The role of energy storage & recycling in the distributed renewable energy market
Integrating variable renewable energy resources into power grids is crucial for achieving a sustainable energy future. A key enabler of this integration is energy storage, which facilitates the expanded use of renewable energy technologies. This not only increases access to electricity in emerging markets but also enhances the resilience, reliability, stability, and quality of energy systems—factors that are essential for supporting productive energy use[1].
Cegasa
Over the past decade, the market for batteries in distributed renewable energy (DRE) systems has experienced a significant decline in prices. According to a 2023 analysis by Bloomberg NEF, the average cost of batteries dropped by 14% in 2023, falling from USD 161/kWh in 2022 to USD 139/kWh[2]. Unlike previous years, where technological innovation was the primary driver of price reductions, the recent decrease appears to be largely due to lower costs of raw materials. Experts anticipate that battery prices will continue to fall in the coming years, with some projections suggesting costs could drop below USD 100/kWh by 2027. For instance, as of 2021, lithium-ion batteries were priced at approximately USD 123 per kWh on average. By 2030, these prices are expected to decrease further to around USD 75 per kWh.
In addition to traditional lead-acid and lithium-ion batteries, sodium-ion (Na-ion) batteries have emerged as a promising alternative, offering advantages in cost, safety, sustainability, and performance. While Na-ion batteries are not ideal for applications requiring high energy density, such as electric vehicles, they hold significant potential for stationary energy storage solutions. This is due to their compatibility with existing lithium-ion battery production methods. Na-ion batteries are predicted to follow a growth trajectory similar to that of lithium-ion batteries. According to IDTechEx, 10 GWh of Na-ion battery capacity is expected to be installed by 2025, with prices potentially dropping to around USD 40/kWh by 2030[3]. Despite commercialisation being in its early stages and only a few companies currently producing Na-ion batteries at scale, the diversification of battery technology is likely to be beneficial in the long run, especially given the limited supply of raw materials and growing concerns about energy security[4].
ARE promotes innovative energy storage & recycling solutions
Energy Storage Partnership (ESP): A key initiative in the energy storage and recycling space is ESP, convened by the World Bank Group to accelerate the adoption of variable renewable energies in emerging markets. This global initiative involves collaboration among national laboratories, research institutions, development agencies, and philanthropic organisations. In this regard, ARE also plays a vital role in the group working on DRE solutions with an energy storage component, particularly in mini-grids.
Hosted by the World Bank’s Energy Sector Management Assistance Program (ESMAP), the ESP adopts a holistic, technology-neutral approach, exploring various forms of energy storage beyond just batteries. Through the Battery Storage Investment Program, the ESP has successfully mobilised over USD 850 million for battery storage projects.
Partnership for Responsible Battery and Metal Recycling (ProBaMet): Another notable initiative is the ProBaMet, launched by Oeko-Institut, ARE, SRADev Nigeria, and Platform Blei. Funded by BMZ and supported by GIZ, ProBaMet aims to transform the battery recycling sector in Nigeria by promoting sustainable practices. The project is currently focused on developing circularity guidelines to establish standards for battery management in Nigeria, and industry stakeholders are encouraged to provide feedback on these guidelines. It is expected that the guidelines inspire similar efforts in other markets as well.
Öko-Institut
Innovation for Electrification (I4E): Since 2022, ARE has hosted the I4E webinar series, focusing on various parts of the DRE value chain. The upcoming edition, scheduled for 5 September 2024, will focus on energy storage and best practices for recycling. The webinar is free to attend, and interested parties can register online.
A call for collaboration
ARE invites additional energy storage companies to join its membership, offering the remaining months of 2024 free of charge for those committing to membership until the end of 2026. Interested companies can express their interest by sending mail to are@ruralelec.org to begin their membership journey.
By championing innovative energy storage and recycling solutions, ARE and its Members are playing a crucial role in shaping a sustainable energy future. Through international partnerships, industry collaboration, and educational initiatives, ARE is helping to pave the way for a greener and more resilient energy landscape.
[1] The Energy Storage Partnership (ESP) | ESMAP
[2] https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/
[3] https://www.idtechex.com/en/research-article/cheaper-and-safer-sodium-ion-batteries-on-the-horizon/29608
[4] https://www.idtechex.com/en/research-report/sodium-ion-batteries-2023-2033-technology-players-markets-and-forecasts/933
