Upward pressure on renewables costs to be transitory

A combination of higher interest rates and rising raw material prices have interrupted the long-term declines in the costs of renewables and battery power, and could push costs up further in the near term. However, such pressures will dissipate as policy interest rates decline and short-term supply crunches for commodities such as lithium ease, and so are unlikely to appreciably slow the pace of the green transition.

In view of the wider interest, we are also sending this Climate Economics Update to clients of our Energy and Metals services.