensifies the debate on carbon pricing and emission reductions in Canada, underscoring the challenges faced in meeting the nation’s climate goals.
The post Canada Faces 2 Carbon Issues: Shaky Carbon Tax and Missed Emissions Goal appeared first on Carbon Credits.
Carbon Footprint
Moeve, Masdar, and Enalter Partner on Southern Europe’s Largest Green Hydrogen Project
Spanish energy company Moeve approved more than €1 billion ($1.2 billion) for the first phase of its Andalusian Green Hydrogen Valley. The final investment decision cleared the way for construction to begin in the coming weeks. Significantly, Moeve will hold a 51% majority stake. The remaining share will be owned by Masdar and Enalter.
Enalter is majority controlled by Enagás Renovable, a pioneer in renewable gas development. Meanwhile, Masdar brings global clean energy expertise from Abu Dhabi.
This first phase, called Onuba, will install 300 megawatts (MW) of electrolyser capacity in southern Spain. Moreover, the company kept the option to expand the project by another 100 MW, subject to grid access and board approval.
Onuba: A Strategic Project With European Backing
The Onuba project will be the largest green hydrogen facility in southern Europe once operational. It carries a total investment of over €1 billion. That includes related infrastructure and a dedicated solar power plant for self-consumption.
Importantly, the project secured strong public support. The European Commission classified it as a Project of Common European Interest (PCI). In addition, the Spanish government awarded €304 million in funding under its Recovery, Transformation and Resilience Plan. This support came through the EU’s NextGenerationEU program under the Hydrogen Valleys scheme.
Such backing places the project at the center of Europe’s industrial decarbonization strategy. Brussels aims to reduce dependence on imported fossil fuels while scaling domestic clean energy production.
Ownership Mix Boosts Financing
This ownership mix reflects a wider shift in global capital. Gulf and European investors are increasingly channeling funds into hydrogen infrastructure. Notably, Moeve itself is owned by Mubadala, Abu Dhabi’s sovereign fund, and U.S. private equity firm Carlyle. As a result, the project benefits from deep financial backing and international reach.
Production Capacity and Climate Impact
- At 300 MW, Onuba will produce about 45,000 tonnes of green hydrogen per year. This output will help avoid around 250,000 tonnes of CO₂ annually.
Simply put, the emissions reduction equals more than the total emissions generated by passenger vehicles with internal combustion engines in the Spanish cities of Huelva, Cádiz, and Jaén.
The hydrogen produced will serve multiple sectors. It will support aviation fuels, road transport, and marine fuels. In addition, it will help decarbonize chemical and fertilizer industries. Therefore, the project directly targets hard-to-abate sectors.
Solving the Grid Bottleneck
Grid access has slowed many hydrogen projects across Europe. However, Moeve recently secured a connection to the Spanish electricity grid. This approval came at a crucial time.
Besides grid power, the project will use a dedicated solar plant. This hybrid model will stabilize the electricity supply and improve the plant’s carbon intensity profile.
Access to renewable electricity remains essential. Green hydrogen only delivers climate benefits when powered by clean energy. Therefore, Andalusia’s strong solar resources give the region a clear advantage.
Furthermore, the region’s port infrastructure could support exports of hydrogen derivatives such as ammonia to northern European markets. This strengthens Spain’s ambition to become a renewable energy exporter.
Moeve’s Broader €8 Billion Transition Plan
The hydrogen valley forms part of Moeve’s broader €8 billion transition strategy. Formerly known as Cepsa, the company rebranded in 2024 to signal its shift toward low-carbon businesses.
Since 2022, Moeve sold most of its oil production assets, including operations in Abu Dhabi and South America. It redirected that capital into renewables, biofuels, and hydrogen.
This capital reallocation marks a clear pivot. Instead of expanding oil production, the company invested in long-term clean infrastructure.
Financially, the company strengthened its position before making this move. Net profit rose to €341 million last year, compared to €92 million in 2024. This improved profitability provided internal funding capacity for large-scale energy transition projects.
