Electric power storage has received a lot of attention in discussions regarding the energy transition. To reach global climate goals, it is essential that developing countries consider both the challenges and the potential of different power supply systems at the earliest planning stages. Battery storage systems can provide efficient solutions to these issues, but they are still relatively expensive and come with certain risks.
The current edition of Development in Brief provides an overview of the future potential of battery storage systems in developing countries, and the challenges these systems face on the path to widespread use.
After decades of underinvestment and a dramatic power crisis afflicting much of the continent, power investment in Sub-Sahara Africa (SSA) has picked up significantly in recent years. One unintended consequence is that public utilities in the region are now running growing currency mismatches on their balance sheets, as these investments are banked on hard currency while end-user tariffs are collected in local currency (LCY). This represents a huge contingent liability, creates uncertainty and thus undermines the sustainability of power sectors in the long run. Development Finance Institutions (DFIs) need to lead the way in finding innovative solutions to increase the share of local currency financing.
Energy is a key factor in modern economies as well as in developing countries. Yet around 1.1 billion people still have a shortage of this fuel for development purposes; they do not have access to modern energy. In the new Sustainable Development Goals (SDGs) catalogue the community of states is therefore focusing on the topic of energy for the first time. Indeed, by the year 2030, all people shall be ensured access to "affordable, reliable, sustainable and modern energy".