Energy Storage for Mini Grids Status and Projections of Battery Deployment An Energy Storage Partnership Report Energy Storage for Mini Grids Status and Projections of Battery Deployment This report of the Energy Storage Partnership is prepared by the Energy Sector Management Assistance Program (ESMAP) with contributions from the Alliance for Rural Electrification (ARE), Ricerea sul Sistema Energetico (RSE), Loughborough University, and the Inter-American Development Bank (IADB). The Energy Storage Partnership is a global partnership convened by the World Bank Group through ESMAP Energy Storage Program to foster international cooperation to develop sustainable energy storage solutions for developing countries. For more information visit: https://www.esmap.org/the_energy_storage_partnership_esp ii ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT ABOUT ESMAP The Energy Sector Management Assistance Program (ESMAP) is a partnership between the World Bank and 24 partners to help low- and middle-income countries reduce poverty and boost growth through sustainable energy solutions. ESMAP’s analytical and advisory services are fully integrated within the World Bank’s country financing and policy dialogue in the energy sector. Through the World Bank Group (WBG), ESMAP works to accelerate the energy transition required to achieve Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable, and modern energy for all. It helps to shape WBG strategies and programs to achieve the WBG Climate Change Action Plan targets. 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VII ACKNOWLEDGMENTS........................................................................................................ VIII KEY FINDINGS....................................................................................................................... IX EXECUTIVE SUMMARY......................................................................................................... X 1 BATTERY TECHNOLOGIES IN MINI GRIDS ACROSS THE WORLD.......................... 1 1.1  The Global Stock of Mini Grids............................................................................... 2 1.2  The Generation Mix of Mini Grids.......................................................................... 3 1.3  The Role of Storage............................................................................................... 3 The Role of the Levelized Cost of Storage in the Technology 1.4  Selection Process.................................................................................................. 5 1.5  Using Mini Grids for Productive Uses: Beyond Basic Access to Electricity........... 5 1.6  Challenges Faced by Mini Grid Developers........................................................... 5 2 SIZE OF THE GLOBAL MARKET FOR MINI GRID AND ENERGY STORAGE............ 7 2.1  Number of People without Access to Electricity..................................................... 7 2.2  Projected Access by 2030..................................................................................... 8 2.3  Rural Mini Grid Installations in 2021...................................................................... 8 2.4  Forecasting Global Demand for Mini Grids and Battery Storage Systems........... 9 3 SELECTION OF BATTERY TECHNOLOGY...................................................................12 3.1  Factors Investors Consider.................................................................................. 12 3.2  Comparison of Storage Technologies.................................................................. 14 3.3  The Capital Cost of Batteries............................................................................... 15 3.4  The Levelized Cost of Storage............................................................................. 16 4 FUTURE TRENDS IN BATTERY STORAGE FOR MINI GRID APPLICATION........... 20 4.1  Used Lithium-Ion Batteries as a Stationary Storage Solution.............................. 20 4.2  Iron-Air Batteries for Long-Term Energy Storage................................................ 21 4.3  Sodium Ion Batteries............................................................................................ 22 4.4  Hydrogen-Powered Storage................................................................................ 22 4.5  Flywheel Energy Storage for Mini Grid Stabilization........................................... 22 5 CASE STUDIES............................................................................................................... 24 Solar Mini Grids with Lead Acid Batteries: The Husk Power Microgrids 5.1  Initiative in India and Nigeria................................................................................ 24 Solar Hybrid Mini Grid with Lithium Iron Phosphate Batteries: The Lolwe 5.2  Islands, Uganda................................................................................................... 25 iv ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT Solar Hybrid Mini Grid with Lithium-Ion Nickel Manganese Cobalt Batteries: 5.3  San Seth, Bogale, Myanmar................................................................................ 26 Solar Hybrid Mini Grid with Lithium Iron Phosphate Batteries: Dancitagi, 5.4  Nigeria.................................................................................................................. 26 Solar Mini Grid with Lithium Iron Phosphate Batteries: Makhala, 5.5  Amperehour, India................................................................................................ 27 Solar Mini Grid with Vanadium Redox Flow Battery: Maldives............................ 28 5.6  Solar Mini Grid with Flywheel Energy Storage Systems: The Philippines........... 28 5.7  6 RECOMMENDATIONS....................................................................................................31 REFERENCES.................................................................................................................. 33 APPENDIX A: TYPES OF ENERGY STORAGE.............................................................. 35 MPROVING THE PERFORMANCE OF LEAD ACID BATTERY APPENDIX B: I STORAGE MINI GRIDS............................................................................ 38 LIST OF FIGURES AND TABLES v LIST OF FIGURES AND TABLES FIGURES 1.1 Number of Installed and Planned Mini Grids, by Region, 2021.................................. 2 1.2 Number of Installed and Planned Mini Grids in Selected Countries, 2022................ 2 1.3 Generation Mix of Installed and Planned Mini Grids, 2019........................................ 3 1.4 Battery Storage Transition in Rural Mini Grids in Asia and Africa, 2012–21.............. 3 1.5 Primary Source of Battery Storage by Selected Mini Grid Developers in 2017–21........ 4 1.6 Mini Grid Battery Storage as Percentage of Total Capacity, by Technology Type, 2012–21............................................................................................................ 4 1.7 Shares of Lead Acid and Lithium-Ion as Sources of Battery Storage by Mini Grids in South and Southeast Asia and Africa, 2022......................................... 4 1.8 Effect of Grid Load Factor on Levelized Cost of Electricity........................................ 5 2.1 Number of People Without Access to Electricity, by Region, 2021 and 2030............ 8 2.2 Projected Annual Increase in Number of Rural People with Access to Electricity, by Region, 2021–30.................................................................................. 8 2.3 Distribution of Mini Grid Capacity, by Region, 2021................................................... 9 2.4 Projected Annual Global Demand for Rural Mini Grid in the Low-, Base-, and High-Case Scenarios, 2021–30........................................................................ 10 2.5 Projected Global Cumulative Capacity Addition of New Rural Mini Grids, 2022–30.................................................................................................................... 10 2.6 Projected Global Demand for Batteries for Rural Mini Grids, 2021–30.................... 11 3.1 Estimated and Projected Demand for Batteries for Mini Grids, by Type, 2021–30.................................................................................................................... 13 3.2 Cost of Six-Hour Storage, by Battery Type, 2022–30.............................................. 15 3.3 Levelized Cost of Storage of Selected Battery Types at Different Durations........... 18 3.4 Contributions of Capital Expense, Operations and Maintenance, Residual Value, and Electricity Cost to the Levelized Cost of Storage, by Battery Type........ 18 3.5 Estimated and Projected Levelized Cost of Storage for Six-Hour Duration System, by Battery Type........................................................................................... 19 4.1 Projected Changes in Battery Performance Between 2018 and 2025, by Type of Battery..................................................................................................... 21 5.1 Husk Mini Grid in the Village of Akura, in Nasawara State, Nigeria......................... 25 5.2 Hybrid Solar Mini Grid in the Lolwe Islands, Uganda............................................... 25 vi ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT 5.3 Ice Manufacturing Unit Powered by Engie-Equatorial’s Solar Mini Grid in the Lolwe Islands, Uganda............................................................................................. 26 5.4 Hybrid Solar Mini Grid in San Seth, Bogale, Myanmar............................................ 27 5.5 Solar Hybrid Mini Grid with Containerized Energy Storage Solutions Installed by PowerGen in Dancitagi, Nigeria........................................................................... 27 5.6 Solar Mini Grid with Containerized Battery Energy Storage System in Makhala, India.......................................................................................................... 28 5.7 Vanadium Redox Flow Battery Energy Storage System at the Malahini Kuda Bandos Resort, Maldives.......................................................................................... 29 5.8 Kinetic Energy Storage Systems in the Palawan islands, the Philippines................ 30 TABLES 2.1 Estimated and Projected Mini Grid Capacity per Household, by Region, 2021 and 2030............................................................................................................ 9 2.2 Battery Capacity in Selected Mini Grid Projects Installed in 2020–21..................... 11 2.3 Ratio of Battery Capacity to Mini Grid Installed Capacity........................................ 11 3.1 Technical Parameters of Selected Battery Technologies......................................... 14 3.2 Pugh Matrix Ranking of Storage Technologies in Mini Grid Applications................ 15 3.3 Descriptions and Assumed Values in Levelized Cost of Battery Storage Calculations.............................................................................................................. 17 ABBREVIATIONS CAPEX capital expenditure CSR Corporate Social Responsibility DER distributed energy resource EE Engie-Equatorial ESP Energy Storage Partnership ESS energy storage system(s) FESS flywheel energy storage system(s) GWh gigawatt hour(s) kg kilogram kVA kilovolt ampere kW kilowatt kWh kilowatt hour(s) kWp kilowatt peak LCOE levelized cost of electricity LCOS levelized cost of storage LFP lithium ferro-phosphate MWh megawatt(s) NMC nickel manganese cobalt O&M operations and maintenance PALECO Palawan Electric Cooperative PV photovoltaic SIPCOR S.I. Power Corporation VRFB vanadium redox flow battery W watt Wh watt hour Wp watt peak All currency is in United States dollars (US$, USD), unless otherwise indicated. vii ACKNOWLEDGMENTS T  is report was prepared by the World Bank’s Energy Sector Management Assistance h Program (ESMAP) and Customized Energy Solutions, and under the auspices of the Working Group Five of the Energy Storage Partnership with technical contributions and reviews by Jon Exel (Senior Energy Specialist, WB), Chris Greacen (Consultant, WB), and Alfredo Villavicencio (Consultant, WB). Gabriela Elizondo Azuela (Practice Manager), Chandra Govindarajalu (Lead Energy Specialist), Juliet Pumpuni (Senior Energy Specialist, WB), and Clemencia Torres de Mästle (Senior Energy Specialist, WB) provided invaluable contributions and overall guidance. Special thanks to Husk Power Systems, Engie Energy Access, PowerGen, Amperehour, and Amber Kinetics for providing information for the case studies; and to the following Energy Storage Partnership partners – Jens Jaeger (ARE), Luciano Martini (RSE), Ed Brown (Loughborough University), and Edwin Malagon (IADB) who participated in the peer review process. KEY FINDINGS T  is report specifically focuses on battery energy storage in decentralized off-grid h mini grids located in remote areas. It provides an overview of battery technologies used in mini grids globally, demand forecasts for various battery technologies, a comparison of characteristics of different batteries, an exploration of costs and trends in battery technologies, case studies, and recommendations. In the high-case scenario, it is projected that annual demand for mini grid batteries is projected to increase to over 3,600 MWh by 2030 from around 180 MWh in 2020. In a base-case scenario, annual demand exceeds 2,200 MWh, while in the low case annual demand is around 1,500 MWh. The selection of battery technology for mini-grid projects is a multi-faceted decision based on factors such as cycle life, depth of discharge, type of load connected to the grid, energy density, C-rating, thermal runaway, maintenance, after-sales service, hardware compatibility, maturity, cost, battery degradation, operating conditions, and environmental concerns. The levelized cost of storage (LCOS) is critical for optimal decision-making in mini grid development. Though upfront costs often dominate the technology selection process, the LCOS provides a more comprehensive perspective by considering the lifetime cost of storage technologies. The LCOS calculation incorporates the capital expenditure, operations and maintenance costs, residual value, and cost of charging the battery. While lead acid batteries cost less per nameplate capacity ($/kWh), the superior cycle life, efficiency, and permissible routine depth of discharge of lithium-ion batteries result in a lower LCOS. Lithium-ion batteries have grown in popularity and are displacing lead acid batteries, thanks to reduced prices, longer lifespan, and minimal maintenance requirements. Historically, lead acid batteries were the go-to choice due to their maturity, availability, and low upfront cost. Lithium-ion prices are forecasted to decline until 2030. In contrast, lead acid, a mature technology, may not witness significant price drops. Forecasts suggest that lithium-ion batteries will extend their lead as the lowest-cost battery technology for mini grids dropping from 2022 LCOS of $0.37 per kWh to $0.34 in 2026 and $0.32 by 2030, notwithstanding the likelihood that raw material costs for lithium-ion batteries rise due to demand from the electric vehicle industry. The cost of lead acid batteries will decline only slightly, from $0.55 to $0.54 per kWh over this time period. In the near future, other battery storage options are promising, including “second-life” lithium-ion batteries, sodium-ion batteries, iron-air batteries, hydrogen, and flywheel energy storage This report includes case studies of mini grids from Africa and Asia that highlight global deployment of battery technologies ranging from conventional lead acid to lithium-ion, to VRBF and flywheel storage. Each case study describes the mini grid’s rating, energy storage rating, battery chemistry, businesses served, communities electrified, and the way in which the electricity is used. Mini grid energy storage recommendations include: studying battery performance in actual operating conditions, considering total cost and not just upfront battery cost, adopting safety and performance standards, promoting recycling practices, encouraging the use of repurposed battery technologies, exempting mini grid batteries from import duties, providing technical skills training, and creating standard operating procedures to understand battery technology performance. ix EXECUTIVE SUMMARY T he Energy Storage Partnership (ESP), established by the World Bank in 2019, aims to develop and implement energy storage solutions for developing countries. These solutions, coupled with renewable energy sources, could provide electricity to over 1 billion people who currently lack reliable access. A mini grid is an interconnected system of distributed energy resources (DERs) – generally