The World Bank launches $1bn energy storage programme for developing nations
The World Bank has launched a first-of-its-kind $1bn funding programme to fast-track deployment of battery storage projects in developing countries, to 'close the gap' on efforts to transition to cleaner energy sources.
The World Bank, which has financed 15% of grid-related storage deployment in developing countries to date, will use the $1bn programme to buy down costs and risks of battery storage systems and solutions. The Bank is aiming to finance 17.5GWh of storage solutions by 2025 – more than triple the 5GWh currently installed in developing nations.
By reaching out through channels such as the Climate Investment Funds’ Clean Technology Fund (CTF), the World Bank is also hoping to increase funding to $4bn through public and private sector investment.
The World Bank’s senior director and head of energy and extractives Riccardo Puliti said: “We are seeing historic low prices for solar and wind energy, and countries want to use as much of it as possible to meet their energy needs.
“But to make full use of solar and wind power, we need at-scale and affordable battery storage. Our goal is to catalyse new markets that will help drive down costs and make batteries a viable storage solution for developing countries.”
The Accelerating Battery Storage for Development programme will aim to help developing nations and rapidly growing economies bolster clean energy efforts by tackling the intermittency of renewables. African nations, for example, have a great solar potential, and the World Bank believes that battery storage solutions will improve energy security and grid stability as renewables become integrated into the energy mix.
Renewable energy sources accounted for almost two-thirds of new net power capacity globally in 2016, adding almost 165GW of power. Renewable electricity – partly fuelled by business demand – is also forecast to grow by more than 900GW over the next five years.
Similarly, the battery storage market is also expected to accelerate over the coming years. Bloomberg New Energy Finance (BNEF) expects the lithium-ion battery market for energy storage to reach at least $239bn by 2040. According to BNEF, batteries will compete with natural gas to provide grid and systems flexibility.
Battery storage installations could experience a 17-fold growth by 2030 due to the rapidly falling price of batteries, according to a report from the International Renewable Energy Agency (IRENA).
The World Bank, which has recently launched dedicated bonds focused on water and sustainable development, will use the investment programme to focus on storage that supports renewable energy projects – namely hybrid solar parks and microgrids.