Off-Grid Application for Batteries
There exist great opportunities for renewable energy with the use of vanadium batteries in the $27 billion off-grid energy market.
The following is according to OFF-GRID SOLAR MARKET TRENDS REPORT 2016 published by Bloomberg New Energy Finance and Lighting Global, an innovation of the World Bank Group in cooperation with the Global Off-Grid Lighting Association:
“The 1.2 billion people living without access to power grid spend about $27 billion annually on lighting and mobile-phone charging with kerosene, battery torches, or other fossil-fuel powered stop-gap technologies.
It’s estimated that another 1 billion people are connected to the grid at present but suffer from unreliable service levels.
The off-grid population may spend an additional $5-$6 billion/year on mobile phone charging in Africa and Asia. These phones tend to be charged by small-business owners for fees reported at between $0.15-0.25 per charge. This equates to $30-$50 kWh.
Residential diesel generators are a popular solution among the wealthier people without stable grid access.”
The report went on to talk about how solar power is well suited for the off-grid energy market.
Power blackouts are frequent events in developing countries. I spend 2 to 3 months a year in Mongolia and weekly summer blackouts are common events. Blackouts last from sometimes a few minutes to entire an afternoon. Hospitals and big hotels maintain operations using back diesel powered generators.
I am quite familiar with diesel generators as I managed the Ulaan Ovoo coal mine in Mongolia, that used a large, diesel powered generator that operated 24 hours a day, 7 days a week, to pump in-flowing water out of the open pit mine.
The LCOE (levelised cost of energy) for wind and solar plants have come down so quickly that they are at or below the LCOE of traditional base load coal, nuclear and gas plants.
Grid-level battery costs have also come down remarkably in recent years. While it can’t compete with coal or nuclear power, at 30 cents per kwh, grid batteries are gaining traction for certain on-grid applications such as substituting peaker plants, and tiered pricing arbitrage.
For off-grid applications, grid-level batteries can double the availability factor of renewable energy sources to above 70% and compete with diesel powered generators in this $27 billion per year off-grid energy market.
At the current rate of innovation and adoption, the LCOE for grid batteries may come down to 10 to 15 cents per kwh within 3 to 5 years to dominate the fast-growing energy storage market estimated to be $2.5 billion or 1,662 MW by 2020.