including renewable energy and electricity storage — that operates independently, servicing customer groups of various sizes, from remote areas to urban locations. These mini grids support a range of facilities including primary health centers, agricultural activities, learning centers, hospitals, airports, and commercial establishments. This report specifically focuses on battery energy storage in decentralized off-grid mini grids located in remote areas. It provides an overview of battery technologies used in mini grids globally, demand forecasts for various battery technologies, a comparison of characteristics of different batteries, an exploration of costs and trends in battery technologies, case studies, and recommen- dations. It also includes appendices that offer a broad overview of mechanical, electrochemical, and thermal storage, as well as performance optimization of lead acid batteries in mini grids. Global electricity needs, particularly in remote and rural areas, are a significant challenge. As of 2020, an estimated 740 million people still lack access to electricity, 577 million of whom live in Sub-Saharan Africa (SSA). Though SSA has an electrification rate of 48% as of 2020, ambitious national electrification plans in countries such as Ethiopia, Ghana, Kenya, Nigeria, Rwanda, and Senegal aim to attain universal access by 2030. Some of these 2030 targets have been impacted by the COVID-19 pandemic, with many developing countries likely to experience delays. Under the existing trajectory, it is expected that about 800 million people will gain access to electricity between 2021 and 2030, leaving 560 million unelectrified. To achieve full electrification by 2030, it is necessary to provide electricity to around 1.3 billion people. Growing deployment of mini grids are reaching some of this unelectrified population, with 21,000 mini grids currently serving about 48 million people worldwide. To serve half a billion people by 2030, the world needs a fleet of 217,000 mini grids, most of which will be predominately powered by solar electricity with battery backup. South Asia presently leads with the highest number of installed (9,600) and planned (19,000) mini grids. Afghanistan, India, and Myanmar comprise about 80% of mini grids in this region. Africa is estimated to have about 3,100 installed mini grids with about 9,000 in the pipeline. In Africa, Nigeria, Tanzania, Senegal, and Ethiopia are among a number of countries that have embarked on ambitious projects to boost their national electrification rates using mini grids. Initiatives such as the Nigerian Electrification Project and the Rural Electrification Agency of Senegal intend to provide power access to over a million households and enterprises using mini grids. The paradigm is shifting from traditional diesel and hydro-based grids to third-generation mini grids powered by solar and hybrid energy systems and employing advanced technologies like prepaid meters and online monitoring. The declining cost of solar panels, coupled with the abundant availability of sunshine in developing countries, is making solar-powered mini grids an economically feasible and environmentally conscious choice. In 2021, approximately 1,100 rural mini grid projects were installed globally, providing 80 MW of capacity. South Asia led in annual installations, followed by Sub-Saharan Africa and Southeast Asia. Projections for global demand for mini grids between 2022 and 2030, alongside the need for battery storage systems to support these mini grids, have been formulated under three scenarios— high case, base case, and low case. In the high-case scenario, it is projected that annual demand for mini grid batteries is projected to increase to over 3,600 MWh by 2030 from around 180 MWh in 2020. In a base-case scenario, executive summary xi annual demand exceeds 2,200 MWh, while in the low case annual demand is around 1,500 MWh. Lithium-ion batteries, in particular, have seen increased usage in mini grids, especially in Sub-Saharan Africa. By 2030, lithium-ion battery penetration is projected to rise to 70 percent from 55 percent in 2021 (Figure ES.1). Expanding the role of mini grids for productive uses, beyond basic electricity access, allows for increased grid utilization without a corresponding rise in peak load. The outcome is lower levelized costs of electricity (LCOE) and expedited return on investment for developers. Case studies from Bangladesh and India validate the effectiveness of this approach. Despite their immense potential, mini grids face various challenges, including remote project locations, difficulties in monitoring and maintenance, sustainability concerns, taxation issues, risk of stranded assets, lack of financing, and an absence of standardization. Operational challenges related to temperature also present difficulties, particularly for storage technologies. Overcoming these barriers will be vital to leverage the full potential of mini grids in meeting the world’s energy access goals. Storage technologies are central to the efficiency and reliability of mini grids. The selection of battery technology for mini-grid projects is a multi-faceted decision that investors base on factors such as cycle life, depth of discharge, type of load connected to the grid, energy density, C-rating, thermal runaway, maintenance, after-sales service, hardware compatibility, maturity, cost, battery degradation, operating conditions, and environmental concerns (Table ES.1). Historically, lead acid batteries were the go-to choice due to their maturity, availability, and low upfront cost. Based on a database of 170 mini grids using 30 MWh of combined storage, lithium-ion batteries have grown in popularity and are displacing lead acid batteries, thanks to reduced prices, longer lifespan, and minimal maintenance requirements. A qualitative Pugh matrix assessment with responses from mini grid developers reveals lithium-ion as the most suitable technology, despite redox flow batteries scoring high on battery life and environmental friendliness. Vanadium Redox Flow Batteries (VRFBs) also show promise due to their long operational life, high depth of discharge, robust performance across a range of temperatures, and potential for cost reduction through innovative business models such as vanadium leasing. When considering the capital cost of batteries, lead acid, a mature technology, may not witness significant price drops. In contrast, lithium-ion prices are forecasted to decline until 2030, notwithstanding the likelihood that raw material costs for lithium-ion batteries rise due to demand from the electric vehicle industry. Considering the levelized cost of storage (LCOS) is critical for optimal decision-making in mini grid development. Though upfront costs often dominate the technology selection process, the LCOS provides a more comprehensive perspective by considering the lifetime cost of storage technologies. The LCOS calculation incorporates the capital expenditure, operations and maintenance costs, residual value, and cost of charging the battery. While lead acid batteries cost less per nameplate capacity ($/kWh), the superior cycle life, efficiency, and permissible routine depth of discharge of lithium-ion batteries result in a lower LCOS. For VRFBs, the CAPEX per kWh significantly drops as storage duration increases. Forecasts suggest that lithium-ion batteries will extend their lead as the lowest-cost battery technology for mini grids dropping from 2022 LCOS of $0.37 per kWh to $0.34 in 2026 and $0.32 by 2030, while the cost of lead acid batteries will decline only slightly, from $0.55 to $0.54 per kWh over this time period. VRFBs are expected to become increasingly competitive with lead acid batteries (Figure ES.2). FIGURE ES.1: Projected Global Demand for Batteries for Rural Mini Grids, 2021–30 4,000 3,500 3,000 Capacity (MWh) 2,500 2,000 1,500 1,000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Low Case Base Case High Case Source: CES. xii ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT TABLE ES.1: Technical Parameters of Selected Battery Technologies Battery Type Vanadium Advanced Redox Batteries Parameter Lead Acid Lead Acid Lithium-Ion NiNaCl2 (VRB) Zn–Br (flow tech) Lead, carbon Nickel, sodium Battery chemistry Lead NMC/LFP Vanadium Zinc, bromine electrodes chloride Round-trip efficiency (percent) 60–80 80–90 85–95 70–90 60–70 68–70 C-rate C/10 C/5 C/4-2C C/6-C/8 C/5-C/8 C/3–C/4 Depth of discharge (percent) 50–60 70–80 90 80 100 100 Energy density (Wh/kg) 40–60 27–30 80–150 65–70 7–8 15–25 Cycle life 500–1,000 1,200–1,800 2,000–6,000 4,500–5,000 7,000–10,000 3,000–3,500 Safety High High Medium Medium High Medium CAPEX ($/kWh) 80–150 120–300 250–350 750–1,000 600–1000 750–800 Toxicity of chemicals High High High Medium Medium High Operating temperature (°C) –20–50 –20–50 0–55 270–350 15–55 20–50 Self-discharge (percent/month) 10–15 3–5 0.5–2 5 5 60 Source: CES. FIGURE ES.2: Estimated and Projected Levelized Cost of Storage for Six-Hour Duration System, by Battery Type 0.6 0.5 0.4 LCOS ($/kWh) 0.3 0.2 0.1 0.0 2022 2026 2030 Lead Acid 0.55 0.54 0.54 Adv. Lead Acid 0.52 0.50 0.49 Li-ion LFP 0.37 0.34 0.32 Vanadium Redox 0.43 0.41 0.40 NiNaCl2 0.55 0.51 0.48 Source: CES. executive summary xiii In the near future, other battery storage options are promising. “Second-life” lithium-ion batteries presents a potential stationary storage solution after they have been cycled out of use in automotive applications and thoroughly tested. Sodium-ion batteries have emerged as a potential solution for energy storage in solar mini-grids, with advantages over lithium-ion batteries in terms of raw material abundance, reasonable cycle life, comparable energy storage capacity, adaptable manufacturing processes, and improved safety and stability. Iron-air batteries might offer a viable path for low-cost long-term energy storage, despite their lower energy density. Hydrogen-powered storage solutions, capable of storing energy for longer periods than batteries, are being proposed as alternatives to traditional diesel generators and could potentially power mini grids in remote areas. Flywheel energy storage, which stores kinetic energy in a rotating mass, offers significant advantages, such as a long lifetime, increased charge-cycle capabilities, and rapid output, while lacking hazardous chemicals or fire hazards. Its current constraints include cost, rapid self-discharge, and limited capacity for extensive energy storage. Case studies highlight global deployment of emerging storage technologies. Each case study describes the mini grid’s rating, energy storage rating, battery chemistry, businesses served, communities electrified, and the way in which the electricity is used. Husk Power Systems in India and Nigeria uses hybrid systems combining solar PV, batteries, and biomass gasification to power over 200 community solar mini grids. Their system employs machine learning to optimize the battery management and increase the lifetime of its lead-acid batteries. The company’s careful approach to monitoring and controlling lead acid charge-discharge cycles and its ability to obtain attractive volume pricing on Indian-made lead acid batteries are two reasons it uses lead acid batteries. In the Lolwe Islands, Uganda, Engie Energy Access and Equatorial Power deployed a hybrid solar mini grid with Lithium Iron Phosphate (LFP) battery storage. The mini grid, supplying over 3,800 consumers, is supplemented with a business incubation and asset financing program that includes water purification, ice making, electric mobility, and agro-processing. These activities limit the dependence on diesel generators and help the developers utilize the mini grids at their full capacity. In San Seth, Bogale, Myanmar, Mandalay Yoma developed a hybrid solar mini grid with lithium-ion nickel manganese cobalt (NMC) batteries. A 713 Wp hybrid solar mini grid with storage capacity of 1,312 kWh of lithium-ion nickel manganese cobalt (NMC) batteries is paired with a 315 kVA genset. The grid, supplies over 1,300 households and 20 businesses. The selection of NMC battery technology is primarily due to its lifespan of over 3,000 cycles. In Nigeria, more than 250 mini grids are currently. PowerGen mini grid at Dancitagi village uses a 200 kWp solar hybrid mini grid with 500 kWh of lithium iron phosphate batteries and a 200 kVA diesel genset at. This grid has brought significant improvements in power supply, and two years after installation, the load on the site had increased, and there was a demand for additional storage capacity. In India, Amperehour and the Maharashtra Energy Agency Development Authority (MEDA) have established solar mini grids at Makhala, Amravati, and Maharashtra. These mini grids rely on 110 kWh of containerized lithium iron phosphate (LFP) batteries, providing connections to over 127 customers. No diesel generators are used. A machine learning-based algorithm control optimizes the load profile and informs decision making In Maldives, the Korean company H2 built a system combining solar power and a vanadium redox flow battery (VRFB). This system was designed to produce 1 MWh per day and store electricity for use during peak hours or when solar power is unavailable. The system was specifically engineered to withstand the challenging maritime conditions in the Maldives. In the Philippines, the Palawan Electric Cooperative (PALECO) and S.I. Power Corporation (SIPCOR) are implementing a micro grid project using solar PV, diesel generators, and flywheel energy storage systems (FESS) from Amber Kinetics. This system provides energy to the inhabitants, reducing their reliance on the unreliable grid and promoting economic growth. It is also environmentally friendly as it reduces carbon emissions and the island’s dependence on diesel fuel for power generation. Recommendations for improving the implementation and success of decentralized renewable energy mini grids, with a focus on energy storage technologies: 1. Study battery performance in the field: Conduct comprehensive analyses of different battery technologies under actual conditions where mini grids are built and operate. 2. Consider total cost: When planning mini grids, consider the Levelized Cost of Storage (LCOS) and how the batteries affect the Levelized Cost of Energy (LCOE), not just the upfront cost of batteries. xiv ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT 3. Adopt safety and performance standards: These standards will reduce risks and increase industry acceptance, particularly if they align with standards developed by international organizations. 4. Carefully draft regulatory documents and procurement specifications: This ensures safety, quality, and performance without restricting innovation in storage technologies. 5. Promote best recycling practices: As the industry shifts toward lithium-ion technologies, it’s crucial to develop and implement strategies for recycling these batteries. 6. Encourage the use of repurposed battery technologies: Develop a standard for testing and certifying second-life battery packs to increase confidence in their use for mini grids. 7. Exempt mini grid batteries from import duties: To make battery technology more affordable and expedite their deployment in mini grids. 8. Provide skilling and upskilling programs: These will enhance technical competency, reduce downtime of mini grid systems, and create employment opportunities in communities. 9. Create standard operating procedures for understanding battery technology performance: This will help mini grid players optimize their asset utilization and reduce risks, for example, by understanding the effects of environmental conditions on battery performance. 