BRIEF October 15, 2018

Accelerating Battery Storage for Development

The World Bank Group (WBG) has committed $1 billion for a program to accelerate investments in battery storage for electric power systems in low and middle-income countries. This investment is intended to increase developing countries’ use of wind and solar power, and improve grid reliability, stability and power quality, while reducing carbon emissions.

WBG investments will be made in the following areas:

  1. Hybrid solar photo voltaic (PV) + storage plants for reliable electricity supply and diesel/heavy fuel oil displacement shifting part of the energy produced during daylight to evening peak use
  2. Grid services to vertically integrated utilities (ancillary services including frequency control, voltage control or black start capability) through stand-alone batteries that can act as power grid assets
  3. Mini-grids in low access areas, including small island states

In addition to investments, the WBG will also support the development of policies and regulations required to promote deployment of energy storage and the implementation of procurement practices in favor of economically feasible and environmentally friendly battery technologies.

Here are four ways for industry players to engage with the program:

  1. Bid on Public Procurement Packages and Requests for Proposals (RFPs) that will be publicly disclosed at https://www.undb.org/ and https://www.dgmarket.com. Battery manufacturers will be able to bid into procurement processes to supply batteries to public sector entities. Support will be provided to large-scale demonstration projects that prove the commercial viability of battery technologies suitable for developing countries’ needs (batteries with long durations suitable for grid deployment, resilient to harsh conditions and with minimal environmental risks). 
  2. Partner with International Finance Corporation (IFC) to develop private sector projects and mobilize financing. IFC will work with private sector clients and host governments to support the development of markets for the private sector to participate in battery storage projects, whether standalone or in combination with solar PV and wind for various applications. Working closely with the World Bank, IFC will engage in upstream activities to create an enabling environment for private financing of storage projects, help develop country-specific and project-specific bankable project documents and mobilize financing, including blended finance, to support the rapid commercialization of storage in developing countries. For more information on this, please contact askinfra@ifc.org.
  3. Submit Expressions of Interest (for eligible WBG vendors) for contracts at https://wbgeconsult2.worldbank.org/wbgec/index.html. A range of interested and qualified stakeholders can also bid for consulting services under WBG projects. It is not a requirement that firms submitting proposals for these services be registered as vendors already, but the firms must be eligible to become a vendor and register as a qualified vendor before a contract to the selected firm can be issued.
  4. Learn about our Energy storage partnership (ESP) initiative by writing to energystorage@worldbankgroup.org. The WBG is convening an Energy Storage Partnership (ESP) to foster international cooperation on: technology research development & demonstration, applications; system integration and planning tools;  enabling infrastructure, such as communication technologies and energy management systems; and policies, regulations and procurement for energy storage. The ESP will take a holistic technology-neutral approach to energy storage, potentially covering all forms of energy storage technologies. By developing and adapting new storage solutions to the needs of developing countries, the ESP will help expand the global market for grid storage, leading to technology improvements and new opportunities.

Why battery storage?

The transition to renewable energy sources in today’s power systems is becoming one of the largest contributions in tackling climate change. The significant increase in the deployment of wind and solar power, however, requires different forms of flexibility to manage the uncontrollable variability of these resources and provide round-the-clock power. In developing countries, renewable energy with storage solutions can also offer local clean alternatives to fossil-based generation for bridging the electricity access gap in ways that do not impose additional demands on the system. Energy storage takes many forms – pumped storage, compressed air storage, and thermal storage, among others. The WBG has been supporting pumped storage and thermal storage (in concentrated solar plants) for years. Among the energy storage options available, battery storage is becoming a feasible solution to increase system flexibility, due to its fast response, easy deployment and cost reduction trends, helping to integrate higher shares of variable renewable energy in a reliable manner. This is particularly relevant in weak grids, isolated locations, and vulnerable environments where supplying electricity has its own challenges.

What is the gap?

The current market for batteries is driven by the electric vehicles industry and most mainstream technologies cannot provide long duration storage nor withstand harsh climatic conditions and low operation and maintenance capacity. Many developing countries also have limited access to other flexibility options such as natural gas generation or increased transmission capacity. There is a clear need to catalyze a new market for batteries and other storage solutions that are suitable for electricity grids for a variety of applications and deployable on a large.