IFC says it forecasts the deployment of energy storage systems in emerging markets to grow by over 40% per annum over the next decade.
The organisation forecasts the portfolio of energy storage systems in emerging economies globally to grow from the current 2GW to 80GW by 2027.
The report, Energy Storage trends and opportunities in emerging markets, address the challenges and opportunities within the market as well as the benefits of energy storage systems in helping energy distribution firms optimise their operations.
Factors impacting adoption of energy storage systems
According to the IFC, despite a number of challenges being faced in the market, the adoption of energy storage systems has increased significantly due to decreases in costs.
An increase in drafting and implementation of policies encouraging the adoption of energy storage has driven the growth.
In addition, utility awareness on the benefits of energy storage systems continues to rise. Through the use of the technology, energy providers are able to meet growing power demand at the same time adopt emerging utility business models through an increase in integration of grid networks with renewable energy resources.
The will by governments and utility firms in emerging economies to increase access to electricity to some 1.2 billion people without electricity will also drive an increase in the rollout of energy storage systems.
Moreover, the need to meet carbon emission reduction targets set under international, regional and national mandates will also push energy providers to increase their energy storage portfolios.
IFC projects that by 2035, emerging economies will represent 80% of the total growth in energy production and consumption hence the need to increase adoption of energy storage to meet power demand by storing excess energy during off-peak periods and feed into the grid during peak periods.
Although the cost of deploying energy storage systems has decreased, IFC says adoption is still high in developed economies and limited in developing countries due to unavailability of funds.
IFC says there is need for government interference and an increase in public-private partnerships in sponsoring the deployment of energy storage programmes.
Some of the factors identified by IFC determines the need the need to adopt energy storage systems include:
- The combination of energy resources within a certain region
- Historical physical infrastructure
- Electricity market structure
- Regulatory framework
- Population demographic
- Energy demand patterns and trends
- General grid architecture and condition
The paper analyses the adoption of energy storage systems in different regions of the world. For instance, the South Asia market according to IFC is dominated by India.
India witnessed the highest penetration of energy storage systems compared to other South Asian countries due to the introduction of the National Solar Mission programme which aims to help the country meet energy demands by expanding its portfolios of both residential and utility scale solar systems.
Through the National Solar Mission Minister Narendra set a target to install some 100GW of solar PVs as well as accelerate the deployment of energy storage systems to enable storage of electricity during times when renewable energy generation is high and supply it to the grid during peak periods.
India has been witnessing severe power outages due to inabilities of its grid network to sustain growing power demand resulting from an increase in population growth and economic activities.
In addition, severe weather conditions continue to damage the country’s energy infrastructure.
However, despite being the leading country in terms of energy storage adoption in South Asia, the rate of adoption has remained lower than the anticipated rate due to lack of funding, limited local experience and knowledge on energy storage, lack of competition within the market and underdeveloped grid infrastructure.
Image Credit: Shutterstock.