1 BATTERY TECHNOLOGIES IN MINI GRIDS ACROSS THE WORLD I n 2019, the World Bank convened the Energy Storage Partnership (ESP), a global partnership to adapt, develop, and roll out energy storage solutions for developing countries. Storage technologies, in tandem with renewable energy sources, have great potential to provide access to electricity to the more than 1 billion people who either lack access or are served poorly. To enable the rapid uptake of variable renewable energy sources in developing countries, the ESP is working on developing power systems, disseminating knowledge, building capacity, developing testing protocols, validating performance, providing flexible sector coupling, developing decentral- ized energy storage solutions, crafting procurement frameworks, enabling energy storage policy, and recycling systems and standards. This report is a knowledge product of the project lead by Working Group 5, which focuses on developing knowledge products to support the development and expansion of energy storage solutions. A mini grid is a group of interconnected multiple or single distributed energy resources (DERs) and loads that work independently in remote locations or grid connected areas (SE4All 2022). Mini grids cater to customer groups of different sizes, ranging from a few consumers in remote areas to thousands of consumers in urban areas. In remote areas, mini grids have improved energy access to primary health centers, lighting, agricultural activities, including productive use applications like agricultural processing and cold storage and learning centers. Urban mini grids serve hospitals, airports, Special Economic Zones, universities, and small commercial establishments. Some successful mini grids are already connected to the central grid; others may be connected in the future. Yet others are in locations that are too remote to be connected in the foreseeable future. This report focuses on decentralized off-grid mini grids in remote locations. It is organized as follows. • Section 1 provides an overview of battery technologies in mini grids across the world, using information collected through interviews with major project developers and plant operators. • Section 2 forecasts demand for various battery technologies deployed or targeted. • Section 3 compares various storage technologies for mini grid applications. • Section 4 explores costs and trends in battery technologies deployed in mini grids. • Section 5 presents seven case studies. • Section 6 proposes recommendations. • Appendix A provides a broad overview of mechanical, electrochemical, and thermal storage. • Appendix B discusses performance optimization of lead acid batteries in mini grids. OVERVIEW In 2020, around 9.5 percent of the world’s population (approximately 740 million people) lacked access to electricity (World Bank 2020a). Around 500 million of them live in Sub-Saharan Africa (World Bank 2019a). The lack of access to electricity can be attributed to sparse population densities, the remote locations of the villages, financially stressed state-owned electric companies, low willingness to pay, and lack of capital investment. As of 2022, around 21,500 mini grids worldwide were serving around 48 million people. Another 29,400 projects, with the capability to serve another 35 million people, were in the pipeline. This pipeline will serve less than 5 percent of the population without access to electricity. To serve half 1 2 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 1.1: Number of Installed and Planned Mini Grids, by Region, 2021 20,000 19,000 Number of mini grids /off-grids 15,000 connections 9,600 9,000 10,000 7,200 5,000 3,100 800 1,200 400 300 100 0 South Asia Africa East Asia & Pacific OECD & Central Other Asia Installed Planned Source: ESMAP 2022. a billion people by 2030, the world needs a fleet of The national electrification rate in Nigeria is around 217,000 mini grids powered by solar and hybrid energy 55 percent, with a rural electrification rate of only systems (ESMAP 2022). 39 percent. To achieve universal energy access by 2030, Nigeria needs to connect 500,000 to 800,000 households every year, with a focus on rural areas. The Nigerian THE GLOBAL STOCK OF 1.1  Electrification Project (NEP), with support from the World Bank, the African Development Bank, and other MINI GRIDS partners, aims to provide energy access to under- and South Asia leads the world in terms of both the number unserved communities in Nigeria using renewable of mini grids installed (9,300) and planned (19,000) energy. The project promotes electricity access for Figure 1.1 shows the regional distribution. households; micro, small, and medium-size enterprises Together, Afghanistan, India, and Myanmar have (MSMEs); and public education institutions. It aims to about 80 percent of the world’s installed mini grids in provide cost-effective power to 250,000 MSMEs and Asia. Afghanistan has the largest number of mini grids 1 million households through off-grid and mini grid installed (around 4,700). By 2018, India had brought systems by 2023. The plan will install mini grid systems electrical poles and wires to all of its settlements. It now in 250 sites and target 15 mini grids at federal universities aims to increase the reliability and productive use of (Nweke-Eze 2022). power. Achieving these objectives requires a large fleet In Senegal, the Rural Electrification Agency of Senegal of solar-powered mini grids. (ACER) aims to install 1,000 mini grids, in order to achieve FIGURE 1.2: Number of Installed and Planned Mini Grids in Selected Countries, 2022 A. Number of installed mini grids B. Number of planned mini grids 20,000 18,900 5,000 4,700 4,000 4,000 15,000 3,200 3,000 10,000 2,000 1,500 1,200 5,000 1,000 2,700 1,500 1,200 600 - - Afghanistan Myanmar India Nepal China India Nigeria Tanzania Senegal Ethiopia Source: ESMAP 2022. BATTERY TECHNOLOGIES IN MINI GRIDS ACROSS THE WORLD 3 FIGURE 1.3: Generation Mix of Installed and Planned as backup generators, deployed during extended cloudy Mini Grids, 2019 periods. 100% The increased popularity of solar/solar hybrid mini 19 18 grids reflects three main factors: 80% 5 Percent of generation • Sunshine is abundantly available. 60% 40 • Most developing countries under study depend on 40% 78 imports for the supply of fossil fuels. 20% 35 • Capital expenditure (CAPEX) per kilowatt (kW) is projected to fall from $3,659 in 2021 to under 0% 7 Installed mini grids Planned mini grids $2,500 by 2030 (ESMAP 2022). This decline has Solar & solar hybrid Hydro Diesel Other the potential to make each unit of electricity generated by these grids competitive with electricity supplied Source: Analysis by CES. by the main/central grid in many areas. a 2025 target of universal access to electricity by 2025 (Burger 2022). 1.3  THE ROLE OF STORAGE Newer mini grids generally pair renewables with batteries THE GENERATION MIX OF 1.2  supplying four to six hours of electricity in the evening and morning hours, when solar generation is low or unavailable. MINI GRIDS To learn about the use of battery technology in mini grid Many mini grids are either first- or second-generation grids applications, CES interviewed developers representing using diesel or hydro as the main sources of generating 382 mini grids and 72 megawatt hours (MWh) of electricity. Most of the projects in the pipeline are third- battery storage usage.1 In 2017–21, 202 of these mini generation grids. These grids generally use solar or solar/ grids, with 39 MWh of storage were built by 8 mini grid diesel hybrids to generate electricity; they use advanced developers (figure 1.4). Ten mini grids—with 3 MWh of technologies like remote monitoring and smart pre-paid flow battery and sodium-based battery energy storage meters to ensure the seamless functioning of mini grids. technology comprised of flow battery (manufactured by Third-generation mini grids installed by members of the VFLOW technologies) and sodium-based technologies African Mini Grid Developers Association (AMDA) report (Dielectrik)—were also added (figures 1.5 and 1.6). average uptimes of 99 percent (AMDA 2022). A database of 170 mini grids, with 30 MWh of With the decline in the cost of solar panels, diesel storage, was developed based on secondary sources. generators no longer make financial sense as the primary Over 80 percent of the sampled mini grids were operating source of electricity in mini grids. They are now used in Asia. The rest were operating in Africa. FIGURE 1.4: Battery Storage Transition in Rural Mini Grids in Asia and Africa, 2012–21 10,000 Battery storage (kWh) 8,000 6,000 4,000 2,000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Li-ion Battery 1,000 1,400 3,600 4,400 3,200 2,800 Lead Acid Battery 5,520 3,360 6,840 8,400 5,400 6,200 4,760 5,040 3,360 3,600 Lead Acid Battery Li-ion Battery Source: CES. 4 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 1.5: Primary Source of Battery Storage by Selected Mini Grid Developers in 2017–21 10.0 9.0 8.0 0.6 2.2 Battery storage (MWh) 7.0 0.5 6.0 1.4 5.0 1.5 4.0 7.7 3.0 6.6 4.9 1.8 2.0 4.2 1.4 0.4 1.0 1.8 1.7 1.5 1.1 0.0 Mandalay Mlinda Amperehour Engie Energy Atlantia Schneider Energy GIZ Nigeria Selco Yoma Access Renwia Access Lead Acid Lithium LFP Lithium NMC Nickel - Sodium Chloride Source: CES. Lead acid storage technology was the dominant lithium-ion technology. Other respondents believed that choice for mini grid developers before 2018. Since then, lead acid battery technology is likely to be used for many lithium-ion batteries have been increasingly popular, more years, although most mini grid developers are slowly reaching 44 percent of deployed battery storage beginning to use lithium-ion technology in their energy technologies in 2021. Their increased popularity in storage mix. the electric vehicle sector has led to reductions in the price Because of its robust performance in a broad range of lithium-ion cells. Lithium-ion batteries have become of temperatures, redox flow battery technology can be more attractive for mini grid developers because of this a good option for mini grids. It is still in the initial phase price reduction and the batteries’ increased availability. of development. Some developers expressed interest in Mandalay Yoma—a solar energy provider in experimenting with flow batteries. Invinity Energy, VFlow Myanmar—uses only lithium-ion battery technology Tech, and Delectrik manufacture redox flow batteries for (figure 1.7), because of its increased life and maintenance- the mini grid market. free operation. It expressed confidence in the future of Of the 37.4 MWh of storage deployed in mini grids (see figure 1.7), 65 percent of storage capacity is in South and Southeast Asia and 35 percent is in Africa. FIGURE 1.6: Mini Grid Battery Storage as Percentage of Total Capacity, by Technology Type, 2012–21 2% FIGURE 1.7: Shares of Lead Acid and Lithium-Ion as 2% Sources of Battery Storage by Mini Grids in South and Southeast Asia and Africa, 2022 100% 23% 28.7 80% 44.1 Percent of total 60% 73% 40% 71.3 55.9 20% 0% South & South East Asia Africa Lead Acid Li-ion Redox Flow Nickel Sodium Chloride Lead Acid Lithium-Ion Source: CES. Source: CES. BATTERY TECHNOLOGIES IN MINI GRIDS ACROSS THE WORLD 5 (Redox flow batteries and sodium-based technologies the new-generation mini grids are promoting productive- were excluded from the analysis in order to compare use applications, such as egg incubators, grinders lead acid and lithium-ion technologies deployed.) for pulses, water pumps, flour mills, and other small business uses. Increased use of productive appliances can increase the load factor of the grid. Domestic load peaks during THE ROLE OF THE LEVELIZED 1.4  mornings and evenings; the grid is relatively load free COST OF STORAGE IN THE in the middle of the day. The addition of productive TECHNOLOGY SELECTION appliances creates load during business hours, leading to increased utilization without an increase in peak load. PROCESS When electricity used to power productive appliances is The levelized cost of storage (LCOS) is a financial term consumed at the same time the electricity is generated, for the average cost of storing each unit of energy in a the levelized cost of electricity (LCOE) falls (figure 1.8). storage project over its lifetime. It takes into consideration Doubling the load factor from 20 percent to 40 percent different cost items and their timing, the time value of the has the potential to reduce the LCOE by 25 percent. money, and the opportunity cost of the invested capital. Lower levelized costs support sustainable business models For mini grid developers, upfront cost (CAPEX) is and help developers achieve their targets earlier. an important factor determining the selection of a tech- The Suro Bangla mini grid in Bangladesh, developed nology, and can overshadow other key parameters such by the Infrastructure Development Company Limited as the useful life of the project, efficiency parameters, (IDCOL), generated its full potential within 1.5 years, a year and the cost of operations and maintenance (O&M). earlier than initially projected, thanks to the use of produc- Indeed, despite the lower lifetime cost of lithium-ion tive loads (ESMAP 2022). The mini grid in Shivpura (Uttar batteries, lead acid technology is still used by many Pradesh, India) powers many productive loads, including a developers because of the low upfront cost. Using the bank, a sweets shop, a school, and other small businesses. LCOS can help decision makers make better choices about technology. CHALLENGES FACED BY 1.6  MINI GRID DEVELOPERS USING MINI GRIDS FOR 1.5  Mini grids around the world face operational and finan- PRODUCTIVE USES: BEYOND cial challenges, including the following: BASIC ACCESS TO ELECTRICITY • Remote location: High transport costs of equip- With an average uptime of 99 percent, third-generation ment and raw materials increase the costs of mini mini grids provide highly reliable supplies of electricity grides in remote locations. Safety requirements for that go beyond basic access to electricity. Most of battery transportation can add costs. FIGURE 1.8: Effect of Grid Load Factor on Levelized Cost of Electricity 0.60 0.55 0.50 LCOE ($/kWh) 0.45 0.40 0.35 0.30 0 10 20 30 40 50 60 70 80 90 Grid load factor (percent) Source: ESMAP 2019. 6 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT • Monitoring: Remoteness makes it difficult to send early and reduce this risk, developers opt for lower personnel for periodic monitoring. As most mini payback periods. Lower payback periods need higher grids are far from telecommunication networks, annual capital depreciation and increase the cost of monitoring through technological interventions like each unit of electricity generated. The higher cost wireless communication devices can be difficult. of each unit generated negatively affects users and Battery technologies that require periodic monitoring hence the large-scale deployment of mini grids. present challenges. • Financing: Some mini grid projects have been • Periodic maintenance: It is difficult to find compe- funded exclusively by grants. These projects tent technicians to carry out periodic maintenance tend to be unsustainable, coming to a halt when in remote areas. Developers try to bridge the gap funding ends. by identifying local entrepreneurs and training them • Absence of standardization: The size of individual in maintenance. equipment like inverters, batteries, and switch gear • Business sustainability: Consumers’ willingness lack mini grid-specific standardization. As a result, to pay for electricity is often low. Some mini grid some components are over-designed and not fully developers/companies charge as much as utilized. There is no standard mini grid size that grid $0.75/kWh—far more than the average cost developers can use for deployment. A standard size of electricity offered by some utilities in African could be based on the size of the community to be countries. Storage choices require balancing cost served or the available load. against the reliability of supply and the impact on • Operational challenge related to temperature: tariffs, which affect the amount of electricity customers The performance of some storage technologies is can afford to purchase. sensitive to ambient temperature. Some storage • Taxation: Most mini grid players operate in devel- technologies perform better when they are cooled oping countries that must import the required equip- by air conditioning systems. Air conditioning uses ment, including the batteries. Some countries have some of the power stored in the batteries, however, differential import duty regimes, in which duties on reducing the amount of energy available for other separate components (20–30 percent) are higher uses, and air conditioning systems can be challenging than duties levied on integrated units (as low as to maintain in remote locations. 5–10 percent). • Stranded assets: Mini grid developers face the financial risk of their asset becoming stranded NOTE when the main grid arrives. The addition of CAPEX- 1. The mini grid developers interviewed for this project represent a small subset of global players and may not be representative. The intensive battery technologies increases this results reported may over- or underestimate the prevalence of particular financial risk. In a bid to recoup their investment battery storage technologies used in mini grids. 