At the same time, Moeve entered non-binding talks with Portuguese energy firm Galp. The companies are exploring a combination of refining, chemicals, and fuel retail businesses. They aim to complete due diligence and possibly reach an agreement by mid-2026.
If successful, consolidation could free up more capital. It could also stabilize legacy businesses during the transition period.
Solving Europe’s Hydrogen Challenge
Low-carbon hydrogen plays a critical role in cutting emissions from industry and transport. The European Union set ambitious goals under its hydrogen strategy and REPowerEU plan. The bloc aims to produce 10 million tonnes of renewable hydrogen and import another 10 million tonnes by 2030.
However, the path remains complex.
Analysts say that by 2030, Europe would need at least 100 gigawatts (GW) of installed electrolyser capacity to meet REPowerEU targets. That implies annual capacity growth of roughly 150% between 2025 and 2030. By comparison, growth between 2020 and 2024 averaged around 45%.
European renewable hydrogen production capacity announced
In addition, regulatory rules for renewable hydrogen, such as strict temporal and geographical correlation requirements, increase development costs. Projects often require extra storage and grid adjustments.
Funding remains another bottleneck. Although the EU structured many subsidies and incentives, approval processes can take 12 to 24 months. These delays risk slowing deployment.
As of December 2024, about 60% of Europe’s renewable hydrogen production ambition was covered by national targets. Member states must better align policies and accelerate ramp-up if the EU hopes to meet 2030 goals.
A Fast-Growing Market
Despite challenges, market growth remains strong. The European green hydrogen market was valued at around $4.85 billion in 2024. Analysts expect it to reach nearly $147.88 billion by 2034. This implies a compound annual growth rate (CAGR) of about 40.7% between 2025 and 2034.
Several factors drive this expansion:
- Rising demand for net-zero solutions
- Decarbonization pressure on heavy industry
- Expanding renewable energy capacity
- Policy incentives and carbon pricing
By technology, alkaline electrolysers dominated the market in 2024, holding about 45% share. These systems remain cost-competitive and proven at scale.
Why This Project Matters
Moeve’s Andalusian Green Hydrogen Valley signals more than a single investment. It highlights three broader trends. First, capital is shifting from oil to clean infrastructure. Second, Europe is backing hydrogen with serious public funding. Third, Spain is emerging as a strategic clean energy exporter.
If executed successfully, Onuba could become a cornerstone of Europe’s hydrogen economy. More importantly, it shows that large-scale projects are moving from ambition to action. Thus, in a decade defined by energy transition, this €1 billion decision may mark a turning point for southern Europe’s clean industrial future.
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Carbon Footprint
The U.S. EV Supply Chain Race: Where Surge Battery Metals Fits in the National Critical Minerals Strategy
Disseminated on behalf of Surge Battery Metals Inc.
Electric vehicles (EVs) are central to the global shift away from fossil fuels. EV sales continue to rise each year. Analysts estimate that global lithium demand may grow to over 2.8 million tonnes of lithium carbonate equivalent (LCE) by 2030 as EVs and grid storage expand.
Battery energy storage systems (BESS) are another major source of demand. Shipments of stationary storage batteries are forecast to grow around 50% in 2025, driven by renewable energy and grid needs.
Growth in both EVs and energy storage is pushing demand for lithium and other battery minerals higher. Many forecasts suggest lithium demand could more than triple by 2030 versus today’s levels.
These trends are visible in price movements. Lithium prices have risen sharply in recent years. They might hit high levels if demand keeps exceeding supply growth.
Despite some volatility in the market, long-term demand remains robust because EVs and BESS use large amounts of lithium per unit. Cell chemistries like lithium-iron-phosphate (LFP) are expanding, further increasing lithium use across applications.
Tight Supply, Rising Risk: The Global Lithium Bottleneck
Global lithium supply is strained by rapid growth in demand. Supply forecasts have shifted from a modest surplus in 2024 to potential deficits as early as the mid-2020s.
