THEnergy’s New Analysis: Rural Electrification Will Become a Large Energy Storage Market

THEnergy, a German consulting service in the sector of renewable energy, released a new analysis, which shows that rural electrification in developing countries will become more important in the future.

22 expert interviews with leading decision-makers specialized on the African and Asian market, confirmed that in the past, the sector of rural electrification has been supported by investments by development finance institutes (DFIs) and impact investors. But the interest also increased in the energy storage sector, so that leading energy providers – such as Shell, Engie, Total, Mitsui and Caterpillar – started to invest.

Due to the shift in battery technologies over the past two years, the experts expect a shift in rural electrification applications as well. Lead-acid batteries are therefore being replaced by lithium-ion batteries – the latter experienced a decrease of costs in the past few years. Still, there are some obstacles to overcome: There are still training needs for the technology of lithium-ion batteries. On top of that many developing target countries, such as Kenya or Tanzania, have little to no experience with these technologies and therefore charge unexpected costs for export or transport.

Other technologies, such as flow-batteries, do not play an important role in rural electrification, so that the use of lithium-ion batteries will increase further.

“The recent investments in rural electrification will enable the construction of several hundred mini-grids per year. The market segment will finally come to life – also from a commercial perspective. In the short-term we will see an annual market potential of 50 MWh – in the long-term this could raise to 1 GWh. Storage manufacturers should consider entering this market early,” predicts Dr. Thomas Hillig, Managing Director of THEnergy, a consultancy specializing in off-grid power generation.

Source: THEnergy

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