2 SIZE OF THE GLOBAL MARKET FOR MINI GRID AND ENERGY STORAGE 2.1  NUMBER OF PEOPLE WITHOUT ACCESS TO ELECTRICITY A ccording to the Multi-Tier Framework (MTF), households with access below Tier 1 have electricity for less than four hours a day to light lamps or charge phones (Bhata and Angelou 2014). The International Energy Agency defines access to electricity as access to at least 250 kWh of electricity a year in rural areas and at least 500 kWh a year in urban areas of (IEA 2022c). The International Renewable Energy Agency (IRENA) estimates that in 2022 around 10 to 12 percent of the global population of 7.9 billion lacked access to electricity. Sub-Saharan Africa Sub-Saharan Africa has the world’s largest unelectrified population (figure 2.1). The share of the population with access to electricity stood at 48 percent in 2020 (World Bank 2020b). Rates in several countries, such as Niger, Chad, and the Democratic Republic of Congo, were less than 20 percent. The region’s population of 1.1 billion is expected to exceed 1.4 billion by 2030. In a business as usual scenario, access to electricity is projected to hit 62 percent by 2030. Ethiopia, Ghana, Kenya, Nigeria, Rwanda, and Senegal have ambitious National Electrification Plans, which are expected to achieve universal access by 2030.2 For rural electrification, around 45 percent of investments are for grid expansion to remote areas, 25 percent are for stand-alone solar home lighting systems, and 30 percent are for mini grids (EnDev 2022). South Asia Around 108 million people in South Asia lacked access to electricity in 2020. In 2019 Pakistan, Nepal, and Bangladesh had the lowest access rates in the region at 73 percent, 89 percent, and 93 percent, respectively (World Bank 2022b). These countries aim to achieve universal electricity access by 2030. In Afghanistan, a 3 MW solar hybrid mini grid project funded by the United Nations Development Programme (UNDP) is under evaluation (Green Climate Fund 2022). Bangladesh uses solar photovoltaic (PV) as the key source for powering rural mini grids. In India, 2019 and 2020 saw massive deployment of standalone solar home lighting systems to rural households. Under the Saubhagya Scheme Programme, around 30 million solar home lighting units were distributed in 2019–21 (See the Saubhagya Scheme Dashboard). Southeast Asia In 2020, Cambodia , Laos, and Myanmar had electrification rates of 70 percent, 94 percent, and 89 percent, respectively (World Bank 2022a). In 2022–23, 350 unelectrified villages in Cambodia are expected to be connected by solar mini grids. Most countries in Southeast Asia aim to achieve universal electricity access by or before 2030 (IEA 2022b). Indonesia plans to achieve universal access by 2024, Myanmar expects to reach it by 2030, and Lao PDR expects to reach 98 percent access by 2025. The Philippines and Indonesia have several unelectrified islands that are difficult to connect via the grid. 7 8 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 2.1: Number of People Without Access to To achieve 100 percent electrification by 2030, around Electricity, by Region, 2021 and 2030 1,300 million people need to be electrified. 800 To achieve rural electrification targets, 800 million 18 households must be electrified by 2030. In 2021, the 700 23 annual electrified population was estimated to be Number of people without access to 108 around 30 to 40 million. CES estimates that achieving 600 7 22 universal electricity by 2030 would require a compound electricity (millions) 500 1 annual growth rate of the electrified population of around 6.5 percent. This report assumes that all regions 400 except Sub-Saharan Africa will achieve universal energy 300 577 access by 2030 (figure 2.2). 530 200 100 RURAL MINI GRID 2.3  0 2021 2030 INSTALLATIONS IN 2021 Sub-Saharan Africa South Asia CES conducted a survey to estimate the number of Southeast Asia Rest of the world mini grids installed in 2021 and the MW capacity those Source: UN Population Division Data Portal and World Bank Access to installations provided. It found that 1,100 rural mini grid Electricity Portal 2022. projects across the world provided 80 MW of capacity. South Asia continued to lead in annual installations, at 35 percent of total MW installed, followed by 2.2  PROJECTED ACCESS BY 2030 Sub-Saharan Africa (30 percent) and Southeast Asia Globally, the electricity access rate increased steadily (28 percent) (figure 2.3). between 1996 and 2020, rising from 73.4 percent to In South Asia, India, and Afghanistan lead, together 90.5 (Our World in Data n.d.). During 2020 and 2021, accounting for at least 20 MW of capacity. The typical the COVID-19 pandemic slowed the pace of electricity mini grid capacity was around 30 kilowatt peak (kWp) in access programs, as governments shifted their India and over 1 megawatt peak (MWp) in Afghanistan. priorities toward healthcare and logistics (IEA 2022a) In Southeast Asia, Myanmar, Indonesia, the Philippines, The universal electricity access targets for 2030 are and Malaysia have the largest number of installations. likely to be delayed in several developing countries as Mini grids of 100 kW and above have been installed in a result of the pandemic. the region. In Africa, Nigeria, Sierra Leone, and Senegal In a business as usual scenario, some 800 million lead. Uganda and Ethiopia have several projects people are expected to receive electricity between 2021 underway. Mini grids with capacities of 50 kWp to and 2030, leaving 560 million unelectrified (IEA 2022a). 130kWp were installed in Sub-Saharan Africa in 2021. FIGURE 2.2: Projected Annual Increase in Number of Rural People with Access to Electricity, by Region, 2021–30 140 120 Population (mIllions) 100 80 60 40 20 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Year Sub-SaharanAfrica Southeast Asia Latin America & the Caribbean South Asia Total Source: CES. SIZE OF THE GLOBAL MARKET FOR MINI GRID AND ENERGY STORAGE 9 FIGURE 2.3: Distribution of Mini Grid Capacity, Mini grids are designed to power households and by Region, 2021 commercial buildings, such as small shops and health Rest of the world (7%) centers, in villages. They vary in size from dozens of kWp to hundreds of kWp. The average size varies from region to region. Household consumption averages are based on inputs from mini grids developers across Africa and South and Southeast Asia. Southeast Asia South Asia (35%) Table 2.1 shows the average capacity of a mini grid (28%) assigned to a household3 in each of the four regions in 2021 and 2030. These data are based on primary inputs. The connected loads for a typical household in these regions were typically up to four units of 7 watts Sub-Saharan Africa (30%) (W) LED lights, two units of 25 W fans, and a socket to which the household connected a television unit of 40 W. These loads were connected on the microgrid Source: CES. network. Figure 2.4 shows the annual installed capacity of mini grids in 2022–30 in the three scenarios. Figure 2.5 FORECASTING GLOBAL DEMAND 2.4  shows the cumulative installed capacity. FOR MINI GRIDS AND BATTERY Table 2.2 describes a sample of mini grid projects STORAGE SYSTEMS installed during 2020 and 2021. Most of them are dependent on diesel generator sets for a few hours This section forecasts global demand for mini grids of power generation during the evening.4 The ratio of between 2022 and 2030. It also estimates demand for battery kWh to kWp of solar power is typically limited to battery storage systems to support these mini grids. 2 to 2.5 when lithium-ion batteries are used for backup. The forecasts are based on assumptions about the share If lead acid batteries are used, the ratio increases to of mini grids in rural electrification and the capacity 3 to 4, because the depth of discharge is lower for lead of the mini grid per household. Based on extensive acid batteries (50 percent) than for lithium-ion ones interactions with mini grid players across Sub-Saharan (80 percent). Africa, South Asia, and Southeast Asia, CES estimates Mini grids paid for by government and Corporate that in 2021, around 80 MW of mini grids were installed Social Responsibility (CSR) funds appear to favor globally. Of the total rural population electrified in 2021, batteries with higher kWh to kWp ratios than mini grids around 30 percent were electrified through mini grids. built with private developer funds. In India, the government Three scenarios for mini grid installations are funded several mini grid projects in 2016–18 as part of projected for 2022–30: its rural electrification strategy. These projects used lead • High-case scenario: From 2022 to 2025, of the acid batteries. The ratio of the size of the battery to the rural population electrified in each year, the share mini grid capacity was 7 to 12. In projects funded with that gains electricity access through mini grids is CSR funding, the ratio was 3 to 6. In private mini grid projected to increase from 30 percent to 50 percent, projects, developers conduct load modelling and select remaining at 50 percent until 2030. This scenario is the optimum size of batteries to support renewable consistent with the assumptions in the State of the Global Mini Grids Market Report 2020 (SE4All 2022). TABLE 2.1: Estimated and Projected Mini Grid Capacity • Base-case scenario: In the business-as-usual per Household (Wp), by Region, 2021 and 2030 scenario, mini grid penetration remains at 30 percent. Region 2021 2030 • Low-case scenario: In this scenario, mini grid Sub-Saharan Africa 120 150 penetration is projected to fall to 20 percent. Other Latin America and the Caribbean 100 150 methods of electricity access, such as grid expansion South Asia  90 150 and solar home lighting systems, are assumed to be Southeast Asia  80 120 more prevalent. Source: Primary inputs collected by CES from mini grid players. 10 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 2.4: Projected Annual Global Demand for Rural Mini Grid in the Low-, Base-, and High-Case Scenarios, 2021–30 1,800 1,600 1,400 Annual installed capacity (MWp) 1,200 1,000 800 600 400 200 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Low Case Base Case High Case Source: CES. power. The ratio of the battery to mini grid capacity in 2019–20. Several countries, such as Senegal, provide these projects was 2. Mini grids achieve one to two CAPEX subsidies for installation of mini grids. The ratio days of power autonomy in government-funded projects; of the battery size to the mini grid installed capacity in privately funded projects, the stored power was in Africa was 2 to 3, in most projects using lithium-ion exhausted at night. Government-funded mini grid batteries (table 2.3). projects are now minimal, as governments increasingly In 2021, demand for batteries is estimated to choose grid expansion for rural electrification. have been around 180 MWh. Battery storage is The penetration of lithium-ion batteries in mini projected to rise to 3.6 gigawatt hours (GWh) by grids was higher in Sub-Saharan Africa than in Asia in 2030 (figure 2.6). FIGURE 2.5: Projected Global Cumulative Capacity Addition of New Rural Mini Grids, 2022–30 8,000 7,000 6,000 2,300 Cumulative capacity (MW) 5,000 440 4,000 600 1,300 3,000 221 900 345 2,000 90 250 3,400 1,000 2,300 1,700 0 Low case Base case High case Sub-Saharan Africa Southeast Asia Latin America & the Caribbean South Asia Source: CES. SIZE OF THE GLOBAL MARKET FOR MINI GRID AND ENERGY STORAGE 11 TABLE 2.2: Battery Capacity in Selected Mini Grid Projects Installed in 2020–21 Battery Size Mini Grid Year Capacity Genset Size Country Installed (kWp) kWh kWh/kWp Battery Technology (kVA) 2021 39 110 2.8 Lithium-ion/LFP No India 2020 23 96 4 Lead acid- Valved Regulated Lead-Acid (VRLA)   15 2021 713 1,312 1.8 Lithium-ion/ nickel-manganese cobalt (NMC) 315 Myanmar 2019 55 160 2.9 Lithium-ion/ lithium ferro-phosphate (LFP) n.a. 2021 120 264 2.2 Lithium-ion/LFP n.a. Nigeria 2020 200 500 2.5 Lithium-ion/LFP 100 Uganda 2021 600 358 0.60 Lithium-ion/LFP 315 Source: Interviews with mini grid developers; engineering, procurement, and construction (EPC) contractors; and mini grid solution providers. Note: n.a. Not applicable. TABLE 2.3: Ratio of Battery Capacity to Mini Grid Installed Capacity Battery Type kWh/kWp Lead acid 3 Lithium-ion 2 Other 3 Source: CES. FIGURE 2.6: Projected Global Demand for Batteries for Rural Mini Grids, 2021–30 4,000 3,500 3,000 Capacity (MWh) 2,500 2,000 1,500 1,000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Low Case Base Case High Case Source: CES. NOTES size was assumed to be at least six in Sub-Saharan Africa and four to five in South Asia, Southeast Asia, and Latin America and the Caribbean 2. These plans are the Ethiopia Universal Electrification, the Ghana (UNDESA 2022). National Electrification Scheme, the Kenya Universal Electricity Access, 4. The Uganda mini grid is an outlier that relies more heavily on the the Rwanda Universal Electricity Access Program, and the Senegal diesel. It is an island mini grid in which the battery is used only to reduce Electrification Plan. diesel consumption. The battery is therefore smaller than in other mini 3. The number of rural households was calculated by estimating the grids. In many situations like this, batteries are much smaller than in mini average number of people per household in each region. Household grids in which solar PV and battery are the primary sources of energy. 3 SELECTION OF BATTERY TECHNOLOGY 3.1  FACTORS INVESTORS CONSIDER I nvestors consider many factors in choosing a battery chemistry for a project, including the following: • Cycle life of the batteries: Longer cycle lives are desirable, because battery replacement costs represent a significant share of overall project cost. Replacement cost is always higher than the original battery cost, because it includes the labor cost of replacement in addition to the battery cost. • Depth of discharge: Batteries with higher depth of discharge capabilities can be more discharged without damaging the battery. They thus provide more available energy, reducing the cost of storing each unit of electricity. • Type of load connected to the grid: In productive-end use applications (such as motors with high inductive loads that use a high initial current to start), lead acid batteries are not ideal, because high inrush currents can cause them to fail before the end of their expected lifetimes. • Energy density: High-density products are more attractive than lower-density ones, because they offer more available energy. Energy density is a very important criterion for mobile applica- tions, because more energy-dense technology has a higher payload capacity. Batteries need to be transported to remote locations; lighter versions reduce transport-related expenditure and ease the handling process. • C-rating (charge and discharge current rating): The C-rating is a measurement of the max- imum current a battery can be charged or discharged. Most mini grids use lead acid batteries with C-ratings of C/10, meaning that when discharging the battery can provide a level of current that would cause it to fully discharge in 10 hours. These batteries are not intended for heavy-duty applications with high discharge current requirements. When used for such applications, these batteries die quickly. Lithium-ion and redox flow batteries often have higher C-ratings. • Thermal runaway: Thermal runaway is a phenomenon in which the internal impedance of a battery drops with increases in operating temperature. Reduced impedance results in increased current flow, exacerbating the temperature of the system and posing the risk of fire or explosion. Certain chemistries, including lithium-ion, face this issue, which requires attention. • Maintenance: Battery technologies with fewer maintenance requirements fare better than technologies that require frequent or complicated maintenance. Flooded lead acid batteries require monitoring and the addition of distilled water. Redox flow batteries have pumps, seals, and cooling systems that require routine maintenance. • After-sales service: After-sales service is very important, because capabilities to troubleshoot technologies may be limited in remote areas. • Integrated solution: Plug-and-play solutions are operator friendly and can reduce tax costs in some jurisdictions. In some African countries, for example, import duties on individual grid components range from 20 to 30 percent while duties on an integrated unit can be as low as 5 to 10 percent. • Hardware compatibility: Charge controllers and inverters have voltage windows within which they must operate; they also have built-in battery-charging cycles that are battery chemistry-specific. Many newer models have programmable settings that allow for different 12 SELECTION OF BATTERY TECHNOLOGY 13 types of technologies; some old equipment may into account in choosing a battery type. The ability not. For these reasons, developers can face to recycle lead acid and lithium-ion batteries varies compatibility issues when replacing a battery with across countries; recycling of lead acid batteries in a new chemistry type (for example, switching many countries is generally easier and more commer- out old lead acid batteries with a new lithium-ion cially developed than recycling lithium-ion batteries. pack). Some countries export battery waste. • Maturity: Developers tend to