BESS is a key factor. It could account for 30–36% of total lithium demand by 2030, according to major banking forecasts.
At the same time, much of the world’s lithium refining and battery production capacity remains concentrated outside the U.S., especially in China. This concentration raises supply chain risks for North American manufacturers and automakers.
Domestic supply development has not kept pace with demand. Historically, the U.S. produced only a small fraction of the total lithium supply, even though it sits on large known lithium resources.
These factors have pushed companies and governments to speed up new projects and improve local production skills.
Federal Strategy: Building a Domestic Supply Chain
The U.S. government has passed several policies to strengthen the EV supply chain and domestic critical minerals base. Key federal actions include incentives, regulations, and strategic planning. These efforts involve several agencies, like the Department of Energy (DOE) and the Department of Defense (DoD).
Programs like the Inflation Reduction Act (IRA) provide tax incentives for EV manufacturing and battery production. These incentives emphasize sourcing from the U.S. and allied countries to reduce reliance on foreign supply chains. The DOE also funds energy storage research, materials processing, and efforts to scale domestic industrial capacity.
The FY26 National Defense Authorization Act (NDAA) includes provisions that support critical materials production and supply chain resilience in the defense sector. It broadens the Defense Industrial Base Fund’s authority. Now, it includes support for domestic production and modernization projects, including batteries and related infrastructure.
The law sets rules on buying certain key minerals and advanced batteries from non-allied foreign sources. Over a phased timeline, DoD must avoid sourcing these materials from “foreign entities of concern,” such as those linked to China and other designated countries. They must expedite the qualification of compliant domestic and allied suppliers.
The NDAA also requires the Department of Defense to assess weaknesses in key material supply chains. It promotes programs for stockpiling, recycling, and reuse to reduce reliance on imports. These federal actions support U.S. projects that provide lithium, nickel, and other battery materials. They boost confidence for investors and the industry in the domestic supply chain.
Inside the Battery Metals Economy
Lithium’s role in the EV supply chain is clear: it is a core input for lithium-ion batteries. Long-term demand forecasts for lithium reflect this central position. Some market forecasts project global lithium demand to rise to 3–4 million tonnes LCE by 2030, depending on EV market growth assumptions.
Price forecasts vary but generally reflect tightening supply. Some analysts estimate lithium prices could continue to rise if supply fails to match demand growth. Lithium carbonate spot prices recently jumped to $24,086, a 191%+ increase from July 2025.
Nickel and cobalt remain important for certain battery chemistries, even as some EV makers move toward low-cobalt or cobalt-free chemistries. All these metals are part of the broader battery metals ecosystem that underpins the EV supply chain.
Beyond EVs, electric grid storage, industrial batteries, and portable electronics all contribute to long-term demand. Even conservative estimates show sustained growth in battery-grade materials over the coming decade.
Nevada’s Lithium Anchor: NILI and Its Role in the U.S. Supply Chain
Surge Battery Metals (TSX-V: NILI; OTCQX: NILIF; FRA: DJ5) stands out as a lithium exploration and development company focused on the Nevada North Lithium Project (NNLP).
NNLP hosts one of the highest-grade lithium clay resources in the United States. Its inferred resource of approximately 11.2 million tonnes of LCE at an average grade above 3,000 ppm positions it well above many domestic peers.
This high quality makes the resource attractive for future development. A Preliminary Economic Assessment (PEA) indicates strong economics. It shows a net present value of about US$9.2 billion and an internal rate of return of over 22%. This reflects the project’s strong potential.
The project’s operating cost metrics are also competitive, with estimated costs significantly lower than those of many North American rivals.
NNLP’s shallow geology and proximity to infrastructure help keep capital and processing costs down. The project sits near power lines, highways, and existing mining hubs in Nevada.
