VRE technologies have undergone dramatic cost reductions since the early 2000s and are becoming competitive in many markets, putting the possibility of achieving high penetration levels of VRE within reach in a growing number of countries. However, solar and wind resources have high inherent resource variability and limited predictability and are thus considered non-dispatchable power sources. The possibility of having a sizeable share of VRE serving electricity demand is therefore raising concerns about the ability to reliably operate the electric power system, the extra-costs associated with mitigating VRE variability and uncertainty, and the risk of partially curtailing VRE output.
There was a need to support sustainable grid integration of VRE in World Bank Group client countries by providing technical assistance, capacity building and knowledge products for the development and the implementation of the necessary operational, planning, regulatory and market interventions. To respond to this need, this program focused on addressing key challenges and opportunities for VRE grid integration. At a global level, the Program has improved the knowledge on VRE grid integration through knowledge products addressing how to manage the variability of VRE resources and their integration into power grids. Some of these knowledge products include the technical guides: “Grid Integration Requirements for VRE”, “Compensation Devices to Support Grid Integration of VRE”, and “Using Forecasting Systems to Reduce Cost and Improve Dispatch of VRE”. The Program has also developed activities and reports on innovative topics such as “Innovative Approaches to Public-Private Partnerships in Smart Grid Investments”; “Green Hydrogen in Developing Countries”; and “Energy Storage Market Opportunities in Emerging Markets”; and has established the Energy Storage Partnership -- an initiative convened by ESMAP, with 35 partner organizations collaborating to develop and adapt energy storage solutions tailored to the needs of developing countries. Some of these partners include the Moroccan Agency for Sustainable Energy (MASEN), the Government of India, and the South African Energy Storage Association (SAESA).
At a country level, the Program focused on providing grants and expert support for the development of Advisory Services and Analytics products (e.g., strategic analyses, prefeasibility studies, etc.). Deliverables resulting from these products over the duration of the Program included analytical reports on key VRE grid integration issues; hands-on advice and technical assistance; policy notes and presentations; and knowledge-sharing workshops, conferences, and training.
The Program, during 2017 to 2020, has supported a total of thirty-one country activities and five regional activities (West Africa, Latin America, MENA, Central Asia, Pacific Islands) addressing VRE grid integration issues. Activities supported by the Program have informed the development of a total of 16 investment projects and influenced 14 country strategies related to integrating more VRE capacity in the power grid (e.g., Vietnam, India, Haiti, among others). Key results from the Program include:
- influenced the development of battery storage projects in Gambia, Haiti, India, Central African Republic and China through grid integration studies and just-in-time technical support on VRE grid integration;
- supported the development of grid codes in Armenia and Mongolia to ensure reliable integration of new VRE capacity in their national grids. In Armenia, the Program advice fed into the development of the technical sections of the Armenian Distribution Grid Code and the grid interconnection requirements for the 55 MW Masrik-1 solar project, Armenia’s first utility-scale PV project (Utility Scale Solar Power Project);
- informed long-term roadmaps to scale-up renewable energy in Haiti, Maldives, Mongolia, Pakistan, Sri Lanka, Uzbekistan and Vietnam;
- supporting operational improvements in dispatch practices in countries such as Guatemala, India and Uzbekistan. For example, Vietnam’s Ministry of Energy used the Program’s advice to invest in additional flexibility to integrate 45 GW of VRE by 2035 and includes a VRE integration approach in its eighth national Power Development Plan (PDP8);
- the Government of Haiti developed a VRE investment plan to scale up VRE projects;
- in India the utility Power System Operation Corporation of India (POSOCO) adopted a dispatch optimization tool to plan the optimal allocation of reserves among its thermal and hydro generators.
Bank Group Contribution
The ESMAP support between July 2017 and June 2020 for VRE Integration Support Program accounted for $12.8 million from ESMAP donors, including $11.8 million provided for country grants.
The Program has leveraged the power of partnerships and has delivered technical assistance through collaborations with external organizations. Examples of these collaborations include activities with the Public-Private Infrastructure Advisory Facility (PPIAF), the National Renewable Energy Laboratory (NREL), the Global Sustainable Electricity Partnership (GSEP), the Clean Energy Ministerial (CEM), the Children Investment Fund Foundation (CIFF) and the Korea Green Growth Trust Fund (KGGTF). The Energy Storage Partnership comprising 35 international partner organizations (International Energy Agency, International Renewable Energy Agency industry associations and national laboratories, among others) collaborating to develop and adapt energy storage solutions tailored for the needs and conditions of developing countries.
The Program has evolved with business needs. As part of the transition into a new ESMAP Business Plan (July 2021 to June 2024), the activities supported by the Program have led to the development of new dedicated programs on key topical areas that will further support the scaling-up of VRE capacity through grid integration:
- Energy Storage: this program will provide support to World Bank task teams to deploy sustainable energy storage solutions for developing countries. This will be carried out through a holistic approach of investment/technical support to task teams and clients for project preparation of energy storage projects; and development of the knowledge base in energy storage through the Energy Storage Partnership.
- Energizing Renewables: this program aims at supporting governments to develop and implement sustainable VRE programs to attract the private sector in optimized conditions; reduce reliance on public finances; and maximize socio-economic benefits.
- Green Hydrogen: this program aims at raising awareness of the value of green hydrogen (i.e., hydrogen produced via electrolysis powered with renewable electricity) in decarbonizing economic activities in developing countries, addressing barriers to production and use, and supporting the successful development of first-of-a-kind projects that increase VRE use, and mitigate VREs seasonal variability through hydrogen storage.
The ultimate beneficiaries of financial support for VRE grid integration were the citizens and the end consumers, who saw electricity access increased, electricity prices lowered by reducing dependence on imported fuels, environmental and health impacts mitigated, and employment opportunities increased. Direct beneficiaries of financial interventions depended on the country and the challenge faced. For instance, in Central African Republic the targeted beneficiaries of a 50 MW solar photovoltaic (PV) and battery project were the end consumers who were experiencing a critical situation with up to 16 hours of load shedding in the capital Bangui as a result of the ongoing conflict.