view mature storage Lead acid batteries long dominated the market for technology as more reliable. Mature technologies batteries for mini grid. These batteries are a mature, tend to have well-developed supply chains and easily available technology with low upfront capital cost after-sale service. ($70–$100/kWh). They remain the battery technology of • Cost: Cash-constrained developers may be more choice for some leading innovative mini grid developers concerned with the upfront CAPEX than with the (see case study 5.1). total lifetime cost of a technology. (See the Pugh Thanks to the declining cost of lithium-ion batteries, matrix in table 3.2.) their lower LCOS, and longer battery life compared with lead acid chemistry, the trend is changing (figure 3.1). • Battery degradation: Technologies with higher Lithium-ion battery penetration is projected to increase to degradation rates need to be replaced more 70 percent by 2030, from 55 percent in 2021, according often and to have higher lifetime costs than other to CES analysis. batteries. In 2019, 19 percent of mini grid batteries in Asia • Operating conditions: Some storage technologies and 29 percent in Sub-Saharan Africa were lithium-ion underperform or degrade more quickly than others, batteries. An ESMAP survey of 211 mini grids under particularly in hot regions. construction or commissioned in 2020 and 2021 found • Environmental concerns: End-of-life battery disposal that 69 percent used lithium-ion batteries and 31 percent can create environmental hazards. Some batteries used lead acid batteries (ESMAP 2022). Lithium-ion contain heavy metals, such as cadmium and lead technology is used widely in stationary installations and (a dangerous neurotoxin), which can leach into the electric vehicles. It provides a longer life and less ground water. Lithium-ion batteries pose fire hazards. maintenance than lead acid batteries. Case studies 5.2 to Battery electrolytes are generally caustic. Developers 5.5 profile mini grids using lithium-ion batteries in Uganda, need to take the recyclability of the battery technology Myanmar, Nigeria, and India. FIGURE 3.1: Estimated and Projected Demand for Batteries for Mini Grids, by Type, 2021–30 2,500 1 300 2,000 Annual installed capacity (MWh) 1,500 1,200 1,000 50 500 270 740 53 5 390 0 162 2021 2025 2030 Lead Acid Lithium-ion Flow Battery Others Source: CES. 14 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT The upfront capital cost of lithium-ion batteries is Other technologies include advanced lead acid projected to drop from a global average of $250/kWh chemistry, sodium batteries, fuel cells, and flywheel in 2021 to $200/kWh by 2030. Driven by large-scale storage. Together, these technologies are used in manufacturing plans for lithium-ion battery cells across fewer than 0.5 percent of mini grids installations. the globe and increasing scale of production, the price Market share by 2030 is likely to remain below of battery cells is projected to fall. However, most 1 percent of annual installations. Case study production will be used to satisfy demand for batteries 5.7 profiles a mini grid with a flywheel energy storage in electric vehicles. system in the Philippines. Vanadium redox flow batteries (VRFB) are batteries that use vanadium as an electrolyte to store energy. Several factors make them attractive for mini grid COMPARISON OF STORAGE 3.2  applications: TECHNOLOGIES • They last six or more hours. Table 3.1 compares storage technologies. The • They have operational lives of up to 10,000 cycles comparison is quantitative in nature; the importance or 20 years. of each parameter depends on the application of • They allow 100 percent depth of discharge. the battery. However, the upfront capital cost of VRFBs is Nickel sodium chloride technology is unique $350 to $450/kWh, according to battery manufacturers in requiring very high temperatures to keep the interviewed in 2022. Case study 5.6 focuses on a solar salt/electrolyte in a molten form. Achieving this mini grid using a VRFB battery on an island in the requirement may be difficult in remote locations. Maldives. An innovative business model involving Table 3.2 presents a Pugh matrix to compare vanadium leasing reduced the upfront cost by 40 percent. various advanced battery technologies. This tool In this model, vanadium metal is leased to the end-user helps users select the best option by scoring technologies and purchased back at the end of life of the battery. on a scale of 1 to 10 on a set of parameters. Ranks Vanadium can be 100 percent recovered at the end are multiplied by assigned weights; the result is a of life of the battery. Mini grids in India, China, Korea, weighted average for each option.5 This analysis Sub-Saharan Africa, and Southeast Asia have already reveals that lithium-ion is the most suitable installed this battery chemistry. technology. TABLE 3.1: Technical Parameters of Selected Battery Technologies Battery Type Vanadium Advanced Redox Batteries Zn–Br Parameter Lead Acid Lead Acid Lithium-Ion NiNaCl2 (VRB) (flow tech) Lead, carbon Nickel, sodium Battery chemistry Lead NMC/LFP Vanadium Zinc, bromine electrodes chloride Round-trip efficiency (percent) 60–80 80–90 85–95 70–90 60–70 68–70 C-rate C/10 C/5 C/4-2C C/6-C/8 C/5-C/8 C/3–C/4 Depth of discharge (percent) 50–60 70–80 90 80 100 100 Energy density (Who/kg) 40–60 27–30 80–150 65–70 7–8 15–25 Cycle life 500–1,000 1,200–1,800 2,000–6,000 4,500–5,000 7,000–10,000 3,000–3,500 Safety High High Medium Medium High Medium CAPEX ($/kWh) 80–150 120–300 250–350 750–1,000 600–1000 750–800 Toxicity of chemicals High High High Medium Medium High Operating temperature (°C) –20–50 –20–50 0–55 270–350 15–55 20–50 Self-discharge (percent/month) 10–15 3–5 0.5–2 5 5 60a Source: CES. Note: Using (1-.03)30 a daily self-discharge of 3 percent equates to a monthly self-discharge of about 60 percent. SELECTION OF BATTERY TECHNOLOGY 15 TABLE 3.2: Pugh Matrix Ranking of Storage Technologies in Mini Grid Applications Nickel Weight Advanced Sodium Parameter (Percent) Li-Ion Lead Acid Lead Acid VRFB Zn–Br Chloride Battery life 25 8  5 7 9 8 9 Heavy-duty usage (higher C-rate) 15 9  5 7 7 7 7 Maintenance 10 9  6 8 7 7 6 After-sales service 15 8  9 8 6 6 5 Maturity of technology 10 8 10 6 7 7 6 Cost 25 9 10 8 6 6 5 Weighted-average score 8.5 7.5 7.4 7.1 6.9 6.5 Source: CES. Few companies manufacture redox flow batteries; THE CAPITAL COST OF 3.3  they perform poorly on service and CAPEX compared with lead acid and lithium-ion. They score well in BATTERIES terms of battery life, however. Redox flow batteries are Figure 3.2 provides CES’ estimates and forecasts of also considered environmentally friendly, with lifetimes battery costs for 2022–30. Lead acid is a mature tech- of 20 to 25 years; their vanadium and zinc components nology and may not see significant price drops in the are relatively easy to recycle. As more units are future. Lithium-ion is benefitting from significant learn- manufactured, the CAPEX of flow batteries might ing curves; price levels are forecast to drop until 2030. drop, making them an attractive choice for mini grid There is upward pressure on the cost of raw materials developers. used by lithium-ion technology, however, because of FIGURE 3.2: Cost of Six-Hour Storage, by Battery Type, 2022–30 700 600 Cost per kWh capacity (dollars) 500 400 300 200 100 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 Lead acid 110 110 110 110 110 110 110 110 110 Adv. lead acid 160 158 155 153 151 148 146 144 144 Li-ion LFP 250 243 235 228 221 215 208 202 196 Vanadium flow 350 340 329 319 310 301 292 283 274 NiNaCl2 600 582 565 548 531 515 500 485 470 Lead acid Adv. lead acid Li-ion LFP Vanadium flow NiNaCl2 Source: CES. 16 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT demand from the electric vehicle industry. Prices are battery capacity across the battery’s lifetime. The LCOS expected to become stable once the mining industry includes costs associated not only with the battery but catches up with new demand. also with the battery inverter. Battery capacity is nominal capacity; it does not The calculation of LCOS also includes the cost of take into account different recommended depth of charging the battery. These costs need to be included, discharge to avoid damaging the battery. For a flow because efficiency losses during a complete charge- battery, the cost per kWh drops significantly as storage discharge cycle means that more energy has to be duration increases, because kWh capacity in a flow obtained for charging the battery than can be delivered battery is a function of the size of the storage tanks and when discharging. This loss of energy can constitute a electrolyte volume. significant cost factor. Not included in these energy loss calculations are auxiliary air conditioning, which may can help certain battery types (for example, lead acid THE LEVELIZED COST 3.4  and lithium-iron phosphate) achieve longer lifetimes. Although the cost per nameplate capacity ($/kWh) OF STORAGE of lead acid batteries is considerably lower than that of The levelized cost of storage (LCOS) is the ratio of the lithium-ion, the superior cycle life, efficiency, and permis- discounted value of total expenditure and total electricity sible routine depth of discharge of lithium-ion batteries delivered by the storage unit over its lifetime. It is given leads to a lower LCOS (figure 3.3). by equation 3.1 (Mayr 2016):6 Lithium-ferro-phosphate (LFP) battery technology offers low-cost storage for all the durations considered. CAPEX LCOS = The LCOS decreases as the storage duration increases _ 1 - DEG ) n i #cycles ) DOD ) C rated ) | n = 1 from four to eight hours, because the per kW cost of N _1 + r i n the power conversion electronics, such as inverters, is 1 spread over more kWh of storage. O&M ) | n = 1 N _1 + r i VRFB technology decouples the power and energy n _ 1 - DEG ) n i + ratings of the system. It expands storage capacity by #cycles ) DOD ) C rated ) | n = 1 N _1 + r i adding extra electrolyte to the tank, which causes a n significant drop in the CAPEX per kWh of the system as Vresidual the system duration increases. _1 + r i N+1 – Figure 3.4 shows the contributions of CAPEX, O&M, _ 1 - DEG ) n i residual value, and electricity cost to the LCOS for the #cycles ) DOD ) C rated ) | n = 1 N _1 + r i n five technologies. Levelized CAPEX costs incorporate not only the battery capital cost but also the battery life- Pelec–in time and the allowable depth of discharge. Batteries with . h _ DOD i + long lifetimes have a somewhat lower residual value, because the trade-in value is discounted farther into the The first term in the equation addresses the CAPEX- future. Batteries with higher round-trip efficiencies have associated costs of storage, the second covers O&M lower charging electricity cost, because less electricity is costs, the third reflects the residual value after the dissipated as heat in the charge/discharge process. project lifetime, and the fourth addresses the cost of the Figure 3.5 shows estimates and forecasts of the energy used to charge the battery, including the cost LCOS based on CAPEX and performance forecasts. of electricity lost as a result of the battery’s inefficiency Lithium-ion LFP batteries are expected to increase their (more electricity must be put into the battery when lead as the lowest-cost battery technology for mini grids, charging than comes out when discharging). Table 3.3 thanks to increased performance and cost reductions describes and provides values for these variables. through their widespread deployment in electric vehicles, The LCOS formula includes a discount rate for stationary grid-based electricity storage, and other the weighted-average cost of capital of 11.5 percent, applications. Lead acid batteries remain a high-cost reflecting a 15 percent expected return on equity and choice, with only a slight decline in their price (because debt interest of 10 percent with a 70/30 debt to equity the technology is mature). VRFB becomes increasingly ratio. The calculations assume a linear degradation of competitive with lead acid batteries. SELECTION OF BATTERY TECHNOLOGY 17 TABLE 3.3: Descriptions and Assumed Values in Levelized Cost of Battery Storage Calculations Advanced Li-ion Vanadium Variable Description Comments Lead Acid Lead Acid LFP Redox NiNaCl2 Upfront capital cost Cost varies depending CAPEX including battery inverter 135–160 185–210 275–300 314–507 625–650 on hours or storage ($/kWh capacity) Intermediate variable in Hours of storage 4, 6, and 8 CAPEX Battery cost ($/kWh Intermediate variable in 110 160 250 50–300a 600 capacity) CAPEX Intermediate variable in Inverter cost ($/kW) 200 CAPEX Associated inverter cost Intermediate variable in 25–50 for systems with four to eight hours storage ($/kWh capacity) CAPEX Number of Charge/discharge cycles One cycle assumed per 365 cycles per year day Depth of discharge Designed allowable DOD 50 70 90 100 80 (percent) depth of discharge Degradation (percent of Degrades to 80 percent DEG capacity degraded per capacity by end of 5 5 1.5 0.7 1.3 year) project life Calculated from number N Battery lifetime (years) 4 4 13 27 15 of cycles 70 percent debt at Discount rate of 10 percent interest + r weighted-average cost of 30 percent equity with 11.5 capital (percent) 15 percent expected rate of return Operations and O&M maintenance cost ($/ 10 10 10 20 10 year) Residual value of Estimated at 10 percent Vresidual equipment at end of CAPEX cost, discounted 16 21 30 51 65 project lifetime ($) to end of project year Electricity tariff for battery Pelec-in 0.16 charging ($/kWh) Total charge-discharge efficiency, including η(DOD) battery efficiency 75 75 85 70 90 and two-way inverter efficiency (percent) Source: Interviews and desk research conducted by CES. Note: a. The cost of redox batteries declines with increasing hours, because electrical capacity depends on the volume of electrolyte in tanks. FIGURE 3.3: Levelized Cost of Storage (LCOS) of Selected Battery Types at Different Durations 0.70 LCOS per kWh (dollars) 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Adv. Lead Vanadium Lead Acid Li-ion LFP NiNaCl2 Acid Redox 4 hours $0.58 $0.54 $0.38 $0.44 $0.56 6 hours $0.55 $0.52 $0.37 $0.43 $0.55 8 hours $0.53 $0.51 $0.36 $0.43 $0.54 Source: CES assumptions applied to equation 3.1. FIGURE 3.4: Contributions of Capital Expense, Operations and Maintenance, Residual Value, and Electricity Cost to the Levelized Cost of Storage, by Battery Type Lead acid Advanced lead acid 0.6 0.6 0.5 0.5 0.13 0.4 0.4 0.13 (0.02) 0.06 (0.02) 0.3 0.3 0.04 0.29 0.28 0.2 0.2 0.1 0.1 0.0 0.0 CAPEX O&M Residual Electricity cost CAPEX O&M Residual Electricity cost Increase Decrease Total Increase Decrease Total Li-ion LFP Vanadium redox 0.6 0.6 0.5 0.5 0.4 0.4 0.3 0.3 0.14 0.12 (0.00) (0.00) 0.2 0.2 0.03 0.06 0.1 0.15 0.1 0.14 0.0 0.0 CAPEX O&M Residual Electricity cost CAPEX O&M Residual Electricity cost Increase Decrease Total Increase Decrease Total NiNaCl2 0.6 0.5 0.11 0.4 (0.01) 0.04 0.3 0.34 0.2 0.1 0.0 CAPEX O&M Residual Electricity cost Increase Decrease Total Source: CES assumptions applied to equation 3.1. SELECTION OF BATTERY TECHNOLOGY 19 FIGURE 3.5: Estimated and Projected Levelized Cost of Storage for Six-Hour Duration System, by Battery Type 0.6 0.5 0.4 LCOS ($/kWh) 0.3 0.2 0.1 0.0 2022 2026 2030 Lead Acid 0.55 0.54 0.54 Adv. Lead Acid 0.52 0.50 0.49 Li-ion LFP 0.37 0.34 0.32 Vanadium Redox 0.43 0.41 0.40 NiNaCl2 0.55 0.51 0.48 Source: CES assumptions applied to equation 3.1. NOTES 5. Several mini grid developers worked together to assign weights for each parameter. 6. Implementation of the LCOS methodology for this section and development of the accompanying spreadsheet was conducted by ESMAP senior consultant Chris Greacen, using cost and performance assumptions and battery CAPEX forecasts developed by CES. The LCOS spreadsheet model is available for download, so that interested readers can explore the implications of other assumptions. 