Recent drilling programs continue to show promising results. In 2025, the focus was on infill drilling and core sampling. These efforts aim to upgrade resources and prepare for prefeasibility work. Results show thick lithium clay layers, which boost confidence in the project’s size and consistency.
More recently, Surge reported additional strong drill results from Nevada North. The company announced a 31-meter intercept grading 4,196 ppm lithium from surface in a 640-meter step-out hole to the southeast. This step-out extends mineralization about 640 meters beyond the current resource footprint, confirming the strong continuity of high-grade lithium.
The intercept grade is well above the project’s current average resource grade of about 3,000 ppm lithium. Near-surface mineralization also reduces stripping requirements and supports efficient future development. These results strengthen the project’s scale and reinforce its role as a growing domestic lithium source.
Surge has also secured strategic partnerships. A joint venture with Evolution Mining will speed up exploration and development. This partnership will increase land holdings by over 21,000 acres of promising land.
The company has been recognized for performance in the market, including being named a Top 50 performer on the TSX Venture Exchange in 2024.
Surge Battery Metals plans to improve metallurgical testing for lithium chemicals with over 99% purity. This will help supply battery makers and energy storage companies with high-quality products.
Its management team brings both industry and policy experience, including executives with track records in lithium development and the energy sectors.
Live Nickel Spot Price
The New Energy Reality: Demand, Security, and Strategic Supply
Surge Battery Metals’ project aligns well with broader U.S. efforts to strengthen domestic supply chains for critical battery metals. With rising demand for lithium, NNLP provides a high-quality, near-surface resource. This could greatly benefit the EV and energy storage battery markets.
Domestic projects, such as NNLP, reduce reliance on imports. They can also gain from federal incentives that promote U.S.-based production and processing. This strategic fit makes the project more relevant to policymakers, investors, and supply chain planners.
For policymakers, projects such as NNLP help diversify sources of critical minerals and build resilience against global market disruptions. For investors, strong project economics and top-quality resources offer a way to create value as market demand increases.
The U.S. EV supply chain race centers on securing reliable sources of battery metals. Lithium remains at the heart of this transition, driven by both EV and energy storage demand. Strong long-term demand forecasts and tighter supply show the need for new domestic sources.
The federal strategy backs this shift with policy incentives, funding, and programs. These focus on resilient, locally sourced materials. This environment favors projects that are high quality, well-positioned, and strategically relevant.
Surge Battery Metals and its Nevada North Lithium Project represent one such opportunity within the U.S. critical minerals strategy. NILI has solid resources, low costs, and important partnerships. This enables the company to strengthen the U.S. supply chain for lithium and other battery metals. This alignment shows how market forces and policy priorities shape the future of EVs, energy storage, and clean energy infrastructure.
- READ MORE: Surge Battery Metals Strengthens Nevada North With High-Grade Expansion and Infill Success
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Certain statements contained in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information generally can be identified by words such as “anticipate,” “expect,” “estimate,” “forecast,” “plan,” and similar expressions suggesting future outcomes or events. Forward-looking information is based on current expectations of management; however, it is subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those anticipated.
These factors include, without limitation, statements relating to the Company’s exploration and development plans, the potential of its mineral projects, financing activities, regulatory approvals, market conditions, and future objectives. Forward-looking information involves numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking information. These risks and uncertainties include, among other things, market volatility, the state of financial markets for the Company’s securities, fluctuations in commodity prices, operational challenges, and changes in business plans.
Forward-looking information is based on several key expectations and assumptions, including, without limitation, that the Company will continue with its stated business objectives and will be able to raise additional capital as required. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended.
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The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management’s current beliefs and is based on information currently available to the Company. The forward-looking information is made as of the date of this news release, and the Company assumes no obligation to update or revise such information to reflect new events or circumstances except as may be required by applicable law.
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Battery energy storage has entered a new era. Costs have fallen to historic lows, and deployments are accelerating across major markets. According to BloombergNEF’s (BNEF) Levelized Cost of Electricity 2026 report, the economics of grid storage shifted dramatically in 2025 — even as other clean energy technologies became more expensive.
- The global benchmark cost for a four-hour battery storage project dropped 27% year-on-year to $78 per megawatt-hour (MWh) in 2025.
That marks the lowest level since BNEF began tracking the data in 2009. As a result, batteries are now reshaping how power systems balance renewable energy and meet rising electricity demand.
At the same time, solar and wind projects faced cost pressures. Supply chain constraints, weaker resource quality in some regions, and policy reforms in mainland China pushed up benchmark costs. However, despite these short-term headwinds, BNEF expects long-term clean energy costs to continue declining through 2035.
Battery Storage Breaks Records While Solar and Wind Stall
In 2025, battery storage clearly stood out. The $78/MWh benchmark for a four-hour system reflected a steep and rapid decline. Lower battery pack prices, stronger competition among manufacturers, and better system design all helped drive the drop.
By contrast, solar and wind moved in the opposite direction. The global benchmark cost for a fixed-axis solar farm rose 6%, reaching $39/MWh. Onshore wind increased to $40/MWh. Offshore wind climbed sharply to $100/MWh due to tight supply chains and financing challenges.
Thermal power also became more expensive. The levelized cost of electricity (LCOE) for new combined cycle gas turbine (CCGT) plants jumped 16% to $102/MWh — the highest level recorded. Equipment price increases and strong demand for gas turbines, partly fueled by data center expansion, kept costs elevated. Coal plants also faced higher capital expenses.
Yet even with solar and wind costs rising in 2025, BNEF projects that innovation and scale will push prices down again over the next decade. By 2035, the firm expects:
- Solar LCOE to fall 30%
- Battery storage to decline 25%
- Onshore wind to drop 23%
- Offshore wind to decrease 20%
These projections suggest the current cost increases are temporary rather than structural.
China’s Cost Advantage
Wind energy told a more mixed story.
Mainland China retained a cost advantage. However, projects built in lower wind-speed regions pushed up the global benchmark. Onshore wind projects outside mainland China saw a 4% cost decline, but the global average rose 2% due to Chinese market dynamics.
Offshore wind faced deeper challenges. Supply chain bottlenecks increased turbine and installation costs across major markets. In the United Kingdom, recently financed offshore wind projects now cost 69% more than they did five years ago. BNEF expects offshore wind costs to remain elevated until at least 2030.
Still, in the United States, wind power regained its position as the cheapest source of new electricity generation in 2025. Rising gas turbine costs pushed wind ahead of gas for the first time since 2023.
EV Overcapacity Slashes Battery Prices
One major factor behind the storage cost collapse is manufacturing overcapacity in the electric vehicle (EV) sector.
China’s lithium-ion battery production capacity surpassed 2 terawatt-hours in 2024. That was about 60% higher than total battery demand. As a result, manufacturers competed aggressively on price, which benefited grid-scale storage buyers.
Battery pack prices for EVs fell 8% in 2025 to a record low of $108 per kilowatt-hour, according to BNEF’s December survey. Lower pack prices directly reduced the cost of large storage projects. Meanwhile, system-level improvements — including better integration and optimized engineering — improved performance and reduced overall project expenses.
According to Amar Vasdev, senior energy economics associate at BNEF and lead author of the report, manufacturing overcapacity and better system designs are transforming the economics of large energy storage projects. In six markets, the LCOE of a four-hour battery system has already dropped below $100/MWh.
That threshold is critical. At those levels, battery storage becomes highly competitive with fossil fuel peaking plants.
- RELATED: China’s One Month Lithium Battery Energy Storage Installations Beat America’s One Whole Year
Lower Battery Costs Drive Renewables Plus Storage Boom Worldwide
Lower battery costs are accelerating hybrid renewable development. In 2025 alone, developers added 87 gigawatts of co-located solar and storage projects worldwide. These combined systems delivered electricity at an average cost of $57/MWh.
