Why batteries and green molecules are the final pieces in the decarbonization puzzle

The global energy transition hinges largely on decarbonizing electricity and electrifying as much of the economy as possible. Renewable sources like wind and solar form the backbone of this transition. But to carry the system forward to net-zero, it needs two strong legs: batteries and green molecules. Rather than competing solutions, they should be seen as complementary.

Batteries ensure that clean electricity is available when and where it is needed, balancing daily supply and demand. Green molecules provide a solution for long-term energy storage and serve as feedstock or energy carrier for sectors that are difficult or impossible to electrify. This includes hard-to-abate sectors such as steel, cement, heavy industry, shipping, aviation and parts of long-haul transport. Together, they complete the puzzle, building resilience and flexibility into a renewable-powered system.

Renewable energy sources, especially solar and wind power, have become the dominant forces in new electricity generation. In 2024, renewables accounted for over 90% of new global power capacity, a clear sign of their cost-competitiveness and rapid deployment. However, their inherent variability means that power systems increasingly require flexibility to maintain reliability and security.

Grid-scale batteries play a pivotal role here. By storing electricity when production is high and demand is low (e.g. sunny afternoons or windy nights) and discharging it during demand peaks, batteries provide short-term flexibility to the grid. They enable renewables to replace fossil fuels not only during hours of generation, but as a “Round the Clock” (RTC) or “firm” dispatchable capacity.

Battery deployment has been expanding exponentially. This is aided by maturing technology, falling costs, and economies of scale thanks to innovation and investment in global manufacturing. While China has led in this space, other regions are catching up fast.

India is rapidly scaling battery production and storage deployment, integrating it with most renewable energy projects as well as for peak shaving applications. The recent auctions in India for Solar and Battery Energy Storage Systems (BESS) have been highly competitive, priced at $3.6 cents/kWh. Across the Middle East, North Africa and Central Asia, developers are integrating BESS with solar photovoltaic (PV) projects to support ambitious renewable energy goals.

In Saudi Arabia a consortium led by ACWA Power is building the Red Sea Global Project. It features a 100% sustainable, off-grid solution powered by a 340 MW solar PV plant coupled with a 1.2 GWh BESS. This will allow the desalination plant to operate entirely on renewable energy – day and night.

In Uzbekistan, ACWA Power’s Tashkent Riverside Solar PV and BESS project has a 200 MW solar plant and a 500 MWh BESS. It will be the largest in Central Asia, while an additional 2 GWh of BESS capacity commissioned in the country.

Where batteries reach their limits, green molecules can step in. They can serve as long-duration or seasonal energy storage as well as energy carriers for hard-to-abate sectoral applications, using variable renewable output.

Hydrogen, ammonia, methanol and other synthetic fuels made using renewable electricity – collectively referred to as green molecules – are also essential to decarbonize sectors that require high heat, dense energy storage or chemical feedstocks.

In steel, cement and chemicals, green hydrogen can replace fossil-based hydrogen and act as a reducing agent or high-temperature heat source.

In aviation and maritime shipping, green methanol and ammonia are among the most promising alternatives to jet fuel and marine diesel. This dual function as a feedstock and an energy carrier makes green molecules indispensable.

Countries with abundant solar and wind resources and the capacity to build the right infrastructure can play a central role in the green molecule economy. India and the Middle East are uniquely positioned to become cost-competitive producers and exporters of green molecules.

These regions can deliver green hydrogen and its derivatives like green ammonia at scale and competitive prices.

Auctions in August 2025 in India for green ammonia held by the Solar Energy Corporation of India (SECI) awarded prices of $591/ton, down from $640/ton the previous month. This includes taxes and transportation to the end consumer. Similarly, record-setting low prices for green hydrogen were set in the auctions by refineries in India, at $3.75/kg. These price trends for green molecules position India well to become an export hub to meet demand centres in Europe, East Asia and North America.

However, green molecules face a critical challenge: the lack of a mature global market for green molecules. Unlike oil and LNG, there is no well-established infrastructure, pricing mechanism or set of international standards for green hydrogen trade.

What is needed is clear global demand signals, harmonized standards for certification and investment in transport infrastructure such as pipelines, ammonia terminals, bunkering facilities and conversion technologies. International cooperation is key to developing cross-border value chains that connect low-cost producers in the Global South to demand centres in Europe, East Asia and North America.

To unlock the full potential of green molecules, the world must move from pilots to scale. Governments and industry must work together to create a market, enabling regulatory frameworks and de-risking early investments. Carbon pricing, mandates for green fuels in aviation, shipping and other sectors, and public procurement policies can all help build early demand.

Multilateral initiatives are beginning to address these barriers. But emerging markets need a louder voice at the table to ensure that the green molecules’ opportunities are leveraged to the full extent of their decarbonization potential.