4 FUTURE TRENDS IN BATTERY STORAGE FOR MINI GRID APPLICATION M any mini grid developers are working to reduce the risk of stranded assets caused by expanding the grid. This financial risk can be mitigated by rolling out third-generation mini grids, which use advanced technology such as pre-paid meters that make them integration-ready. Advanced lithium-ion technology and associated battery management systems may allow transition to smart grids that can be operated remotely. The success of these new-generation mini grids in dealing with the risk of asset stranding depends on the proportions of productive-use appliances in consumption, because productive appliances require reliable power for longer hours and therefore require heavy-duty storage capability. The spider web plot in figure 4.1 shows the projected improvement in the battery performance based on key performance parameters. These plots are application agnostic, and not all parameters are relevant for mini grid application. Cost, cycle life, and roundtrip efficiency are highly important to the cost of service; increased roundtrip efficiency increases the available units of electricity and reduces the LCOS. All of these technologies are poised for some degree of performance improvement. Flow battery technology, which looks promising for stationary energy storage application (see the Pugh matrix in table 3.2), is poised to witness some decline in CAPEX. The rest of this section describes several promising alternatives. They include but are not limited to lithium-ion batteries, iron-air batteries, hydrogen-powered storage, and flywheel energy storage. USED LITHIUM-ION BATTERIES AS A STATIONARY 4.1  STORAGE SOLUTION The average discarded lithium-ion battery still has a capacity of around 65 percent left. A German- Indian nonprofit startup—Nunam, funded by Audi Environmental Fund—is working on a way to use repurpose these used batteries for applications in which high energy density is not a requirement (Audi 2022). Korea launched a program to reuse lithium-ion batteries, in order to meet its goal of selling 1 million electric vehicles by 2025. Under this program, the government funded a project to demonstrate MWh-level reusing practices of old lithium-ion batteries. LG Chem will collect used electric vehicle batteries to build energy storage systems (ESS) (Crompton 2022). A significant demonstration of large-scale usage of used batteries for ESS is the 3 MW/2.8 MWh energy storage system installed at Amsterdam’s Johan Cruyff Arena. This ESS includes 590 battery packs, 250 of which are used modules from electric vehicles. Each of these modules had an original capacity of 24 kWh; during their second life at the stadium, they exhibited usable capacity of 20 kWh (Pagliaro 2019). China decided to end the use of lead acid batteries in its fleet of telecom towers, powering them instead with used lithium-ion batteries. It has signed agreements with 16 electric vehicle and battery manufacturers. The cost of battery packs made of used lithium-ion batteries is around $100/kWh, on a par with the price of new lead acid batteries (Jaio 2018). With growing electric vehicle uptake and a useful lifetime of around seven to eight years for lithium-ion batteries, there may be a burgeoning market of used lithium-ion batteries ready to be used for stationary ESS applications. Using such battery packs could reduce the CAPEX of mini grid projects. 20 FUTURE TRENDS IN BATTERY STORAGE FOR MINI GRID APPLICATION 21 FIGURE 4.1: Projected Changes in Battery Performance Between 2018 and 2025, by Type of Battery Lead Acid Advanced Lead Acid Li-ion ENERGY ENERGY ENERGY DENSITY DENSITY DENSITY SELF POWER SELF POWER SELF POWER DISCHARGE DENSITY DISCHARGE DENSITY DISCHARGE DENSITY SAFETY SAFETY SAFETY CYCLE LIFE CYCLE LIFE CYCLE LIFE (THERMAL) (THERMAL) (THERMAL) ROUNDTRIP ROUNDTRIP ROUNDTRIP COST COST COST EFFICIENCY EFFICIENCY EFFICIENCY COMPLEXITY COMPLEXITY COMPLEXITY OF BMS OF BMS OF BMS NAS Flow Battery - VRB Flow Battery - ZnBr ENERGY ENERGY ENERGY DENSITY DENSITY DENSITY SELF POWER SELF POWER SELF POWER DISCHARGE DENSITY DISCHARGE DENSITY DISCHARGE DENSITY SAFETY SAFETY SAFETY CYCLE LIFE CYCLE LIFE CYCLE LIFE (THERMAL) (THERMAL) (THERMAL) ROUNDTRIP ROUNDTRIP ROUNDTRIP COST COST COST EFFICIENCY EFFICIENCY EFFICIENCY COMPLEXITY COMPLEXITY COMPLEXITY OF BMS OF BMS OF BMS Lithium-Sulphur (LiS) Al-air Supercapacitors ENERGY ENERGY ENERGY DENSITY DENSITY DENSITY SELF POWER SELF POWER SELF POWER DISCHARGE DENSITY DISCHARGE DENSITY DISCHARGE DENSITY SAFETY SAFETY SAFETY CYCLE LIFE CYCLE LIFE CYCLE LIFE (THERMAL) (THERMAL) (THERMAL) ROUNDTRIP ROUNDTRIP ROUNDTRIP COST COST COST EFFICIENCY EFFICIENCY EFFICIENCY COMPLEXITY COMPLEXITY COMPLEXITY OF BMS OF BMS OF BMS Source: Sen 2019. Note: Figure reflects data from commercially available products as of 2018. Expected performance improvements through 2025 are shown as darker regions. Performance metrices are rated on a 0 to 10 scale, where 10 indicates the best performance. IRON-AIR BATTERIES FOR 4.2  reaction involves reversible oxidation of iron pellets— essentially reversible rust (Plautz 2021). LONG-TERM ENERGY STORAGE One drawback of iron-air batteries is their low Batteries based on iron, which is plentiful on the Earth’s energy density. They are about 100 times heavier crust and nontoxic, hold promise for longer-term energy than lithium-ion batteries, with each battery unit storage. Iron-air batteries use iron as the anode and about the size of a washing machine. Because they oxygen in the air as the cathode. release energy slowly, they likely need to be coupled Form Energy, a US energy storage company, has with energy storage that can release electricity more developed an iron-air battery for utility applications that quickly, such as lithium-ion batteries. In this configura- is designed for a 100-hour discharge. It is targeting a tion, they could possibly replace diesel generators in cost of $20/kWh—less than one-fifth the cost of large- some mini grids. scale lithium-ion batteries. The electrolyte used in these ESS Inc. is another company building long-term battery batteries is a nonflammable, water-based solution; the storage based on iron. It has developed a low-cost iron 22 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT flow battery optimized for 6 to 12 hours of storage and a • Enhanced safety and stability: Sodium batteries have claimed cycle life exceeding 20,000 cycles. better thermal stability than lithium-ion batteries. They are therefore safer. 4.3  SODIUM ION BATTERIES Sodium-ion (Na-ion) batteries are quickly emerging as 4.4 HYDROGEN-POWERED a candidate for energy storage for solar mini-grids. In STORAGE November 2022, China’s Hina Battery factory started Some players are offering hydrogen-powered energy to produce sodium ion batteries on a 1 GWh a year solutions as an alternative to traditional diesel generators. production line (Kang 2022), which it expects to expand These solutions make use of hydrogen’s ability to store to 5 GWh a year. The largest Chinese manufacturer of energy for longer periods than batteries. They could be lithium-ion batteries, Contemporary Amperex Technology used to power mini grids in remote areas. Co Ltd (CATL), also plans to start mass production of Tiger Power, in association with VITO (the Flemish sodium ion cells in 2023 (CATL 2021). Technological Research Institute), produces turnkey These batteries have several advantages over products that can harvest solar energy using a foldable lithium-ion batteries: solar panel unit that can be transported to areas of interest. • Abundant and inexpensive raw materials: Unlike The electricity generated is stored in batteries or converted lithium, sodium is widely available and inexpensive, to hydrogen for storage in tanks. The company’s making Na-ion batteries more accessible and cost- algorithms optimize the usage of the battery and electro- effective. Sodium is about 1,000 times more preva- lyzers. This product is offered as an alternative to diesel lent on the Earth’s crust than lithium; it is available generators and used for fairs, music festivals, farms, and from soda ash or sea salt. Initially, the fact that other remote locations that need temporary on-demand sodium ions are larger than lithium-ions presented electricity (VITO 2022). challenges for cathode and anode materials in the The state-run National Thermal Power Corporation battery, but recent developments by the Chinese (NTPC) Ltd., India’s largest integrated power producer, battery manufacturer CATL in the use of inexpensive awarded a green hydrogen project to one of its plants in Prussian Blue as a cathode material and a porous southern India. The project’s objective is to produce and hard carbon for the anode appear to have overcome store green hydrogen using a 240 kW solid oxide electro- these problems. Aluminum is used as a current lyzer. The electricity it generates with 50 kW solid oxide fuel collector in the cells; it is less expensive than copper cells is meant to be used during the evening. This unique, used as a current collector in lithium-ion cells. large-scale project is envisaged to be a precursor to multiple • Reasonable cycle life: Cycle life for sodium ion such micro grids deployed in the future (Mint 2022). batteries is reportedly 3,000 cycles (SMM 2021). The Japanese company Toshiba Energy Systems This is about half of lithium iron phosphate cycle life & Solutions Corporation produces an integrated hydro- but may expand as manufacturing expertise grows. gen energy system called H2One. Each unit contains • Comparable energy storage capacity: CATL an electrolyzer, a fuel cell, a battery, and a storage tank. recently released a sodium ion battery with energy The units store renewable electricity in batteries and density (160 Wh/kg), comparable to lithium-ion produce hydrogen that is held in storage tanks. The (>200 Wh/kg). The company has patented a sodium system delivers the stored electricity on demand (Green ion battery with an energy density of 200 Wh/kg. Car Congress 2022). An integrated solution using a small The lower energy density of sodium ion batteries container could be used to power mini grids. make them suitable for low-end electric vehicles as well as stationary applications like mini grids. • Ability to use adapted li-ion manufacturing processes: FLYWHEEL ENERGY STORAGE 4.5  The production of sodium-ion batteries can follow the relatively mature lithium battery production process, FOR MINI GRID STABILIZATION with material changes but not manufacturing OXTO Energy, a British company, has developed and process changes in electrolytes, anodes, or cathodes patented a new flywheel energy storage device that (DNKPOWER 2022). will deliver safe, scalable storage at a competitive cost, FUTURE TRENDS IN BATTERY STORAGE FOR MINI GRID APPLICATION 23 with high energy density and low physical footprint (Gill Flores, another mini grid developer, uses a mix of 2022). The flywheel stores kinetic energy in a vacuum in diesel, wind, and hydro generation to power some islands in the form of a rotating mass, which it converts back into Portugal. The installed system consists of four hydro power electricity using an efficient switching mechanism. Its generators (3 × 250 kW + 1 × 600 kW), two wind turbines innovative power electronics allow the system to alter- (2 × 315 kW), and four diesel generators (3 × 550 kW + nate between high power and energy. While providing 1 × 810 kW). Because of the type of control used on the fast response, it allows a quick switch between load and hydro and diesel generators, the renewable energy pene- supply modes. tration of the Flores system was limited primarily by system OXTO’s flywheel has a lifetime of at least 25 years stability; step response, spinning reserve, and reactive and can be built with readily available materials. Other power requirements were not limiting factors. A 350 kW/ advantages include increased charge-cycle capabilities 5 kWh flywheel energy storage system was added to the (more than 100,000, compared with 5,000 to 10,000 for system to improve frequency and voltage stability. batteries); full output within 20 measurement signals; Flywheels have good technical characteristics, but and the lack of hazardous chemicals or fire hazards. cost, self-discharge, and the limited ability to store large OXTO’s flywheels can be produced as 65 kW modules quantities of energy still constrain their use in small for high power and low-energy applications like frequency standalone PV systems. They can be very useful in and voltage regulation. The duration of storage for PV-hybrid systems, however, for both addressing power flywheel technologies is considered to be less than quality issues in inverter-dominated systems and bridging 30 minutes. Oxto’s standard unit has a power output of power until a diesel generating set is started and ready 65 kW and the ability to store 5 kWh of energy. to be brought on-line in genset dominated ones. 5 CASE STUDIES T he case studies described in this section highlight global deployment of emerging storage technologies. Each case study describes the mini grid’s rating, energy storage rating, battery chemistry, businesses served, communities electrified, and the way in which the electricity is used. SOLAR MINI GRIDS WITH LEAD ACID BATTERIES: THE HUSK 5.1  POWER MICROGRIDS INITIATIVE IN INDIA AND NIGERIA Founded in 2008, Husk Power Systems owns and operates more than 200 community solar mini grids in India, Nigeria, and Tanzania. More than 130 mini grids in India, in the states of Bihar and Uttar Pradesh, have total installed capacity of about 8.5 MW. They provide 24/7 electricity to more than 10,000 small businesses. In November 2021, Husk began operating its first six mini grids in Nigeria’s Nasawara State. Within several months, it had installed 12. In addition to the sale of electricity, the company is engaged in a range of services, including water purification, agro-processing, and e-transportation. Husk uses a hybrid supply system consisting of solar PV, batteries, and biomass gasification. When it first enters a village, it usually starts with about 50 kW of installed capacity. It considers the exact size of each component a commercial secret; the solar PV panels in India averaged 30 kWp of capacity, with the remaining capacity coming from biomass. In Nigeria, the minimum size of the installed solar PV is 50 kWp (figure 5.1). Husk can add generating capacity as demand of customers increases. Battery backup Husk’s standard configuration includes a valve regulated lead acid (VRLA) battery that acts as the mini grid’s main power source between 11 pm and 7 am. It can also act as a backup supply source between 7 am and 11 pm if the solar PV and biomass are not functioning as expected. The batteries are designed for up to six hours of autonomous operation. Using a machine-learning approach to battery management and generator dispatch, Husk has been able to increase the lifetime of its lead- acid batteries to about five years, from a previous average of about three and a half, by ensuring that batteries do not discharge too deeply or chronically overcharge. The company’s careful approach to monitoring and controlling lead acid charge-discharge cycles and its ability to obtain attractive volume pricing on Indian-made lead acid batteries are two reasons it uses lead acid batteries. Daytime operations Solar PV is the main source of power at every location. The PV system is combined with the biomass power plant system to supply electricity demand on rainy and foggy days. When excess electricity is produced, it is used to charge the battery. Solar PV panels produce about 75 percent of the electricity generated at a typical Husk mini grid in India and Nigeria. Night-time operations Husk’s biomass gasification system is switched on around 5 pm. It burns waste feedstock, such as rice husk or corn cobs, and can serve customers until 11 pm. Husk estimates that the LCOE from its gasification system at full load is 30 percent lower than the LCOE from diesel generation and 24 CASE STUDIES 25 FIGURE 5.1: Husk Mini Grid in the Village of Akura, in 2022, under it Engie-Equatorial (EE) joint venture, the two Nasawara State, Nigeria companies commissioned a solar mini grid in the Lolwe Islands, Uganda, situated in Namayingo District near Lake Victoria. The island’s 15,000 people have limited access to electricity and are heavily dependent on diesel gensets for lighting and powering fishing boats around the lake. The intervention provides clean and reliable electricity for powering houses, enhancing livelihood opportunities, and limiting the use of fossil fuels for energy generation (Figure 5.2). Source: Husk 2023. System sizing and distribution network A hybrid solar mini grid of 600 kWp with LFP battery storage capacity of 600 kWh paired with emergency 35 percent lower than the LCOE from battery storage.7 gensets of 200 kilovolt-amperes (kVA) is ensuring safe This gasification system ensures a lower cost of elec- and reliable electricity to residents of the island. The tricity production at night than withdrawing the electricity mini grid provides connections to over 3,800 consumers, from batteries or generating it from a diesel genset. As including 3,026 households. The connections are it has largely automated the gasification system, Husk powered over 45 kilometers of medium- and low-voltage does not require a full-time onsite operator to manually distribution networks. run the system. Productive use of solar energy Tariffs and metering Local businesses have been supported by EE’s business Tariffs for all customers are based on time of use, with incubation and asset financing program. EE’s integrated a discount of 15 to 20 percent for daytime use. The program also features an electric mobility integration tariff rate declines once a customer crosses a minimum platform with electric outboard engines for boats and threshold of 120 kWh per month. Nearly all customers e-motorcycles, an agro-processing hub, water purification prepay for service. Meters can limit customers’ maximum instantaneous loads. Power consumption and genera- tion data are monitored in near real time (at five-minute FIGURE 5.2: Hybrid Solar Mini Grid in the Lolwe Islands, intervals). Husk tracks how long it takes to resolve Uganda customer complaints, ensuring that that reported problems are fixed within four hours for households and two hours for commercial customers. SOLAR HYBRID MINI GRID WITH 5.2  LITHIUM IRON PHOSPHATE BATTERIES: THE LOLWE ISLANDS, UGANDA Engie Energy Access is the leading mini-grid and off-grid pay-as-you-go solar energy solutions company in Africa. Equatorial Power is a Uganda-based renewable energy company with expertise in agro-processing, business incubation, water purification, and e-mobility. In January Source: Engie Energy Access 2023. 