This model solves one of solar’s biggest challenges — intermittency. Batteries allow solar farms to store excess daytime generation and dispatch it later when demand peaks. As storage becomes cheaper, solar-plus-storage projects become more financially attractive and reliable.
BNEF expects annual global energy storage additions to reach 220 GW by 2035, growing at a compound annual rate of nearly 15%. If that projection holds, batteries will become central to grid balancing worldwide.
The U.S. Storage Boom Accelerates
The United States is emerging as a key growth engine for battery deployment.
According to the February 2026 Electric Power Monthly report from the U.S. Energy Information Administration (EIA), 86 GW of new utility-scale capacity is expected to come online in 2026. Of that total, 26.3 GW will come from battery storage.
That represents the largest single-year capacity expansion in more than two decades. Solar and battery storage together account for nearly 79% of planned additions.
Texas has become a hotspot for battery development. As of July 2025, the state had 12.2 GW of storage capacity operating. Developers rushed projects online ahead of summer peak demand, including nearly 1 GWh brought online by esVolta across three projects.
California continues to lead nationally, with more than 12 GW of operational storage capacity. Projects such as the Rexford solar-plus-storage facility in Tulare County strengthened the state’s position as a grid storage pioneer.
Meanwhile, New England expanded its footprint with large-scale additions to the ISO New England grid. These projects demonstrate that battery storage is no longer confined to a few early-adopter markets.
Australia’s Breakout Year
Australia also delivered a major milestone in 2025. The country commissioned 4.9 GWh of utility-scale battery storage during the year — more than the combined total installed between 2017 and 2024.
In the fourth quarter alone, over 1,000 MW of new capacity came online. Large projects, including the 500 MW Liddell battery system in New South Wales, highlighted the rapid pace of expansion.
Australia’s experience shows how quickly storage can scale once policy support, market design, and financing align.
Data Centers Drive the “Race for Electrons”
A powerful new demand driver is reshaping electricity markets: data centers.
The rapid expansion of AI and cloud computing has triggered strong demand for reliable power. Gas turbine orders surged as operators sought firm capacity. This demand doubled U.S. turbine capital costs in just two years.
However, higher gas costs are improving the competitiveness of renewables and storage. In regions like California and parts of Texas, co-located solar and four-hour battery systems can already meet a significant share of data center demand at lower cost than new gas plants.
Grid interconnection queues and gas turbine supply constraints are also slowing fossil fuel projects. In contrast, solar and storage systems can often deploy more quickly.
As Vasdev explained, the world is in a “race for electrons” to meet rising demand from electrification and data centers. In many markets, renewables are not only cheaper for new builds — they are now undercutting the operating costs of existing fossil fuel plants.
Solar beats new coal and gas across most Asia-Pacific markets. Wind is the lowest-cost new generation source in the U.S. and Canada. Solar consistently outcompetes fossil fuels in Southern Europe, while wind dominates in Northern Europe.
From Niche Technology to Grid Backbone
Battery storage has moved beyond its early-stage niche. It is now central to power system planning.
As storage costs fall, batteries strengthen renewable energy revenues, stabilize grids, and reduce reliance on fossil-fuel peaking plants. Instead of building new gas capacity for short-duration peaks, operators can increasingly rely on storage-led balancing.
BNEF’s annual LCOE report analyzed more than 800 recently financed projects across over 50 markets and 28 technologies. Its expanded coverage of the Middle East and Africa highlights how storage economics are improving globally, not just in mature markets.
The broader message is clear. While 2025 delivered mixed signals for clean power costs, battery storage emerged as the clear winner. Manufacturing overcapacity, technological learning, and intense competition have driven prices to record lows.
Looking ahead, continued cost declines could accelerate the global shift toward renewable-dominated grids supported by flexible storage. In that transition, batteries are no longer optional. They are becoming the backbone of a reliable, low-carbon electricity system.
The post Renewables Plus Storage Surge as Battery Costs Drop Record Low, BNEF Reports appeared first on Carbon Credits.
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