26 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 5.3: Ice Manufacturing Unit Powered by One successful mini grid installation is in San Seth, Engie-Equatorial’s Solar Mini Grid in the Lolwe Islands, Bogale Township, in the Ayeyarwady region of Myanmar. Uganda A 713 Wp hybrid solar mini grid with storage capacity of 1,312 kWh of lithium-ion nickel manganese cobalt (NMC) batteries, paired with a 315 kVA genset, ensures safe and reliable electricity to residents of the township. The primary reason the developer selected NMC battery chemistry is the technology’s life cycle of more than 3,000 cycles. The mini grid is providing connections to more than 1,300 households (MiTV 2023) and more than 20 businesses. All the connections are powered by an 11 kV, 400 volt multiple transformer and vacuum circuit breaker (VCB) switchgear protection for safer opera- tions. The price at which electricity is delivered to these customers comes to around $0.20/kWh, with a contract period of 15 years with the township. The mini grids will be able to generate around 950 MWh of energy annually, Source: Engie-Energy Access 2023. replacing 900 tons of carbon emissions. systems, ice making, and other allied value-addition services, such as fish drying. All these productive end-use activities now rely less on diesel generators, SOLAR HYBRID MINI GRID 5.4  and adding anchor and business loads has helped the WITH LITHIUM IRON developer use the mini grids up to their rated capacities. PHOSPHATE BATTERIES: The mini grids will be able to generate around 800 MWh of energy annually, replacing 750 tons of carbon DANCITAGI, NIGERIA emissions. PowerGen started operation in 2011, with the vision of The EE hybrid solar mini grid is not the only entity making clean, renewable energy accessible to more providing basic electricity access to inhabitants of the people in Africa. It now operates in Kenya, Nigeria, Lolwe Islands and contributing to overall development of Tanzania, and Zambia. The company has installed the community. EE is engaging with New Energy Nexus more than 10,000 connections since its inception, to run a business incubation program in the region commissioning more than 100 mini grids. Until 2019, that will have compulsory 50 percent participation from the preferred choice of energy storage technology was women. One project outcome is EE’s support of Lolwe maintenance-free lead acid. PowerGen has now shifted female fishmongers to ensure inclusive recruitment and to lithium-based storage systems. access to the services provided.8 Nigeria has a low access to electricity, with only 55% of electrification rate (World Bank 2023). To achieve universal electricity access by 2030, it will need to SOLAR HYBRID MINI GRID 5.3  connect 600,000 to 800,000 households a year, with a focus on rural areas. WITH LITHIUM-ION NICKEL More than 250 mini grids are currently installed MANGANESE COBALT in Nigeria. One installation is at Dancitagi, near Jutigi BATTERIES: SAN SETH, Edatti, where PowerGen has installed a 200 kWp solar hybrid mini grid with 500 kWh of lithium iron phosphate BOGALE, MYANMAR batteries and a 200 kVA diesel genset. Two years after More than 70 percent of Myanmar’s population lacks installation, the load on the site had increased, and access to electricity. To take electricity to the last mile, there was a demand for additional storage capacity. Mandalay Yoma has developed more than 45 solar All connections are powered through low-voltage distri- hybrid mini grid projects across the country. With these bution networks of about 10 kilometers. Mini grids will be efforts the company can touch more than 10,000 lives able to generate around 300 MWh of energy annually, and generate more than 2,000 local jobs. replacing 250 tons of carbon emissions. CASE STUDIES 27 FIGURE 5.4: Hybrid Solar Mini Grid in San Seth, Bogale, Myanmar Source: Mandalay Yoma 2023. SOLAR MINI GRID WITH 5.5  the mini grids to sustain variable loads and generation profiles. A machine learning-based algorithm control LITHIUM IRON PHOSPHATE optimizes the load profile and informs decision making. BATTERIES: MAKHALA, Amperehour has deployed more than 200 such systems and software platforms on mini grids in India. AMPEREHOUR, INDIA Amperehour has deployed 39 kWp of solar mini Amperehour, in collaboration with the Maharashtra grids with 110 kWh of containerized LFP batteries and Energy Agency Development Authority (MEDA), has no backup diesel generators. These mini grids are commissioned solar mini grids at Makhala, Amravati, providing connections to more than 127 customers. and Maharashtra, India. The technology—a combination The electricity tariff shared by the developer is around of power electronics, software, and control systems— $0.10/kWh, with a monthly fixed charge of $0.80 per was developed by Amperehour. These features allow connection. The mini grid developer has contracts with FIGURE 5.5: Solar Hybrid Mini Grid with Containerized Energy Storage Solutions Installed by PowerGen in Dancitagi, Nigeria Source: Power GEN Nigeria 2023. 28 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 5.6: Solar Mini Grid with Containerized Battery Energy Storage System in Makhala, India Source: Amperehour 2023. villages for periods of five years of O&M. These mini grids a tsunami, the foundation was designed to be installed will be able to generate around 51 MWh units of energy a at a height of 60 centimeters or more from the ground. year, replacing 48 tons of carbon emissions annually. The electrical connection and the cooling piping were These mini grids have brought access to electricity installed and insulated. The system was transported to more than 500 people in these villages. They power using barges and cranes; the electrolyte was injected at two drinking water pumps and two flour-milling units. the site after separate transportation. People in these communities are now able to watch tele- When solar power is generated during the day, some vision, open new shops, and begin a digital education power is charged to the redox flow battery; constant program at community schools. voltage is discharged for a certain period of time in the evening. In order to improve efficiency, a weak- ness of redox flow batteries, power consumption was SOLAR MINI GRID WITH 5.6  reduced through on/off control of the fan and the chiller; to reduce balance of plant (BOP) power VANADIUM REDOX FLOW consumption, it was configured by quantifying the BATTERY: MALDIVES flow rate by output. The system was designed to be managed through In 2020, H2, a Korean company specializing in redox remote monitoring in order to reduce follow-up manage- flow batteries, built a 60 kW/250 kWh vanadium redox ment (given the characteristics of the island area), flow battery system (VRFB) linked to solar power ensure safety, and improve efficiency through scenarios generation at the Malahini Kuda Bandos Resort in operations. Spare parts that are difficult to procure Maldives. A 500 kW diesel generator alongside 293 kWp locally were procured in advance and built to be of photovoltaic power generation was installed at the managed smoothly. Local engineers were trained to resort utility facility building. It was designed and built ensure stable post-management, and an operation to generate 1 MWh a day; the electricity stored through manual was created. the redox flow battery was designed to be used when it rains or during power peak hours. The redox flow battery is capable of repeated full discharge/charge, from 0 percent state of charge to 100 percent. A diesel SOLAR MINI GRID WITH 5.7  generator provides backup power. FLYWHEEL ENERGY STORAGE The design, installation, and operation of the VRFB considered the installation environment, the container SYSTEMS: THE PHILIPPINES load distribution design, the impact load during maritime The island of Palawan, in the Philippines, has abundant transportation, the special painting for the parts, and the sunshine but frequent power outages, because of an salty environment of the resort island. Given the risk of unreliable grid based on fossil fuels. The Philippine CASE STUDIES 29 FIGURE 5.7: Vanadium Redox Flow Battery Energy Storage System at the Malahini Kuda Bandos Resort, Maldives Source: H2 2023. government has undertaken several efforts to bolster system. The Amber Kinetics FESS will be electrically energy supply in Palawan, including the use of solar PV connected to PALECO, but all flywheel management for power generation. Using solar power systems in the systems will be integrated to the energy management province could provide significant benefits, including system that SIPCOR is going to install and control. reduced carbon emissions, lower electricity costs, and The flywheels store electricity by spinning a large improved energy security. rotor at high speeds using an electric motor. When In 2023, following the publication of the study, electricity is needed, the flywheel releases the stored the Palawan Electric Cooperative (PALECO) and energy, which can be converted back into electricity S.I. Power Corporation (SIPCOR) signed a power supply (Figure 5.8). agreement for a 15-year supply to the main grid in the Flywheel-based energy storage systems have province. SIPCOR will install a micro grid with solar PV several advantages, including high efficiency, low and diesel generating sets along with flywheel energy maintenance costs, and long lifespans. Flywheels storage systems (FESS) from Amber Kinetics to provide are made from recycled steel and do not contain any a reliable and sustainable solution. SIPCOR will support hazardous chemicals or toxic materials, making them the main grid of Palawan with 20 MW of conventional environmentally friendly. and renewable solar energy technology backed up with This project will provide numerous benefits: FESS. This micro grid project consists of installing • The system will provide reliable and sustainable 20 MWp of solar technology and a 23.1 MW diesel energy to the island’s inhabitants, reducing their genset plant; it will be supported with a 2.5 MW/ dependence on an unreliable grid. 10 MWh FESS. • The system will reduce the island’s carbon footprint, SIPCOR will be responsible for the installation, by decreasing the amount of diesel fuel used to operation, maintenance, and supply of power. The generate electricity. FESS will store excess generation, which can be dis- charged at nighttime, when the energy from the sun is • The system will promote economic growth by no longer available. This energy-shifting application can providing a stable source of energy that can provide continuous electric supply from the renewable support local businesses and industries. energy sources to the electric cooperative, PALECO. SIPCOR will also install a diesel generator with a While the FESS is in charging mode during the daytime, dependable capacity of 20 MW. It will be integrated it can perform solar + storage application to address into the solar + FESS system and connected along the intermittency and variability of solar PV, mitigate the the distribution system. The generator will move from effect of such intermittency on the PALECO distribution being the main source of power to becoming a back-up system, and ensure the stability and reliability of the source of power. 30 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT FIGURE 5.8: Kinetic Energy Storage Systems in the Palawan islands, the Philippines 69kV PALECO Transmission Line (+-)100m Transmission Line 1km Transmission Line 1km apart Energy Management 20MWp Solar 2.5MW / 10MWhr 23.1 MW Diesel Genset Plant System Source: Amber Kinetics 2023. NOTES 7. If gasification has an LCOE that is 30 percent lower than battery storage, one might wonder why systems use batteries at all. The reason has to do with partial loads. After 11 pm, loads taper off, but some remain. Keeping the biomass gasifier running at these times would be inefficient and more expensive than cycling electricity through the battery. During the day, batteries provide a buffer between the production of solar electricity and consumption, without which electricity supply would be unstable. 8. For information on the project, see Equatorial Power (n.d., 2022) and Nomvuyo (2022). 6 RECOMMENDATIONS D ecentralized renewable energy mini grids are crucial to achieving universal energy access by 2030. Their success depends critically on the technologies used to store the energy they produce. Until 2020, solar hybrid mini grids used primarily lead acid batteries for storage. In 2021, 44 percent of the newly built mini grids studied for this report used lithium-ion technologies. The next generation of energy storage will likely be dominated by lithium-ion and flow battery technologies, causing the LCOS of lithium-ion technologies to fall as technologies scale up for stationary and mobile applications. The analysis conducted for this report yields several recommendations for energy storage practitioners: • Study battery performance in the field. A ground-up analysis of the performance of the battery technologies at existing sites would increase understanding of storage solutions have measured up. This information would be useful for comparing battery performance in the challenging environments where mini grids are built and operate. Case studies of mini grids using battery technologies other than lead acid or lithium-ion would be particularly valuable. • Look beyond the upfront cost of batteries. Teams considering mini grids should consider the LCOS or how the batteries affect the LCOE of the mini grid modeled in simulation/optimization software like HOMER Pro. Both of these approaches take into account operating expense, cycle lifetime, charge/discharge efficiency, and CAPEX. • Adopt battery safety and performance standards appropriate for mini grids, in order to reduce risks and increase acceptance across the industry. Drawing on safety standards for batteries developed by the International Electrotechnical Commission (IEC), the United Nations, the Underwriters Laboratories (UL), and others, development institutions could suggest standards for mini grids that governments could adopt. Examples include the following: • IEC 61427: Secondary cells and batteries for renewable energy storage systems • UL 1642: Safety of lithium batteries (for cells) • UN 38.3: Transportation testing for lithium batteries • IEC 62619: Safety requirements for lithium-ion batteries for stationary applications • IEC 62620: Performance requirements for lithium-ion batteries for stationary applications. • Draft regulatory documents and procurement specifications carefully, to ensure safety, quality, and performance while avoiding restricting choices in ways that lock in incumbent technology and rule out innovative storage technologies. • Identify and promulgate best recycling practices for energy storage technologies. The lead acid battery recycling industry and supply chain is well established. Lithium-ion supply chains are more complex and involve multiple chemical and mineral processing plants, many of which are located in China. This geographic separation increases the challenges of lithium recycling. Anticipating the energy transition to lithium-ion technologies, government agencies should engage with industries and research institutes to develop management strategies for recycling lithium-ion batteries. National governments could collaborate with research institutes and 31 32 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT industry players to set up regional recycling hubs to of technicians and engineers, in order to reduce help address regional collection issues. the down time of mini grid systems. Such training • Reuse repurposed battery technologies in could improve troubleshooting and create employ- stationary storage applications. A standard to test ment opportunities in communities. Programming and certify second-life battery packs would increase requires government, nongovernmental organiza- the confidence of mini grid players and funders for tion, and private sector support. During mini grid deploying repurposed batteries. commissioning, batteries often reach sites months in advance; they require proper handling and storage. • Exempt mini grid batteries from import duties, Detailed guidelines for safe handing, storage, and to make battery technology affordable and fast- track their deployment in mini grids. One way inspection of battery solutions would help avoid to ensure that the tax exemption is not captured deep discharges, fires, and safety hazards. by standard internal combustion vehicle starting, • Create standard operating procedures for under- lighting, and ignition (SLI) batteries is to restrict the standing battery technology performance, to help exemptions to batteries above a certain capacity mini grid players get the most out of the asset. (for example, above 10 kWh or 15 kWh, with appro- For example, understanding the effect of temperature priate interpretive guidance provided to customs and other ambient climatic conditions on life cycle and officials to recognize these capacity amounts when performance of a battery would help mini grid devel- expressed in voltage and ampere-hour readings). opers design cooling for the storage compartments. • Provide skilling, reskilling, and upskilling A standard operating procedure on the management programs to enhance the technical competency of fire hazards could help reduce risks. REFERENCES AMDA (African Minigrids Developers Association) 2022. Africa Minigrid Benchmarking Report Launched. https:// africamda.org/2020/08/13/africa-minigrid-benchmarking-report-launched/ Anderson, Jonathan O., Josef G. 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Washington, DC. https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=8S APPENDIX A: TYPES OF ENERGY STORAGE Energy storage technologies can be divided into five groups. MECHANICAL STORAGE Mechanical storage includes the following: • Pumped hydro storage (PHS) stores electrical energy as the potential energy of water. It generally involves pumping water into a large reservoir at a high elevation, usually the top of a mountain or hill. When energy is required, the water in the reservoir is guided through a hydroelectric turbine, which converts the energy of flowing water to electricity. PHS is often used to store energy for long periods. It would be difficult to deploy for rural mini grids, given the need for topographical features to store large amounts of water and the difficult of making the technology competitive at mini grid scales. • Compressed air energy storage (CAES) converts electrical energy into compressed air, which is stored in an underground cave or an above-ground high-pressure container. When excess or low-cost electricity is available from the grid, it is used to run an electric compressor, which compresses and stores air. When electrical energy is required, the compressed air is directed toward a modified gas turbine, which converts the stored energy into electricity. Several start- ups are testing storing the heat produced during compression. This type of CAES does not use natural gas to reheat the air upon decompression and is therefore emissions-free as well as more efficient. Storing energy at scale generally requires geological features such as a cavern. • Flywheel energy storage stores electrical energy as rotational energy in a heavy mass. A typical flywheel energy storage system (FESS) consists of a large rotating disk or cylinder supported on a stator, the stationary component found in electric motors and generators. Stored electric energy increases with the square of the speed of the rotating mass, so materials that can withstand high velocities and centrifugal forces are essential. Flywheel technology is a low-maintenance and low environmental impact type of energy storage. It is suitable for high-power applications, thanks to their capacity to absorb and release energy in a very short period. Flywheel storage is more practical for high-power, high reaction time storage, to smooth out energy flows on the scale of milliseconds or seconds, not hours or days. ELECTROCHEMICAL STORAGE Electrochemical storage includes various battery technologies that use different chemical compounds to store electricity. Each of the numerous battery technologies has slightly different characteristics and is used to store and then release electricity for different durations, ranging from a few minutes to several hours. There are two main categories of batteries: (a) traditional solid rechargeable batteries, where the chemical energy is stored in chemical reactions on the surface of solid metal electrodes, and (b) flow batteries, where chemical energy is stored in liquid electrolytes kept in tanks and pumped through the electrochemical cells. Rechargeable batteries include the following. • Lead acid batteries have been in commercial use in different applications for over a century (see case study 5.1). Lead acid is the most widely used battery technology worldwide. 35 36 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT High-performance variations of lead acid batteries produce fully rechargeable zinc-based chemistries. are classified as advanced lead acid and have a This technology is lightweight, low-cost, and nontoxic. longer life. Advanced lead acid batteries include Zinc air batteries (also known as zinc air fuel cells) carbon and bipolar lead acid type. Lead carbon function by oxidizing zinc with oxygen while lead acid batteries use carbon additives to improve controlling the reaction rate by controlling the air flow. energy density, cycle life, and charging-discharging They come in both rechargeable and nonrechargable properties. Bipolar lead acid batteries have bipolar forms. Applications include vehicle propulsion and plates, which eliminate the high current density seen grid storage. Urban Electric Power (UEP), a US around the terminals in a conventional design. Each company, has developed a rechargeable zinc point on an electrode is in contact with the current manganese (ZnMnO2) battery with a two- to collector. This type of battery has higher specific eight-hour discharge duration. These batteries are energy and energy density, a footprint that is about safe and nontoxic, with no lead, heavy metals, or 40 percent smaller footprint than the monopolar flammable electrolytes. The company is scaling up type, and is made of recyclable materials. It can be production and is expected to provide a cheaper used in place of lead acid batteries. replacement for lithium-ion batteries. • Lithium-Ion batteries are lightweight and have high Flow batteries (see case study 5.6) differ from density (see case studies 5.2–5.5). They are particu- conventional batteries in that energy is stored in the larly well suited for portable applications (electric electrolyte (the fluid) instead of the electrodes. The vehicles and electronic devices). Performance electrolyte solutions are stored in tanks and pumped characteristics depend on the internal chemistry. through a common chamber, separated by a membrane, Improvements have increased usage in stationary that allows for transfer of electrons or flow of electricity storage. Progress has led to a scale-up of manufac- between the electrolytes. turing and installation and a subsequent rapid price There are many different types of flow batteries. reduction. Increasing energy densities in lithium-ion At least three are currently commercially available: batteries have been key in tilting interest toward them. redox flow, zinc-iron flow, and zinc-bromine batteries. Variations such as zinc-iron flow batteries and hydrogen- • High-temperature sodium batteries are made from bromine flow batteries are also under development. inexpensive nontoxic materials. They operate at This technology has reached commercialization, a high temperature (above 300°C) and have long with 326 MW grid connected flow batteries across cycle lives. Sodium sulfur (NaS) batteries are 108 projects installed to date. In India, technology manufactured with molten sodium and liquid sulfur adoption is limited to test trials. A 30 kW vanadium enclosed in a steel casing and a cell container (usually redox battery was installed in 2015 for mini grid cylindrical in shape). Nihon Gaishi kabushikigaisha capability by Imergy Power Systems. (NGK) Insulators, a Japanese company, is the only company manufacturing this battery. Key applications include spinning reserve, frequency regulation, THERMAL ENERGY STORAGE energy time shift, and transmission congestion relief. In India, NGK’s NaS battery was trial tested Thermal energy storage includes ice-based storage by the National Thermal Power Corporation (NTPC) systems, hot and chilled water storage, molten salt for its feasibility in Indian grid conditions in a solar storage, and rock storage technologies: system. Sodium nickel chloride (Na-NiCl2) batteries • In latent heat storage, energy is stored in a material operate at a lower temperature with molten sodium that undergoes a phase change (transition between as a cathode, NaAlCl4 as the electrolyte, and nickel solid and liquid) as it stores and releases energy. chloride as the anode. Major applications include One example of latent heat storage is an ice storage black start, renewable energy time shift, and fre- tank for domestic or industrial cooling. quency regulation. • In sensible heat storage, available energy is stored in • Zinc-based batteries combine zinc with various the form of an increase or decrease in temperature chemicals. They are at an earlier development of a material, which can be used to meet a heating stage than some other battery technologies. or cooling demand. Variations of this technology Historically, zinc batteries were not rechargeable, include molten salt storage (generally coupled with but developers are overcoming challenges to concentrated solar power plants, hot water storage, APPENDIX A: Types of Energy Storage 37 and chilled water storage), designed to serve technologies are ideal for storing and releasing high households or a community. levels of energy in short bursts. • In thermochemical storage, reversible chemical reactions are used to store thermal energy in the form of chemical energy. Variations are in initial CHEMICAL STORAGE developmental stages. Chemical storage typically uses the electrolysis of water In these systems, excess thermal energy is collected to produce hydrogen as a storage medium. Hydrogen for later use. Given the Second Law of Thermodynamic can subsequently be converted to electricity (via fuel inefficiencies in converting low-grade heat to electricity cells or engines) or heat and transportation fuel (power- and the challenges of storing high temperature heat at to-gas). In power-to-gas storage, excess electrical small scales, this kind of storage is generally not viable energy is used to electrolyze water to produce hydrogen for mini grids. and oxygen. The stored hydrogen can be used directly as fuel for heating applications or in fuel cells. Electrolyzers are unidirectional devices allowing for ELECTRICAL STORAGE only the storage of energy. Super capacitors and superconducting magnetic energy Chemical energy stored in fuels (ethanol, hydrogen, storage (SMES) systems store electricity in electric and or natural gas) can be converted to electrical energy. electromagnetic fields with minimal loss of energy. A few Several variations exist, including solid oxide fuel, small SMES systems are commercially proton exchange membrane, and phosphoric acid fuel available, mainly for power quality control in manufacturing cells. These systems can be used for stationary storage plants (such as microchip fabrication facilities). These or in transportation applications. APPENDIX B: IMPROVING THE PERFORMANCE OF LEAD ACID BATTERY STORAGE MINI GRIDS Most battery technologies in use today are lead acid. Most batteries are sulphated, reducing their charge acceptance rate and forcing mini grid players to use diesel generators to meet the shortage. A project on battery performance in India and the CLEAN Battery O&M manual highlight the challenges of lead acid batteries in many mini grids. This appendix shows how the performance of mini grids was deteriorating and provides recommendations on how it can be improved. Figure B.1 plots battery capacity against the age of battery banks at selected sites. It shows that most of the batteries monitored were operating below 80 percent of their rated capacity within six months of installation; modelling had projected capacities of over 80 percent for at least three years after installations. It also shows that valve regulated lead acid (VRLA) gel performed better than flooded tubular and that VRLA absorbed glass mat after five years of operation. Laboratory tests conducted by CES confirm these results. Timely and adequate equalization of flooded lead acid battery banks greatly increased the capacity of the plants (figure B.2). Revival of older lead acid batteries can take about a month. It took almost 25 days to bring six-year old batteries up to a certain capacity (table B.1). For this reason, is very important to regularly maintain batteries throughout their lifetimes. Battery efficiency exceeded 80 percent for most plants that were no more than two years old two years (figure B.3). Most plants that were more than two years old had efficiencies of less than 80 percent. Battery efficiency in these solar plants did not show significant improvement after equalization. Battery utilization data recorded at these sites challenges two industry perceptions. One is that batteries die early from overuse. Another is that as the plant ages, utilization of the battery increases as the load at the site increases. The data show that utilization of older plants was lower than that of newer plants. They also show that none of the plants had batteries that exceeded 60 percent of their rated capacity (figure B.4) Battery utilization was plotted against battery size (the ratio of battery-to-solar PV installed capacity) (figure B.5). All batteries that used 30 to 60 percent of their capacity had battery-to-solar ratios of 2.0 to 4.0 kWh/kWp, suggesting that this range could be considered the optimum battery size for rural mini grids. Most government tenders suggest that sizes should be over 7.0 kWh/kWp. Underutilization is found in plants with all sizes of batteries. 38 appendix b: Improving the Performance of Lead Acid Battery Storage Mini Grids 39 FIGURE B.1: Capacity of Flooded Tubular, Valve Regulated Lead Acid (VRLA), and VRLA Gel Batteries in First Eight Years 100% Battery capacity (percent) 80% 60% 40% 20% 0% 0 1 2 3 4 5 6 7 8 9 Age of battery (years) Flooded Tubular Gel VRLA VRLA Source: Sen 2019. FIGURE B.2: Tubular Battery Under 80 Percent Discharge and Recharge Cycle in Solar Charging Conditions Demonstrating Drop and Increase in Capacity Before and After an Equalizing Charge 140 120 100 Battery IN and OUT (in Ah) 80 60 40 20 0 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Number of Cycles Charging Discharging Source: CES battery lab tests. 40 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT TABLE B.1: Revival of Old Lead Acid Batteries Capacity Age of Plant Initial Capacity After Revival Duration of Battery Make Battery Type (years) (percent) (percent) Revival (days) Observations Most sites can be revived to similar capacity and provide Reliance Flooded tubular 6.0 30 80 25 two to three years more life with regular O&M. This cell totally dried out, because of o overcharging HBL Gel tubular 4.5 10 25  0 at the site, and could not be revived. This battery bank can be discarded. Most sites deploying batteries Agni Flooded tubular 6.0 20 55 25 from reputable manufacturers will get revived better. Source: CES lab test. FIGURE B.3: Efficiencies of Batteries at Plants of Different Ages 100% 80% Efficiency (percent) 60% 40% 20% 0% 0 1 2 3 4 5 6 7 8 9 Age (in years) Source: Sen 2019. FIGURE B.4: Battery Utilization at Plants of Different Ages 60% 50% Battery utilization (percent) 40% 30% 20% 10% 0% 0 1 2 3 4 5 6 7 8 9 Age (in years) Source: Sen 2019. appendix b: Improving the Performance of Lead Acid Battery Storage Mini Grids 41 FIGURE B.5: Battery Utilization at Various Battery-to-Solar Installed Capacity Ratios 60% Battery utilization (percent) 50% 40% 30% 20% 10% 0% 0 2 4 6 8 10 12 14 Battery-to-solar installed capacity ratio (kWh/kWp) Source: CES lab tests. 4 ENERGY STORAGE FOR MINI GRIDS: STATUS AND PROJECTIONS OF BATTERY DEPLOYMENT Funded by: